With its origins rooted in the cryptocurrency Bitcoin, blockchain is technology that has been offered as a way to securely allow supply chain data to be shared without being altered or corrupted. Many companies are looking at how the underpinning technology of blockchain can be used across other industries, and the supply chain is one of them.
What is blockchain?
Borrowing from a great primer on ZDNet:
“Blockchain is an algorithm and distributed data structure for managing electronic cash without a central administrator among people who know nothing about one another.”
How does this translate into supply chain and logistics?
Think of all the parties to a transaction that have some piece of information that belongs to them. They want to share this information among themselves but without aggregating it all in one place. This is different than the connectivity between systems afforded by today’s cloud-based technologies and Application Programming Interfaces, or API’s.
A shipper has the product name, description and per unit cost. The freight forwarder has the booking number, container number, seal number and vessel details. The importer has the harmonized tariff number and PGA information. The Customs broker has release-centric data. The warehouse has the inventory count and location.
All of these entities have something to contribute to a single shipment from beginning to end. And blockchain allows them to secure their portion of the data and share it while maintaining ownership. Most importantly? The records cannot be altered by outside, unauthorized parties and authorized changes to the data are shared between the parties as well.
Who is using blockchain now?
Maersk, the world’s largest shipping line, and IBM are testing blockchain as a proof of concept. The Adam Smith Project, part of industry publication American Shipper, has written about it on their website.
Do I need to get on the blockchain train?
Our advice is to wait. The early adopters are testing it out before it becomes more readily available to the wider community at large. Plus, there will be additional investments in IT infrastructure to support and participate, and the more people use blockchain, the lower the cost becomes to participate. RIM is evaluating blockchain and will continue to monitor its progress and is on our IT roadmap for potential development and implementation in the coming years.