Home » 3PL/4PL, Breaking News » Logistics industry sees blockchain as a ‘game changer’

Blockchain is one of the most influential trends to impact on the logistics and supply chain sector, according to a recent poll by industry analyst Ti-Insight.

The global survey found that 56% of supply chain executives believed that the technology was “a game changer.” A further 30% believed it to be “an interesting trend” and only 3% said it was “much ado about nothing.”

In a new report, Ti-Insight examines the viability of blockchain-based solutions in supply chain management. It noted that many claims have been made about the new technology, but that there are many confusions and misunderstandings about how it works and what benefits it will bring.

Part of the problem, it said, has been its conflation with cryptocurrencies such as Bitcoin and the distrust which this has engendered in the underlying technology.

Among the key findings of the report is that a new kind of trust model would be helpful in dealing with the fragmented nature of today’s supply chains. “In a commercial environment where there are numerous participants who need to establish relationships and transfer funds, blockchain can provide a trust mechanism to do this,” said the report.

Moreover, while the use of blockchain-based solutions can help reduce the number of paper-based exchanges along the supply chain, the blockchain will not make the paper-based processes disappear; rather it will be used in addition to the paper processes.

In addition, the distributed nature of the blockchain means that it cannot be tampered with easily, so this means transaction information is very trustworthy. In fact, said the report, blockchain technology is probably the most trustworthy mechanism for maintaining a transaction ledger there is.

According to the report’s writer, Ken Lyon, “Where many companies need to share data between themselves, their suppliers, partners, customers and competitors, the most obvious being supply chain visibility, blockchain is an exciting option.”

However, he warns that blockchain is not for everybody. “In many cases it may make no sense to implement blockchain technology, for example applications built around a centralised database and accessed by specific users.”

Lyon concluded, “Blockchain technology is still evolving and has a number of challenges ahead of it, not least performance. But this is the same for all technologies that emerge. The successful ones improve, adapt and evolve so long as they provide utility and value.”

Photo: Jack Moreh

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