Tech News, Magazine & Review WordPress Theme 2017
  • Home
  • Supply Chain Updates
  • Global News
  • Contact Us
  • Home
  • Supply Chain Updates
  • Global News
  • Contact Us
No Result
View All Result
No Result
View All Result
Home Supply Chain Updates

Is Blockchain a Perfect Fit for the Supply Chain?

usscmc by usscmc
November 17, 2019
Is Blockchain a Perfect Fit for the Supply Chain?
Share on FacebookShare on Twitter

Is blockchain technology a natural fit for the supply chain? Or is it just “a solution looking for a problem”?

That second possibility is raised, ironically, by a blockchain proponent: Ajay Chidrawar, vice president of global product management and customer success with CGS, a provider of outsourced software and business processes.

It’s entirely possible, says Chidrawar, that a company doesn’t need to grapple with the complexities of blockchain, especially if it’s completely vertically integrated and all major processes occur within its corporate boundaries.

When it comes to supply chain, however, that scenario goes out the window. By definition, organizations must reach out to a wide variety of external partners to execute the stages required to manufacture product and get it to market. Collaboration is a must.

So is the need to insure the integrity and timeliness of key data, such as sales and payment records, and to be able to track product all the way from raw materials to final delivery to the end customer. And for that purpose, blockchain would seem ideal.

For most companies, however, blockchain remains a concept in its infancy. The high cost of entry and complexity of the technology make adoption a daunting proposition.

Compounding the confusion is the link between blockchain and cryptocurrencies. It was the invention of bitcoin, after all, that led to the emergence of blockchain as a means of recording transactions of that new breed of virtual cash. Traders needed an immutable record of their buying, selling and holding of bitcoin, and they got it by storing the information in “blocks” of code, then spreading it among multiple computers. The existence of a distributed ledger makes it impossible for anyone to alter the records. Or so goes the theory.

When blockchain migrated to the supply chain, for which it seemed an obvious fit, it was accompanied in most cases by either a cryptocurrency or some type of virtual “token” to be held by participants. Some were meant to be tradable as securities, others not. (The precise status of those instruments is still an open question, with the U.S. Securities and Exchange Commission taking a hard line on many initial coin offerings.

Turns out that blockchain needn’t be accompanied by any kind of coin or token when it’s deployed for non-financial purposes. “It doesn’t have to be tied to a payment model,” says Chidrawar. More importantly, it allows for the creation of “smart contracts,” which are validated through blockchain technology and automatically enforce the performance of all parties.

Chidrawar acknowledges that blockchain has a long way to go before becoming an effective instrument for global supply chains. Companies looking to get started should pick a specific function and a couple of partners to undertake a pilot. “Part of it is learning,” he says, “and part is proving that it actually delivers on its promise.”

Companies also need to evaluate what happens to their blockchain initiatives when they begin to scale. A large manufacturer might have thousands of partners that need to be included. The basics of blockchain should be nailed down and validated before rolling it out to the entire universe of suppliers.

One potential obstacle is the absence of standards for communicating within a blockchain. “Everybody’s coming at it from many different angles,” says Chidrawar. “There’s not a clear standard yet.” The standards organization GS1 US is working toward that end, but its efforts won’t begin to bear fruit until the end of this year at the earliest. And industry-specific standards are even further away from adoption.

Blockchain lends itself especially well to product traceability, claims Chidrawar. The food supply chain is in dire need of a means to trace the provenance of product all the way back to the farm and field, for reasons of safety as well as concerns over sustainability and workers’ rights. Pilots have been launched for tracking raw materials such as vanilla from Madagascar and palm oil, and many similar initiatives are sure to gear up in the months ahead.

Blockchain’s proponents say it can also prove effective in preventing counterfeiting in industries such as apparel and luxury goods. In the case of the latter, buyers insist on knowing the origin and authenticity of their pricey purchases. Drug manufacturers are likely to embrace the technology to keep up with tightening regulations and ensure patient safety. Manufacturers of cheap mass-produced items such as t-shirts, on the other hand, might not be able to justify an investment in blockchain — or even care about the possibility of counterfeits.

For a brand seeking reliable manufacturers or suppliers, the presence of a blockchain allows for rapid evaluation and adoption of the right partner. “If I’m a vendor and can do a good job, it’s in my interest to provide timely and accurate information,” Chidrawar says. A blockchain could be the best way to convey that data.

Chidrawar predicts that blockchain will take off once its effectiveness is proved by large companies with extended supplier bases, probably within three to five years. “Once the benefits become clear, costs go down, and there’s more competition — that’s when it should catch fire.”

Next: Where are the standards?

usscmc

usscmc

No Result
View All Result

Recent Posts

  • Volkswagen Announces Pricing of 25% Equity Stake Sale in Porsche
  • Can software simplify the supply chain? Ryan Petersen thinks so
  • A strategic approach to cost reduction for banks and fintechs
  • Study examines supply chain issues and opportunities
  • Instacart acquires hyper local grocery e-commerce platform

Recent Comments

  • Top 5 Supply Chain Certifications that are in high demand | Top 5 Certifications on Top 5 Globally Recognized Supply Chain Certifications
  • 3 Best Procurement Certifications that are most valuable | Procurement Newz on Top 5 Globally Recognized Supply Chain Certifications

Archives

  • September 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • September 2019

Categories

  • Global News
  • Supply Chain Updates

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org

slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor

Pages

  • Home
  • Terms of Use
  • Privacy Policy
  • Disclaimer
  • Antispam
  • Contact Us

Categories

  • Global News
  • Supply Chain Updates
slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor

Tags

APICS Globally Recognized Supply Chain Certifications IIPMR Certifications International Institute for Procurement and Market Research (IIPMR) ISM Next Level Purchasing Top 5 Supply Chain Certifications top supply chain certifications

Trending

No Content Available
  • Antispam
  • Contact Us
  • Disclaimer
  • Home
  • Privacy Policy
  • Terms of Use

© 2023 www.usscmc.com

No Result
View All Result
  • Home
  • Supply Chain Updates
  • Global News
  • Contact Us

© 2023 www.usscmc.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

SAVE & ACCEPT