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Blockchain meets the supply chain: a primer

April 05, 2019

If you’ve been in IT for very long, you know that there have been plenty of technologies and solutions over the years that overpromised and underdelivered. Often, when there’s a lot of hype surrounding something, it’s easy to assume that it will join others in history that came up short. Where blockchain is concerned, however, all signs are pointing to a technology that will indeed have a significant impact on the solutions you implement in the future—it’s merely a matter of time. Here are answers to common questions to help jumpstart your education.

What is blockchain?
According to blockgeeks.com, a blockchain is a time-stamped series of immutable data that’s managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e., block) are secured and bound to each other using cryptographic principles (i.e., chain). In even simpler terms, it’s a fancy database where information is gathered, shared and tamper proof.

What are the benefits of blockchain?
There are a few benefits of blockchain:
  1. Sharing. One advantage is having a shareable (although encrypted) database that partnering companies can access (with coordination) to provide additional value to themselves or customers, or to gain previously unobtainable insights.
  2. Tamper proof. Data is immutable thanks to cryptography and distributed ledger technology.
  3. Decentralized. Data doesn’t reside in one place, making it impossible for hackers to target or for the data to be lost.
  4. Efficiency gains. Like most technologies, blockchain doesn’t hold much value unless it’s implemented and appropriately used. True blockchain implementations in business include building processes and workflows, called smart contracts, around the blockchain to gather data and then use it. Therefore, one benefit is the streamlining of operations.
 
How can blockchain help the supply chain?
To date, the most popular use of blockchain in our industry can be seen in the food traceability initiative between Walmart and IBM with its Food Trust solution. The goal is to increase food safety and give customers more confidence in the origin of food and methods of growing/raising.
Other potential applications can be found in pharmaceutical, manufacturing and healthcare.

What’s the timing of all this?
Using Geoffrey Moore's “Crossing the Chasm” bell curve, the use of blockchain in our industry is, at most, currently at the “early adopters” stage. Finding actual implementations is challenging, and information is sparse.

Also, due to the complexity of building custom blockchain solutions around specific business processes, you won’t find SKUs for plug-and-play supply chain software that uses the blockchain.
Still, the benefits of blockchain are genuine, and we don’t think this is a fad.

How can I get started with blockchain?
While most solution providers will be happy to learn a little about blockchain and keep it on their radar for future consideration, there are some who may wish to leverage the opportunity to differentiate by becoming an early adopter. If that’s you, Ingram Micro’s blockchain expert Brandon Gruttadauria is available to provide guidance and can get you started with blockchain solutions from IBM, Azure and AWS.