The biggest bandwagon since the dotcom revolution, companies of all stripes are chanting “blockchain, blockchain, BLOCKCHAIN” in their marketing as if it were a spell they could cast to magically attract business. While most people don’t even understand this exciting new technology beyond the notion of its role in the rise of “crypto-currency”, there are practical uses for it across many critical business functions. Let’s explore how it can be leveraged for improved supply chain management.
First, a simple definition. Blockchain technology is basically a digital ledger for recording transactions made anywhere across a decentralized global network of computers. This distribution of the data across unrelated machines in thousands of locations makes it impossible for any single instance of data tampering/manipulation or unauthorized change to occur. This is what makes it is so useful for recording monetary exchanges outside the proven, regulated security of traditional central banking infrastructure. But there are lots of other ways such a secure ledger of transactional data can be useful.
Driving visibility and accountability across the uninterrupted chain of custody from the raw materials inbound, though delivery of finished products at the end of the supply chain is another highly relevant objective with enormous implications for modern supply chain management.
The blog at Newgenapps.com explains the possibilities in easy to grasp terms. They write, “In [the] case of supply chain management, a record needs to be maintained of all the goods that have been added or removed from an organization’s inventory. Each item of the supply chain can be added to the blockchain ledger. The USP [unique sales proposition] of blockchain in supply chain management is that it prevents any kind of change to the recorded transactions. Hence, there would be fewer chances of perjury.”
From the transportation logistics standpoint, this tech could unlock great value in validating freight chain of custody, the purity of negotiated carrier rate records, even ensuring the accuracy of claims, driver payroll, freight invoicing and other financial transactions.
There are companies already at the forefront of applying blockchain technology to supply chain certification, a critical facet of safe, efficient food production and logistics which the Food Safety Modernization Act (FSMA) has codified into law. One such company, Provenance.org, fields blockchain solutions that drive transparency in supply chain certification. They’re leveraging blockchain to effectively trace the origins and histories of products throughout every facet of the product lifecycle.
Provenance.org advocates for carving every step of the supply chain into the body of the blockchain, allowing secure audit of all transactions. Driving visibility and accountability across the uninterrupted chain of custody from the raw materials inbound, though delivery of finished products at the end of the supply chain is another highly relevant objective with enormous implications for modern supply chain management.
For logistics technologies companies like UltraShipTMS – fielding products for transportation management, private/dedicated fleet management, freight payment/audit, yard management and other logistics functions – the blockchain is a promising development. Existing cloud and API based technology is already being leveraged to reduce the friction and inefficiency inherent in managing supply chain logistics with paper and manual processes. The blockchain promises to mitigate the risks inherent in managing the vast, underlying pools of shared data, passed to and from disparate systems like ERP, TMS, YMS, WMS and financial settlement applications.
Take a page from the crack team of innovators and tech experts behind the UltraShipTMS solution and keep an eye on this exciting new paradigm for supply chain management.