The use of blockchain ledgers in supply chains around the world has become a hotly debated topic. Not only are experts divided on the best ways to use these solutions, agreement is hard to come by regarding when the technology will make its impact. At this early stage, it is even possible that the hype will amount to nothing, with a different type of data-transfer infrastructure rising up to take blockchain's place.
Watching each stage of development and potential use case is a prudent strategy today. Organizations should be ready to invest in new technology once they see a path to value, but not before then. Therefore, maintaining a wait-and-see attitude toward blockchain systems is reasonable as developers posit new and practical ways to harness the distributed ledgers.
Building blocks to progress
As Information Age recently explained, it's important for supply chain executives to remember they won't change their industry with blockchain ledgers alone. Companies will need fully developed networks of information storage solutions to ensure communications involve a comprehensive picture of operations. Enterprise resource planning may be the key building block in such a system. Rather than becoming a one-stop data keeping tool, a blockchain implementation will instead serve as a next-generation visibility enabler.
Information Age pointed to a recent experiment with blockchain integration as an example of the importance of ERP connectivity. Walmart created a proof-of-concept operation that would follow a mango from farming to warehousing. The main data source for the experiment was the ERP solution, with blockchain systems providing updates on the mango as it moved. This limited deployment demonstrated the power of the blockchain while also showing that it plays a complimentary rather than central role.
While the use of blockchain ledgers in the supply chain may still be at single-mango levels of experimentation, the demand for the solutions to be a success is palpable. Information Age added that pressure on companies to be forthcoming and accountable is a major factor in the push toward new technology. Consumers demand visibility about where goods have come from, every step of the way. The blockchain's comprehensive and theoretically tamper-proof records provide that insight.
While tracking physical goods via blockchain ledgers remains a few technological leaps away, all-digital industries' supply chains could prove to be excellent testing grounds for the technology's potential. According to Supply Chain Digital, a recent deal between IBM and Mediaocean has created a blockchain-tracked supply chain for advertising publishing. The goods and services being exchanged in this model are online display ads, and the ledger can follow spending, even when intermediary organizations are involved.
The motivation for clarifying this digital chain is similar to the forces driving blockchain in physical goods manufacturing, storage and transportation. Following spending back to its source, using clear and tamper-proof records, boosts accountability. People will theoretically learn who is serving them messages. In an era of complex and sometimes deceptive advertising practices, breakthroughs in transparency are a priority for organizations. If blockchain systems prove up to the task of illuminating all-digital supply chains, their entry into physical shipments could be relatively swift.