Information Technology Assignment: Impact of Distributed Ledger Technology on Supply Chain Management
Task: The research report on information technology assignment is to analyze the impacts of emerging technologies on supply chain management. You could choose only one emerging technology to focus your research. The research report is to analyze the impacts of emerging technologies on supply chain management. You could choose only one emerging technology to focus your research.
In the research report, you need to focus on these two questions. You also need to use reputable academic sources based on Harvard referencing style to support your analysis. Questions:
1) What are the impacts of the selected emerging technology on supply chain management?
2) What recommendations would you propose to companies if they adopt that technology in their business to achieve better supply chain performance?
The distributed ledger technology (DLT) undertaken in the present context of information technology assignmentis superordinate to blockchain technology that is linked with the enhancement of transparency, disintermediation, and trust. The varied scholars and companies are trying their best to assess and harness the benefits associated with the supply chain process(Di Vaio and Varriale,2020). Further, it has been found that there exist different types of complexities in monitoring the transactions of the supply chain and this is possible through the improved level of transparency in the supply chain process. The retailers are making their best effort to coordinate with the solution providers of the blockchain technology to carry out testing of the DLT thereby fulfilling the preferences of the consumers and handling the sustainability information of the supply chain(Roeck et al. 2020). This study will highlight the effect of the DLT on supply chain management as well as the recommendations that are to be provided to the companies to adopt the DLT in their business operation.
Impact of distributed ledger technology on supply chain management With the help of the blockchain that operates the distributed ledger, it would be easier for the companies to tackle the execution errors such as the problems faced in inventory data, duplicate payments as well as the missing shipment that is used in the real-time detection process. Although there is the discovery of a problem in the business, it becomes difficult to find out the source or to fix the sequence of the activities that are to be made in the ledger entries and the documents(Roeck et al. 2020). The ERP system captures different types of flows and thus it becomes tough to find out the journal entries that are associated with the inventory transaction. Further, it can be said that with the help of the DLT, there would be an improved level of chances to carry out the new transactions in a distributed and decentralized manner that is possible through the validation of the peers (Roeck et al. 2020). All these transactions are generally secured with the help of cryptography that is verifiable and tamper-proof. Transparency in the supply chain process is possible with the help of traceability and visibility. Moreover, the transaction process in the supply chain within the DLT network can also be managed in an improved way. On the other hand, it has been found that traceability is generally enabled with the help of the DLT solution to tackle the transaction and thus highlight the actors and the information. Further, with the help of DLT, there is the development of trust between the different parties. This trust is operationalized with the help of integrity, ability, and benevolence (PeltoniemiandIhalainen, 2019). Although, it has been found that benevolence as an attitude is much difficult to be applied in terms of the DLT solutions as it includes the integrity and the ability of the transaction partners to be associated with each other. There should also be an improved level of chances made to verify the abilities of the transaction partners after carrying out the transaction.
With the help of the smart contracts, it has been found that there is the trigger of the pre-defined actions making it possible to verify the adherence of the agreements by the transaction partners supporting the integrity. Further, it has been found that with the help of DLT, there are improved chances to eliminate the intermediaries. This will make it easier to shift the sentiment towards the DLT as a vital substitute for the intermediaries (Chawla et al. 2018). There are also chances to lower the need for intermediation in the supply chain because transparency and trust are developed through the DLT. However, it can be said that without the DLT, it would be difficult for the intermediaries to play a powerful role in tackling the transaction partners and thus maintaining the supply chain process through improved ways (Gao et al. 2018). The transaction can be processed with the help of the network and thus it can be used as the single lone version of the truth to check the transaction process. This ledger can be shared across different parties i.e. it can be private, public as well as semi-private.
The distributed ledger technology also uses the blockchain for tackling the orders, loans, inventories, and the landing of the bills as unique identifiers that can be considered as digital tokens. This unique identifier as well as the digital signatures uses the signs in the block adding to the blockchain technology. Moreover, it can be said that the different steps in the transaction aretranscripted on the blockchain as a transfer of the token from one participant to another (Scholten et al. 2019). An example can be cited of the shared blockchain where the retailer tries to generate the order and thus send it to the supplier. In this stage, there exists no such exchange of the goods and the services and thus no entries can be made in the financial ledger. However, it can be said that the retailer tries to jot down the digital token of the order where the role of the supplier is to log in the order and confirm the receipt of the order that would not be generated in the financial ledger (BoisonandAntwi-Boampong, 2019). It is the responsibility of the supplier to jot down the request of the working capital loan to tackle the manufacture of the good by verification from the bank on the shared blockchain process.
