Block chain is a new technology that many people have been talking about in the past couple of years. It is described as a “revolution” that could drastically change the way business is done today, including Supply Chain processes. That being said, it is important to understand what block chain is exactly and what it was originally developed for before talking about what applications it could have for the supply chain industry.
Block chain was originally developed for the “Internet Money” that you’ve probably heard of by now, Bitcoin. Bitcoin is actually more of a sort of payment system that records, tracks and allows peer-to-peer transaction of a “cryptocurrency”. Additionally, anybody can access and review the data recorded of any transaction. This means that users of this network can verify and validate where the money “comes from”, execute transactions without passing through an intermediary, such as a bank, all that with no risk of being “scammed”. This is enabled by the Block chain protocol, which is a distributed data base shared by all users (or nodes), where all Bitcoin transactions are recorded, available for review and protected from editing. For each new transaction executed from a network member, a new “block,” where the new transaction’s information is added to the previous block’s records, is created and saved on the computer executing the new transaction. All to say, all valuable information can be recorded, tracked, with minimum (to zero) risk of being hacked.
Extrapolating this to a broader view, it would be possible to track any information and improve transparency of any kind of transaction of goods or services. So how does supply chain can really benefit from this new technology? In my opinion, block chain as it is today is not suited for the supply chain industry. Block chain as it is developed today mainly aims at recording currency transactions, with no possibility to hide or delete any of it. I am not sure a lot of sellers want that kind of transparency and are necessarily excited about allowing their buyers to have access to “a full and complete history” behind the production cost of their goods.
However, the technology can be adapted so that a members of the block chain network can choose what information to track and record. Easy to say, but it would require a lot of work! Indeed, it took 8 years from the first introduction of Bitcoin in 2008 to see Block chain technology applied to something other than Bitcoin. Indeed, it took 8 years from the first introduction of Bitcoin in 2008 to see Block chain technology applied to something other than Bitcoin. Walmart partnered with IBM to develop a block chain system to test a packaged produce item in the U.S. and pork in its Chinese stores. By applying block chain to its supply chain processes, Walmart intends to improve the way food is tracked, transported and sold to its customers. It would not only allow Walmart to better control its products from a safety perspective, but it would also allow them to reduce spoilage, waste, and ultimately generate savings opportunities.