What is blockchain's role in supply chain?
Blockchain is essentially, as the name suggests, a chain of blocks...
What is blockchain and how is it influential in the supply chain? Let’s find out.
Blockchain is essentially, as the name suggests, a chain of blocks. However, instead of a physical chain, there’s digital information (the block) stored in a public database (the chain). When a block stores new data, it is added to the blockchain. In order for this to be done successfully, four things must happen:
A transaction must occur - After making an online purchase, a block will group together thousands of transactions so that an individual’s purchase will be packaged in the block along with other users’ transaction information as well.
That transaction must be verified - Following a purchase, a network of computers checks over each transaction to ensure it happened in the way a customer said it did. The network confirms the purchase, including the time, amount and participants of a transaction in a matter of seconds.
That transaction must be stored in a block - Following verification, the transaction gets the go ahead. The transaction’s details are all stored in a block and will join thousands of similar transactions like it.
That block must be given a hash - Once all of the block’s transactions have been verified, it must be given a unique, identifying code called a hash. Once hashed, the block can be added to the blockchain.
How is blockchain influential in the supply chain?
There are several key ways in which blockchain is useful in the supply chain. These are:
Provenance tracking - Large organisations have complex supply chains. This means it is much harder to keep track of all records for multinational companies. This lack of transparency can affect organisations significantly. In a blockchain-based supply chain management, record keeping and provenance tracking is made easier as product information is accessed by embedding sensors and RFID tags.
Cost reduction - Real-time tracking of a product in the supply chain through the help of blockchain can reduce the overall cost of moving items in a supply chain. Following a survey of supply chain workers by the Digital Supply Chain Institute, over one third of people cited reduction of costs as the topmost benefit of application of blockchain in supply chain management.
Establishing trust - Developing trust in complex supply chains with large numbers of participants is key to smooth operations. For example, if a manufacturer shares its products with suppliers, the manufacturer should be able to depend on that supplier to follow factory safety standards.
How are companies leveraging blockchain into their operations today?
In the food and beverage industry, it’s vital to have a solid record to trace each product to its source for safety purposes. For example, Walmart uses blockchain for visibility of the pork it sources from China and blockchain records exactly where each piece of meat comes from and where it is processed, stored and its sell-by date. The transparency of blockchain is also vital as it will let consumers know that they are supporting organisations who share similar values of environmental stewardship and sustainable manufacturing.
To read our full article in May’s magazine and find out which companies are active players in blockchain, click here!
For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.
New speakers announced for Procurement & Supply Chain Live
Two leading executives in supply chain transformation have been confirmed for this year's Procurement & Supply Chain Live event.
Procurement & Supply Chain Live is the perfect opportunity to hear from prominent executives at the world’s leading procurement and supply chain businesses. The event will be streamed live from Tobacco Dock, London via the leading networking platform Brella.
The three-day show, running 28-30 September 2021, is an essential deep dive into the industry, with influential speakers sharing insights and strategies from their organisations, group roundtable discussions, and fireside chats.
We take a look at the latest additions to the already amazing lineup of speakers announced so far, and what they will bring to the flagship event.
VP Global Supply Chain at Macmillan Education Ltd
Shaun Plunkett has over 30 years of supply chain leadership experience in FMCG, entertainment and media sectors, supporting multi-billion euro businesses including Universal Music, EMI, Sony Music, Harper Collins and Associated British Foods. He has a track record of successfully delivering transformational change coupled with award winning operating models and developing and coaching global teams. Plunkett says that challenging the status quo is at the heart of what drives him on a daily basis - and encouraging others to continuously push the boundaries.
Read more about Plunkett’s involvement in Macmillan Education’s supply chain transformation HERE
Digital Transformation Lead, Oracle UK and Board Member, CILT at Macmillan Education Ltd
Vikram Singla is digital transformation director at Oracle, UK. He helps supply chain and finance business leaders leverage technology to deliver meaningful business outcomes for their organisations. He also serves on the board if CILT (Chartered Institute of Logistics and Transport) – UK and is an Honorary Visiting Fellow at Anglian Ruskin University. Singla has more than 25 years’ experience in the technology sector, and in global supply chain transformation, including deploying business transformation programmes for Fortune 500 firms. In his spare time, Singla is a passionate brand ambassador for Cancer Research.
Plunkett and Singla join a growing line-up of speakers, including: Sheri R. Hinish, IBM; Robert Copeland, G4S; Daniel Weise, BCG; Mark Bromley, Mastercard; David Loseby, Rolls Royce; and Ninian Wilson, Vodafone Procurement Company.