The DLT also comprises the varied chronological block strings that integrate the varied types of flow involved in the transaction and the capturing of the details in the financial ledger. The block can be considered to be encrypted for distributing it thoroughly to the individuals who want to tackle their blockchain copy. This will also assist in the provision of a trustworthy, complete as well as a tamper-proof trail in maintaining the supply chain process through improved means (Rejeb et al. 2019). On the other hand, it has been found that the DLT technology also assists in managing the traceability execution as well as the coordination problem in an improved way. The participants who are involved in the process must also try to maintain the individual copies linked with the blockchain so that it becomes easier to review the transaction status accordingly. The participants must also try their best to overwrite the data that has been gathered so that it becomes easier to entail and rewrite on all the blocks of the shared copies associated with the blockchain (Goyat et al. 2019). There are also provisions of the enhancement of traceability of the companies to trace out and identify the requirements of the customers thereby preventing the stealing or the harmful products. The collaboration with the supply chain partners to manage the blockchain will also assist in the creation of history and thus sourcing of the products to the end consumers. It is also important to take a careful approach in carrying out the pilot testing in other locations and thus move towards the broader implementation of the project (Manufahi et al. 2020). The different types of applications also require the use of minimum sharing of information such as the purchase invoices, orders as well as payments that are to be included in the blockchain process. However, in some cases, it has been found that the companies often fail to find out the faulty products thereby enabling the firms utilizing the blockchain to tackle the related products(Harrison et al. 2019). In the case of perishable products, it can be said that the blockchainalso allows the company to judge the quality of the products automatically and lower the unsafe fluctuations.
As there exist different types of concerns linked with the authenticity of the product, it is the responsibility of the retailers utilizing the blockchain to allay them and thus counterfeit the goods with the help of the verification history. This is essential to prevent the companies to get aloof from the corrupt practices linked with the counterfeiter of the goods in the supply chain and the blockchain (Di Vaio and Varriale,2020). On the other hand, it can be said that there are also improved chances of enhancing the speed and the efficiency in tackling the disruptions associated with the DLT technology. This is possible through the centralization of the data involved with the production and the allocation of inventory decisions in the common aspects (Suryanto et al. 2018). There should be careful attempts made in tackling the level of integration with the help of centralized decisions irrespective of the competitors or the partners that are not realistic.Further, one of the most effective solutions of the participating organizations to tackle the flow of inventory on the blockchain enhances the speed and the efficiency of the supply chain. This is possible by keeping a track of the inventory and the time machine at different stages of the customer orders.
The DLT also helps the retailers in tackling the supply chain by solving the issue of the double-spending problem which is associated with the erroneous allocation of the same set of inventories of the other orders. Further, with the help of the shared logistics, it becomes easier to track the shipment and automate the payment process without requiring any such significant changes for maintaining the information technology or the internal processes (Harrison et al. 2019). The varied parts of the appeal using the DLT enhances the efficiency of the supply chain and the speeding up of the application such as the improvement of the traceability motivating the companies to share their limited data such as the inventory or the shipment date. This can be considered to be effective for larger organizations that use the ERP system in improved ways. Moreover, the information, inventory, and financial flows that are shared by the firms with the help of blockchain can also be tackled through the improved level of supply chain financing, carrying out the business as well as maintaining the contracts. This can be considered to be effective for those organizations that use the trade credit and the working capital to manage the asymmetrical information associated with the borrower’s business(Harrison et al. 2019). The designing of the bank processes such as the management of risks makes it easier to handle the transaction cost thereby slowing down the capital access and reduction of the capital availability among the small firms. All these aspects will help the companies to utilize the smart application relying on the DLT and thereby removing the conflicts between the banks and the borrowing firms.
