Blockchain has become an industry unto itself. While "blockchain" refers to a narrowly defined technology – namely, a distributed digital ledger or system of records that can be viewed and modified by anyone via approved consensus mechanisms – its use cases are broad. Every vertical from retail to supply chain management (SCM) and logistics have explored the integration of specialized blockchains into their operations.
With blockchain technology on the ascent, what are its most important applications? Let's take a look at recent developments to find out:
Blockchain in supply chain logistics and SCM
The supply chain is fertile ground for blockchain tech, which can deliver three overarching benefits:
- Transparency: SCM is often complicated by uncertainty about the provenance and handling of in-transit items. For example, how can anyone be 100 percent sure that luxury goods are authentic, or that pharmaceuticals haven't been tampered with? With key blockchain logistics such as immutable records of transactions, it's easier than ever to see what's happening across a supply chain.
- Trust: Efficient supply chains require trust between suppliers, logistic providers, banks, customs authorities and many other parties. However, coordinating their activities is often challenging. Enter blockchain. With "smart" (i.e., automatically enforced) contracts and shared access to data, traditional intermediaries – such as complex electronic data interchange transactions – can be eliminated, thanks to a more transparent process that fosters mutual trust.
- Accountability: The immutability of blockchain makes it ideal for establishing chain of custody for items as they move through supply chains. Logistics providers, private organizations and even government agencies can be held accountable for how their orders and shipments were processed.
Major logistics companies including UPS and FedEx have already made big bets on blockchain. UPS has joined the Blockchain in Transportation Alliance (BiTA), in part to help reduce the $30 billion in annual cargo theft estimated by the FBI. FedEx is also a BiTA member and has tested a custom blockchain in supply chain logistics for dispute resolution.
The advantages of blockchain for logistics ultimately resemble those of remote infrastructure monitoring solutions from trusted IT partners such as Paramount. In other words, you get to keep a close eye on critical assets and ensure their acceptable performance and compliance even amid rapidly changing conditions.
Retail blockchain solutions at a glance
Retailers are primed to become some of the chief beneficiaries of blockchain's effects within supply chains, since they will be selling many of the same products tracked by SCM-specific blockchains. A July 2017 Cognizant survey also revealed that today's retailers broadly expect blockchain to transform their operations in finance, IT and data management.
"Retailers are primed to become some of the chief beneficiaries of blockchain's effects within supply chains."
More specifically, blockchain technology might serve as a single source of truth for increasingly complex inventory management workflows, providing clarity despite the proliferation of short product cycles and numerous, hard-to-track SKUs. Blockchain-based solutions could also simplify the management of customer loyalty programs and, as a result, reduce balance sheet liabilities and fraud.
For retailers, blockchain ultimately represents an opportunity to streamline their processes and improve their margins in an already famously low-margin industry. Blockchain can even be combined with other technologies such as data storage solutions to ensure the integrity and continuity of retail operations. Paramount's data back up and storage management offerings include tools for disaster recovery, archiving, and system consolidation, all of which can complement blockchain implementations by supporting similarly trustworthy and continuous recordkeeping.
Learn more about how Paramount can assist you on your blockchain initiatives by contacting our team today!