Is Blockchain Technology the perfect for Supply Chain Management challenges?

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.” [1] – 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.[2]”

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

Shared ledger consists of two data structures

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:

  1. Michael J. Casey and Pindar Wong, Global Supply Chains Are About to Get Better, Thanks to Blockchain,
  2. Chris O’Connor, “Driving industry advancements with Watson IoT and Blockchain,” written July 19, 2017,
  3. Joe McKendrick, Why Blockchain May Be Your Next Supply Chain, retrieved 10-11-2017,

Walmart and 9 Food Giants Team Up on IBM Blockchain Plans

While blockchain technology is fairly, IBM has already helped several customers achieve success. Many financial organizations have already launched their own blockchain initiatives.

For instance, the diamond insurer, Everledger, has used blockchain to digitally store the provenance of diamonds to minimize and prevent everything from fraud to conflict stones. There are over 1.2 million diamonds on their blockchain today, which may save insurers up to $50B annually. ([1]).  However there are several areas where the use of blockchain are just now being explored.

For example, IBM partnered with Walmart, Nestle, Unilever and other food giants to trace food contamination with blockchain and thereby improve food safety.

Full coverage



Defining digital trust

Blockchain technology, for all its merits, is not a new technology but rather it’s a combination of proven technologies (the Internet, private key cryptography and a protocol governing transactions) applied in a new way.

Blockchains are built from 3 technologies
Private Key Cryptography P2P Network Program (the blockchain protocol)
Identity System of Record Platform

Trust is a risk judgement between different parties, and in the digital world, determining trust often boils down to proving identity (authentication) and proving permissions (authorization).

Meaning, ‘Are you who you say you are?’ and ‘Should you be able to do what you are trying to do?’

In the case of blockchain technology, private key cryptography provides a powerful ownership tool that fulfills authentication requirements. The private key also spares a person from having to share more personal information than they would need to for an exchange, leaving them exposed to hackers.

Authorizing transactions is a result of the entire network applying the rules upon which it was designed (the blockchain’s protocol). This distributed network must also be committed to the transaction network’s recordkeeping and security.

Authentication and authorization supplied in this way allow for interactions in the digital world without relying on (expensive) trust.

Authentication is not enough. Authorization – having enough money, broadcasting the correct transaction type, etc – needs a distributed, peer-to-peer network as a starting point. A distributed network reduces the risk of centralized corruption or failure.

Blockchain has the potential to become the new gold standard of business and trade. But first, all nations need to accept the new technology. There are technical hurdles to overcome too as the blockchain protocol(s) used to secure the ledger of global trade and manufacturers must be trusted by all of its users and be effectively un-hackable.

For more thoughts on trust, check out the following articles:

“The Economist”,

“World Economic Forum”,

Introducing the IBM Blockchain Network


While many financial institutions have explored, Bitcoin, the most well-established blockchain implementation for more the last couple years, the use of cryptocurrency has proven limited in scope and scalability.

However, Blockchain, the backend technology behind Bitcoin, has shown a lot of promise and several large companies including, IBM, are throwing their weight behind.  Fundamental units of blockchain are the transactions, where two parties exchange information.  The data is subsequently, verified and validated, whereby it is reviewed whether one party owns the respective rights for these transactions.

Blockchain Peer Network - 1

IBM Blockchain is based on Hyperledger Fabric from the Linux Foundation.  Hyperledger, an open source collaborative effort to advance cross-industry blockchain technologies, is hosted by The Linux Foundation®. IBM provides blockchain solutions and services leveraging Hyperledger technologies, including Hyperledger Fabric and Hyperledger Composer. For more see

IBM is already working on applying blockchain in the finance and logistics industries. It’s now working to use it to help food industry improve traceability by providing the businesses with a shared store of information that they can trust regarding the provenance and destination of ingredients.

To accomplish this, IBM is collaborating with a consortium of food manufacturing and distribution giants including Nestle, Tyson Foods, Dole, McCormick, Walmart and Kroger to identify new uses for blockchain technologies in the supply chain.   For more information checkout the article by Peter Sayer, “IBM wants to make blockchain good enough to eat”,.

In addition, IBM has recently launched an enterprise blockchain platform as part of its range of cloud services. The IBM Blockchain Platform is currently the only fully integrated enterprise-ready blockchain platform designed to accelerate the development, governance, and operation of a multi-institution business network.

The IBM Blockchain Platform is currently the only fully integrated enterprise-ready blockchain platform designed to accelerate the development, governance, and operation of a multi-institution business network.

·  Based on Hyperledger Fabric V1 runtime optimized for enterprise requirements

·  Specialized compute for security, performance and resilience

·  Delivered via the IBM Cloud on a global footprint with 24×7 Integrated Support

·  Full lifecycle tooling to speed activation and management of  your network

 IBM Blockchain Network

Businesses that want to roll their own blockchain can access IBM’s array of developer tools, including the Hyperledger Composer framework for mapping business processes to code.