Recommendations proposed to companies to adopt distributed ledger technologyin their business
The globalization of the supply chain can be considered to be advantageous when the goods are sourced at the lowest cost from any other part of the world. This can be considered to be disadvantageous for the business consumers, the individual consumers, or the regulators who use different types of information linked to the products that are sourced from different areas of the world. As there exist complexities across different industries, it is important to minimize and monitor the ill-effects as the retailers constitute a major aspect in tracking and tracing the DLT associated with the supply chain projects(Di Vaio and Varriale,2020). On the other hand, it has been found that in the adoption of the DLT technology, it is the responsibility of the firms to digitize the manual and the paper-based processes for maintaining the records of the supply chain process(Harrison et al. 2019). This can be considered to be beneficial for the regulatory bodies that are involved in the export and import of goods across the world. Further, it has been found that the supply chain process must also be typically involved with the participants that utilize the complex cases to implement the blockchain technology. As the application of the DLT in the management of the supply chain finances includes the significant and exciting effect in terms of the economic effect, there should be careful adoption made through the enterprises. The varied types of application in the logistics and the management of the supply chain can be considered to be more matured and widespread in the adoption of the technology(Scholten et al. 2019). The financial transactions that take place with the help of the DLT can be considered to be prevalent only when there are chances of accommodation of the new methods and the payment process. The quality of data can also be regarded as an important area of concern in the application and the management of the supply chain(Di Vaio and Varriale,2020). This will assist in the physical built-up and the close monitoring of the supply chain process with the help of the antitrust perspective.
The companies must also adopt the DLT technology for replacing slow and manual processes. This supply chain is also effective in handling the complex and the large data sets as most of the processes especially in the lower tier supply can assist in the effective and smooth operation of the industry. On the other hand, it is also recommended for the companies to utilize the DLT technology as it assists in strengthening the traceability that is considered to be much higher in the case of the consumer and the regulatory demand(Di Vaio and Varriale,2020). This also assists in adding up the value through the mitigation of the higher quality problem costs such as the damage of reputation, the recall, and the revenue loss incurring in the grey and the black market. It becomes easier for the retailers to simplify the complex base of the supply chain that is linked with the creation of improved opportunities (Scholten et al. 2019). In some stages, it is found that there include higher benefits of lowering the IT transaction costs and this is possible only with the help of DLT. Although this cost can be considered to be prohibitive in maintaining the supply chain, the higher authority needs to check that this cost can be maintained adequately.
The companies must also use the consensus protocol as well as the mechanism for maintaining the sole version of the transaction history. It is also necessary to check the transaction of the network that are generally accepted by the majority of the participants for enhancement of the speed of blocks. On the other hand, it can be said that the DLT technology can be considered to be secured only when it is introduced in the supply chain process through improved ways(Harrison et al. 2019).
It is essential to take care of the danger that is linked with the inaccurate inventory data associated with the mistakes in tagging, scanning, and data entry. It is also the responsibility of the companies to address the different types of risks that it witnesses in the effective operation of the DLT such as carrying out stringent physical audits when products generally enter the supply chain to match up the records of the blockchain. Further, in developing the distributed applications, it is also essential for the company to develop the DLT for tracking the products throughout the supply chain process(Harrison et al. 2019). This will assist in maintaining the data integrity and communicating with the blockchain to prevent further deception and errors.
The companies must also use blockchain technology for providing an efficient and secured platform that is essential to record the transactions of intellectual property rights. Moreover, the DLT must also be used for the distributed level of governance for verifying the limited transaction process. It is also necessary to check that there is an improved level of transparency along the varied transaction streams for the transfer of data from one organization to another(Scholten et al. 2019). On the other hand, it has been found that most of the organizations use the decentralized ledger and thus they fail to manage the central infrastructural point. In such a situation, there should be robust use of the network processes improving the reliability, quality as well as availability of the information and the services. The organizations that generally carry out one particular transaction must try to behave logically with the use of the DLT.
This will allow the company the development of a highly transferable network so that it becomes easier for the stakeholders to control the entire process effectively. It can be said that this process can be considered to be effective for organizations to control the illegal transaction process(Harrison et al. 2019). It is also essential for the companies to use the DLT for the verification of the consensus that is managed in the chain process as such data cannot be modified easily in a manual process. Further, the DLT also allows the companies to effectively manage asymmetric cryptography as well as the algorithms required in the digital signature for ensuring the individual identity and the data security process. All these aspects will cater to the needs of the unique businesses that are willing to use the DLT in their supply chain.
Thus, it can be said that with the help of the DLT, there will be the facilitation of the desired changes based on the controlled private ledger environment. It has been found that the permissioned blockchains assist in tackling energy efficiency, transaction cost, security, confirmation time, and privacy issues. However, all these approaches cannot be considered to be decentralized and thus it is important to rely on the trusted parties who are responsible for the validation of the identity of the participating actors by assigning the desired level of credentials linked with the blockchain. Therefore, the DLT will make it easier to carry out a detailed analysis of the specific blockchain implementation for the management of the supply chain.
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