Blockchain is moving from testing phases to real-world platforms this year. Supply chain management is in high demand. Specialists are starting to crop up who remove inefficiencies and save companies money. Artificial intelligence, machine learning, and other new technologies are already being applied to supply chain optimization, but the new star is blockchain distribute ledger technology.
Blockchain, the technology which underlies bitcoin and other cryptocurrencies, has been described as “a record-keeping mechanism that makes it easier and safer for businesses to work together over the internet.” And what better way to build trust between companies than an unhackable, decentralized ledger?
Unlike the industry standard for supply chain management today that does not offer one, real-time view of all transactions to all the parties involved in the supply chain, a blockchain “master ledger” enables manufacturers and retailers to look at the same information at the same time. This cuts steps in the shipping and payment processes and streamlines revenue flow.
The other key attribute of blockchain technology is smart contracts – a business automation tool that can apply pre-determined terms and conditions to each new data entry before it becomes a permanent part of the distributed ledger. The tool automatically checks to determine whether there is an out-of-balance condition and if so, the system stops the record being entered. It can also help supply chain record keeping by tracking receipts, tracking the transfer of assets and managing purchase orders.
In January, Maersk and IBM announced a joint venture to deploy a blockchain-based electronic shipping system that will digitize supply chains and track international cargo in real time. It’s expected to save the global shipping industry billions of dollars every year.