Blockchain technology has been at the heart of economic topics since the inception of the Bitcoin Craze. Bitcoin, the digital currency that saw record-breaking growth last year, is built on blockchain technology, providing an endless ledger of transactions. Blockchain technology in supply chain and logistics is believed to be the end-all solution to renowned transparency and end-to-end visibility, not to mention accountability, says Robert J. Bowman of Supply Chain Brain. The interest in blockchain technology in supply chain and logistics is simply irresistible, and supply chain executives need to know a few things about it.
Blockchain Technology in Supply Chain & Logistics Is Still a New Topic
Part of the reason behind the fear and uncertainty around blockchain is the novelty of the technology; it is still a new technology, regardless of what experts may say. The technology is available for use in the supply chain and logistics sectors in limited supply, and the most influential aspects of applications were developed for supply chains with mandated asset tracking and accountability, such as the pharmaceutical industry. Yet, broad applications of blockchain technology are still in infancy.
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Supply Chain Leaders Should Consider Blockchain Technology’s Current Applications
Before looking into applications, it’s important to understand what Blockchain technology is and is not. Blockchain technology involves the creation of data “blocks,” detailing actions for a given transaction or actions, and such information is finalized and locked into a chain. The chain is only added to with each transaction, so the origin of transaction details, such as financial records, product details, and location, can be traced. Thus, all subsequent transactions can be verified and tracked, enhancing transparency and visibility into the transaction. In addition, blockchains may be public or private, granting or denying access to the chain details based on authorization, so private information can be protected, while allowing addresses to authorized parties, explains Jeff Berman via Logistics Management.
There are real ways to use blockchain technology today. The development of cryptocurrencies has a great opportunity for payment processing and financial management of the supply chain. Swissport has already developed a platform, which is currently in the pilot phase, for using blockchain to manage cargo handling.
Other applications of blockchain technology in the supply chain include Microsoft’s joint venture project, Ardents NovaTrack, explains Ana Alexandre of CoinTelegraph, used to track pharmaceuticals while in transport, but the potential application of the technology may quickly rise to be a leading soldier in the battle against the opioid epidemic. The recent developments regarding Walgreens’ presumed impact on the epidemic could have been identified earlier through blockchain technology, reducing the company’s exposure to the risk of legal proceedings and remuneration.
Another excellent example of blockchain in the supply chain of today includes limited access networking. Although these networks are not necessarily blockchain in the literal sense, they bear remarkable similarities to the technology. If the technology tracks all actions, it is a form of blockchain, but the key lies in eradicating the ability to edit past transactional details. This is where many of today’s applications fall short, allowing for edits, but blockchain in the truest forms is a complete record, making compliance virtually self-sustaining, reports Supply Chain 24/7. As a result, the ability to track and manage the supply chain through blockchain may be among the greatest sustainable practices to arise in the next decade, especially in an age where every dollar spent comes under the scrutiny of the public eye.
How Will Blockchain Technology Affect the Future of Supply Chain & Logistics Management?
The future of the supply chain is limitless with the power of blockchain technology, and paired with the potential of the Internet of Things (IoT), blockchain will bring a new level of visibility and insight into supply chain management. Automated identification and data capture (AIDC), including RFID tags, will make blockchain technology more efficient, empowering informed decisions and helping supply chain managers move more product, spend less on freight, and create positive customer experiences, says Hope Liu via Supply Chain Brain.
Take the Time to Understand Blockchain to Define the Value of the Technology Now
Blockchain technology will continue to be a defining characteristic of supply chain management in the future. Supply chain leaders that take the time to understand blockchain technology and its potential applications can position their organizations to reap the greatest benefit when the technology becomes readily available. Since the best-laid plans for success in supply chain management require education, supply chain leaders must work to reduce inefficiency and move into digital-driven supply chain management. This is the only way to prepare for a future filled with “blocks” of transparency.