Blockchain Could Revolutionise Supply Chains
Despite being known as the technology behind cryptocurrencies, Blockchain could have more wider reaching implementations.
The organisms behind supply chains are still very paper-intensive. Bills of Lading, proof of shipping, letters of credit, title papers, certificates of both quality and quantity, customs forms… Bureaucracy, inefficiencies, and lack of transparency can cause any number of problems or delays, and can leave companies waiting for payments.
Those advocating Blockchain technology claim to be able to address these issues. All the required documentation and information can be stored digitally on a shared ledger which is visible to all in the supply chain and is also secure from being tampered with. These proponents claim it could’ve prevented Tesco’s horsemeat fiasco.
The technology can also incorporate “smart Contracts” which are computer programmes connected to the ledger and automatically trigger payments once certain conditions are met.
But what makes Blockchain perfect for supply chains is the fact the data isn’t centralised, it isn’t built around one dominant or clear owner – all of the data is in the block but the creator of the data can choose what to share. This would allow suppliers to stop buyers seeing the original price of the goods, for example.
The biggest challenges for Blockchain in the supply chain space appear to be regulatory support, and the cost of replacing legacy IT systems with Blockchain.
Source: “Financial Services Technology” by Raconteur, written by Sarah Rundell, The Sunday Times, 18/02/2018