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Learning Supply chain management

Traditional Supply Chain Pain Points

3 min read
supply chain pain points

A supply chain is a network of upstream, midstream and downstream businesses involved in the entire process of providing products or services to end consumers. Suppliers, manufacturers, distributors, retailers and ultimately consumers are the main players in the supply chain. Simply put, a supply chain is the sequence of processes involved in the production and distribution of a commodity.

Raw materials are shipped to manufacturers and then to the commodity circulation market. Commodities move through dozens of countries and there are hundreds of processes. Once there is a problem in one process the final products are affected. The headache is that there is no way to investigate each problem on a one by one basis. Currently, there is no way to investigate product incidents on a case by case base.

Traditional supply chain pain points

Supply chain pain points can be analyzed through the following perspectives:

  • Real logistics: poor logistics efficiency, current logistics service levels, whether cargo damage is widespread or isolated, etc.
  • Information flow: Is the transparency of information accurate, is there too much reliance on information asymmetry, whether the level of information does not meet industry standards etc..
  • Capital flow: Whether there is a long waiting period in the collection and payment of funds and whether the degree of marketability (standardization) of products is high enough.
  • E-Trading : Whether the trading process is too complicated, whether the transaction process is poor, whether the offline transaction can be digitized, etc.
  • Delivery angle: Whether a delivery standard exists, whether the delivery efficiency is poor, whether the delivery quality is substandard, how to resolve delivery disputes, etc.
  • Interaction: How to meet the diversified needs of all parties, how to improve the level of upstream and downstream synergies, how to manage inventory, etc.

The maturity of supply chain management in the industry is an important indicator for traditional supply chain pain points. The industries with the highest level of supply chain management are often those that are highly competitive, such as the automotive industry, the electronics industry and the FMCG industry. Other industries, such as construction, agricultural products and commodities, are often lagging behind and there are plenty of opportunities to improve pain points.

Ensuring that you pick the right solution to supply chain pain points is a crucial step. It’s important to rethink whether the supply chain pain point solution matches the resources you have (industry resources, IT technology, and capital resources).

How does blockchain solve the pain points in the supply chain?

Blockchain technology uses blockchain data structures to validate and store data, it uses distributed node consensus algorithms to generate and update data, it also uses cryptography to ensure data transfer and access security, and utilizes intelligent script code. It’s a new distributed infrastructure and computing paradigm for contracting to program and manipulate data.

In the blockchain system, the transaction data generated by each participating entity is packaged into a data block and the data blocks are arranged in chronological order to form a chain of data blocks. The main body has the same data chain and cannot be unilaterally tampered with. Any modification of the information can only be carried out with the consent of the agreed proportion of the subject and only new information can be added. The old information cannot be deleted or modified. Information sharing and consistent decision-making ensure that the identity of each subject and the transaction information between entities are open and transparent and can’t be falsified.


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