According to a survey, with a compound annual growth rate (CAGR) of 25.1%, the worldwide Blockchain AI market is expected to increase from $0.39 billion in 2022 to $0.48 billion in 2023. This figure can further grow to $1.18 billion by the end of 2027 at a CAGR of 25.2%.
Now the question is how it can disrupt the supply chain business as a study from Businesswire states that the global supply chain management market size can reach $37.41 billion by 2027, growing at a CAGR of 11.2% from 2020 to 2027.
Needless to say, both AI & Blockchain carry the ability to deliver an enhanced experience for suppliers as well as end-customers. But when it comes to supply chain management (SCM) there are huge challenges that need to be addressed.
So will AI and Blockchain technology play a major role in helping the SCM market reach the $37.41 billion mark by 2027?
Will these technologies improve supply chain efficiency?
Will AI & Blockchain help you earn a huge ROI?
Well, let’s find the answer to all these questions.
Before diving straight into the topic let’s find out what supply chain management is all about. Well, in simple words, supply chain management, or what we generally called SCM is the handling of a good or service’s full manufacturing flow, ranging from the raw materials to the delivery of the finished product to the customers. A business establishes a network of suppliers (or “links” in the chain”) to convey the product from raw material suppliers to businesses that deal with customers directly.
In other words, SCM is the integrated planning and execution of processes needed to control the flow of goods, information, and capital investments in activities that broadly include demand planning, product sourcing, production, inventory management, and storage, transportation – or logistics – and exchanging overstock or defective goods
SCM is a massive industry with great future potential. The supply chain business has faced certain difficulties throughout the years, though, as a result of the pressure to deliver high-quality services, stay current with technology, and retain customer happiness. Let’s discuss some of the key challenges that are affecting it the most.
Unavoidable risks associated with supply chain management can result in delays, customer unhappiness, and expense hikes. Whether we talk about socioeconomic factors, shifts in the global stock market, and political schemes, they frequently contribute to these hazards.
Manufacturing financial, legal, environmental, and cyber threats are a few of the supply chain concerns that need to be addressed on a priority basis. Needless to say, managing these risks is essential but the situation worsens when one fails to recognize and manage these risks. On top of that, there are many intangible effects in the supply chain that may result from ineffective risk mitigation.
2Customer Expectation Management
The industry needs to be prepared for the worst circumstances because consumer behavior is unpredictable. Every business aspires to have a customer-focused supply chain. It must therefore keep up with the daily expanding expectations of consumers.
But the reality is, it is getting harder and harder to manage consumer happiness while making big changes to the supply chain system and dealing with shifting consumer expectations & habits. Customers may become dissatisfied as a result of issues like delivery delays, products that are damaged while in transit, and other misfortunes.
Now as more customers choose sustainability, adjustments are being made in the sourcing of materials and the search is on for more environmentally friendly delivery choices. The SCM industry may incur significant costs as a result of these changes.
The supply chain must be digitized in order to support the expansion of industry at a rapid pace. It is difficult to implement these technologies in a way that is both effective and efficient. Technology connects the various supply chain nodes, which aids in forecasting and provides visibility to help with any potential supply chain hiccups.
The SCM sector won’t be able to evaluate crucial data points and useful information to determine how effective and adaptable a company’s planning and production methods are if these connections aren’t controlled effectively.
Creating autonomous supply chains is something that many businesses wish to do, but doing so will require extensive time and money-saving measures.
These days customers demand quick deliveries and no delays; thanks to delivery alternatives including same-day delivery, one-day delivery, and express delivery. However, the supply chain’s inbuilt characteristics are temporal delays. Delays are becoming increasingly difficult to foresee, especially with greater distances, more complicated modes of transportation, and products purchased from outside.
Delays can also be brought on by ineffective manufacturing and production procedures. Human error or other issues like ineffective material procurement, a lack of established procedures, or a failure to adjust to shifting demand patterns can be blamed for these delays. Whatever, the reason is, this has become a major issue.
When a ship arrives at a port but the station is already full, it cannot load or unload its cargo. This is known as port congestion. Congestion at ports is caused by a variety of circumstances, including inclement weather, accidents, damage to port equipment, erratic trade demand, and subpar port infrastructure.
Queuing, extended transit times, and delivery delays can all be caused by port congestion. For the logistics and supply chain sector, these implications translate into higher costs, lost trade, decreased productivity, impeded port access, and other outcomes that may be irreparable
The merging of blockchain and artificial intelligence (AI), two of the most revolutionary technologies of the twenty-first century, has the potential to revolutionize supply chain management in ways that were previously thought to be unthinkable.
Artificial intelligence (AI) can be used to analyze vast volumes of data, spot trends & patterns, and forecast upcoming occurrences. Companies can thereby increase operational effectiveness, cut waste, and make better judgments. AI, for instance, can be used to schedule and route trucks more efficiently, saving time and money on transportation.
