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Global supply chain & blockchain: Why Toronto’s Kevin Hobbs sees the industries continuing to intertwine

As for the future, the potential for blockchain-enabled solutions to transform the supply chain and logistics industry is potentially endless — or so we will find out.

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We live in a world of data, both in our professional and personal lives: sending and receiving information via email multiple times a day, posting messages and interacting with others via our social media platforms, transferring files on an ongoing basis, and using a plethora of applications to share all kinds of content. Much of this data is confidential or at least private. We trust our apps, external servers, and the cloud to send, receive, and store valuable data efficiently and securely.

In the supply chain, there’s a similar scenario.

Each link in the chain shares data or information. One user sends it to the next, and so on. The implication is that each person, or link, in the supply chain, is communicating information quickly and accurately from one to another, but more often than not the information received at the end isn’t exactly the same as it was at the beginning. This has always been a problem. And, depending on the nature of the chain itself, errors or “weak links” along the chain could potentially create expensive issues.

The complexity and lack of transparency of the current supply chains don’t have to occur, say many people who follow the emerging field of blockchain technology.

Blockchain is a viable solution for improving supply chains for many reasons,writesbestselling author and futurist Bernard Marr.

“There is not one central authority over the blockchain, and it’s extremely efficient and scalable. Ultimately, blockchain can increase the efficiency and transparency of supply chains and positively impact everything from warehousing to delivery to payment.”

Blockchain creates an unchangeable record of transactions, which is what supply chain managers need. The technology is suitable for tracking the origin of goods and establishing trust in shared supplier information.

Even prior to the COVID-19 crisis, retailer Walmart implemented blockchain in an effort to prevent E. coli outbreaks. Walmart is now running a project with IBM’s Food Trust Solution to track lettuce from its suppliers to Walmart shelves.

Experts agree.

According to Kevin Hobbs, blockchain consultant and executive working in the area, blockchain has the potential to offer needed capabilities to supply chain management.

The supply chain industry is well-positioned to become reliant on blockchain technology, and the change could easily take place sooner than later,” says Kevin Hobbs. “And now that the world is immersed in the COVID-19 pandemic, it’s become evident that some of the old ways aren’t as efficient as they could be. Blockchain can strengthen some of the weaknesses that exist along traditional supply chains.”

He’s correct.

Over the past few weeks, numerous stories have been reported in the media about shipments of goods, including medical equipment, face masks, and other items, that haven’t arrived at their intended destinations. Or shipments that did arrive and were stored but haven’t been accounted for.

For example, according to ABI Research Principal Analyst Susan Beardslee, “Rising costs, shrinking capacity, and panicked customers are shaking up the freight transportation and logistics markets.”

The shipment and cargo industry is experiencing a large decline in volume for cargo shipments sourced from China, including canceled or postponed sailings. The American Association of Port Authorities reported a 20% decline in port volumes, and intermodal activity has dropped by 50%.

A supply chain employing blockchain technology could have likely eliminated or at least greatly reduced some of these issues.

“Blockchain,” Hobbs adds, “creates an unchangeable record of transactions, which is what supply chain managers need. You’d know exactly where every shipment is at any given time. The technology would be perfect for tracking the origin of goods and establishing trust in shared supplier information.”

While others will argue that traditional supply chains are generally efficient, we’ve learned in recent weeks that they are not infallible.

In March, HFS Research and Wipro issued a report based on a poll of 300 senior executives worldwide. Of them, 75 percent consider blockchain to be a strategic priority. The report also noted that supply chain management is one of six broad areas on which 95 percent of enterprise initiatives focus.

Saurabh Gupta, chief research officer at HFS Research,noted that2020 promises to be the most exciting year with enterprise blockchain adoption coming of age to solve real-world business problems.”

Hence, there’s been a call by many to use blockchain as part of their supply chain efforts. In the wake of the COVID-19 crisis, companies are realizing that there’s a better way to ship, track, and store goods while maintaining a permanent record.

In the future, blockchain could bring many new benefits to the supply chain industry. For example, if a product is recorded in a ledger on a chain, it’s there and nowhere else. It’s also confirmed with a digital signature, so there’s no doubt or question. Everyone involved has a copy of the transaction, and once the status has been recorded it can’t be altered. Then, when it goes from one place to another, that status is updated virtually immediately and shared with all participants.

Since the data is stored in the blockchain, all authorized participants have a complete history of everything in the supply chain. Any member of the supply chain can watch as items move from place to place.

As for the future, the potential for blockchain-enabled solutions to transform the supply chain and logistics industry is potentially endless — or so we will find out.

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