Have you noticed lately that supply chains are morphing into all kinds of new chains? We now call the temperature-controlled supply chain the “cold chain.” The process of adding value to activities within the supply chain is part of the “value chain.” Now along comes the new kid on the block — blockchain!
What exactly is blockchain? It is basically a database that runs across a global network of independent computers. It serves as an open ledger, where every transaction is recorded and available for all companies and participants to see and verify. By providing a singular view, a blockchain eliminates the need to transfer information between organizations. Gone are such things as emails, spreadsheets, data feeds and the like. Bottom line, blockchain helps to reconcile any differences in data between suppliers and customers. Most importantly, the blockchain database cannot be changed without all partners in agreement.
Now that we understand blockchain, what are the implications upon the supply chain? Simply put — enormous! Experts believe there are many ways blockchain technology can applied both in the U.S. and globally. As the Harvard Business Review article “Global Supply Chains Are About to Get Better, Thanks to Blockchain” shares, there are numerous opportunities for blockchain within the supply chain. Walmart is working in Beijing to follow the movement of pork in China with a blockchain. Mining giant BHP Billiton is using the technology to track mineral analysis done by outside vendors.
Tracking and tracing of goods across multiple parties is by far the most logical use of blockchain. The current processes are cumbersome and lack reliability. Blockchain offers the ability to embed the origin and transfer points, destinations, and lot codes in the chain.
Every supply chain today relies on EDI as the foundation for communication of information. This batch process inherently involves latency. Imagine blockchains that are by nature updated in near to real time. Can blockchain replace EDI? While is it a stretch goal, it is certainly coming in the not-so-distant future.
So what can blockchain do for your supply chain? Don’t sit back and watch. Get busy and create your new chain today!