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Supply Chain

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What Is Supply Chain?

A supply chain encompasses a network of individuals and businesses involved in producing and distributing a specific product or serving a particular customer. This network includes raw material suppliers, processing facilities, assembly units, storage and shipping services, retail outlets, and all other entities essential for delivering goods and services to customers.

Importance of Modern Global Supply Chains

Modern supply chains have a global reach, enabling businesses to access a wider range of parts, products, and materials at reduced costs compared to localized supply chains. This enables businesses to enhance profitability and explore new market opportunities. Given that supply chains often source products from multiple countries, they can be complex. Consequently, there is a substantial industry focused on supply chain management, aimed at optimizing supply chains while mitigating potential risks.

Blockchain and Supply Chains

Despite their benefits, global supply chains face challenges that can be mitigated using blockchain technology. One promising application of blockchain in supply chain management is the enhancement of supply chain transparency. By leveraging shared ledgers provided by blockchain, businesses within a supply chain can create permanent records related to product sourcing and ownership, thereby establishing a more transparent and efficient supply chain. This record-keeping also reduces the need for internal audits, enabling companies to allocate resources to more impactful tasks.

The use of blockchain technology for supply chain management can also help companies reduce administrative costs through the implementation of smart contracts. Smart contracts enable businesses to track products through supply chains and automatically establish ownership rights. Additionally, they can facilitate automated payments upon delivery of goods, reducing the need for manual payment processing.

Another crucial capability of blockchain in supply chain management is its integration with physical sensors to monitor shipping and storage conditions for sensitive products. For instance, trucks transporting perishable goods can be equipped with sensors to monitor temperature conditions, ensuring proper storage during transportation. Through such tracking capabilities, blockchain solutions enable businesses to authenticate the quality and handling of received goods.

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