Supply Chain NextGen: Put the blockchain at work

Of Bob Trebilcock ·

7 September 2018

Editor's Note: This is the second of 3 columns on blockchain in the supply chain. The first can be found here.

Blockchain is enigmatic as a mermaid on the screen of the film in black and white. On the one hand, a number of commentators have their potential to transform the way we do business; on the other hand, the use cases were difficult to detect. In a sense, it reminds me of the discussions about RFID in the supply chain more than a decade ago during the Walmart mandate. During an RFID conference, I literally heard a presenter say that the information gathered from RFID tags could provide medical breakthroughs that could one day lead to a cure for cancer. So much for that!

But based on some conversations I've had recently, including one with Mark Walton-Hayfield, a digital business leader with Accenture based in the UK, use cases may emerge. And I think that emerging is the right word. Since to be effective, blockchain requires partner collaboration up and down the supply chain, it is not enough for the company to implement a blockchain strategy if its partners are not interested. It's a bit like being the first house on your block with a phone: technology has little value if there's no one you can call.

At the macro level, Walton-Hayfield notes that the blockchain could be new to the supply chain, but in the world of cryptocurrencies, it has been around for about a decade. In this regard, it is proven. Now we are at the stage where organizations are looking for ways to apply it in their organizations. The early adopters, according to Walton-Hayfield, are heavily regulated industries with complex and heavy supply chains required by customers, such as pharmaceuticals, aerospace and defense. In both cases, supply chains have traditionally been based on paper documents to document a chain of custody and to demonstrate that the correct steps and procedures for repairs have been followed.

"These are industries that require a level of traceability and evidence of what happened in the supply chain," Walton-Hayfield said. They also operate with a degree of confidence that business partners have done what they should do, and blockchain "is really a technology that enables trust."

One blockchain company in the UK is Thales Group, a manufacturer of avionics and sonar, just to name a few products, for aerospace and defense. "The idea was to see if the blockchain can be used to improve transparency and visibility around the certainty that the parties had the correct certifications and were not counterfeit or from the gray market," says Walton-Hayfield. The project started as a pilot and a proof of concept; At that point, Thales is examining whether it can apply blockchain to the incoming supply chain of some specific high-value long-term contracts. "One of the things Thales does is keep their kits and kits from suppliers to ensure parts are available when they're needed," says Walton-Hayfield. "They have to have a specific part for a specific project and in a specific configuration." By using the blockchain in the incoming supply chain, they can make a decision when the parties enter the port where and under what conditions and configurations are stored at that time. " This is important for Thales, which often works on the parties' availability contracts.

Along the way, Thales could consider making a case for adapting the blockchain to the MRO supply chain, to create the record of how a part was revised and maintained.

Regarding the evolution, Walton-Hayfield says it is still an emerging technology. "Last year it was proof of concepts and pilots," he says. "Now organizations are validating and testing the real world of solutions in a limited area, I think we will see success stories by 2020."

6 September 2018