DC Velocity - February 2020

28 DC VELOCITY FEBRUARY 2020 www.dcvelocity.com
At first blush, it seems like blockchain’s distributed ledger technology
could be the perfect solution to many of the supply chain’s problems.
But before companies can reap the benefits of this exciting new
technology, they must think carefully about where to apply it and
how to overcome a few key stumbling blocks.

BLOCKCHAIN ABSOLUTELY SEEMS LIKE THE TECHNOLOGY INNOVATION SUPply chain has been waiting for. Why? Well, supply chains are heavily distributed and heterogeneous. No single company “has a supply chain.” Instead, everyone is a member of a highly complex and ever-evolving supply chain network.

In this type of network, you are highly dependent on others: your customers and suppliers, your warehouse and logistics providers, your transport carriers, your brokers and trade banks, your contract manufacturers, your channel partners and distributors. The orchestration of supply chain planning and execution activities across all those partners is paramount, and sharing information effectively is the lubricant that creates a well-oiled supply chain. Currently, however, that orchestration and information sharing is primarily done through emails, spreadsheets, and messaging. Why? Because data is scattered everywhere. It’s caged in the silos of each partner’s systems, redundant and in different representations. Everyone is looking at their own “truth,” and data integration between partners is feared like the plague because it is so complex. Collaboration across company boundaries is therefore the undisputed number-one unsolved business problem in supply chain.

What could be a more fitting solution for this task than “distributed ledger” blockchain technology? After all, the promise of blockchain is to provide “immutable truth” across a vast network of “nodes” and to enable the sharing of data freely but securely with only those with rights to it. With blockchains, business partners will be able to execute “smart contracts” independent of any third-party authority or technology vendor and use “tokens” to pay for the infrastructure and distribute value as an incentive for participation. Wow!