{"id":9343,"date":"2020-08-17T06:46:03","date_gmt":"2020-08-17T06:46:03","guid":{"rendered":"https:\/\/www.experfy.com\/blog\/?p=9343"},"modified":"2023-11-20T16:20:30","modified_gmt":"2023-11-20T16:20:30","slug":"the-transformational-impact-of-blockchain-based-supply-chains-nine-real-world-use-cases","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/fintech\/the-transformational-impact-of-blockchain-based-supply-chains-nine-real-world-use-cases\/","title":{"rendered":"The Transformational Impact of Blockchain-based Supply Chains: Nine Real-World Use Cases"},"content":{"rendered":"\t\t
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In May 2016,\u00a0Don Tapscott<\/a>\u00a0published\u00a0Blockchain Revolution<\/em><\/a>,<\/em>\u00a0his\u00a016th book<\/a>, this one co-written with son\u00a0Alex<\/a>.\u00a0\u00a0Don<\/a>, whom\u00a0I\u2019ve known\u00a0for over 25 years, has an uncanny knack for identifying The Next Big Thing and explaining it to everybody else through his books, articles, and\u00a0speeches<\/a>.\u00a0\u00a0Don and Alex have each developed a follow-on blockchain book.\u00a0\u00a0Earlier this year, Alex published\u00a0Financial Services Revolution<\/em><\/a>, while a few weeks ago Don published\u00a0Supply Chain Revolution<\/em><\/a>, which I will now discuss.<\/p>\n\n\n\n

Supply Chain Revolution<\/em>\u00a0consists of nine chapters, edited with a foreword by Don.\u00a0\u00a0He opens his foreword by noting, \u201cWhen we first started working on this book, the coronavirus (COVID-19) hadn\u2019t yet made headlines\u2026 \u00a0As I\u2019ve become fond of saying, \u2018If you\u2019ve got it, a supply chain brought it to you.\u2019\u00a0\u00a0I suppose that, during these times, I could add, \u2018If you can\u2019t get it, a supply chain let you down.\u2019\u201d<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u201cThe global supply chain is a $50 trillion industry,\u201d wrote Don.\u00a0\u00a0\u201cIt\u2019s the foundation of commerce and our global economy\u2026\u00a0\u00a0Information technology has certainly improved the flow of goods globally over the last decades\u2026\u00a0 But, as the COVID-19 crisis revealed, there is still critical work to do.\u201d<\/p>\n\n\n\n

\u201cToday\u2019s supply chains are complex, with various manufacturers creating components of goods that move through trucks, planes, boats, and trains,\u201d he continued.\u00a0\u00a0\u201cToo many parties are still coordinating and conducting their transactions through a Byzantine network of computer systems with disparate applications like e-mail, phone, and fax.\u00a0\u00a0It is still slow, expensive, and very serial in nature\u2026\u00a0 Consumers and supply-chain players alike struggle to get accurate information.\u201d<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Blockchain technologies\u00a0promise<\/a>\u00a0to improve supply chains applications significantly by tracking the life cycle of its components and product; securely protecting the transactions and data moving through the supply chain; and increasing the speed and accuracy of commercial settlements.\u00a0\u00a0Blockchains provide an immutable, non-revocable record of all the transactions through the entire supply chain cycle, which will be of great help in the\u00a0timely resolution<\/a>\u00a0of errors and disputes among widespread supply chain partners.<\/p>\n\n\n\n

Let me briefly summarize three of the use cases featured in\u00a0Supply Chain Revolution<\/em>.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Global Trade<\/strong><\/h3><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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First, I\u2019d like to focus on global trade.\u00a0\u00a0\u201cGlobal trade has grown in complexity and magnitude over millennia, but its processes remain relatively unchanged,\u201d observed the authors of the book\u2019s first chapter.\u00a0\u00a0Global trade is now worth more than $18 trillion per year, and its transactions generally involve a variety of institutions spread around the world, including shippers, freight forwarders, ocean carriers, ports and customs authorities.\u00a0\u00a0\u201cEach participant in the network of global trade stands to derive unique value from blockchain; however, the most successful implementation and commercialization of platforms will be contingent upon collaboration rather than competition.\u201d<\/p>\n\n\n\n

