All the product that we encounter on a day to daybasis is the result of supply chain; the process of raw goods or materials to aproduct purchased by the consumers. The process of supply chain allows companieswho are involved in the process to all influence the eventually finishedproduct. Along the way, a product makes stops along the chain on its way to afinished product. Whether that stop is at the beginning as a simple raw materialor further down the chain on the shelves of stores waiting to be purchased.
Theseare just a few of the stops a product makes along the supply chain. However,most recently there has been problems associated with supply chain as globalproducts begin coming into the mix. Global trade has benefitted economies allaround the world, but with problems such as cyberattacks, theft, and exposureof certain information, certain systems in place are not doing the proper job.This is where blockchain technology comes in. It is said to be a revolutionaryway of keeping track of inventory, protecting secure information, and auditingamong other things. Taking a closer look at supply chain we see the manybenefits of the process but the negatives associated with it as well. With somany firms potentially having a part in the process of a good, it is easy tosee how something could go wrong. Just one little miscommunication from onefirm to another can cause the whole process to be scrapped and started overfrom scratch.
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Leading to extra costs, materials and time added to thecompletion of the product. When a product needs to be completed in a timelymanner it is evident how this could be problematic for the consumer, but aswell the firms if late charges and fines are applied. The completion ofproducts in a timely manner is one of the most important parts of the supplychain process. The timely aspect of the process could be even more of a threatwhen the industry of global supply chain comes into effect. The other problemwith global supply chain is the many complicated regulations associated withit. These international regulations have costed companies millions in tied-upinventory and overhead costs. With increasing the supply chain across Asia,United states, and Europe, companies have been forced to introduce moreadvanced systems of tracking product as it makes its way down the chain. Thesemore advanced systems are put into place to limit lag among firms in differentcountries and allow for these firms to communicate better with one another.
This all leads to an easier supply chain process and positive end result. Thefirms participating in the supply chain have objectives of their own as well. Firmsin the supply chain want to make sure that merchandise and products are beingdistributed properly in terms of the right quantities, locations and in atimely matter. These three things are important to the firms in order tosatisfy customers, minimize costs, improve standardization and remainingcompetitive. All firms in the process must simply do their part in a timely andorganized manner. Blockchain technology is seen as the next biggesttechnology behind bitcoin. It is a newly created technology used primarily forkeeping track of transactions of goods between those participating in thesupply chain.
Essentially is was created with five things in mind:Transparency, scalability, security, real-time transactions, and innovation.These are all issues the supply chain faces all the time. Blockchain looks totackle these issues like no other technology.
Being transparent is importantwithin a supply chain process. Blockchain can help with that. Having theability to better document processes within the supply chain is key toeffectiveness in attaining a positive result. Being transparent with firmsduring the process makes all parties involved more comfortable with theprocess. Blockchain technology makes scalability easier as well. Unlike beforewhere information would be stored on one central server, blockchain technologyintroduced a way of storing information on different internet nodes.
Therefore,making it “infinitely scalable” (Pan, Xin, & Xu 2016). Through being ableto store information on internet nodes rather than a central server, thisdecreases the risk of cyber-attacks and heightens security as well. Along withscalability, and security, blockchain technology helps with real-timetransactions in decreasing processing time. With decreasing processing times,this in turn decreases dollars held in the supply chain. The quicker thiscapital can be in and out of the supply chain, the quicker this same capitalcan be used in another supply chain and so on.
The fifth issue blockchain dealswith is innovation. And the allowance of continuing innovation. This innovationallows those with certain conditions access to certain information. Blockchaingives those who use it a competitive advantage over others due to itsimprovement in those five areas. Those firms with it would have a competitiveadvantage. In terms of safety and being able to keep track of its supply chainprocess more easily and in greater depth. The benefits of introducingblockchain technology into your supply chain network greatly out way thenegatives. Theproblems and challenges associated with blockchain technology are greatlyoutweighed by the positives.
However, one would be naïve to not consider someof the potential challenges such as costs and design errors. According to theInternational Financial Law review, blockchain is linked to troubled timesahead and warns of potential errors in the design, and even the opportunity formalicious behavior (Price, 2016). Withevery new and innovative technology, there will always be challenges it mustface and questions it must answer. So far, this blockchain technology has beenup to the task and has shown that it is everything it says it is. Bitcoin wouldn’thad adopted the technology if it wasn’t the real deal. To this date there hasnot been any issues with its design. It has helped bitcoin a tremendous amountwith its servers, protecting information, and making things roll as smooth aspossible.
These could all be potential positives and shortcomings of whetheryou as a company choose to adopt the blockchain technology or not. As mentionedearlier in the analysis the positives of the blockchain technology outweigh thefew negatives with it. If I was a consultant acting on behalf of a company Iwould recommend adopting the technology would be more beneficial than to notadopt it. The technology just gives you such an advantage over other firms whowould choose not to. Essentially a competitive advantage.
Inconclusion, the supply chain is a step by step process in the evolution of aproduct to its finished form. All firms in the supply chain have a part to doin order for the product to be finished in an effective and timely manner. Someissues the supply chain can potentially face such as lag of information andglobal regulations can potentially have a negative affect in the process ofgoods in the supply chain. The revolutionary technology blockchain looks tominimize all potential errors in the supply chain.
It was created with thingsin mind like improving transparency, scalability, and security. It is evidentthat if a company were to adopt blockchain technology that it would greatlybenefit in doing so. A company would have a competitive advantage in using blockchainas its main technology, as blockchain offers solutions to issues which currenttechnologies don’t. References Price, Edward.
(2016). Regulatory Divergence CouldHamper Blockchain: International FinancialLaw Review, 1. Retrieved from https://library.macewan.ca/library- search/detailed-view/ofs/118882941?query=blockchain+costs#fulltext_html