Omnichain board member Chris Mahl explains how Blockchain breaks down data silos, driving greater transparency and trust across the supply chain.
In nearly every industry today, organizations are challenged with finding efficient, secure methods to manage and share data related to transactions, contracts, assets and more. From finance and real estate to healthcare and retail, information silos and disparate databases create operational inefficiencies and make true collaboration between business parties difficult to achieve. However, a new technology has emerged that allows companies to break down these data silos and digitally connect multiple systems, partners and customers: blockchain.
Introduced in 2009 by Bitcoin inventor and pioneer, Satoshi Nakamoto, blockchain was originally developed to track cryptocurrency exchanges. A permanent, connected, peer-to-peer ledger, blockchain digitizes transactions by saving each exchange in a series of cryptographic blocks, from which the technology gets its name. No single party can alter any records, and any change requires consensus from all those in the network. The resulting ledger is immutable, providing complete data transparency and building trust for all members of the blockchain network.
Growing blockchain adoption
With its origins in cryptocurrency, many organizations in finance and banking have naturally gravitated towards investing in the technology. However, blockchain carries the potential for a wide variety of applications beyond financial transactions. Its ability to provide real-time data visibility and transparency while keeping private information secure can help companies across industries improve operational efficiency, establish trust and make critical business decisions.
Healthcare practices, for instance, are exploring blockchain as a solution for the secure management of patient data. Hospitals, health systems, and insurance providers can use blockchain to record clinical information, share medical records, and even manage patient consent. The entertainment industry has found applications for the technology as well, employing it to prevent piracy. Movie studios and music labels can leverage blockchain to monitor owned content distribution, rights management, sales and licensing deals. And in real estate, blockchain can be used to manage contracts, property records and monetary transactions to streamline the home buying process.
In fact, a 2018 Deloitte survey of more than 1,000 global executives revealed not only growing interest in blockchain’s potential, but also rising investment in its practical applications:
- 74% of respondents stated that their companies recognize a “compelling business case” for Blockchain.
- 34% reported already having a blockchain system in production.
- 41% expect to deploy a blockchain solution within the next 12 months.
With companies across industries managing the increasingly complex networks involving the production, transportation and distribution of goods, it’s no surprise that 54% of survey respondents are exploring blockchain’s use cases for the supply chain.
Data transparency in the supply chain
With today’s global supply chains spanning multiple manufacturing sites, suppliers, distribution centers and retail channels, blockchain is poised to transform supply chain management for companies of all sizes. As products pass through each point in this complicated network, information is stored in disparate databases, recorded on spreadsheets or filed away as paper documents. This disconnect between parties results in limited visibility into operations, creating inefficiencies and imbalances upstream and downstream.
Without end-to-end visibility across their supply chains, companies lack the data needed to make critical decisions when it comes to demand forecasting, manufacturing planning, and inventory replenishment. Businesses have to rely on a reactive approach, incurring losses due to inaccurate inventory levels, poor turnover, increased markdowns and out-of-stock goods. Though some companies have implemented enterprise resource planning (ERP) systems as a solution, the majority of these applications only provide warehouse-level planning and do not factor in store-level demand. Instead, they need a solution that provides real-time data transparency so that they can make proactive business decisions and drive growth.
Blockchain offers a way to seamlessly share data between each party in the supply chain through an end-to-end ledger of goods movement from source to shelf. All transaction records are digitized, centralized and accessible, so that every member of the network can view in real time what has been produced, distributed and sold. Companies can then boost profitability with proactive and accurate forecasting and planning based on true demand.
Click here to read more.