Seems perfect, doesn’t it? I am not being sarcastic. This is
exactly how I felt, and still in many ways feel today, when
thinking about how perfectly suited blockchain is to solving
supply chain problems.
If you feel a big “but” coming, you are right. It turns out
that before we can even begin to implement blockchain and
realize its tremendous value for the supply chain, there are
obstacles we must overcome in three key areas: data quality,
technology complexity, and adoption model.
IMMUTABILITY DOES NOT EQUAL DATA QUALITY
In the world of multiparty coordination, data quality—or
having data that is accurate, complete, and timely—is a very
hot topic. That’s because it is important but very difficult
to achieve. Technology that provides “immutable truth”
seems like the perfect solution to this problem, but it really
isn’t. All “immutable truth” means is that once data is com-
mitted to the ledger, it can’t be changed. For example, if a
manufacturer first records the country of origin of a prod-
uct as Bangladesh on an electronic certificate, it can’t later
change that to U.S.—nor could anybody else who might
benefit from that change.
However, the vast majority of data-quality issues in sup-
ply chain are not someone changing data. Unfortunately,
it’s much more basic than that. Most problems are about
data being entered incorrectly in the first place or coming
in way too late. Or else they are about data being misun-
derstood or simply not being there at all. Unfortunately,
blockchain does very little, if anything, to address these
issues. That’s not a knock on blockchain; it wasn’t designed
to solve those problems.
Furthermore, while immutable truth is mostly a good
thing, it can sometimes cause problems. Why? Well, given
the complexity and nature of supply chains, things invariably do go wrong, and bad data does enter supply chain systems. For example, a supplier might enter the wrong country of origin, which subsequently holds up a letter-of-credit
payment and thus shipment of the goods. Or a logistics
provider might perform a major system upgrade, and all of
a sudden, all incoming advance shipment notices (ASNs)
have the product weights wrong. This type of stuff happens
every day, and fixing the issues across the entire supply