How Blockchain Will Save Your Supply Chain
All around the globe, complex networks are emerging to produce our increasingly connected products. The challenge for big business is knowing which technologies to implement and when to make the change. Once seemingly a radical idea, many businesses are now turning towards Blockchain technology to solve Supply Chain Management issues. For example, Walmart has recently implemented a blockchain-based network for their supply chain.
In essence, a Blockchain is a distributed and digital ledger that can be used to record interactions between people. A Blockchain can be used to record contracts, signatures, and even payments. Since every interaction between two people is recorded across distributed copies of the ledger, it is highly transparent. Transparency enables business to pinpoint in great details where problems may be developing along the chain. There are many steps that must take place to move a product from production to store shelves. A supply chain represents “the steps it takes to get the product or service to the customer.”
Depending on the kind of product, a supply chain could have hundreds of stages before the final product touches the shelves. Supply chain management is a crucial process because an efficient and fully optimized supply chain can result in lower costs and much faster production cycles. The less time it takes to produce and distribute a specific product, the faster that new products can hit shelves ready for consumers.
Our Current Supply Chain system is Broken
Over hundreds of years ago, supply chains were fairly simple. A majority of commerce happened on a local level, but with time this has changed due to the dramatic shifts in supply chain management technology. Today, most manufacturing processes have been globalized and a large portion of this is done in China.
Today’s opaque supply chains are struggling to be profitable, manageable, and flexible. This is because globalization is changing the way companies use their supply chains day-to-day. Supply Chain operators need the tools to personalize their processes for multiple consumer segments. Unfortunately, many businesses are attempting to use old processes and technologies in a globalized economy. More often than not, many of these existing systems are not capable of keeping up with demand. As companies look to grow and expand into new markets, foresight into new emerging technologies is paramount. They will have to reconsider their management processes in order to support future innovation.
Blockchain is the answer
Though it was initially intended to be used for financial transactions, there are many opportunities for the development of Blockchain applications. While the most well-known application for Blockchain Technology is in Digital Currency, the true value lies in the new technology’s versatility for other sectors. The only authority that rules a Blockchain is consensus. As long as more than 51% of the copies are not malicious, the Blockchain functions in an extremely efficient, secure, and scalable way.
There are two things that a Supply Chain cannot survive without: integrity and security. Blockchain technology was created with these processes built in. Any records on a Blockchain cannot be undone or erased - they are immutable.
If you’re not first, you’re last
Walmart has recently applied to patent its “Smart Package” system. This “Smart Package” uses a Blockchain-based tool to track package contents, environmental conditions, location, and other details. This device is intended to be used in new technologies like autonomous vehicles.
In the patent application, Walmart acknowledged the need to design a tool providing “greater security in the shipping packaging that the items are shipped in.” This is not the first instance of Walmart using Blockchain technology to empower their business. In November, 2016, Walmart began using a Blockchain to detect and remove recalled foods from its products list. This application was possible through Walmart’s partnership with IBM.
More businesses will join Walmart in the months to come. Many are starting to see the opportunities that blockchain-enabled supply chains hold. Only time will tell when and how these new technologies will transform the supply chain and logistics industry.
Aeppel, Timothy. â€œWhy Caterpillar Can't Keep up with a Boom in Demand.â€ Reuters, Thomson Reuters, 24 May 2018, www.reuters.com/article/us-caterpillar-supplychain-analysis/why-caterpillar-cant-keep-up-with-a-boom-in-demand-idUSKCN1IO0FW.
Partz, Helen. â€œWalmart To Implement Blockchain-Based Delivery System.â€ Cointelegraph, Cointelegraph, 1 June 2018, cointelegraph.com/news/walmart-to-implement-blockchain-based-delivery-system.
Russo, Camila. â€œWalmart Is Getting Suppliers to Put Food on the Blockchain.â€ Bloomberg.com, Bloomberg, 23 Apr. 2018, www.bloomberg.com/news/articles/2018-04-23/walmart-is-getting-suppliers-to-put-food-on-blockchain-to-track.
Staff, Investopedia. â€œSupply Chain.â€ Investopedia, Investopedia, 17 Nov. 2017, www.investopedia.com/terms/s/supplychain.asp.
Young, Joseph. â€œWalmart Experiments With Blockchain to Safely Store Food.â€ Cointelegraph, Cointelegraph, 2 Mar. 2018, cointelegraph.com/news/walmart-experiments-with-blockchain-to-safely-store-food.
Peterson, Becky. â€œIBM Wants to Use the Technology That Underlies Bitcoin to Help Prevent Major Foodborne Outbreaks like Salmonella.â€ Business Insider, Business Insider, 22 Aug. 2017, www.businessinsider.com/ibm-and-walmart-are-using-blockchain-in-the-food-supply-chain-2017-8.