Blockchain has been able to reduce a lot of the risk that comes with this complexity and boost efficiency, transparency, and trust within complex supply chain relationships. Here are the top five ways to cash out your bitcoin if you do not know how to cash it. Value chains are growing to encompass more than tangible items; blockchain technology is disrupting the idea of a company’s supply chain boundaries for them to be truly global.
Blockchain can also help track the overall distribution of manufacturing processes across different regions and periods, allowing companies to improve inventory control and reduce operational risk in the long run. With all these benefits, it’s easy to see why this new technology is integrated into nearly every industry imaginable.
However, blockchain technology is still in its infancy, and many limitations will need to be overcome to make it a mainstream and viable option for supply chain management. While the technology offers many benefits and uses, it can only handle the scale, efficiency, and complexity required by today’s supply chains. Some of the most apparent issues include:
Privacy concerns over data sharing:
Information sharing between blockchain participants is becoming more complex, with an increasing number of internal blockchains being deployed across an increasing number of parties. In conjunction with the global nature of blockchain applications, this creates new challenges around data privacy.
Governance:
Business processes are complex and involve several stakeholders; ensuring all parties agree on the rules will be critical in helping blockchain technology succeed. In addition, the technology has yet to be tested enough to understand how well it can scale up while meeting interoperability and privacy concerns. Once these issues have been sorted out, blockchain will offer more efficiency and transparency across supply chains, especially when dealing with regulated industries like financial services.
Scalability:
The technology has a lot of potentials, but it still needs to be seen how scalable blockchain technology can be regarding the volume of data required for supply chains. If the technology can’t handle the volume required for supply chain management, then one of several possible solutions would need to be implemented.
Some of the solutions that have been proposed include data deduplication, data compression, encryption, and quantum computing. Of course, these solutions don’t necessarily mean they’re going to succeed either, but they do illustrate that a lot of research is being put into this new approach to supply chain management.
Liquidity:
Enterprise-grade blockchain technology needs to be more liquid than it currently is to ensure transactions take place quickly. The technology is still in its infancy, and scalability and liquidity issues will need to be worked out before it can be adopted. It’s also important to note that many companies will find blockchain technology cheaper than their current alternative.
Interoperability:
While blockchain technology is helping companies worldwide work together, it can’t handle being able to do so seamlessly. In addition, blockchain technology must be interoperable instead of clunky to take off in enterprise-level applications. In conclusion, blockchain technology still has a long way to go before it can be considered a viable solution for supply chain management, and it’s essential companies have the facts about what blockchain is and isn’t capable of before jumping into this new form of industry disruption.
The limitations of Blockchain technology are that the blockchain is vulnerable to quantum computers, the block size is limited, and scalability issues with the blockchain. In addition, blockchain requires a tremendous amount of energy and computational resources. The proof-of-work concept in Bitcoin is a good example wherein multiple computers must solve cryptographic puzzles to be rewarded in Bitcoins. These puzzles are challenging to solve but are very easy for other computers to verify.
Regulations:
The technology is also finding itself having to deal with various regulatory changes, especially when it comes to cryptocurrency and ICOs. However, as the market becomes more mainstream, regulations will undoubtedly significantly impact the amount of innovation that can take place.
Finally, there’s much more investment being made available to companies with a blockchain technology strategy than there is for those that don’t. As blockchain technology becomes more mainstream, less risk will be involved by people in adopting the new supply chain management method, and more companies will jump on board with it.
Limited availability of technical talent:
There isn’t a lot of technical talent available for companies to embrace blockchain technology; training existing personnel will take time and money, and in the meantime, companies may need to rely more on short-term contractors.
Blockchain technology is still relatively new but has already started changing the way supply chain operations are handled worldwide. While many limitations still need to be overcome, blockchain has already proven itself as a much more secure and efficient method of operations than businesses are currently using it.
