What is a blockchain and how does it work?
What is blockchain? How does it work? How does it revolutionize the supply chain? What the future hold? We presented on the subject of blockchain and it’s developments with Zebra Technologies and GS1 at APICS 2017 in San Antonio, TX,. If you were unable to attend, below is a summary of the blockchain presentation and why it’s poised to revolutionize the way companies manage their supply chain.
According to a definition shared by our partners at IBM, blockchain technologies are “distributed ledgers that create a permanent and shared record of every transaction associated with an asset.” Each record is time-stamped and appended to the event that preceded it, which creates an unbroken chain of trust.
Blockchain technologies can reveal:
- where an asset is at any point in time
- where it has been
- who owns it or is handling it, and
- what state it is currently in
Knowing this information and having a complete record of connected transactions means companies no longer have blind spots in their supply chains. They can track orders, shipments, chain of custody, and the status of all assets with real-time updates along the way.
Equipped with this data, companies can more accurately predict when goods will arrive and what condition those goods will be in when they arrive. Real-time blockchain data also gives companies total visibility into handoffs and helps them proactively eliminate bottlenecks and maintain optimal inventory levels.
Such visibility is an enormous benefit for just-in-time (JIT) planning, inventory management, quality assurance, dispute resolution, and waste reduction. It even means you can see the status of goods while they’re in transit, and you can maintain a full record of each asset for traceability and compliance.
In addition, documents, bills of lading, material composition, product origin, and records of storage or container conditions can be recorded in a blockchain for each asset. All it takes is a combination of RFID tagging or labeling with the software and database to complete your blockchain infrastructure.
What are supply chain applications of blockchain?
In manufacturing, blockchain allows manufacturers to track all the parts that travel through countries, factories, and suppliers to produce each finished good or product. This not only provides total visibility into the supply chain, but helps manufacturers avoid costly disruptions, ensure quality, and have complete traceability in the event of a recall.
Blockchain also enables real-time, nimble responses to changing supply and demand. Blockchain in the supply chain reveals:
- the status of each shipment
- what it contains
- whether orders and production are on track to be fulfilled, and
- whether inventory adjustments or additional shipments will be needed to ensure on-time performance
Blockchain data also makes it easy to track and evaluate supplier performance, while giving suppliers a way to create a seamless audit trail, document their performance, and earn trust.
In warehousing and logistics, blockchain provides the real-time insights needed to manage inventory and optimize efficiency by re-routing materials, shipments, and inventory to different warehouses, trucks, or docks.
As this fast-emerging technology takes hold across these and other industries, many more blockchain applications will emerge. Wherever a complete, unbroken record of assets and transactions is beneficial, blockchain will play an increasingly crucial role.
Innovative and forward-thinking companies will need to get on board quickly, as Toyota® has, to prepare for the new future of supply chain.
What is the future of blockchain?
We look forward to sharing more about the developments in blockchain in future posts, but you can learn more by contacting our supply chain experts at Lowry Solutions, requesting an RFID Demo, giving us a call at 888-881-2477, or email us through our convenient online form.