Blockchain


Blockchain is set to revolutionise how we work in many industries, the technology is advancing but also being applied to many sectors as blockchains are being constructed from the point of source.

 

Blockchain is a secure ledger system, which in effect will track a product from source, a new ledger entry will be built based on each trasaction that takes place with the product or as that product is used as a component to build finished goods.Block Chain image

 

For example, for car manufacturing a finished car that rolls off the production line could be logged as a ledger entry on the blockchain by the manufacturer, the car is then traded onto the dealership, this transaction between the manufacturer and dealership is also logged onto the blockchain ledger.  Once the car is sold onto a consumer a new ledger is added to the blockchain to log this transfer of ownership, the transactions can be supported by the use of smart contracts so reducing the need to use 3rd party intermediateries.  In reality the technology is already in place to enable blockchains to be established from the component stage of manufacture, so all SKU's used within the production process for the vehicle, specification sheets, technical information, installation and quality check reports can also follow the finished product off the production line.

 

There are potential benefits for blockchain technology to be used, as the ledger can not be altered or changed by individuals, a consumer will have full visibility of the product back to source.  This will ensure that the product is "genuine" and will mitigate risk for all parties, from a supply chain perspective a full tier tracing system removes potential reputational risk for modern slavery being used in the supply chain during the manufacturing process of parts that may have been used to build the vehicle.

 

There are many aplications for blockchain usage and many benefits such as:

  • Transparency - leading to risk mitigation
  • Cost Saving
  • Reduction in resource consuption and waste generation
  • Time saving

Smart contracts

Smart contract are a digital contract that acts on computer coding in order to update a blockchain ledger.  The contract is programmed to act on an IF; THEN; DO basis.

For example:

IF we require a purchase order for 400 units from supplier A for delivery on 01/01/19, we can raise the smart contract and issue this to the suplier for them to sign off to confirm they will deliver 400 units on that date.

THEN the supplier delivers 400 units on 01/01/19 and the goods are scanned into the warehouse.

DO class the order as complete and log to the blockchain ledger along with documentation (shipping docs, customs clearance paperwork and warehouse GRN)

OR

THEN the supplier delivers just 300 units on the 01/01/19

DO not class the order as complete and raise a query to the supplier, courier and procurement team for follow up.

Regardless of the full or partial delivery the information will be logged to the blockchain so full transparency is available.