The Imminent Blockchain Rush and Avoiding Supply Chain Disruption
For a brief time, blockchain was something of a market joke, an almost made-up word that drew investors for little reason other than it was “the future.” Now that blockchain is beginning to have a very real and very profound impact in how we operate within a technological landscape, it is time that we take stock of what this means for the modern supply chain.
Supply chains today are already complex. With a single product now requiring dozens or hundreds of stages across multiple geographic lines, complete transparency is a difficult proposition — even if it is something organizations continually strive for.
For those not in the know, blockchain is essentially a detailed, decentralized digital ledger where processes can be tracked and recorded in an unparalleled secure fashion. Cryptocurrency, for example, is blockchain technology being used as a way to keep digital transactions safe and unaltered. Each transaction is recorded as a “block” that together create a greater chain that cannot be altered without the consensus of each block before it. Its decentralized nature means that manipulating any data in the chain is virtually impossible.
The implications for the financial sector are the most obvious (payments, contracts, transfers, etc.), but what has industry professionals excited is the nearly limitless application. This includes many, many different facets of the modern supply chain which, if implemented, will provide transparency across all levels like never before.
BHP Billiton, for example, the world’s largest mining company, will implement blockchain to better track and record data throughout the mining process. In another example, diamond company De Beers plans to leverage blockchain to track stones from the point they are mined to store shelves. The possibilities are nearly endless and the technology can greatly increase overall efficiency and operating costs.
If there is a significant barrier to blockchain, however, it would be the electronics technology required to properly implement blockchain into the supply chain.
Very much like Internet of Things (IoT) technology, blockchain operates on a cloud-based system that requires each piece of the chain to be properly connected. This means that all applicable parties need to be far ahead of the obsolescence curve for the chain to operate effectively.
“Basically, a blockchain is a network across a large number of nodes. Each participant needs a node, which is the entry point into the blockchain,” says Bernard Golden, Vice President of Cloud Strategy at Capital One. “Keep in mind that a chain is only as strong as its weakest link, which is equally true of blockchains. If one node has performance, scale or security problems, they can impact the other nodes.”
This has the potential to create an extremely competitive component market as organizations that operate as part of a chain continually update and maintain their equipment to meet the necessary high standard. Output, efficiency, and storage capacity must be continually increased to keep pace. This necessitates the need for a BOM Monitoring system that can track the state of the market for each individual component so organizations can avoid imminent shortages – which lead to obsolescence issues and excessive allocation designations – that could put the security of the entire chain in jeopardy.