As anyone responsible for supply chain management can tell you, the demand for accountability and tracking at every step of the supply chain just continues to grow. For example, consumers want to know where their vegetables were sourced, how they were grown, handling methods, refrigeration temperatures in transit, how long since they have been harvested, etc. However, that’s only the beginning of the information required of supply chain management professionals.
With increasingly sophisticated tracking and handling of the entire supply chain, both sensitive financial and confidential data can be shared between the supplier and the customer. And that’s where blockchain comes in.
How It Works
First, what is a blockchain? At its core, a blockchain is simply a distributed record-keeping system. Each encrypted transaction record is added to the blockchain, securely linked to the record before it. Because everyone on the blockchain has access to an encrypted copy of the record, it is almost impossible to alter. This greatly enhances the security of records, and it also has massive security implications.
Securing the Supply Chain
David Higgins shares a perfect example of the need for enhanced digital security of the supply chain in his article Supply Chain Meets Blockchain: A Perfect Match. He writes, “Following allegations of nation-states targeting the supply chain at the chip level to embed backdoors into both B2B and consumer technologies, organizations are increasingly embracing blockchain to secure their supply chains and reduce the risk of fraud. The distributed nature of blockchain makes it very well suited to validate every step in the supply chain – including the authenticity of hardware and software.”
Blockchain’s secure nature offers a number of interesting use cases in the supply chain field. A number of industry leaders, including Carrefour, Target, and Panalpina, are exploring blockchain pilot programs to see how the technology can be leveraged for supplier certification, trade document digitization, and more.
Paperless Supply Chain
Another benefit of using blockchain for supply chain is the potential for a completely paperless process. Not only is this process more secure with better data provided at every step, it’s also good for the environment. Samsung recently demonstrated the potential for this type of transaction when they received the very first paperless shipping container ever delivered. This transaction was financed through the blockchain, and every step was tracked.
“The first shipments to use the platform gave us a good insight into the possibilities of large-scale implementation. As cargo recipient, we benefited from real time information and advance availability of digitized cargo documentation. We can re-design our processes more efficiently, enabling us to act based on real-time events and trusted data. Ultimately, this will strengthen our service proposition to customers,” said Robert van der Waal, Deputy President of Samsung SDS EU/CIS.
It is clear that blockchain represents an important future for the supply chain industry. In fact, the global blockchain supply chain market size is projected to reach nearly $10 million by 2025 according to a report published by Global Info Research.
Is Your Organization Ready for Blockchain?
To help your organization better understand blockchain use cases at an enterprise level, IEEE has recently released a 5-course program series called Enterprise Blockchain for Healthcare, IoT, Energy, and Supply Chain. Learn about the importance of blockchain in applications beyond just finance as well as how they may affect your organization.
Interested in a license for your organization? Let us know and we’ll connect you with an IEEE Account Representative who can give you the details.
Purchasing the program for yourself instead? View the courses on the IEEE Learning Network, a new learning management platform!
Higgins, David. (25 Jul 2019). Supply Chain Meets Blockchain: A Perfect Match. SecurityBoulevard.com.
Green Car Congress. (26 Jul 2019). First Blockchain Container Shipped to Rotterdam; DELIVER. GreenCarCongress.com.
VMR. (25 Jul 2019). Blockchain In Supply Chain Market Is Thriving Worldwide, Business Status and Industrial Outlook till 2024. RiseMedia.net.