The Current and Future State of Block in the Supply Chain Industry Part Two

As blockchain technology is seeing considerable adoption in the supply chain industry, it’s important to see where it thrives and where it needs improvement if it’s going to continue its ascent. 

Blockchain technology is a revolutionary innovation for supply chains. Incredibly, despite how new it is, it’s already having a monumental impact upon them. We addressed this in our first ebook on blockchains. It covers just what blockchain is, how it works, and why it’s important to the industry.

Yet, given the recency of the technology’s invention, there remain concerns surrounding it. As such, it still requires a great deal of fine-tuning before it’s universally embraced. With that in mind, how well it does down the line is going to be dependent on how well it can adapt. With many demands currently being placed upon it, only time will tell if it will be able to.

This ebook explains what the current state of blockchain is in the supply chain industry, the technology’s strengths and weaknesses, and where it’s set to go in the coming years.

The Pros and Cons of Blockchain and Where it Will be in the Future
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With the growth of  blockchain as a viable mechanism to oversee supply chain processes, it’s worthwhile taking a look at how it currently stands in the industry and where it is going.

Blockchain has been talked about as a potential breakthrough technology for supply chains for a while. Yet, in the past couple of years the wait for the potential of the technology to meet the reality of technology has threatened to stall enthusiasm around it.

However, with the recent waves of progress surrounding the technology, including the launching of multiple blockchain platforms for supply chains, there is renewed interest afoot. Despite that, the question remains: can blockchain live up to its promise of being the transparent, secure, and democratic platform the industry is seeking?

This eBook covers just what blockchain is, how it works, its utility for supply chains and the impact it’s having and set to have on them.

How Blockchain is set to Transform the Supply Chain Industry

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That’s it for us this week! If you liked this blog post, why not subscribe to our blog? Interested in our 3rd party logistics services? If so, don’t hesitate to check out our services . We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Copy of Copy of Copy of Copy of How Supply Chain Orchestration Improves the Customer ExperienceClearly blockchain technology has major benefits for supply chains, but even with that being the case, there are some significant obstacles it still has to overcome.

Blockchain is growing rapidly. According to TechJury, the blockchain market is set to have made 20 billion dollars by 2024. More pertinently, 53% of respondents to a 2018 Statista study said they’re using blockchain for their company’s supply chain. As such, the futures of supply chains and blockchains are very much intertwined. Yet, like with any new technology that has to grow at an immense pace in order to keep up with market demands, blockchain remains on unsteady ground.

This week’s article by Morai Logistics explores the most prominent hurdles blockchains have yet to overcome in the world of supply chains.

Novelty

The very fact that blockchains are such a new technology is their baseline barrier to any market. This includes the supply chain industry. Simply understanding the technology, how to talk about it, and how to use it to its fullest potential all have to be a part of an education process.

CoinDesk highlighted this in an article addressing blockchain limitations,

Blockchain technology involves an entirely new vocabulary. It has made cryptography more mainstream, but the highly specialized industry is chock-full of jargon.

Without acclimating each segment along supply chains to blockchain technology, it is unlikely be adopted by them. This is harder than it might seem. These segments are often disparate and will have different degrees of understanding and resistance—from those in warehouses to those driving trucks.

Security

Despite being known for the transparency they provide, blockchains aren’t foolproof when it comes down to data security.  This is particularly true when a blockchain isn’t large. Part of the strength of the technology is the size of its network. If, for example, there only a few actors along a chain, it’s more likely that that blockchain will be susceptible to poor/bad data. Large scale adoption is crucial to overcome this.

Additionally, not all blockchain platforms are made equal. Technological advancements in machine learning and automation are not always used in supply chains. This means the data that is entered in the blockchain is more likely to suffer from human error. Blockchain needs to be part of a larger evolutionary process by supply chains, not adopted in a vacuum.

Efficiency

Building off the previous point, blockchains are not only less secure but, in turn, less efficient without a holistic approach to their implementation. This means there needs to be integration of blockchain data into the supply chain platform being used. Moreover, without some kind of automated operation to make sure the data is clean, secure, and reliable, it can be a slow form of record keeping—human data entry being more time-consuming.

