There is a lot of talk and excitement about blockchain being a real opportunity for supply chain. I believe that blockchain will be an important evolution in supply chain management.
International trade is essentially a contract of carriage and the execution of it. As the Maersk/IBM blockchain pilot showed, that simple contract and execution of carriage has hundreds of decentralized parties and stakeholders. Blockchain’s smart contract capabilities as a decentralized system between involved parties allows for the potential of process simplification ( read disintermediation…and we know how much intermediation there is!). Think faster, irrefutable, disintermediated.
So while the supply chain is ideal for blockchain , it may be too ideal to exploit quickly. Blockchain requires all parties to be part of the chain and therein lies the complexity. So many parties involved, so much decentralization, so much intermediation… add to that geographical, regulatory fragmentation. All the things that make blockchain interesting, make it difficult in this early age of transformation.
While the big international players are starting to become interested in this space and opportunities associated with it, I believe the traction will come from elsewhere – the players looking to blockchain enable discreet components of the blockchain and by doing so be able to offer immediate value to their end customers. One such discreet segment of the supply chain is the first and last mile.
I am working with a company called Openport in Asia, that offers technology layers to first and last mile trucking, providing electronic proof of delivery (EPOD) which accelerates payment and vendor management. Openport is developing blockchain protocols, essentially building the irrefutable epod, amongst other things. And they will be able to create immediate value to existing customers. When layered with crypto payments to parties in the trucking transaction, all kinds of vendor management opportunities become possible. In the United States, we have seen the creation of BiTA, a trucking blockchain alliance, looking to understand and develop protocols around this opportunity.
And the number of parties involved in a last mile delivery from port or distribution center are few – a controllable blockchain execution.
So while the whole international Supply Chain is the Holy Grail, in this space, we arewell served to execute the chain one link at a time.