With blockchain set to disrupt the supply chain, you’re left to wonder whether companies are really and truly prepared to trust each other to reap the benefits.
Apparently not, according to Biju Kewalram, the chief digital officer at the logistics company Agility, writing in Forbes this week.
Blockchain is an industry buzzword. Thousands of articles have been written about its potential for the supply chain and everyone’s a believer. But the number of companies actually getting into it belies the hype.
A recent study by the Boston Consulting Group says that 88% of transport and logistics professionals think blockchain will disrupt the industry, yet 74% of them say they have given the issue barely a cursory glance, or worse still, they haven’t even begun to think about it.
Costly paper chase
Why are they holding back when the benefits are so in-your-face? Kewalram argues that paperwork in the supply chain accounts for some 20% of the overall shipping cost. So a secure, shared electronic database system to replace the paperwork could slash costs for adopters.
Blockchain essentially means that everyone along the supply chain puts their data into one place, creating perfect traceability in a transaction. Freightwaves says it well: “To put it simply, a blockchain is like a database. It’s a way of storing records of value and transactions. However, calling a blockchain a new type of database is like saying email is a new way of sending people letters.”
With one shipment sometimes generating up to 200 documents, the database aspect alone is appealing but the real attraction is how such a system could tie into the whole world of big data and the Internet of Things devices like smartphones.
The diamond industry, for example, is using a blockchain to ensure the provenance of individual diamonds, from mine to jeweler.
Kewalram cites the potential for a microchipped sweater…