In this posting, appearing in Supply & Demand Chain Executive, the author discusses a recent survey of more than 1,000 executives across industries and regions in which more than half are working on blockchain (BCT) use cases, most often in the supply chain area of functions.
“Which begs the question: If you are a supply chain executive who isn’t working on blockchain use cases, why is that?….One explanation might be that, for all the talk of blockchain’s potential, some people haven’t grasped how it might be used to improve their processes yet. This is understandable considering the fact that the technology is emerging and still has some yet to be proven.”
We have been pointing out the ‘peekaboo’ nature of blockchain projects during the past couple of years (after the super-hype died down, then the real work began), which has resulted in many announcements about proofs of concept and collaborative (but limited) success cases between companies, FIs and even government entities. The missing link to date is a real scalable monetized product (or products) that the open market can price, touch, feel, and kick around. We know it is coming, and just a matter of time. In the B2B space, the product cases are most notable in supply chain (trade services and finance), cross border payments, capital markets and fraud management. This noted article is all about supply chain feasibility, which is certainly a target case.
“One of the reasons why the digital ledger has created such a buzz is because it is distributed on a secure network that provides tracking capabilities and enables users to transfer assets easily. Supply chains not only have multiple potential points of failure, but also a number of grey areas where individual companies do not have clear visibility of the provenance of assets they have purchased. Such systems are susceptible to fraud and counterfeiting, which can cause harm to consumers and damage corporate reputations.”
Of course BCT is not a panacea for all things needing solving, so precautions must be taken, but by and large the technology will provide faster and safer commercial transactions, with industrial strength solutions expected to start proliferating sometime in the next couple of years.
“By connecting IoT devices to the blockchain, a greater level of real time data can be stored in a network where everyone has visibility of it. Not only that, such data can be recorded in an immutable way, so that everyone involved can trusted its traceability…..Of course, the old saying that “if you put bad data in, you get bad data out” still applies. Supply chain executives need to be sure of how their data gets recorded on the blockchain. Even here, the industry is coming up with solutions in the shape of decentralized oracles that aggregate multiple sources of data before deciding it can be trusted.”
“As these examples demonstrate, blockchain’s transformation of the supply chain is well underway and has a long way still to go. Supply chain executives that haven’t recognized the potential so far would be mindful to take note as soon as possible.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
