Blockchain in Supply-Chain

Ever wondered what would have been going in the mind of Satoshi Nakamoto when he came up with the concept of Bitcoin and its underlying database Blockchain in 2008. The growth of Blockchain has been phenomenal and even threatening to the existence of traditional banks.

Primarily Blockchain is distributed, immutable and transparent ledger which records every transactions in a cryptic way that occurs in the network after consensus is built. Two most prominent features of Blockchain are Immutability (No transactions can be erased or reversed once verified and accepted) and security (uses cryptographic algorithm based on private/public encryptions).

No doubt the greatest implementation or expansion of Blockchain is happening in financial service area but underlying features are now being explored and extensively being leveraged is other business areas primarily supply chain.

Blockchain in Supply Chain Use Cases

Retail Industry – Retail Blockchain is capable of providing seamless customer experience through an integrated seller and service platform. Retailers can enhance trust in their products and build a stronger brand by showcasing that their products are “Fair Trade” and “Ethically Sourced” – and this is assured at every step of their supply chain.

How a retail Blockchain concept can be applied

1. Detailed Attributes captured

2. Origin and authenticity verified

3. Traceability of each supply chain event

4. Real time global stock visibility by product

5. Sale verification and electronic invoicing

6. Live payment execution on the basis of pre-defined contracts

Customers can log on to a Blockchain account managed by sellers and can locate certified partners and be assured that product or service they are receiving can be trusted and are affordable as compared to the market rates.

Resources Industry – Natural resources industry like Mining or Oil and Gas work on a unique model wherein large number of equipment and components are provided to customers on leases. The companies are charged on the basis of usage of the assets in the mine/oil well – Load carried/distance travelled, on time etc. Main challenge is lack of secure trust based technology solutions for renting/leasing of heavy equipment assets in resources industry.

Using IOT (Internet of Things) sensors/devices elementary equipment data can be collected and transmitted to the blockchain network, which would then be integrated with backend IT systems for invoice generation and settlement. The data is secure, immutable and Traceable.

Another example in the same resources industry is tracking of ore which is extracted over a period of time. It has basically three components:-

1. Vendor

2. Extraction attributes – wellbore, pressure

3. Quality and Quantity

4. Sample characteristics

5. Producer

6. Ore Grade Quality

7. Capacity

8. End – product

9. Rail/Haul

10. Demand

11. Market location

12. Transportation assets

Blockchain provides access to Real Time production, inventory and in-transit data. Better operational control and planning for overhauling of equipment which causes shutdown. In the end, cost effectiveness is achieved based on overall improved performance.

Future Outlook - Blockchain is here to stay and grow. Many countries have started legalizing trade through Blockchain platform. Continuous technological evolution is a multiplier in favor of Blockchain as it builds trust among all stakeholders. Smart contracts are lucrative offering as it is much quicker and cheaper as compared to time taking paper work. The world is moving towards embracing digital technologies like never before and Blockchain is a clear winner as it adds flavors of intelligent operations and rapid execution in its USP.

Milk-Run Consulting

https://milk-run.co.in