Contrarily, blockchain brings a higher level of security and transparency to supply chain management. It is a decentralized, impenetrable ledger that securely and openly records every transaction. This lowers the risk of fraud and increases the overall effectiveness of the supply chain by enabling businesses to track the movement of goods and services in real time.
When combined, these technologies can improve the supply chain’s end-to-end visibility, optimize routes, and help with inventory management. Organizations may enhance decision-making and supply chain operations by utilizing AI and blockchain, which will promote customer happiness and corporate performance.
To help you understand better let’s go through the top 7 benefits of integrating AI & blockchain technology in supply chain management.
1Improved Geographic Scalability
Apps based on AI and Blockchain provide smart scalability, allowing enormous databases to be accessible from many places throughout the world. This is especially useful when handling expensive goods like pharmaceuticals and diamonds to prevent fraud or fakes. Less time spent on data validation enables more time to be spent on securely and safely delivering the items.
Through improved scalability, the technologies also improve the inventory management system, lower courier costs, and hasten the development of customer trust.
2Enhanced Automation With Fewer Human Errors
When it comes to reducing paperwork and bureaucracy there is no match to AI and blockchain technology. Up to 10% of freight invoices contain erroneous information, which leads to disputes and other supply chain process inefficiencies. This could be prevented simply by integrating AI & Blockchain.
The two technologies ensure an automated process that stores all the data in a digital format and tracks a commodity’s pick-up-and-delivery timeline, allowing for a more direct relationship between each stakeholder, such as the wholesaler, logistics service provider, and consumer, as opposed to managing a long paper trail. When supply chain automation is guaranteed, there is less opportunity for error and everyone in the supply chain is responsible for their actions.
3Increased Traceability & Transparency In Supply Networks
Organizations that leverage AI and Blockchain in supply chain management can gather and analyze data regarding how goods are made or sourced from, what raw materials they comprise, how they are managed, and so on.
Each and every piece of information about a commodity can be stored in a Blockchain-based system, thus becoming easily accessible to the concerned stakeholders. More importantly, this gives logistics partners the power to track and trace the goods better than ever.
In addition to this, they can prove legitimacy, especially in high-value goods like gold jewelry and medicinal equipment. The information can also trickle down to the end-user to know more about the products.
4Data Interoperability For Extracting Additional Value From The Supply
The lack of information on the ownership and lifecycle of the shipment is one of the major problems in SCM. Although delays are typical, they have an impact on the business’s profitability and customer satisfaction when they happen frequently.
Data can be interoperable and readily shared across all stakeholders, including manufacturers, wholesalers, retailers, and logistics service providers; thanks to blockchain and AI technology. Moreover, transparency in data sharing also lessens delays and internal disputes. Because products can be traced in real-time, it also prevents commodities from being stranded in the supply chain and reduces the likelihood of misplacements.
5Improved Supply Chain Connectivity
Even a typical logistics procedure involves time-consuming physical tasks and copious paperwork. In addition to this, because of the industry’s fragmentation and competition, businesses are unable to fully realize the value of logistics. This is brought on by a lack of transportation transparency, data silos in logistics, a wide range of technical solutions, and non-standardized procedures.
Data visibility can be sparked across many parties via AI and blockchain. There is improved connectedness across supply chains when there is mutual trust and smooth information exchange. It is quicker and more error-free to pick up and deliver goods.
6Solid Connectivity & Collaboration
In SCM, the word “chain” immediately conjures up images of connectedness, alliance, and collaboration. Any procedure that is completed successfully is the product of good collaboration between multiple parties.
To add logistical value, there is a requirement for this cooperation at any cost. Moreover, an organization can easily commit to a closely related undertaking when it integrates AI and Blockchain technologies into its SCM. The usage of these technologies can promote internal and external communication amongst many stakeholders, increasing supply chain efficiency and transparency.
7Reduction In Counterfeit Trading
The manufacturing of a product by a business or private entity that replicates one that already exists on the market with the intention of misleading customers into thinking it is the “real thing” is known as counterfeit commerce.
For instance, I might decide to create a smartphone with the same slick design and branding and then advertise it to customers as the newest model from a certain brand. Even though it’s clearly against the law and a clear violation of trademark regulations, this nevertheless occurs, especially in highly competitive areas.
Most cases are not actually this blatantly obvious. AI & Blockchain technology can be used to follow the supply chain, allowing both businesses and customers to confirm the legitimacy of the product under development. Furthermore, those companies creating illegal goods won’t be able to modify their blockchains once blocks have been created, making it impossible for them to hide their methods.
When it comes to adopting blockchain technology, it is challenging because of problems like interoperability amongst blockchains. The benefits of using AI and blockchain are substantial, but developing them will require new tactics and possibly rearranging staff.
In short, if you have made up your mind to go with AI & Blockchain for supply chain management you are required to hire the best blockchain development company to streamline and profit from the usage of blockchain throughout your whole supply chain. This is where Blocktunix can help you with. Blocktunix has a team of certified blockchain developers that can provide you with highly scalable and robust development solutions.
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