Prelude
Block chain technology has been at the
heart of economic topics since the inception of the Bitcoin Craze. Bitcoin, the
digital currency that saw record-breaking growth last year, is built on block chain
technology, providing an endless ledger of transactions. Block chain technology
in supply chain and logistics is believed to be the end-all solution to
renowned transparency and end-to-end visibility, not to mention accountability.
The interest in block chain technology in supply chain and logistics is simply
irresistible, and supply chain executives need to know a few things about it.
Block chain Technology in Supply Chain & Logistics Is Still
a New Topic
Part of the reason behind the fear and
uncertainty around block chain is the novelty of the technology; it is still a
new technology, regardless of what experts may say. The technology is available
for use in the supply chain and logistics sectors in limited supply, and the
most influential aspects of applications were developed for supply chains with
mandated asset tracking and accountability, such as the pharmaceutical
industry. Yet, broad applications of block chain technology are still in
infancy.
Supply Chain Leaders Should Consider Block chain Technology’s
Current Applications
Before looking into applications, it’s
important to understand what Block chain
technology is and is not. Block chain technology involves the
creation of data “blocks,” detailing actions for a given transaction or
actions, and such information is finalized and locked into a chain. The chain
is only added to with each transaction, so the origin of transaction details,
such as financial records, product details, and location, can be traced. Thus,
all subsequent transactions can be verified and tracked, enhancing transparency
and visibility into the transaction. In addition, block chains may be public or
private, granting or denying access to the chain details based on
authorization, so private information can be protected, while allowing
addresses to authorized parties.
There are real ways to use block chain
technology today. The development of crypto currencies has a great opportunity
for payment processing and financial management of the supply chain. Swiss port
has already developed a platform, which is currently in the pilot phase, for
using block chain to manage cargo handling.
Other applications of block chain
technology in the supply chain include Microsoft’s joint venture project (Ardents
NovaTrack), used to track pharmaceuticals while in transport, but the potential
application of the technology may quickly rise to be a leading soldier in the
battle against the opioid epidemic. The recent developments regarding
Walgreens’ presumed impact on the epidemic could have been identified earlier
through block chain technology, reducing the company’s exposure to the risk of
legal proceedings and remuneration.
Another excellent example of block chain
in the supply chain of today includes limited access networking. Although these
networks are not necessarily block chain in the literal sense, they bear
remarkable similarities to the technology. If the technology tracks all
actions, it is a form of block chain, but the key lies in eradicating the
ability to edit past Transactional details. This is where many of today’s
applications fall short, allowing for edits, but block chain in the truest
forms is a complete record, making compliance virtually self-sustaining. As a
result, the ability to track and manage the supply chain through block chain
may be among the greatest sustainable practices to arise in the next decade,
especially in an age where every dollar spent comes under the scrutiny of the
public eye.
How Will Block chain Technology Affect the Future of Supply
Chain & Logistics Management?
The future of the supply chain is
limitless with the power of block chain technology, and paired with the
potential of the Internet of Things (IoT), block chain will bring a new level
of visibility and insight into supply chain management. Automated
identification and data capture (AIDC), including RFID tags,
will make block chain technology more efficient, empowering informed decisions
and helping supply chain managers move more product, spend less on freight, and
create positive customer experiences.
Need to Understand Block chain to define the Value of the
Technology Now
Block chain technology will continue to be
a defining characteristic of supply chain management in the future. Supply
chain leaders that take the time to understand block chain technology and its
potential applications can position their organizations to reap the greatest
benefit when the technology becomes readily available. Since the best-laid
plans for success in supply chain management require education, supply chain
leaders must work to reduce inefficiency and move into digital-driven supply
chain management. This is the only way to prepare for a future filled with
“blocks” of transparency.
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