Blockchain for supply chain solutions help supply chain leaders use big data and deep data visibility and accessibility to handle business disruptions and build resiliency for the future.
Blockchain is a distributed database that is shared among nodes on a globally connected computer network, storing information in digital format. Blockchains such as Bitcoin are known for their role in the world of cryptocurrency where they maintain a secure and decentralised record of transactions.
The distributed blocks in a blockchain are connected, making it difficult to tamper with a single record of transaction. To evade detection, a hacker would need to alter all the blocks containing that record that is hosted on multiple computers connected to a decentralised network.
Further, records are secured through a variety of mechanisms that include advanced cryptography. Private keys are assigned to participants on a network and if a record is altered their signature becomes invalid, and the network is notified that something has been tampered with. Blockchains are also distributed, making them even more tamperproof.
What is appealing about blockchain is that because it guarantees the reliability and security of records, it generates trust. That is why blockchain technology is being increasingly used in the context of supply chain management.
According to Deloitte, blockchain-driven innovations in the supply chain have the potential to deliver tremendous business value by increasing supply chain transparency, reducing risk, and improving efficiency and overall supply chain management.
The digital record-keeping technology can significantly improve supply chains by enabling faster and more cost-efficient delivery of products, improving traceability, and enhancing coordination between partners. Deloitte recommends using blockchain to help participants record price, date, location, quality, certification, and other relevant information to manage the supply chain more effectively.
Blockchain is an attractive solution for a notoriously complex market segment which involves multiple internal and external information systems that cannot communicate with each other, and require time-consuming, labour-intensive manual reconciliations. This often results in data disparities when it comes to purchase orders, invoicing, or even knowing where goods are at any point in time.
In 2017, ten major global food manufacturers and distributors – Walmart, Dole, Nestle, Tyson, GSF, Unilever, McCormick, Kroger, Driscoll's and McLane – partnered with IBM to implement blockchain technology in their logistics processes.
IBM used the Hyperledger Fabric distribution registry to launch the IBM Food Trust ecosystem, which increases the transparency and traceability of food supply chains by creating end-to-end “stories” of each product – the network collects and integrates all information on the production, transport and storage of food. What this does is increase visibility across the entire supply chain with a shared and incontrovertible record of all transactions that everyone can read.
This increased the resiliency of the supply chain, giving participants the ability to quickly react to unanticipated events that could otherwise jeopardise the entire supply chain.
For SMBs that typically have a management team that has to juggle multiple areas of responsibility, blockchain technology in the supply chain holds even more compelling promise when it comes to supply chain process efficiency, visibility where it matters, efficient inventory management, governance and managing supplier relationships.
At Tarsus Distribution, our supply chain solutions necessitate us managing large volumes of data on behalf of our supply chain partners and also share trusted data within the supply chain. Distribution companies are looking at how disruptive technologies such as blockchain can address the three most critical points in creating a blockchain for our supply chain business: governance, business value and technology. In times of disruption, this matters more than ever.
References
https://www2.deloitte.com/us/en/pages/operations/articles/blockchain-supply-chain-innovation.html