Although the term Blockchain has been gaining strength in recent years, it is very likely that its closest interpretation is related to the financial industry and more specifically to cryptocurrencies. However, the technology behind Bitcoin and the rest of these currencies has great implications for a wide variety of industries, including logistics.
To briefly explain the concept of Blockchain, we will say that this technology allows the transfer and verification of encrypted information between peers, and each stage of said transaction creates a block of data that is stored in a public book. Each block is assigned a cryptographic key that contains information encoded with respect to the previous blocks in the chain. If someone tries to manipulate any link in the chain, it will make the key change making it immediately apparent. This achieves a high degree of reliability in information security.
We know that one of the biggest problems that arise in supply chains is the lack of visibility and that at the moment when a shipment leaves from its point of origin, the information that is available is scarce even when the company rely on ground tracking tools. Even these problems can be accentuated as the chain gets longer and the nodes increase. For example, a transported product may pass through different regulatory environments depending on the country (customs, health records, conditions such as incoterms, etc.), a variation in the means of transportation (air, land, sea, rail, etc.) may be required and In addition, special transport care may be required, such as the environment in which it must be transported, among many others.
There are currently tools that allow customers and suppliers to track their merchandise in real time but in a timely manner. With Blockchain technology, collaboration between the different stakeholders in the chain is much more fluid and secure. You can make decisions faster and even transactions can be generated by eliminating third parties and cost overruns (Smart Contract). Therefore, the difference in addition to transparency and security lies in the detail of the information that can be obtained during the process.
A clear example is the linking of sensors in the containers to the blockchain. These can be scanned by a device that will automatically create an entry in the blockchain ledger, giving the option to any company with a legitimate interest in shipping, which verifies the ledger and knows the conditions of the container and its content at any stage of process. If, for example, the damaged goods arrived in a shipment of perishable products, it would be easier to identify when the container lost the acceptable refrigeration parameters through blockchian technology. In this way the great blockchain book will allow you to identify if there are parts of the supply chain that are failing and adjust them.
In conclusion, new disruptive technologies such as Blockchain open a number of possibilities to the industry; However, it is important to understand that these types of changes (which are part of the so-called “fourth industrial revolution”) is not a leap that can happen overnight. In an investigation carried out by WBR Insigthts, Alexander Kharlamov, an IoT expert applied to business models and a member of one of the research teams of a project on enablers for the collection of personal data use made up of universities such as Cambridge, Warwick, Surrey and UWE said that the adoption of blockchain technology in supply chains requires that people, the process and technology be ready. Kharlamov added that the success of this technology in the future lies in overcoming the challenge posed by human behavior, as people’s habits have shown that they do not reach high yields when exposed to large volumes of data.
Author: Pablo García, Senior Client Development Consultant at Cerca Technology
Preukschat, Alex. Blockchain: La Revolución Industrial de Internet. 2da edición, Paidós Empresa, 2018.
Abrams, Deborah. (2018). 6 questions and 1 answer about blockchain inlogistics. Supplychaindive. https://bit.ly/2uiEVqt
Kharlamov, Alexander, A. (2018). Advanced Supply Chains: Visibility, Blockchian and Human Behaviour. ResearchGate. https://bit.ly/2MhrEt4