Barcelona, May 24, 2020.- Of course, yes. Day by day, blockchain technology is being implemented in the management of companies from different economic sectors. In the Supply Chain Digital magazine, the benefits of blockchain are explained very simply:
Blockchain is essentially, as the name suggests, a chain of blocks. However, instead of a physical chain, there’s digital information (the block) stored in a public database (the chain). When a block stores new data, it is added to the blockchain. In order for this to be done successfully, four things must happen:
A transaction must occur – After making an online purchase, a block will group together thousands of transactions so that an individual’s purchase will be packaged in the block along with other users’ transaction information as well.
That transaction must be verified – Following a purchase, a network of computers checks over each transaction to ensure it happened in the way a customer said it did. The network confirms the purchase, including the time, amount and participants of a transaction in a matter of seconds.
That transaction must be stored in a block – Following verification, the transaction gets the go ahead. The transaction’s details are all stored in a block and will join thousands of similar transactions like it.
That block must be given a hash – Once all of the block’s transactions have been verified, it must be given a unique, identifying code called a hash. Once hashed, the block can be added to the blockchain. There are several key ways in which blockchain is useful in the supply chain. These are:
Provenance tracking – Large organisations have complex supply chains. This means it is much harder to keep track of all records for multinational companies. This lack of transparency can affect organisations significantly. In a blockchain-based supply chain management, record keeping and provenance tracking is made easier as product information is accessed by embedding sensors and RFID tags.
Cost reduction – Real-time tracking of a product in the supply chain through the help of blockchain can reduce the overall cost of moving items in a supply chain. Following a survey of supply chain workers by the Digital Supply Chain Institute, over one third of people cited reduction of costs as the topmost benefit of application of blockchain in supply chain management.
Establishing trust – Developing trust in complex supply chains with large numbers of participants is key to smooth operations. For example, if a manufacturer shares its products with suppliers, the manufacturer should be able to depend on that supplier to follow factory safety standards.
In the food and beverage industry, it’s vital to have a solid record to trace each product to its source for safety purposes. For example, Walmart uses blockchain for visibility of the pork it sources from China and blockchain records exactly where each piece of meat comes from and where it is processed, stored and its sell-by date. The transparency of blockchain is also vital as it will let consumers know that they are supporting organisations who share similar values of environmental stewardship and sustainable manufacturing.
According to Harvard Business Review
Major change is coming to the logistics and shipping industries – a transformation that promises to be even more dramatic than the move to third-party logistics a generation ago. With increasing digitization, platform-based business models will connect new players, wash away inefficient old ones, and harness the cloud.
Consumer-facing transportation and logistics have already seen the rise of platforms such as Uber and Deliveroo, yet business-to-business logistics pose different challenges. Where successful firms once coordinated just two parties’ assets — those of shippers and receivers –logistics hubs now coordinate multiple stakeholders, involving containers, finance, fuel, transport, regulatory approval, and more. Multi-party coordination of this asset-intensive industry adds to overall complexity.
At least three factors are driving the industry move to platforms: New infrastructure and technology, richer and more visible logistics data, and relentless pressure to reduce costs. Customers demand the increased functionality that platforms provide along with the cost reductions that come from better use of assets. Allocating spare capacity to its best use creates value, while platform business models allow value capture from links in a chain, without any one party having to own the whole chain.
Over the past decade, sensor-generated data from physical assets such as delivery vehicles, containers, and warehouses have vastly increased visibility across the logistics value chain. In addition to the benefits derived from such rich operational data, the emergence of blockchain and other distributed-ledger technologies enables public record-keeping and automatic coordination where digital and physical events can trigger one another. Data created by sensors, ERP systems, inventory palettes, and shipping events can automatically add records to the blockchain, which can launch cascading events farther along the value chain. Meanwhile, the blockchain’s open architecture allows multiple parties to contribute, share and co-govern their data at a single source, with an array of benefits: Public records increase transparency, with the result that all actors are held to high standards. Further, a blockchain’s ability to manage permissions, asset ownership, and accountability helps assure service quality. Trust improves because any individual performance lapses, which could be hidden among the complex systems in the past, become visible to all parties at every stage.
Facilitating this transformation, banks around the world are financing industry interoperability by partnering with logistics firms to leverage the blockchain. Greater transparency using the blockchain enables better investment decisions across a wider range of transactions.