Securing Commercial Supply Chains with Blockchain
Trust is an issue on the minds of many CIOs; indeed it's what keeps many awake at night! Blockchain presents an advanced digital solution to the problem and is estimated to reach a market size of US$260 billion by 2028.
Companies of all sizes are trying to better understand the ability to implement and deploy blockchain technologies. The issue they face is the high cost and complexity to build, scale and maintain. Blockchain technology is complicated to engineer and implement and requires specialist expertise to manage.
For blockchain to be truly impactful, it must be able to seamlessly integrate with existing technology, for instance IoT, machine learning and edge computing. NTT DATA has been looking at how to bridge the gap between customer demand for blockchain technology and its practical application, addressing regulatory, governance and interoperability issues to ensure better accessibility and a lower carbon footprint.
What is blockchain?
At its core, blockchain is a distributed ledger system that records transactions across multiple computers. This ensures records are secure, transparent and tamper-proof. Each unique transaction is recorded as a block. Each block generates a unique signifier known as a 'hash' with each hash containing the signifier of the block before and after it. Together, they link to form an impenetrable chain.
As companies try to manage cyber threats and data security against government and industry regulation, blockchain provides a highly secure decentralized application. Blockchain is essentially a technological security fortress. It is perhaps why blockchain was first born of the financial services industry with payment processes proving the fastest growing use case of blockchain today.
Sustainable supply chains
It is not just in finance, however, where blockchain delivers value. It also has the ability to build resilience into supply chain models that combine ethics, sustainable principles and efficiency. This delivers a number of additional benefits.
- Improved security: supply chain operators benefit from the technology's unique cryptography providing protection against fraud.
- Trust: blockchain provides a single source of truth creating new value models in the digitization of traditional sectors while enabling new financing models such as asset tokenization.
- Efficiency gains: when used in smart contracts, self-executed programs triggered by predetermined conditions, can automate processes such as payments and quality checks. This reduces administrative costs while speeding up transactions.
Case study: Tecopesca
NTT DATA worked in collaboration with a fish processing company in Ecuador to help them guarantee trusted supply chains of tuna. NTT DATA enabled the solution through its implementation of IoTrace; a proprietary blockchain system that manages traceability. This demonstrated a paradigm shift in global supply chain design and management providing certainty to investors and transparency to retailers. Anyone who buys a can of tuna can scan the barcode label and track its journey from the fishing line to the supermarket.
Tecopesca used blockchain as a key enabler for realizing its sustainability ambitions and integrating transparency into its core supply chain operations.
Concluding remarks
NTT DATA has specialised in building sustainable blockchain technologies including Blockchain Reconciliation Platform, a general-purpose multi-industry reconciliation platform. BlockTrace is a solution that builds and provides applications according to business use cases. StampChain, is a GDPR-compliant document certification platform and KayTrust is a framework for organizations to manage end-to-end customer identities.
When combined with IoT technologies these proprietary offerings can be leveraged in multiple use cases such as:
- Reducing rates of fraud in the pharmaceutical industry
- Monitoring and controlling the handling of medical drugs within healthcare
- Demonstrate the ethical sourcing of materials in fashion
- In agriculture blockchain can provide a transparent record of the origin of the produce from farm to store
- Track renewable energy sources in the utilities industry
- Digitization of public land registration and identity management
Blockchain is not an easy technology but its rewards are boundless. It can be adopted by any size of organization and with the right partner, provides a trusted, transparent and secure supply chain that will help CIOs get a better night's sleep.
