In Roadmap 2.0, blockchain is noted as being “no longer just for BitCoin and fintech. Walmart is testing it in the supply chain to add structure to its processes.” Indeed, the retailer has since launched a blockchain-based food safety alliance with IBM. The alliance collaborates with ten different food suppliers and retailers to provide the transparency and efficiency required for tracking and tracing edibles that might be compromised and require a recall.
But what is blockchain, anyway? MHI Solutions’ second quarter 2017 issue explains that blockchain is a distributed ledger technology wherein transactional data is stored in “blocks” that are spread across a network of multiple computers (no central repository exists). No single entity controls the entire network. Instead, participants are assigned digital encryption keys that enable them to add and read information within the chain, but prevent anyone from altering it.
Persons with “public” keys can see the transactional records housed within the blockchain; network members with “private” keys can choose to share or to hide information. To prevent erroneous data from being added to the chain, when a block of new data is added the other participants in the network must accept it as being valid and true. Both aspects address concerns about cybersecurity as well. If one block is compromised, all parties along the same ledger chain would know immediately.
Having such a verifiable and trusted chain of transactions will benefit supply chains in numerous ways, but primarily by enabling data to be shared and searched quickly and efficiently by anyone who needs to see it.
That’s why it’s an ideal fit for food and pharmaceutical traceability in the event of a potential recall. Items in question can be easily and immediately ruled problematic or not by having access to all transactional data via a single point of entry, as opposed to multiple data sources. It could also allow consumers, who are more interested than ever in determining if their consumables are ethically and sustainably sourced end-to-end, an easy way to check for themselves.
But blockchain is also a fit for other types of supply chains, such as those involved in the import or export of goods overseas, notes independent industry analyst Jess Groopman in the same issue of MHI Solutions:
“When a product is shipped from overseas, there’s a big lag time until the product is received, and then upon receipt there’s still a manual process required to confirm receipt then send the money to pay the supplier,” she says. “A blockchain secure distributed ledger offers huge implications for the transaction times, streamlining a financial transaction into an operational execution, saving time while eliminating steps and third parties, and mitigating risks against fraud, non-compliance or tampering.”
“In the enterprise space, we’re seeing blockchain activity in supply chain accelerate because of the efficiencies it introduces. Through a blockchain architecture, participants in the supply chain have permissioned access to shared information that, otherwise, is very time and resource-intensive to reconcile, and requires intermediaries to securely transact,” Groopman adds.
The entire article, “Building Better Supply Chains with Blockchain” can be found here.
Additionally, at MODEX 2018, MHI will be releasing its fifth Annual Industry Report during a keynote panel discussion on Wednesday, April 11, 2018. Starting at 8:45 a.m., the presentation features insights into the report and several key next-generation supply chain technologies—including blockchain. Ten different participants from academia, the supply chain industry, and technology experts will be a part of the discussion. For more information or to register, visit modexshow.com.