Maturity

In many ways, the topic of maturity is just all the issues raised in this article combined. All of them come together to make potentially the biggest obstacle that blockchains need to clear. Blockchain is a technology for the future. In the present, it is very new, hurt by that newness, and stymied by efficiency and security concerns.

Kasey Panetta of Gartner writes,

Confusing future blockchain technology with the present-day generation. Current blockchain platform technology is limited in scope, and falls short of meeting the requirements of a global-scale distribution platform that can enable the programmable economy.

Thus, one of the things blockchains require the most is simply time. However, that isn’t something they are receiving. As such, it is up to the countless blockchain projects in the world of supply chains to not rely on what they will be able to do down the line but rather respond to present-day pressures.

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With an ability to offer transparency, efficiency and speed, Blockchain has been coined a ‘game changer’ in the supply chain and logistics industry.

According to Research and Markets, the ‘global blockchain supply chain market’ is will grow ‘from USD 145.0 million’ this year to n expected ‘USD 3,314.6 million by 2023’.

This statistic represents the powerful impact this global digital ledger has made on the way industries make transactions. Supply Chains are currently facing challenges as markets expand, consumer demand increases and e-commerce platforms continue to emerge. However, only 11% of organizations with a working understanding of this technology. Therefore, it’s important to investigate the benefits this technology provides.

This infographic outlines how blockchain will continue to become a valuable technological asset to the supply chain and logistics industry. In addition, it aims to outline how this technology can help organizations improve transparency, cybersecurity and efficiency.

How Blockchain Improves Speed, Security & Transparency

 

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As consumer demands for efficiency and immediacy continue to rise, the supply chain industry is seeking out innovative technologies to meet these growing demands.

Canada Business Network provides recommendations to optimize the supply chain management processes of any business size. They advise companies to:

Invest in technology that will quickly transfer your requirements to suppliers and improve your time to market.

The development of improved measures is usually in response to current setbacks or issues within existing supply chain management systems. Research on the challenges facing supply chain and logistics revealed that transparency and visibility are at the top. The Financial Times defines supply chain transparency as:

The extent to which information about the companies, suppliers and sourcing locations is readily available to end-users and other companies in the supply chain.

With the origin of products becoming of interest to consumers, the ability for supply chains to guarantee visibility is an important component to their management systems.

In this e-book, the emergence of online currencies and ledgers will be explored, with specific attention to Blockchain. This beneficial platform is making headlines as a potential benefit for the logistics and supply chain industry.

How Would Blockchain Improve the Supply Chain Industry?

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If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

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Companies talk about the possibilities of blockchain tech, but with only 1% of the responding organizations are currently using blockchain in their supply chain operations, few are actively investing in it.

Around this time last year, we commented on a story about Europe’s largest shipping Port, Rotterdam Port, taking part in a Blockchain consortium. Blockchain news in the logistics sector isn’t new, but this instance was unique because of the scale of the project.

Since this story, blockchain technology (as it relates to Bitcoin) has received a lot of coverage recently. Just last week, many news outlets reported on how Bitcoin hit a record $19,340 on Coinbase, before falling to $15,198.83 last Thursday. More impressively, by 2025, industry experts expect over 10% of gross domestic product (GDP) to be tied into blockchain.

These figures have made some organizations in the logistics and supply chain sector curious. However, surveys show that roughly half of supply chain organizations are not even looking at the possibilities of the technology. With this being the case, how big is the gap before blockchain can be used across the industry?

Blockchain in a Nut Shell

Many articles detail the impact blockchain-based technologies are having on different industries. Few actually go into the technical details of how it works. Lexology.com writer,
Marc S. Blubaugh, summarizes some of its the features in his article.

