Blockchain in Global Supply Chain Management
Global supply chain management is the method or channel through which every multinational company in the world ensures the safe movement and circulation of their goods in the global market with limited failures incurred. With its demanding task, it ensures that the flow of services and both raw and already processed goods are done effectively around the globe. This field has been in existence ever since the development of big shipment vessels that would oversee the Europeans’ move to every other part of the world, looking for treasures and transporting them to their home countries to process them before transporting them back to these countries as finished goods.
The sector has experienced multiple implementations, and with the ever-advancing world, it is likely to receive even more inventions that have to be put into practice if the sector wants to flourish and not lag behind with the old technical methods of running the business. Some of the new concepts that supply chain management needs to embrace include a blockchain and tracking systems.
A blockchain is an encrypted form of the data storage unit. It is more of an open ledger that is able to take note of verifiable transactions between two people in an efficient and permanent manner. This makes it hard for duplicated goods to take over the market owned by these other major private owners (Moosavi, 2021). Blockchains tend to carry first-hand information about a good. By the mode of design, blockchains cannot allow any form of data modification. The introduction of blockchain in global supply chain management has had a major positive impact on the field. When IoT is used together with blockchain, the movement of goods from one place to another will be properly monitored hence more results for the companies and the consumers, respectively.
Enterprise Value
There are numerous ways blockchain technology can be used to the advantage of companies. Enterprise value can be added by decreasing errors associated with regular data management in the supply chain. To manage the supply chain more efficiently, parties can keep track of price, date, location, quality, certification, and other pertinent information using a blockchain supply chain. The availability of this data within the blockchain can improve visibility and compliance over outsourced contract manufacturing, increase traceability of the material supply chain, reduce losses from the gray market and counterfeit products, and possibly strengthen an organization’s position as a pioneer in ethical manufacturing.
In addition, blockchain technology enhances data security. For multinational companies that are engaged in an overseas exchange of goods, having a unified system that aligns with the laws of all the countries can be a challenging legal task. Moreover, creating and supervising such a system can be resource-demanding, as there are many specialists that need to supervise it. The business has to develop a culture of cybersecurity. Most organizations assign duties to staff to protect the online business platforms through well-structured ideas and the processes. The collaboration between business continuity and cybersecurity can fail in circumstances where the culture is missing (Dutta et al., 2020). For success to be ensured, there needs to be effective communication coupled with a clear and quick response that is accurate in ensuring a robust recovery assessment. With blockchain, this task is simplified with enhanced efficiency. The company’s data is protected from data breaches and is secured from cyberattacks. Therefore, by contributing to the data protection and increasing efficiency of blockchain, the enterprise value is provided.
Customer Value
Blockchain concentrates on the specification of goods to facilitate the establishment of identity with the consumers. It captures; the design of the good, where it has been sourced from, where it has been manufactured and its date, how many times it has been sold or at what value it should be sold at retail, and the purpose of the item being purchased (Chang & Chen, 2020). All this information brings specification and customer awareness of the goods they are buying and facilitates brand establishment.
With the latest developments in the internet of things (IoT), the internet has made it possible for customers and producers around the world to track their goods wherever they are. This has helped improve the performance in distribution. Most multinational companies export their goods overseas (Bowersox et al., 2020). The exportation is due to the larger consumer base in the outside countries than the local consumers. To have this external market active and as a supply chain manager, one has to keep the sequential production distribution and supply of goods efficient.
Over the years, customers have lost several goods that went uncounted due to misplacement or being delivered to the wrong destination or wrong person. With this experience, some customers refused to use the global supply chain services and preferred to make the purchase locally. It is a loss for producers, as they lost customers and the level and quantity of shipment drastically went down. With this, the profit margins also went down due to low revenue being collected from sales and dispatched goods. However, with the IoT, the consumer’s experience has improved, as they are able to know the location and condition of their deliveries.
References
Bowersox, D., Closs, D., Bixby, M., & Bowersox, J. (2020). Supply chain logistics management (5th ed.). New York, NY: McGraw-Hill.
Chang, S. E., & Chen, Y. (2020). When blockchain meets supply chain: A systematic literature review on current development and potential applications. IEEE Access, 8, 62478-62494.
Dutta, P., Choi, T. M., Somani, S., & Butala, R. (2020). Blockchain technology in supply chain operations: Applications, challenges and research opportunities. Transportation Research Part E: Logistics And Transportation Review, 142, 102067.
Moosavi, J., Naeni, L. M., Fathollahi-Fard, A. M., & Fiore, U. (2021). Blockchain in supply chain management: A review, bibliometric, and network analysis. Environmental Science and Pollution Research, 1-15.