Blockchain continues to make its impact on the logistics and supply chain industry around the world as governments and private companies begin to calculate the value of its application in many sectors.
Now, with giants Samsung, Walmart, and Carrefour making announcements, the numbers of large multinational companies investigating or actively using the technology is growing, particularly in the logistics sector; add to this Maersk, IBM, and FedEx and indications are that blockchain is getting attention from some of the biggest players in the market.
Blockchain promises a solution to address many of the complexities of the supply chain industry. Payment between suppliers, vendors, and customers often take days to get processed. Freight passes through multiple destinations before delivery and the traceability of the despatched goods during transport often lacks transparency.
Blockchain, being an immutable, decentralized, and cryptographically encrypted ledger, offers full transparency for an industry dealing with supply chains that tend to include numerous steps and hundreds of geographical locations and checkpoints.
The blockchain is fast becoming an ideal tool for supply chain management of food products, in that the technology can provide detailed information about the food product’s journey through the supply chain, often through numerous countries.
Walmart itself currently shares a blockchain platform with Nestle, Dole Food, Tyson Foods, Kroger and JD.com. Company vice-president for food safety and health, Frank Yiannas, shares Carrefour’s enthusiasm, saying that “there’s no question about it, blockchain will do for traceability what the internet did for communication”.
News for Drivers
Blockchain can also instantly trace the validity of ownership at any point, and determine accountability. This is particularly important in the automobile industry for example. Christopher Bates, COO of IT solutions company Bitland, explained its advantages:
“It is pretty important to know if a car has been in a major accident and has frame/structural damage. If there was an immutable accessible record that kept track of the car history, there would be no way a car salesman could sell a car that had been extremely damaged.”
Electronics and Mining are other areas in which blockchain can have huge application. Samsung, who recently revealed its plans to utilize blockchain through its subsidiary SDS, envisages cutting costs by 20% by using the technology. Cheong Tae-su, professor of industrial engineering at Korea University in Seoul, told Bloomberg that blockchain could shorten time lags between product launches and actual shipments, thereby encouraging more business from China.
Natural Resource Mining
A recent report from professional services network Deloitte explains that the technology efficiently accommodates the growing reliance on data and ensures transparency. “Just as organizations like Fair Trade impacted the coffee industry, it’s not a far stretch to think through ways in which Blockchain enabled solutions could transform the relationship with mining companies and communities,” the report states.
Maersk, the world’s largest shipping company has just finished testing a Blockchain based system for cargo management. The system was initiated in collaboration with IBM and its Hyberledger fabric Framework. FedEx’s vice president of strategic planning and analysis Dale Chrystie announced his company’s membership by saying:
“We have millions of records a day in our system, and we think of blockchain as a secure chain of custody that could transform the logistics industry. We believe it holds a lot of promise in that space and would streamline all that data exchange in a very secure way”