Blockchain, originally developed to support bitcoin (which heralded the digital currency revolution), is being considered, or at least proposed, for a plethora of uses as a result of the continual promise of the Internet of Things (IoT). It’s one of the most hyped, and to be honest, the most over-hyped technologies out there. (As the doctor originally ranted in his initial post on The Big Bad Blockchain back in March, the blockchain has huge potential, but the reality of the blockchain in today’s supply chain is proprietary proposals that are akin to the most “open” supplier networks, which, as we all know, aren’t that open. In fact, one such network is famous for having prisoners, not customers.
But, as the doctor pointed out in We Need BlockChain, But Not for the Reasons You Think, we do need blockchain, and, in particular, a truly open, truly decentralized, truly open blockchain auditable by anyone and everyone (probably operated by a truly global non-profit conglomerate). Because, with that block chain, we could realize the secure transfer of IOUs between multiple supply chain parties. (And that would allow a return to a modern form of barter where supply chain partners could trade debts until they were ready to collect. [After all, one way to hedge currency exchange losses is to trade debts until you can buy or sell in your currency.]
But until we get there (as this is apparently very forward thinking even though trade started with barter), in the meantime there are three very good uses for a proper, open, block chain.
1. Transportation (Cost) Management
All affected parties in a supply can see who has what, when, what charges were applied, when, and how the total landed cost is affected.
2. E-Document Management Between Partners
In addition to the standard fare of purchase orders, acknowledgements, shipping notices, goods receipts, invoices, and payment notices, you also have e-Contracts, e-Agreements, dispute resolution communications, and other documentation critical to regulatory compliance and future lawsuit prevention.
3. Open Innovation Management
Right now we have a lot of crowd-sourcing networks and innovation management platforms where all sorts of parties can post and respond to all sorts of challenges. However, while they have their advantages, they have their disadvantage — in that not everyone wants to give a solution away without some confidence that, if their solution is best, they will get paid and, most importantly, even if it is not, their solution will not be stolen or used without renumeration or, at least, without acknowledgement. But with blockchain, the origin of each submission can be uniquely identified and verified throughout the network, which will help an organization maintain confidence as the ownership of IP can be proven and access can be tracked.
The big bad blockchain is coming, let’s just hope that it the right instantiation of it appears.