Integrating Blockchain and IoT in Supply Chain Management: A Framework for Transparency and Traceability

Integrating Blockchain and IoT in Supply Chain Management: A Framework for Transparency and Traceability

Madumidha S., SivaRanjani P., Venmuhilan B.
Copyright: © 2021 |Pages: 27
DOI: 10.4018/978-1-7998-3444-1.ch010
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Abstract

Internet of things(IoT) is the conception of interfacing the devices to the internet to make life more efficient. It comprises the large amount of data in its network where it fails to assure complete security in the network. Blockchain is a distributed ledger where it mainly focuses on the data security. Every block in the blockchain network is connected to its next block, which prevents threats like large data loss. In the area of agri-food supply chain, where IoT plays a very important role, there occurs data integrity issues or data tampering. This can lead to improper supply chain management, timely shortage of goods, food spoilage, etc. So the traceability of agri-food supply chain is necessary to ensure food safety and to increase the trust between all stakeholders and consumers. Many illegal activities can be prevented, and cold chain monitoring can be achieved by bringing in transparency and traceability.
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Supply Chain Management (Scm)

A supply chain is an entire network of entities, directly or indirectly interlinked and independent in serving the same consumer or customer. It comprises vendors that supply raw material, the producer who convert the material into products, warehouses that store the products, distribution center that deliver to the retailers, and retailers who bring the product to the ultimate user. Figure 1 explains the management of the flow of goods, services, and information involving the storage and movement of raw materials, building products as well as full-fledged finished goods from one point to another are known as supply chain management. Supply chain management includes integrated planning as well as the execution of different processes within the supply chain (Khan, M. A., & Salah, K.; (2018)). These processes include:

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    Material flow

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    Information flow

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    Financial capital flow

Importance of Supply Chain Management

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    SCM activities can improve customer service. Effective supply chain management can ensure customer satisfaction by making certain the necessary products are available at the correct location at the right time. By delivering products to consumers on time and providing fast services and support SCM increases customer satisfaction (Mao, D. et al. (2019)).

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    SCM decreases overall production costs for the companies. The reduced supply chain costs can greatly increase a business's profits and cash flow.

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    SCM can help ensure human survival by improving healthcare, protecting humans from climate extremes and sustaining human life.

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    The supply chain is also vital to the delivery of electricity to homes and businesses, providing the energy needed for light, heat, air conditioning, and refrigeration.

Figure 1.

Traditional Supply Chain Management

978-1-7998-3444-1.ch010.f01
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    The main drawbacks of Traditional Supply chain are:

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    Product safety cannot be assured at any stage.

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    The detailed information about the origin of the product will not be available at the customer end.

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    Limited transparency and Lack of traceability (hard to track down).

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    Controllability-Lifespan of control.

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    Information is stored in Centralized databases.

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