Supply chains were always complex. However, modern supply chains have become complex to a level pretty unthinkable a decade or so back. There are a few important reasons for this extraordinary complexity in today’s supply chain management. The tremendous growth of new and innovative personality-based targeted marketing techniques, rapid digitization, the growth of IoT devices and fierce competition all have contributed massively to supply chain sophistication and complexity.
All these factors have created an ecosystem where consumers have become more demanding, and are always on the lookout for instant gratification. This, apart from the fact that modern organizations now cater to an international audience, unfettered by restrictions of geography and time, has made a linearly structured supply chain rather outdated and unfeasible.
Growing consumer consciousness, and demand for more stakeholder engagement has compelled organizations to opt for ethically sourced raw materials and enhanced supply chain transparency. This is where AI and blockchain technology can help organizations adopt their supply chain management to the changing needs and circumstances. The rapid growth of AI along with the emergence of blockchain technology, and the rise of big data, predictive analytics and deep learning possess the ability to significantly take care of the many supply chain issues mentioned above, in ways that both adhere to the highest level of transparency, efficiency and existential conditions of free markets.
In the following paragraphs, we shall look at how AI and Blockchain technology is playing a critical role in reforming supply chain management, and how a good blockchain development company can reduce the level of complexity associated with modern supply chain management.
Supply Chain Transparency
When we heard the word blockchains, the first thing that comes to our mind is cryptocurrencies like Bitcoin and NFT markets. involvement in the Cryptocurrency and NFT markets. Blockchains are, essentially, digital decentralized ledgers that records all cryptocurrency transactions. Each transaction represents a “block” of data that is encrypted using cryptography, and the data stored is comprehensively immune to outside interference or manipulation.
Supply chain transactions are built up of three specific domains: retail, supply, and funding. From the look of it, these domains are pretty straightforward though this is not the case, as it is incredibly difficult to capture or analyze the flow of information across these domains in real time. Additionally, transactions are generally substantiated and approved using auditing mechanism which is generally prone to errors.
Blockchains can considerably take care of these loopholes in supply chain management by implementing distinct identifiers, whose job is to distinctly identify each domain. An important thing to note here is that that these identifiers are also applicable to the people involved in the process which serves as digital signatures, and do an important job of representing the entire transaction in an efficient and transparent way. As mentioned above, the information regarding the transactions is stored in a block, and these blocks are publicly accessible. This ensures that the people involved along the supply chain can themselves carry out the scrutiny and verification of the transactions.
Better scalability across geographical boundaries
AI and Blockchain applications offer scalability to allow easy access to large databases spread across multiple locations across the globe. This assumes added significance when high-value commodities are involved such as precious metals or expensive paintings. The time saved on data validation can be spent on ensuring that the goods are delivered safely and in good condition. The usage of Blockchain and AI also reduce transportation cost, and help in faster delivery of goods, which help in building consumer trust.
Greater automation means significant reduction in human errors
To put it in simple terms, AI and Blockchain lead to higher automation, which in turn cuts down on paperwork and bureaucracy. For example, it has been proven that more than 10% of freight invoices comprise of inaccurate data leading to disputes, and other process inefficiencies in the supply chains, which can be avoided with automation.
The two technologies automate storage information, which leads to accurate tracking of a product’s journey from source to destination, by keeping all the stakeholders ranging from the manufacturer, logistics service provider to consumer in loop. With supply chain automation is ensured, the room for error is significantly reduced. It also ensures transparency as responsibility is fixed, and everybody is accountable for their actions in the supply chain.
AI and Blockchain are two technologies that help manage data in a variety of ways, which means they can be incredibly useful in supply chain management. A good AI development company can help modern organizations capture relevant data which can help organizations save a lot of money by monitoring resources, and aid in maximum utilization of resources. In addition, a good AI development company can add to the transparency of Blockchain by providing valuable insights from the generated data.