31st August, 2024 
Supply chain management (SCM) has witnessed some major transformation in the last decade. Today, when the global economy is so interconnected, new technologies like verifiable credentials (VC) are making SCM better.
Over 80% of businesses now prefer customer experience enhancement in their digital supply chain strategies, yet only 6% have succeeded in achieving supply chain visibility.
So, let’s explore how new technologies are reshaping the supply chain and how their implementation can increase transparency, efficiency, and, most importantly, trust.
What Is Supply Chain Management?
Supply chain management is a complete centralized management of the flow of all goods and services involved in all processes of creating final products from raw materials. Mainly, it is about making the whole process as smooth and efficient as possible, from getting the materials to making the products to getting them into your hands.
With effective supply chain management, companies can keep an eye on their supply chain. With supply chain transparency and management, they work faster, smoother, gain trust among all stakeholders, and save money in the long run.
SCM has five main stages:
- Planning: The first phase is about figuring out how much stuff people will want and making sure there is sufficient
- Sourcing: It is important to find the right suppliers and work with them to get the materials needed
- Manufacturing: The third stage included turning those raw materials into the finished products
- Delivery: SCM also takes care of getting the products where they need to go
- Returns: Lastly, dealing with products that get sent back or exchanged
Also Read: 21 Decentralized Identity Examples and Use Cases Transforming Industrie
Why Supply Chain Management Is Important for Modern Businesses
Having a well-managed supply chain is a big deal for businesses. Companies with top-notch SCM are 15% less likely to have supply chain costs and make money three times faster.
When SCM is done right, it cuts down on costs, waste, and time – which means more profits. It also helps businesses stay on top of risks, like supply chain disruptions and makes sure they are following all the rules and regulations.
In addition, SCM is important for keeping customers happy and coming back for more. When products are delivered on time and in good condition, trust and long-term relationships are built. And in a world where being eco-friendly is a necessity, SCM helps companies reduce their carbon footprint and be kinder to the environment.
Check: 6 Benefits of Supply Chain Transparency
Is Supply Chain Management Easy?
Managing a supply chain is no walk in the park. 57% of companies are not able to manage their supply chain properly. Some of the biggest roadblocks include:
- Visibility and Transparency: As stated in the introduction, only 6% of businesses have a clear view of their entire supply chain, which makes it tough to spot problems and make improvements.
- Cybersecurity: As supply chains go digital, the risk of cyberattacks and data breaches goes up. In 2023, about 50% of companies worldwide said cybersecurity was their biggest supply chain challenge.
- Find the Right People: The supply chain industry is facing a serious shortage of talent, with the US Bureau of Labor Statistics predicting an 18% increase in demand for logistics pros by 2032.
- Being Sustainable and Responsible: People are paying more attention to environmental and social issues, which means companies are under pressure to make sure their supply chains are ethical and eco-friendly.
How Verifiable Credentials Can Make Supply Chain Management Better
Verifiable credentials (VCs), which use blockchain tech, can be a powerful tool to make SCM better. They are like digital ID cards that can’t be tampered with. Plus, these decentralized credentials are fully controlled by holders, so they decide whom to share with, for how much time, and a specific part of the document.
In a nutshell, these secure, tamper-proof credentials let people and companies share specific info without giving away too much. We explained about verifiable credentials in detail here: What are Verifiable Credentials and Why You Must Know About Them Today
Here’s how verifiable credentials can SCM better:
Better Traceability
Using verifiable credentials at every step of the supply chain can create a secure, auditable record of a product’s journey from start to finish. This makes it easier for businesses to fight counterfeiting, follow regulations, and handle recalls if needed.
More Trust and Transparency
VCs let supply chain partners share only the relevant info, like certifications or licenses, without spilling any secrets. This transparency builds trust among everyone involved, including the end customers.
Faster, Smoother Processes
Since verifiable credentials can be checked instantly, it cuts down on the time and money spent on manual verification. This means supply chain operations, from bringing on new suppliers to getting through customs, can happen faster and more efficiently.
Better Risk Management
With VCs, businesses can more easily assess and manage supply chain risks. For example, a company can quickly check the credentials of a new supplier to make sure they meet quality and sustainability standards.
More Resilience
When things get tough, like during the COVID-19 pandemic, verifiable credentials can help businesses adapt quickly. Companies can more easily find backup suppliers or change their operations as needed.
Check: 14 Real-World Verifiable Credentials Use Cases & Applications
How to Implement Verifiable Credentials in Supply Chain Management
To successfully use verifiable credentials in SCM, companies should follow these steps:
- Identify Main Supplier Qualities: Decide what important characteristics need to be checked, such as following ethical rules, having good safety records, and having quality certifications.
- Select a Verifiable Credentials Platform: Go for a reliable and secure platform, like EveryCRED, that supports creating, issuing, and verifying digital credentials.
- Collaborate with Suppliers: Collaborate with suppliers to gather the necessary information and documents to issue verifiable credentials.
- Integration in Existing Systems: Make sure the verifiable credentials platform works smoothly with the company’s current SCM systems and processes.
- Train Employees: Teach employees involved in SCM how to use and benefit from verifiable credentials.
The implementation of VCs in SCM helps businesses achieve better transparency and reduces costs, compliance, and all the benefits we mentioned in the above section.
Read: How Decentralized Identity is Changing the World
Final Words
Thus, effective supply chain management is very important and needed for businesses today. Companies can have many advantages, such as low cost and smooth operations with proper SCM.
Verifiable credentials, in particular, offer a powerful way to increase transparency, trust, and compliance in supply chain management. Businesses can confidently check their suppliers’ qualities, make onboarding faster, and reduce the risks.
To learn more about how verifiable credentials can help your supply chain management, contact our experts at EveryCRED.
