SCMG501 Week 5 Discussion

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American Public University *

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501

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Information Systems

Date

Jan 9, 2024

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docx

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Uploaded by BarristerTapirPerson186

Good evening fellow classmates and professor, Blockchain technology stores and accesses data in a form of a digital ledger of transactions that is distributed across computer networks. This type of technology records datasets of transactions in a fixed order forming “blocks” that are linked together in a chain using cryptography. This system of capturing information makes it difficult to hack or change the information intentionally in the blocks without being noticed by all it is distributed to in the network. This makes blockchain technology applicable in supply chain management for several reasons. Blockchain technology can be used in supply chain management to promote transparency, accountability, security, visibility, and most importantly the trust aspect across business networks. All these factors are attributed to the decentralize nature of the blockchain. Whenever companies use centralized database in their supply chains they are susceptible to fraud and falsifying information that does not support transparency and the inability to verify information. Proof of Work (PoW) is what is used in validating transactions as a consensus mechanism for blockchains. For example, if a company is using a 3PL to outsource a certain supply chain operation, the 3PL company can modify parts of their database ledger to cover up any flaws or delays. This is because the 3PL is a third-party entity that has a centralized ledger where they do not need to provide certain information to the client since they are considered a middleman in this process. The transparency aspect of using blockchain technology would facilitate the transaction history being shared with all participants involved in the blockchain. They can also see any data that may have been tampered with because they would be able to tell from the status changing on the blockchain, which also highlights the use for accountability purposes. This function of

immutability cannot be had with using conventional databases that also do not provide transparency. Companies adopting blockchain technology can have established security measures using cryptography that grants permissions to only those who require access. Additionally, the “block” and “chain” parts of the technology expands the use of security by being able to protect past data (Verhoeven, Sinn, Herden, 2018). Companies that use conventional databases do not have the ability to trace back data trails for auditing purposes. Using blockchains allow for easier traceability of changes on networks since they can create irreversible audit trails (Budhi, 2022). This is due to the blockchain being a chronological record that cannot be easily changed. Supply chain professionals can use this to their advantage by being able to trace the entire lifecycle of products from origin through its way to the customer that also gives visibility for companies. In combining all theses uses of blockchains for companies and supply chain operations, they build and establish trust which is the biggest reason for its use. Supply chain management involves a lot of different entities and specific professionals that may never meet, and trust is vital to the overall business that is being conducted between parties. Blockchains can reduce costs and complexity by leaving out the middleman and third-party applications, which reduces the time to send paperwork back and forth between businesses and cuts overhead cost by eliminating bottlenecks (ProQuest,2018). This maximizes supply chain efforts that create efficiencies and builds greater confidence for consumers. References

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