One industry for which blockchain tech has been particularly beneficial is the management of global supply chains. With more connected devices, this will become even more prevalent. This article will introduce the basics of supply chain management, and then explain how blockchain technologies aid in its optimisation.
Supply Chain Management
The goal of all supply chain management is to streamline a company’s supply-side operations, from the planning to its after-sales services, to reduce costs and enhance overall customer satisfaction.
Supply chain management, or SCM, is the control of the complete production flow, beginning with raw materials and ending with the final product or service at the destination. SCM also handles material movement, information storage and movements, and finances associated with the goods and services.
While supply chain and logistics can be confused, logistics is only one part of the complete supply chain. Supply chain management traditionally involves the steps of planning, sourcing, production, delivery, and post-sale service for the central control of the supply chain.
That said, the SCM process begins with selecting suppliers that source raw materials that will eventually be used to meet the needs of customers. Next, a decision of, if the manufacturer will deliver themselves or outsource these tasks. And once delivered, the seller must decide if and what after-sales services will be provided, such as return and repair processing, which may or may not be needed to ensure customer satisfaction.
Modern SCM systems have software management helping to decide everything from goods creation, inventory management, warehousing, order fulfilment, product and service delivery, information tracking, and after-sales services.
Amazon, for example, uses numerous automated and robotic technologies to store goods in the warehouse as well as pick and pack orders for shipment. They are now beginning to use drones to deliver packages weighing less than five pounds in selected test regions.
Supply Chain Evolution
The digital supply network is beginning to combine new technologies, like artificial intelligence (AI), blockchain, and robotics, into the supply chain, adding additional information from several sources to deliver valuable data about goods and services along the supply chain.
The supply chain starts with a strictly physical and functional system but then links to a vast network of data, assets, and activities. By using AI algorithms, businesses are now extracting insights from massive datasets to manage their inventory proactively, automate warehouses, optimise critical sourcing connections, reduce delivery times, and develop customer experiences that will increase satisfaction.
Additionally, AI-controlled robots can help automate manual tasks such as picking and packing orders, delivering raw materials and manufactured goods, moving items during distribution, and scanning boxed items. Amazon claims that by using its robots, it can hold 40% more inventory, which allows it to fulfil its on-time Prime shipping commitments.
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