ECR Dinner Talk 2018: “Blockchain in Supply Chain Management: Dream or Reality?”
On the Friday 29th March 2018 ECR Thailand host the event to return the benefit back to ECR members with ECR Dinner Talk 2018 “Blockchain in Supply Chain Management: Dream or Reality?” The aim of this discussion today is to shade a light on blockchain especially for supply chain. How does it work and how blockchain can be used in supply chain management? With honorable speakers with a variety of business background from the world-famous companies: Rachanee Chanwatr – Accenture, Irence Wee -IBM and Dr.Chatchai Thnarudee -JP insurance and moderator Kraisar Gilitwala.
Blockchain in supply chain start from the bit coins, but the technology behind it, it’s being real test, very powerful and very useful in many sectors. And for supply chain, since they are so many things are moving around transitionally, goods, information, internalin payment with marketable with very complex modes. People see the grate opportunities that this could be the area after the financial sector. We already see the deployment of blockchain started in international services including supply chain.
We have gone through 30 years of internet. You can find of YouTube Ted Talk by Don Tapscott introduce the key message that “Blockchain is the internet of value”. Blockchain the next generation of the internet. For the past few decades, we have the internet of information at least 3 decades. When we send an email or a PowerPoint file or something. Actually, you did not send the original but the copy. It can send to the multiple user that can be distributed. Blockchain the internet of value of bit coin which secure for protect the double spend the same value to the other parties. Financial sector picks up the benefit first follow by the other sector in industry including supply chain as well.
Many people may understand that Bitcoin with Blockchain technology is actually the same with Bitcoin is a digital currency. That can be traded online through Blockchain but the technology behind Bitcoin will monitor transactions that take place between individuals. It is more secure than usual.
How blockchain could help in supply chain management?
A blockchain, as the name implies, is a chain of digital “blocks” that contain records of transactions. Each block is connected to all the blocks before and after it. This makes it difficult to tamper with a single record because a hacker would need to change the block containing that record as well as those linked to it to avoid detection. This alone might not seem like much of a deterrence, but blockchain has some other inherent characteristics that provide additional means of security.
The records on a blockchain are secured through cryptography. Network participants have their own private keys that are assigned to the transactions they make and act as a personal digital signature. If a record is altered, the signature will become invalid and the peer network will know right away that something has happened. Early notification is crucial to preventing further damage.
While the most prominent use of blockchain is in the cryptocurrency, Bitcoin, the reality is that blockchain—essentially a distributed, digital ledger—has many applications and can be used for any exchange, agreements/contracts, tracking and, of course, payment. Since every transaction is recorded on a block and across multiple copies of the ledger that are distributed over many nodes (computers), it is highly transparent. It’s also highly secure since every block links to the one before it and after it. 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. Chain of command is essential for many things, and blockchain has the chain of command built in.
(Ref: Bernard Marr, Opinions expressed by Forbes Contributors are their own., https://www.forbes.com)
How blockchain can handle the big data?
Once to look to blockchain is about visibility with all networks. Blockchain is essentially a distributed database forming a ledger. Changes to the ledger need to be agreed upon by every participant in the blockchain, which is reached through a consensus mechanism such as Proof of Work or Proof of Stake. Bitcoin is functions similar to currency. Cooperate blockchain to simply thing in the business. To see the visibility the moving transitionally in the industry network via blockchain technology. Blockchain capable to handle the bigdata within a minute. Users have gained the confident from data validation in blockchain.
Who is the owner of authority of using data in blockchain?
We can see the information related to our transaction. Digitalize information that we can analysts it from the big data analytic. We have our own governance of using data. With decision to use blockchain is agreement of sharing data already.
One of the best things about the blockchain is that, because it is a decentralized system that exists between all permitted parties, there’s no need to pay intermediaries (Middlemen) and it saves you time and conflict. Blockchains have their problems, but they are rated, undeniably, faster, cheaper, and more secure than traditional systems.
What are Smart Contracts?
In 1994, Nick Szabo, a legal scholar, and cryptographer, realized that the decentralized ledger could be used for smart contracts, otherwise called self-executing contracts, blockchain contracts, or digital contracts. In this format, contracts could be converted to computer code, stored and replicated on the system and supervised by the network of computers that run the blockchain. This would also result in ledger feedback such as transferring money and receiving the product or service. Smart contracts help us exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman.
Smart contract of sharing at least 2 parties between buyer and seller that design by trader. Could be customer, shipper, bank, insurance company. Can use digital of cryptocurrency use in blockchain that everyone could see the data at the same time. For example, for insurance process by program using the smart contract trading and sharing information like P.O. or Invoice. The smart contract as digital version. If we would like to use the blockchain as smart contract as solutions then you could see those information’s sharing among key player parties. Like we have seller, buyer, bank, customer clearance, insurance approve via smart contract. Using token as utility in the smart contract, it does not to be cryptocurrency or digital. For insurance could prove the valid of those transactions. If something happen smart contract can help the make sure of the validation for claim process could be done.
Sharing project that using blockchain in supply chain management
SUPPLY CHAIN BLOCKCHAIN:
Blockchain application may have one of the most profound impacts on the logistics industry, especially the supply chain. DHL and Accenture Unlock the Power of Blockchain in Logistics
Trend report explores the technology’s potential for improving transparency and traceability in supply chains and automating commercial processes Blockchain technology spending expected to increase more than tenfold globally between 2017 to 2021, according to International Data Corporation (IDC). Proof of concept successfully demonstrated track and trace of pharmaceutical products from manufacturing to patients, showing potential to eliminate counterfeiting of drugs.
Blockchain is a new type of database system that maintains, records and authenticates data and transactions. In supply chains, products are assigned unique identifiers that allow their entire history to be captured as it moves to the end customer. Stakeholders validate this information in real time and if anyone tries to tamper with, alter or erase a record, everyone will know.
As many as one million lives are lost each year due to counterfeit medications, according to Interpol, and it is estimated that up to 30 percent of pharmaceutical products sold in emerging markets are counterfeit. DHL and Accenture created a blockchain-based serialization prototype with nodes in six geographies to track pharmaceuticals across the supply chain. The ledger tracking these medicines may be shared with stakeholders, including manufacturers, warehouses, distributors, pharmacies, hospitals, and doctors. Lab-simulations show how blockchain could handle more than seven billion unique serial numbers and 1,500 transactions per second.
Blockchain have to agree among business parties to use the trust information in the blockchain like POC (Proof of Concept). Supply chain are start using blockchain as information gadget. We can use the EDI (Electronic Data Interchange) in the standard format in blockchain. Blockchain could make more supply chain professional life that come with digital solution.
This technology still new and need our professional to try to test and apply in your area. Information and process, transaction is there. The technology coming to help digital life the program cryptography. With digital era that we are need to encourage Thailand to move forward.