By now, just about everyone has heard of blockchain networks – also known as distributed ledgers or smart contracts – thanks to their use in crypto-currency settings for the last several years.
Blockchain’s association with the mysterious underworld of crypto-currency bitcoin may have delayed its spread to other industries. As a result, few in the logistics industry know what distributed ledgers are and what they can do for the supply chain. For a little remedial education, the experts at IBM have provided this description of how blockchain works:
- Blockchain, an immutable, security-rich and transparent shared network, provides each participant end-to-end visibility, based on their level of permission.
- Each participant in a supply chain ecosystem can view the progress of goods through the supply chain, understanding where a container is in transit. They can also see the status of customs documents or view bills of lading and other data.
- Detailed visibility of the container’s progress through the supply chain is enhanced with the real-time exchange of original supply chain events and documents.
- No one party can modify, delete or even append any record without the consensus from others on the network.
- This level of transparency helps reduce fraud and errors, reduce the time products spend in the transit and shipping process, improve inventory management and ultimately reduce waste and cost.