The introduction of blockchain has brought new opportunities into the supply chain, but what are they?
The age of the digital supply chain is here.
With new technologies such as AI, Big Data and blockchain at companies’ fingertips, there is an increasing importance to adopt new processes into operations to maintain a proactive supply chain approach. In this article, we define exactly what blockchain is and review the impact it has had in the supply chain space over the past few years.
What is blockchain?
Blockchain is essentially, as the name suggests, a chain of blocks. However, instead of a physical chain, there’s digital information (the block) stored in a public database (the chain). When a block stores new data, it is added to the blockchain. In order for this to be done successfully, four things must happen:
A transaction must occur – After making an online purchase, a block will group together thousands of transactions so that an individual’s purchase will be packaged in the block along with other users’ transaction information as well.
That transaction must be verified – Following a purchase, a network of computers checks over each transaction to ensure it happened in the way a customer said it did. The network confirms the purchase, including the time, amount and participants of a transaction in a matter of seconds.
That transaction must be stored in a block – Following verification, the transaction gets the go ahead. The transaction’s details are all stored in a block and will join thousands of similar transactions like it.
That block must be given a hash – Once all of the block’s transactions have been verified, it must be given a unique, identifying code called a hash. Once hashed, the block can be added to the blockchain.
How is blockchain influential in the supply chain?
There are several key ways in which blockchain is useful in the supply chain. These are:
Provenance tracking – Large organisations have complex supply chains….