  • Blockchain is a decentralized database or spreadsheet (often referred to as a “digital ledger”) that is maintained and updated by a network of participating computers.
  • This highly secure technology permits parties to create a record (known as a block) that is timestamped and linked to the previous block such that it cannot be altered retroactively without the alteration of all subsequent blocks.
  • The digital ledger is typically available to the public but can also be made private.
  • Blockchain is the technology infrastructure for cryptocurrencies like Bitcoin.
  • Blockchain has many uses beyond cryptocurrencies, much like the Internet has many used beyond email.

High Potential but Little Investment So Far

Supply Chain Management Review writer, Becky Partida wrote an article earlier this week about a survey conducted by APQC.

The researchers interviewed 101 supply chain professionals. They found:

About one-third indicated that blockchain has the potential to create a competitive advantage for their organizations over the next 10 years. About 10% of respondents felt that blockchain would be a potential disruptor for their industry within the same time period

Partida points out, however, that Digital Supply Chain Institute (DSCI) conducted their own study of supply chain professionals. One-third of this group is “either extremely or moderately unfamiliar with blockchain.”

The research conducted by DSCI and APQC indicates that only 1% of the responding organizations are currently using blockchain in their supply chain operations, and only 35% are currently exploring the use of blockchain.

Of those surveyed (in both studies), almost 50% of organizations are neither using or exploring blockchain or its possibilities.

Part of the reason for these figures has to do with how new the technology is. It’s only been in the last couple of years that Bitcoin and blockchain have been taken seriously by the public at large. As more knowledge about the technology is disseminated, organizational interest in blockchain will better translate into investment.

If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

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The Port of Rotterdam tests blockchain logistics which can kickstart a revolution in the level of transparency within the industry.

The Port of Rotterdam, Europe’s largest shipping port, is taking part in a Blockchain consortium which is focusing on logistics, reported Coin Desk. The project has the support of more than fifteen public and private sector companies based in the Netherlands.

Consortium members will spend the next two years designing and developing applications for blockchain technology in the logistics sector. There have been similar efforts in the past, but according to the founders, this blockchain project is unique because of its scale in the logistics chain.

What is Blockchain Technology?

According to the Economist, a blockchain is a distributed database that maintains an ever-growing list of records called blocks. The information in a block cannot be altered retrospectively as each block contains a timestamp and a link to a previous block. The nature of blockchains makes it function like a public, digital, distributed ‘ledger’.

The technology is relatively recent having first been put into practice by Satoshi Nakamoto in 2009 as a core component for the digital currency known as bitcoins.

Since its debut, blockchain technology has had a disruptive impact on several industries. Financial technology was the first to start adopting blockchains, but its started to move into the logistics sector as well.

How Blockchain Technology Can Benefit Logistics

There have been several articles published online about the benefits blockchain technology can bring to the logistics and supply chain sector. Here are a few ways the technology can improve the industry.

  • Transparency for customers. For most people, little is known about the products they use. As LetsTalkPayment.com phrases it, “an almost incomprehensible network of retailers, distributors, transporters, storage facilities and suppliers stand between us and the products we use.”

    With blockchain technology, customers will be able to see every part of the journey their product took before arriving in their hands. The network behind the store shelf will no longer be hidden, allowing the customer to make better informed decisions.

  • Transparency for auditors. Because the history of transactions is locked into each block, auditors will have an easier time understanding where items and resources have gone. This, as Adam Robinson of Cersasis puts it, “help[s] supply chain leadership, such as C-level executives understand how to make the supply chain more efficient and productive.”
  • Greater security. The technology will enable supply chain companies to identify attempted fraud more easily.

    “For example, an employee that goes into the system to change past events will alter the coding of the event” writes Robinson. “However, the altered coding appears so differently that it would be practically impossible to not notice the change. This will allow companies to recognize the fraud and who initiated the change almost immediately.”

The two-year project undertaken by Port of Rotterdam will give insight into the scope of the benefits, but the technology has already shown promise.

“With a world that is becoming more connected on a daily basis, blockchain technology will inherently develop into a symbiotic relationship with the Internet of Things and today’s advanced logistics and supply chain management systems” concludes Robinson.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.