Ninety percent of the goods involved in global trade are handled by the ocean shipping industry.\u00a0\u00a0So, not surprisingly,\u00a0Maersk<\/a>\u00a0– the largest container ship and supply chain operator in the world –\u00a0launched a project<\/a>\u00a0in 2017 in partnership with IBM to explore the use of blockchain technologies for transforming cross border supply chains.\u00a0\u00a0The Maersk-IBM collaboration led to the development of\u00a0TradeLens<\/a>, a blockchain-based platform designed to accelerate the digitization of global trade logistics.<\/p>\n\n\n\n

\u201cFor Maersk, the problem was not tracking the familiar rectangular shipping containers that sail the world aboard its cargo ships – instead, it was the mountains of paperwork that go with each container,\u201d noted this\u00a0New York Times<\/em>\u00a0article<\/a>.\u00a0\u00a0\u201cMaersk had found that a single container could require stamps and approvals from as many as 30 people, including customs, tax officials and health authorities.\u00a0\u00a0While the containers themselves can be loaded on a ship in a matter of minutes, a container can be held up in port for days because a piece of paper goes missing, while the goods inside spoil.\u00a0\u00a0The cost of moving and keeping track of all this paperwork often equals the cost of physically moving the container around the world.\u201d<\/p>\n\n\n\n

\u201cHow can global trade companies best embrace the fast-paced world of blockchain?\u201d asked the chapter\u2019s authors as they offered a few final thoughts.\u00a0\u00a0First, start with the problem being addressed, not the technology.\u00a0\u00a0\u201cUltimately, the genuine convergence of business and technology frames of thought will yield the most success.\u201d\u00a0\u00a0Second, scale up incrementally.\u00a0\u00a0\u201cActing quickly on the wrong use cases can be demoralizing and can slow down momentum in the long run.\u201d\u00a0 Last but far from least, work with ecosystem partners to develop blockchain solutions.\u00a0\u00a0\u201cCollaboration trumps competition,\u00a0<\/strong>when it comes to blockchain initiatives\u2026\u00a0 Blockchain\u2019s unique selling point is its ability to connect parties; the best solutions will be those that speak to multiple stakeholders\u2019 needs.\u201d<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Food Traceability<\/strong><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Next, I\u2019d like to discuss the use of blockchain technologies to address the safety of the food supply chain around the world.\u00a0\u00a0In 2016, in response to a series of food contamination scandals, Walmart, IBM, and\u00a0Tsinghua University<\/a>\u00a0\u00a0–\u00a0\u00a0a top research university in Beijing – set up a collaboration aimed at\u00a0using blockchain technologies<\/a>\u00a0to track the shipment of foods from their sources.\u00a0\u00a0That way, if they detected an outbreak such as\u00a0E. coli<\/a>\u00a0or\u00a0salmonella<\/a>\u00a0in the foods being tracked, they could quickly identify and pull supply off grocery shelves or restaurant menus.\u00a0\u00a0The initial pilot focused on the\u00a0movement of pork<\/a>\u00a0from Chinese farms to Chinese stores.<\/p>\n\n\n\n

Two years later, Walmart and IBM successfully completed a\u00a0second pilot<\/a>\u00a0in the Americas, which reduced the time it took to track the specific farm in Mexico where a mango was grown from seven days to 2.2 seconds.\u00a0\u00a0Following a series of\u00a0E. coli outbreaks<\/a>\u00a0affecting romaine lettuce that sickened hundreds, killed five, and caused grocers and restaurants to throw out every bag until the source was located, Walmart announced that starting in September 2019, it\u00a0would require<\/a>\u00a0all its suppliers of leafy green vegetables to input detailed information about their food into a blockchain database.<\/p>\n\n\n\n

