Blockchain, conceptualized more than 35 years ago as cipher block chaining, is getting renewed attention as the infrastructure for bitcoin. (Bitcoin as a digital currency was the first public application of blockchain).
The emerging discussion has less to do with money or currency and more to do with blockchain’s applicability in industry – particularly supply chain.
Transforming The Supply Chain
Blockchain technology has the potential to completely transform the supply chain because it creates a secure and unchangeable record (ledger) of transactions that can be viewed and verified by every stakeholder at any time.
Because of the way blockchain operates, it holds records of data and events that make those records tamper-resistant. You can see it, add to it, but you can’t change what happened, and you can’t delete it. The information is a permanent record.
This speaks directly to what makes logistics efficient: transparency and traceability. And that’s why blockchain is such an attractive option for supply chain: as a digital, distributed, immutable, secure ledger technology, blockchain can store and exchange contract details, coordinate logistics, and streamline disjointed (or disconnected) processes. And it can do it in real time.
Blockchain technology can create greater efficiency than we’ve ever known, while reducing delays, costs and errors (human and electronic). The result: if there’s a problem in the supply chain, you can pinpoint it in minutes rather than hours or days.
Blockchain relies on:
- Transparency: everyone can see what’s happening at all times.
- Decentralization: blockchains operate on a network so no single company controls it.
- Security: data on a blockchain is encrypted, foiling forgeries
While other technology is available to automate supply chain, those systems can be more cumbersome (and time consuming), and less secure.
Digital transformation – and the adoption of smart manufacturing and Connected Enterprises – is allowing companies to realize significant competitive advantages. When connecting manufacturing operations and supply chains together, you’re as strong as your weakest link.
Blockchain can help address the challenges of supply chain – making it more secure and more accurate, and logistics easier to manage and maintain.