In the OpenText™ Business Network – top ten supply chain predictions for 2018 blog post, prediction number 3 was Blockchain starts to be embraced across the supply chain. The full prediction stated:
In the meantime, companies continue to announce blockchain efforts that apply directly to supply chain activities. Typically, when discussing the use of blockchain technology in any industry, you start with possible use cases. In the prediction above, I mention supply chain finance and several track and trace use cases (food, shipping containers, and raw materials).
The supply chain finance use case is frequently mentioned because the use of blockchain started with Bitcoin and financial transactions. Supply chain finance sits at the intersection of supply chain and finance. The core idea for using blockchain is that a lending institution could monitor supply chain events and evaluate risks for lending money to make payments. In addition, the lending process could happen automatically via the blockchain with appropriate terms for each loan.
The freight industry, a key element of supply chains, has created a consortium called Blockchain in Transport Alliance (BiTA).
The purpose of BiTA is to assist in development of blockchain standards and education for the freight industry.
BiTA list 8 possible use cases. You can find them in the BiTA public deck here.
The list includes use cases for performance history, vehicle maintenance, quality assurance, compliance, capacity monitoring, payments and pricing, fraud detection and theft prevention. A number of companies have signed up – including shippers, logistics providers, software companies, and services providers.
One thing not mentioned in the prediction, but is critical for thinking about blockchain. It is highly likely that companies will be asked to participate in multiple blockchains.
For instance, consider the use of blockchain for customs processes. How many countries do you ship to or receive goods from? You may need to participate in a blockchain for each country. Even for seemingly simple activities, you should get ready to participate in multiple blockchains.
Consider the idea of tracking diamonds. The Kimberley Process – an UN-backed initiative aimed at keeping conflict diamonds out of the global precious stones market is looking at how to use blockchain for tracking diamonds and helping certify that some stones are not conflict diamonds. Simultaneously, De Beers is planning to do the same – building out its own platform. If a company buys diamonds from De Beers (the world’s largest miner of diamond) and one or more of its competitors – they will likely need to participate in both blockchain implementations.
What should you do? First, learn about Blockchain technology and start considering potential use case for blockchain in your business. You may also want to join relevant standards groups or consortiums. If possible, try creating a pilot project.
A recent article titled “The Truth about Blockchain” from Harvard Business Review suggests creating solutions that are “relatively high in novelty (uniqueness) but need only a limited number of user to create immediate value, so it’s still relatively easy to promote their adoption.”