Supply Chain Management

A supply chain involves the flow of goods from raw material to the finished product between the manufacturer, supplier, transporter, seller, and buyer. The multiple participants in the process step in as required, receiving the output from the previous participant and then handing it over to the next participant. Almost every industry that manufactures a product has to deal with a supply chain. From something as large and complex as an airplane to the bakery producing bread, all of them depend on the supply chain.

While this is a simplified description, an actual supply chain process can be incredibly complex, with many participants and many hand-offs. The traditional approach generally has an owner for the process who is usually the manufacturer or the seller. The owner will be responsible for maintaining a centralized supply chain management system, which will record and maintain all the details of the process. Products may be tracked in batches (as in the case of bread from a bakery) or individually (as in the case of an airplane) depending on the nature and size of the product. The centralized system needs to track the status of each product or batch of products and several of them and process attributes. All sorts of data, including current status, the participant responsible, quantities or volumes, storage conditions, transport conditions, delays, and losses in the transport or manufacturing process, can be captured, measured, and updated.

In a centralized system, it can be a major challenge to get accurate updates from each of the participants in the supply chain, and without accurate updates at each stage and from each participant, the overall tracking would be incomplete and inaccurate. Also, each participant would have to rely on the central system for their updates, and that data may not reconcile with the data in their systems.

If a Blockchain solution was implemented, every participant would have a copy of the data, and when any participant made an update, would be reflected for all participants with a consensus. All participants will now have the same view of the supply chain at any point in time, and any discrepancies can be flagged immediately.

The Blockchain solution will enable transparency and traceability - if there is a problem, it can be traced back by reviewing the data in the Blockchain. If any participant fails to meet the contract terms or a supplier does not ship on time, the Blockchain solution can receive that event and trigger an action, such as deducting a penalty for the delay. The delay and the resulting penalty would be reflected for every participant, so they can revise their plans to accommodate the delay accordingly.