Blockchain in the supply chain is known as a means to greater trust and visibility.
Said Andy Stinnes, venture partner at Cloud Apps Capital Partners, said dealers within a supply chain, stakeholders deal with a myriad of interdependent, globally dispersed parties that must exchange timely and accurate information.
Yet, these parties often operate under different jurisdictions and lack singular global oversight.
"In most cases, central governing bodies or intermediaries are either not available or can not be trusted," Stinnes said.
Therefore, a global distributed system that provides insight is a unique alternative, he said.
To implement its promise, its implementation is carefully implemented. These seven steps can help you do just that.
1. Determine blockchain's use case, feasibility
A strong business case is a must-have-must-take for the adoption and application of blockchain in the supply chain. It can help you determine whether it is the right technology for your organization.
"Begin with the end in mind," said Tammi Kay "TK" George, product marketing manager at IBM Watson Supply Chain. "Get prescriptive with a use case that is going to deliver results [and] best practices, and deliver more than cool technology. "
She said.
Blockchain is not a hammer for every nail.
Tammi Kay 'TK' GeorgeProduct marketing manager, IBM Watson Supply Chain
"Evaluate if blockchain is the right technology for your use case," George said. "Blockchain is not a hammer for every nail, but it is uniquely able to provide capabilities that other technologies cannot."
For many organizations, a wait-and-watch approach is best as a blockchain benefit proofs themselves and the current implementation complexities yield best practices.
"Compared to most other efforts, blockchain deployments remain among the most challenging," Stinnes said. "It should not surprise anyone that, to date, there are still very few such initiatives and reaching momentum."
2. Find the right blockchain partners
By definition, using blockchain in the supply chain is a collaborative effort that involves third-party data contributions, vetting and sharing.
Said Renee Ure, vice president of global supply chain at Lenovo Data Center Group, said: "Find partners who want to explore advantages with you, even if it is only for proof-of-concept execution." "There are some things you can't do alone."
Blocking requires many different partners to create new, unproven technology that offers limited value in its infancy, Stinnes said.
"The true benefits of blocking increase as the number of participating partners increases." he said. "Since there is no third party like this, they are often hugely problematic."
The ledger entries are only as reliable as the data that is entered.
Stephanie SoChief development officer, The Geeq Project
Unfortunately, supply chain security issues are real due to potential partners or their data is trustworthy.
"Stephanie So, co-founder and chief development officer at The Geeq Project, told public blockchain infrastructure as a service provider." "If one is thinking about many participants, some of which may be dishonest, and there is enough willingness to accept, not to date, it is passed along, then it might not help the business very much."
When assembling partners, it is important to remember that the data is available.
"The blockchain proof-of-concept should answer questions about what's working and what's not," Ure said.
To that end, to determine if it has served the intended purpose, she said. If the goal was efficiency, investigate whether the process gained efficiencies. If the goal was transparency, look closely at the results related to that goal.
"Can you trust the information, and how does it appear when it's done without blockchain?" Ure said.
3. Identify best areas for blockchain implementation
If you have been thinking about implementing blockchains in your supply chain but don't know where to start, look for areas that exhibit all of the following characteristics:
Data is exchanged between a number of unrelated parties.
No central entity or authority is available, and no reliance on a single entity is prohibitive.
A simple, consistent transactional process with well-defined data standards such as electronic data interchange (EDI) exists.
The value proposition is shared between partners, and everybody involved has the incentive to adopt a new technology and processes.
The digital asset is the value of the information that will be exchanged.
4. Aim for data interoperability
To get the most from blockchain, the technology must be well-integrated into the current technology ecosystem.
"Blockchain technology must be implemented as a feature of adhering to your wider data governance strategy," said Brian Platz, co-CEO and co-founder of Fluree, a blockchain-based data management platform.
Blockchain technology should incorporated data management that is interoperable with the organization's standard ERP systems, he said.
"Too many times we have seen a disconnect between public blockchain platforms with obscure programming languages like Ethereum and enterprise data requirements," he added.
5. Envision blockchain's potential
A focus on interoperability might also help multiply blockchain's benefits.
Blockchain can boost the value you gain from investments in EDI and automation processes, bringing immutability, security and visibility to your connections with partners and systems, George said.
"Ability to integrate with your current ecosystem will accelerate connectivity and information flow between parties and allow you to realize faster time to value," she said.
As you evaluate technology options, think about how to use it to tackle For example, addressing the challenge of delivery
"From there you might be invoice reconciliation capabilities, then returns management and extend to additional solutions," George said.
6. Understand blockchain volatility
Organizations should also plan for changes in the technology and plan accordingly.
"While the underlying technology and architecture are important, they are changing and blocking solutions are likely to undergo change in their technology before they become mainstream," said Jeff Stollman, principal consultant at Rocky Mountain Technical Marketing, which advises clients on new technologies.
The blockchain platform market is huge but fragmented, according to Gartner. Some current blockchain offerings focus on confidentiality, while others focus on tokenization or universal computing. Gartner deemed the most important blockchain offerings too immature for large-scale production and its supporting systems and security, but predicted these issues will change within three to five years.
Don't forget to plan for governance changes as blockchain.
"The governance rules need to keep the coalitions from breaking the way, so many early blocks have done via hard forks that split the basic stakeholder," Stollman said.
Bitcoin, Bitcoin Cash, Ethereum and Ethereum Classic all demonstrate this, he said.
7. Test the technology
Whatever path you decide to take with blockchain in the supply chain, a pilot program
"Good pick would be where you have the greatest control; then add a select trading partner on either side," said Ajay Chidrawar, vice president of global product management and customer success at CGS. "For example, if you're a wholesaler, then choose a factory and a warehouse services provider."
After testing the blockchain platform, consider expanding the network of testers.
"Expand the success by onboarding other trading partners – for example shipping companies or retailers – in the supply chain," Chidrawar said.
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