Have you ever wondered what affects supply chain management? The challenge of supply chain volatility and inefficient production planning mismatch the flow of supply and demand at the firm. This volatility leads manufacturers to rethink or re-strategize depending on the latest updates and seek the technologies to address such issues.
Manufacturers worldwide are emphasizing smart manufacturing technology to tackle these operations glitches. The manufacturing problem is solved, but what about financial productivity and legal compliance? How can a manufacturer be sure they are being offered with forgotten or missed revenue opportunities? Here, a smart manufacturing approach is required to be developed keeping in mind all business aspects.
Smart contract development offers the ease to automate transactions and agreements. Not only this, but it also ensures contractual compliance and captures missed revenue which is important to remain competitive in the market.
Paper-based Contract Problems And Limitations
The manual and paper-based contract system is tenuous and lacks intelligence. It doesn’t match the modern manufacturing approach, which results in several issues to contract management and tracking.
Such paper contracts lack a universal source of truth between the parties. When the contract between parties is settled, they will be provided with the same copy of the document as the source of truth. However, these contracts can also be altered over time if business relationships change or something unusual happens between the parties. The scenario is completely different with Blockchain technology. In this case, when contracts are altered, each party having a copy of the contract also gets updated in real-time.
Companies worldwide still rely on traditional paper-based contract management systems. They maintain and track these contracts manually in several ways, such as PDFs and folders which, at the same time, calls for errors and miscommunication.
Another limitation of paper contracts is internal version control. Multiple departments within an enterprise manage different parts of the contract in their own ways which leads to siloed information. There is a high possibility that any update in the contract may not be shared with the entire team.
Smart Contract Development- A Smarter Approach to Contract Management
Smart contracts are built on The Fourth Industrial Revolution, or Industry 4.0 technologies. It encourages automation and a level of intelligence that paper or PDF-based contracts fail to do. It digitizes the whole Manufacturing Execution System and helps overcome the challenges of paper-based tracking methods in the best way.
Traditional contracts lack the universal source of truth. However, the story is completely different from smart contracts as they are stored digitally on an industry blockchain and provide a single source of truth. There is no repeated sharing of contracts between parties.
Blockchain contracts are immutable, which help prevent issues arising from the parties operating on the same contractual obligation. This technology makes the contract unchangeable that helps build trust between the parties involved in the contract.
In the manufacturing industry, contracts also trigger the prices and fees when a particular level of production or predetermined thresholds are met. However, when contracts are tracked manually, there is a high chance that the threshold for additional fees or changes might be missed.
Smart manufacturing requires seamless connectivity between technologies and systems across the enterprise. The backend systems should automate tracking operations when trigger thresholds are met. Smart contracts can do that. When smart contracts are integrated with the enterprise system, it automates the communication between partners and customers which a manual contract tracking system is unable to do. It also provides workers with more time to execute their duties.
Several Considerations When Adopting Smart Contracts
Today, manufacturers are reaping several benefits from smart contract development. However, at the same time, there are several considerations that need to be considered. First, one has to consider the budget. Secondly, finding a team to meet smart contract development requirements. Several companies offer smart contract development for varied industries. Keeping these factors in mind will help you understand if and when smart contracts are the ideal fit for your enterprise.
Wrapping Things Up
To conclude, smart contracts eliminate the risk of human errors in manufacturing operations. At the same time, it automates contract management which fills the growing gap in manufacturing labor fulfillment. Manufacturers don’t need to struggle with filling the positions. They can direct their efforts on operational efficiency and productivity and add more value to the supply chain networks of customers, supplies, and partners.
Let Antier Build a Smart Contract Solution for You!
If you also want to simplify the complexity of manufacturing operations, go for smart contract development. In this journey, Antier can help you. Antier is a leading DeFi smart contract development company with deep expertise in various smart contract programming languages you can hire to automate operations, reduce operational costs and streamline the overall workflow of both the financial and manufacturing industry.