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Blockchain in the Supply Chain

by Mary Rooney | Oct 02, 2018

What is blockchain in supply chain? Simply defined, blockchain is a distributed database that holds records of digital data or events in a way that makes them tamper-resistant. It essentially is a safe, "single version of the truth" about transactions and activities occurring across complex supply chain ecosystems.

While participants in a blockchain may access, inspect or add to the data, they cannot alter or delete existing data. The original information stays put, leaving a permanent and public information trail of transactions. Depending on the type of blockchain, data-privacy protection can be very robust, as can the capabilities for end-to-end visibility, track and trace, security and condition monitoring.

Blockchains come in two flavors: private and public.

In a private blockchain, a private entity controls the computers and the blockchain. Admission is by invitation only to trading partners such as suppliers, buyers, transportation companies and financial institutions. All parties agree to participate by the rules of the private blockchain.

Unlike a private, permissioned blockchain, a public blockchain is completely open. Anyone can join and participate. Bitcoin was one of the first public blockchain networks.

Public blockchains carry two significant drawbacks for commercial users. One is the substantial amount of computational power required to maintain a distributed ledger at such a large scale. Two is the lack of privacy and protection of proprietary data.

While Blockchain is a technology platform that's here to stay and holds great potential for the supply chain environment, broad adoption remains years away. Blockchain, at its current maturity level, is not right for every type and size of company. Adopting blockchain means restructuring how supply chains operate. Early adopters will be those companies and sectors that have the most at stake.

To support widespread adoption, the blockchain must cover the end-to-end supply chain, not just point-to-point transactions. It needs to cover every single supply chain "touch" to deliver the greatest return on investment and make the change management process worth the effort and cost.

Balancing the cost of change against the return on efficiencies, speed and agility, risk reduction and ultimately, profitability, is something every company will have to regularly assess as the technology rapidly evolves.

Read more at Inbound Logistics.

Want to learn more about Blockchain? Attend the Kansas City CSCMP Roundtable Blockchain Symposium on October 26.

The Kansas City CSCMP Heartland Roundtable, along with the KU Supply Chain Management Club and the KU Blockchain Institute, is holding a half-day symposium on emerging applications for blockchain technology in supply chain management. The symposium will take place on October 26 from 10 a.m. to 2 p.m. at the Oread Hotel in Lawrence, Kansas. Confirmed speakers include

  • Sebastian Garcia-Dastugue, Ph.D, Prof. University of Arkansas
  • Chris Burruss, President of the Blockchain in Transport
  • Tom Pearson, Digital Chain KC and Continental Partners
  • Lance Urabe, Innovation Lead, UPS Customer Solutions
  • Duane Osborn, Chief Blockchain Officer, ZOOM Payment Solutions; CEO Regency Manning, Inc.
  • Mike Talbot, Chief Technology Officer, Veracity Consulting

More details available here.

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