The key takeaways from the food traceability use case include: carefully identify the problem warranting a blockchain-based pilot; engage and prepare members of the supply chain; identify the required data; leverage existing processes and information systems; and continue to experiment and learn.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Manufacturing 4.0<\/strong><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Complex products – cars, airplanes, computers, smartphones – consist of a variety of components, some physical and some digital, often designed and developed by different hardware and software companies around the world.\u00a0\u00a0\u201cAs organizations start to embrace manufacturing 4.0, the focus shifts to the integration of heterogeneous participants across the manufacturing ecosystem to enable fine-grained and responsive networks of distributed manufacturing activities,\u201d explained the author of the book\u2019s use case on manufacturing 4.0, the final one I\u2019d like to discuss.<\/p>\n\n\n\n

\u201cWhat is missing is a common and trusted platform that facilitates relationships between companies of different sizes across the value chain to build harmonized applications on an ecosystem level,\u201d the chapter\u2019s author noted.\u00a0\u00a0\u201cBreaking informational silos, blockchain facilitates the transparent, secure, and controlled exchange of data across organizational boundaries.\u00a0\u00a0It could thereby serve as a trusted industry-wide platform for collaborative value-creation activities to orchestrate and manage local or geographically dispersed manufacturing activities.\u201d<\/p>\n\n\n\n

Beyond individual complex products, the need for a trusted platform to help orchestrate and manage a wide variety of collaborative activities becomes even more pronounced with the rise of\u00a0smart connect products<\/a>\u00a0that must all work together as an\u00a0integrated system<\/a>, whether dealing with homes, factories, hospitals, cities, transportation or farms.<\/p>\n\n\n\n

For example, a\u00a0classic tractor<\/em>\u00a0becomes\u00a0smart<\/em>\u00a0as it adds sensors, computing elements, software and other technologies that help it monitor and adapt to its local environment.\u00a0\u00a0It morphs into a\u00a0smart, connected tractor<\/em>\u00a0by linking to its product cloud for more advanced capabilities like predictive diagnostics and remote support.\u00a0\u00a0It joins a\u00a0farm equipment system<\/em>\u00a0by sharing data and control information to better coordinate with related machines like tillers, planters, and combine harvesters.\u00a0\u00a0Finally, the tractor becomes a component of an overall\u00a0farm management system<\/em>, that includes not just farm equipment, but also irrigation, seed optimization, and weather data systems.<\/p>\n\n\n\n

\u201cI can imagine a supply chain that is a high-metabolic shared network, with a real-time, single version of the truth about the location, quantity, and custody of goods,\u201d wrote Don Tapscott in the book\u2019s foreword.\u00a0\u00a0\u201cWe could use smart contracts to make smart payments in the network, thereby reducing conflict, human intervention, and legal fees.\u00a0\u00a0We could redirect vital medical supplies to hospitals hardest hit.\u00a0\u00a0Things themselves could make real-time micropayments as they moved across the network.\u00a0\u00a0Costs would be lower.\u201d\u00a0 In conclusion, the supply chain opportunities are immense, and even more important in light of the Covid-19 crisis.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

The supply chain opportunities are immense, and even more important in light of the Covid-19 crisis. Learn how blockchain is revolutionizing a different supply chain, from general use cases like global trade to more specific ones like food traceability and manufacturing. <\/p>\n","protected":false},"author":612,"featured_media":9344,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[192],"tags":[98,550,551],"ppma_author":[3320],"class_list":["post-9343","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fintech","tag-blockchain","tag-supply-chains","tag-transformationa-limpact"],"authors":[{"term_id":3320,"user_id":612,"is_guest":0,"slug":"irving-wladawsky-berger","display_name":"Irving Wladawsky-Berger","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g","user_url":"","last_name":"Wladawsky-Berger","first_name":"Irving","job_title":"","description":"Irving Wladawsky-Berger, a Guest Columnist at WSJ CIO Journal, is Research Affiliate at MIT Sloan School of Management, Adjunct Professor at Imperial College, London, and Chairman Advisory Board at r4 Technologies."}],"_links":{"self":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/9343","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/users\/612"}],"replies":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/comments?post=9343"}],"version-history":[{"count":5,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/9343\/revisions"}],"predecessor-version":[{"id":34184,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/9343\/revisions\/34184"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media\/9344"}],"wp:attachment":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media?parent=9343"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/categories?post=9343"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/tags?post=9343"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/ppma_author?post=9343"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}