Blockchain the Supply Chain

Without a doubt we are in the middle of a major hype cycle around Blockchain and the potential transformational impact it will have on key industries from Banking, Legal, Compliance, Security and indeed the Supply Chain.

Is this hype justified? The initial signs point to yes but the key as with all new technologies is not how they work ( explain “decentralised digital ledger” to the uninitiated ) but how do we communicate the business benefits and potential ROI to a non technical senior level audience. Where are the real life applications and commercial solutions. It is encouraging the see all the trials and research consortiums being announced but if we are to move beyond the hype we need to see more implementations and case studies now. The challenge is not Blockchain but Communication.

Encouragingly some supply chains are already using the technology, and experts suggest Blockchain could become a universal “supply chain operating system” before long. Some of the tasks it can improve include:

  • Recording

    Recording the quantity and transfer of assets – like pallets, trailers, containers, etc. – as they move between supply chain nodes.

  • Tracking

    Tracking purchase orders, change orders, receipts, shipment notifications, or other trade-related documents

  • Assigning

    Assigning or verifying certifications or certain properties of physical products; for example determining if a food product is organic or fair trade.

  • Linking

    Linking physical goods to serial numbers, bar codes, digital tags like RFID, etc.

  • Sharing

    Sharing information about manufacturing process, assembly, delivery, and maintenance of products with suppliers and vendors.

Benefits in a Nutshell

Regardless of the application, Blockchain offers shippers the following advantages:

  • Enhanced Transparency

    Documenting a product’s journey across the supply chain reveals its true origin and touchpoints, which increases trust and helps eliminate the bias found in today’s opaque supply chains. Manufacturers can also reduce recalls by sharing logs with OEMs and regulators.

  • Greater Scalability

    Virtually any number of participants, accessing from any number of touchpoints, is possible.

  • Better Security

    A shared, indelible ledger with codified rules could potentially eliminate the audits required by internal systems and processes.

  • Increased Innovation

    Opportunities abound to create new, specialized uses for the technology as a result of the decentralized architecture.

The Institute is commencing an extensive program assessing the supply chain applications that will be best suited to Blockchain and also analysing the commercial solutions available now.