The implications of a technology capable of self-maintaining security, maximizing data reporting and accuracy, streamlined payment processing and shipment scheduling, immediate access to real-time data, and end-to-end transparency evoke mirages from the past, asserts Talking Logistics With Adrian Gonzalez. Blockchain is the presumed cure-all solution for everything in supply chains, and its impact will be felt around the globe, in every industry, and within all activities. Powered by an incorruptible ledger, blockchain and TMS solutions will be the defining characteristic of successful supply chains. Let’s take a closer look at whether blockchain truly is the supply chains magic elixir.
Finding Blockchain Solutions Might Seem Difficult, But It’s Not
Blockchain solutions are simple to define; they rely on a completed series of steps, generating data, which are locked into individual blocks. The information can be shared freely throughout the chain, and the decentralized nature of blockchain technology, putting the same information at the ends of each user, eliminates the possibility of corruption.
As a new technology, finding existing applications for using blockchain and TMS solutions as one can be difficult. While major companies work to integrate long-tail supply chains, blockchain-based platforms are still out of reach. However, the likelihood of companies using blockchain today is increasing. Those accepting digital currencies, like Bitcoin, are already involved with blockchain, and TMS solutions that generate an ongoing ledger between parties, even 3PLs, may already have developed blockchain-based technologies that are within months, if not weeks, of launch dates.
An Introduction to Blockchain and Its Potential Benefits and Drawbacks in Supply Chain Management
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Unless blockchain is able to make the transition to help small and mid-sized businesses (SMBs), responsible for 20% of all supply chain transactions, compared to the minority 20% of major supply chains responsible for 80% of transactions, the technology will only serve to restore the mountains of an uneven playing field. It seems dark, but there is a light at the end of the tunnel.
Blockchain and TMS Will Lead to Incorruptible, Efficient Transportation Management
Blockchain-based TMS has the potential to eliminate inconsistencies and errors in managing transportation and freight. The biggest companies, such as UPS, are betting on blockchain, but there will be a maturity phase. The application of blockchain technology will contribute to greater interest among groups that fall between SMBs and big corporations. What’s that mean?
Think about what today’s SMBs do to level the playing field with larger companies; they outsource. In transportation management, outsourcing has another name, partnering with a third-party logistics provider (3PL), like Cerasis. Another reason to stay hopeful derives from a relatively new organization in the blockchain sphere, the Blockchain in Trucking Alliance (BiTA).
BiTA is actively engaged in identifying ways to standardize blockchain technology, explains Sarah Holder of Trucks.com. The organization is comprised of members from across the spectrum of business sizes, and in fact, one of the nation’s top carriers, UPS, has joined BiTA, reports Deep Patel of TechCrunch. In addition, a future built on blockchain hinges on three things, as noted by Jonathan Salama of TechCrunch, including:
- Unrelenting trust in blockchain’s truthfulness and accuracy.
- Engagement with SMBs, including small trucking companies with less than six trucks, which make up 90% of all U.S. trucking companies.
- Data standardization must sweep across the entire trucking industry regardless of size.
These three facts imply that the future of blockchain will require large companies to abandon competitive mindsets in the development of the technology. In other words, the biggest companies will need to develop blockchain-based solutions that will work for the small businessman too.
Possibilities in the Future Through Combined Blockchain and TMS Solutions
The possibilities through blockchain and TMS are extensive. Since the technology depends on data standardization, companies using EDI and API systems will be forced to create standards. The role of the BiTA will grow in importance, and SMBs and more companies will join the consortium.
Blockchain and TMS will provide line-item detail into transactions and enhance the permanence of trucking data. As noted by Wayne Eckerson via TechTarget, an established data governance structure—the standards that BiTA is currently developing, is a stepping stone to reaping the greatest benefits from Big Data Analytics. Ironically, blockchain and TMS will provide the data governance structure, as well as point of access, for putting the power of big data to work at last. Even though existing TMS platforms, such as Cerasis Rater, offer insights through analytics, the savings represent a fraction of the possibilities if every supply chain entity, trucking company, shipper, and broker were to have access to industry-standard data.
Move Into Next-Century Transportation Management Through Blockchain-Based Systems Now
Pairing the efficiency of cost-savings through a TMS with the extenuating capacity of blockchain will have an impact on the future of logistics, regardless of mode, the channel of origin, destination, and IT capacity. Wait, that’s a bit of a tricky concept. IT capacity varies today, but blockchain and TMS will bring virtually unlimited IT capacity to transportation management and supply chain processing. It will reduce costs, eliminate the unnecessary steps, bridge the divide between generation to improve the talent gap, tap into the true potential of analytics, help warehouse and distribution center managers plan for changes in demand, move manufacturing around the globe and back, and overcome the prospects of global trade wars.
The future of supply chain management and logistics is built with bright, insightful, and productivity-inducing blocks. Blockchain and TMS is the match made in heaven that will secure the future of the global economy. For those who are still not convinced, says Peter Spellman of Inbound Logistics, 2018 is going to be the year in which neutral networks and parties come to the forefront to solve blockchain’s challenges and propel blockchain toward an industry-wide, global solution for all business and applications.