Many businesses understand that being able to manage their supply chain is vital to their success. Nevertheless many of these companies still struggle with their supply chain due to lack of visibly, the difficulty of obtaining accurate data in real-time, and the logistical problems associated of getting the right inventory to where it needs to be when it needs to be there.
To attempt to solve some of these challenges, many innovators are turning to blockchain technology with its smart contracts, immutable ledger and greater transparency. As Chris O’Connor stated in his recent article on “Driving industry advancements with Watson IoT and Blockchain”
“Traditionally, supply chain transactions are completed manually, creating delays and a higher risk for recording error, which can cause differences between what was recorded and what was loaded. By digitizing this process using blockchain and Watson IoT, the relevant information is captured directly from the sensors placed on the trucks, and entered onto the blockchain, creating a single, shared repository that all authorized participants can access and which can only be altered with consensus from all parties.”  – Chris Connor
Blockchain technology is all about providing an immutable distributed public general ledger where transactions are recorded and tracked. This makes it much easier to get real-time updates and to see what’s happening every step of the way.
In another article from the Harvard Business Review, Michael J. Casey and Pindar Wong observed that blockchain — an online globally distributed general ledger that keeps track of transactions via online “smart contracts” — will produce “dynamic demand chains in place of rigid supply chains, resulting in more efficient resource use for all.”
As one of my Medical Device Supply Chain colleges observed recently “Pinpointing issues can be difficult when you have multiple suppliers across multiple states and countries, it can be hard to keep track of everything.”
With blockchain, the members of the network can see what’s going on as it happens. The inherit transparency of blockchain helps keep all those involved accountable for their end of the bargain. It’s a great way to get the whole picture, as well as drill down to individual aspects of the supply chain.
Smart Contracts and Using Blockchain Supply Management
Another reason why blockchain technology is so useful in supply chain management scenarios has to do with the smart contracts. With smart contacts, all the interested parties can see the terms of the agreement that enforce themselves.
To move forward with accepting changes to the smart contract, certain expectations have to be met. When the world state meet those expectations, the contracts can be fulfilled
The distributed replication of IBM Blockchain enables the business partners to access and supply IoT data without the need for central control and management. All business partners can verify each transaction, preventing disputes and ensuring each partner is held accountable for their roles in the overall transaction.
Leveraging blockchain for your IoT data opens up new ways of automating business processes among your partners without setting up an expensive centralized IT infrastructure.
Finally as the use of internet of things (IoT) devices and sensors becomes more and more commonplace, tracking the location and status (e.g., fitness, freshness, viability) is becoming easier. With its new blockchain integration, the IBM Watson IoT platform is enabling IoT devices to send data from these “things” to a private blockchain network where the transaction can be added to the shared ledger with tamper-resistant records.
In an upcoming post, I will dive deeper into how define, build and deploy blockchain applications using a combination of Blockchain, IBM Watson and IoT devices to solve some real world supply chain challenges.
For additional reading check out the following:
- Michael J. Casey and Pindar Wong, Global Supply Chains Are About to Get Better, Thanks to Blockchain, https://hbr.org/2017/03/global-supply-chains-are-about-to-get-better-thanks-to-blockchain
- Chris O’Connor, “Driving industry advancements with Watson IoT and Blockchain,” written July 19, 2017, https://www.ibm.com/blogs/internet-of-things/iot-blockchain-industry-advancements/
- Joe McKendrick, Why Blockchain May Be Your Next Supply Chain, retrieved 10-11-2017, https://www.forbes.com/sites/joemckendrick/2017/04/21/why-blockchain-may-be-your-next-supply-chain/#7162bac713cf