Forget about Bitcoin. It’s blockchain — the underlying technology behind cryptocurrency – that might be the real revolution with the potential to dramatically alter how businesses manage their supply chains.
Imagine using your phone to find out where every part in a new truck was made. Or to discover what pesticides were used on those tomatoes. What if you add a new supplier to your operation in hours or days instead of weeks or months? Or dump the piles of paperwork needed for typical transactions? But it’s the supply chain where blockchain may have the greatest impact on the way business is done. It has the potential to simplify transactions between companies, while adding an unprecedented level of transparency and security.
At its simplest, blockchain is a rolling log – a digital ledger or database – where each new record, transaction or event is added to the end of the log. Each new record becomes a “block” on the continually expanding “chain” of data. No one authority has oversight of the ledger. It’s decentralized. A network of independent computer “nodes” shares management of the blockchain. As new data is added, each of the nodes records the transaction and verifies it – creating identical copies of the ledger.
Once written, a block can’t be deleted or changed, thus building a unified trail of verified transactions that can be accessed by the parties involved.
“I can see material flowing, manufacturing, logistics, shipping, customers receiving product. … That this visibility isn’t just inside a company. It’s across all the trading partners,” says Joe Francis, director of Digital Supply Chain Transformation at Accenture. “It’s extremely difficult to do this using traditional techniques. Blockchain makes it really easy to do.”