For more details checkout:

  1. The IBM Blockchain Platform,
  2. Peter Sayer, “IBM wants to make blockchain good enough to eat”, Aug 23rd 2017, retrieved 9-23-2017,
  3. IBM Blockchain,
  4. Dr. Thomas Kaltofen, “5 Points how Blockchain will change our lives in a revolutionary way”, retrieved 9-24-2017,

Blockchain Explained

There has been a lot of hype surrounding technologies such as blockchain and cognitive computing. In the case of Blockchain this buzz is well deserved as it has the potential to revolutionize the way business is done on the Internet.
As blockchain strategies gain traction and the technology matures, organizations are becoming increasingly aware of the fundamental way that business transactions will change. However, many people still have a hard time pinning down exactly what it is and how implementing can help businesses be more successful. In this blog, our goal is to provide a brief overview of the Blockchain technology, provide a couple examples of how it has been applied and provide you with several links to learn more information.
So what is the problem with how we do it today
Let’s start of by first framing the problem with most traditional business networks. First and foremost, no business operates in a vacuum. Each participant must keep their own ledger and asset transfers between businesses are slow, inefficient, and costly.
For example, lets’ take the example of a Car Leasing Business Network, as shown below. Without blockchain, this is how the business network would look like:

Note for more details on the entire case study, checkout

In the traditional scenario  you can clearly see the severe deficit of trust caused by the inefficiencies in record keeping and the ability of back actors to influences outcomes to benefit themselves.

we can already see several concerns such as:

  1. Multiple ledgers – making it difficult to figure out who owns what and when ownership gets transferred.
  2. This is EXPENSIVE and INEFFICIENT – due to duplication by almost every network participant along with adding several layers intermediaries adding costs to the services.
  3. Slow updates – As each participant has its own ledger, real-time synchronization isn’t possible
  4. Error-prone updates – Each participant has to rely on its own business processes to update their ledger and as there is NO central authority this will lead to errors.

Enter Blockchain

Simply put, the Blockchain is a shared version of the truth for anything that can be captured in a digital format (e.g., stocks, music, e-book, contracts, securities, titles, etc.).  The Blockchain relies on a digital ledger that maintains an ever growing list of data records, which are decentralized and tamper proof.

The best know example of this new database technology is Bitcoin. Here are a few of the possible applications of this new technology.

Another great example for the application of blockchain is real estate property around the world:

Imagine the number of legal documents that should be used that way. Instead of passing them to each other, losing track of versions, and not being in sync with the other version, why can’t *all* business documents become shared instead of transferred back and forth? So many types of legal contracts would be ideal for that kind of workflow.You don’t need a blockchain to share documents, but the shared documents analogy is a powerful one.”

William Mougayar, Venture advisor, 4x entrepreneur,
marketer, strategist andblockchain specialist

Now if we take a look at our Car Leading example with blockchain involved, this is how the network would look like

The car leasing network gets some benefits with blockchain:

Shared ledger. The ledger is now an append-only distributed system of record shared across all participants in the business network.

Smart contracts. Smart contracts are business terms embedded in transaction databases and executed with transactions.

Consensus. All participants in the business network agree to network verified transactions.

In addition these benefits, the process has

  1. Shared records but administered in a centralized way
  2. Permissions. Viewing permissions are defined for each participant in the business network to ensure privacy.
  3. Efficiency. Transaction times and data synchronization is reduced from days to near real time. Overhead and intermediary cost reductions.
  4. Reduced risk. Risk of tampering and fraud is reduced with transaction certifications and signatures.


In the next post we will deep a little deeper into the how Blockchain works. IBM is a recognized leader in making blockchain real for business. We are helping many hundreds of clients on their blockchain journeys. Here are some additional links


“What is Blockchain Technology? A Step-by-Step Guide For Beginners”, retrieved 9-16-2017,


Public vs Private – blockchains advantages and disadvantages

Recently one of my clients asked me my perspective on the advantages of public verses private blockchains.

Blockchain - benefits

This led to an extended discussion on several key topics –

  • Autonomy
  • Transparency
  • Security
  • Availability
  • Transaction speed
  • to name a few.

Afterwards, I did some additional  research and ran across a good blog, by Altabel Group’s Blog,  on the topic that I wanted to share.

Now everyone is talking about bitcoin, blockchains, its impact on the world economy, etc.. We can find lots of articles on the internet telling us when blockchain first appeared, the way blockchain works, its perspectives for the future. In my article I tried to look deeper and analyze different types of blockchains, their advantages and […]

via Differences and advantages of public and private blockchains — Altabel Group’s Blog