Using blockchain to drive transparency across the supply chain
FYI, this story is more than a year old
Article by OpenText director of strategic product marketing Mark Morley.
Blockchain is a relatively young technology that has been the focus of much discussion. Its disruptive, transformative capabilities are currently the centre of experiments in multiple industries, including energy, manufacturing and banking, and the supply chain that underpins them. So, what is blockchain and how can it drive greater opportunities for traceability and transparency?
Blockchain is a decentralised, distributed, and public digital ledger that is used to record transactions across many computers. The record cannot be altered retroactively, without the alteration of all subsequent blocks and the consensus of the network.
It provides greater security and transparency than has been available previously. This is because each new “block” of transactions is linked back to previous blocks in a way that makes tampering practically impossible. This level of security means that information cannot be falsified, ultimately leading to greater transparency and as a result, improved trust from partners and end customers.
A block can essentially hold any type of unstructured data, such as quantity of goods shipped, description of goods and price. As it’s publicly available it provides greater transparency to all parties. Consider its use for meat traceability where an organisation is able to track the meat from the farm to the point of delivery, and even beyond.
Blockchain is already being used by global US-based retailer, to track the sales of meat within China. It lets the company see where the meat comes from, its processing and storage and sell-by date. If the product were to undergo a recall, it’s also able to identify which batches are concerned and who bought them.
The challenge that organisations will face with blockchain is that in order for it to be effective, it requires that various parties ‘buy-in’ to its use and understand how to do so effectively. This places the onus on multiple organisations to ensure they have employees that are competent in using blockchain technology – which is another challenge in itself.
As the technology is so new, it’s not common for industry professionals to be familiar with it, let alone capable (and confident) in using it effectively. In order to overcome these challenges, businesses will need to invest in the proper training to ensure that employees are able to use it and the business as a whole gets the most out of it.
With blockchain, it’s likely we’ll see an increase in trust between organisations that work together through the supply chain, as the end-to-end supply chain process becomes more transparent than would have been possible without blockchain. It will also be used to address issues that are otherwise deemed too difficult.
Blockchain will cause significant changes to the supply chain, simply because of the security and transparency, it provides to involved parties. Its true value is best seen when it’s used in conjunction with AI and/or IoT to create more intelligent and connected operations.
For example, IoT devices, like GPS & temperature sensors can help monitor the location and temperature of perishable goods such as fresh fish. As these records are written into the blockchain, they cannot be tampered with, and the recipient knows the exact conditions that their goods have been stored and transported in. In addition, if goods perish during transit then the exact location can be identified via the GPS sensor information archived in the blockchain.
This information is invaluable when making informed business decisions. The data can be further analysed by Artificial Intelligence (AI) to provide insights and to perform actions based on these insights. For example, if a product is selling fast and the stock is running low, the AI can automatically help to order more.
This process can be further tracked through blockchain and ensure the goods selected meet a company’s standards in regard to origin, composition and expected delivery date, for example.
Moving forward, the main challenge that organisations will face in using these technologies will be possessing the right skills to utilise them effectively. However, this can be done with the proper training and investment.
The building blocks of the intelligent and connected supply chain – blockchain, AI and IoT – should be available through a unified digital platform, like an Enterprise Information Management portal. This will ultimately help businesses garner the most from these new technologies, to radically transform today and tomorrow’s supply chains and activate genuinely autonomous, traceable and transparent supply chains.