Transforming supply chains with blockchain technology
October 27, 2021
Every business has a supply chain. It can involve the linkage of materials, parts, products, services, processes, individuals, departments, organisations and companies. In fact, almost any key component of the business can be part of the supply chain. This makes fast, efficient and secure supply chain management essential for a successful, profitable enterprise; and yet there is a huge and variable array of disparate technologies supporting those key linkages. For example, people and processes still connect using phone calls and faxes, through to email, smartphone apps and unified comms platforms. More recently, the Internet of Things (IoT), artificial intelligence (AI) and machine learning have become key components of the supply chain.
According to shipping giant, Maersk, one shipment of refrigerated goods from East Africa to Europe can pass through around thirty people and organisations and involve more than 200 interactions. With this level of complexity, corruption in supply chain data is a significant management challenge that can take a wide variety of forms including manipulation of provenance data, item quantity and payments information, as well as simply the introduction of fake goods into the system.
To address these challenges, industry professionals are increasingly looking to new blockchain technology to reduce costs, build transparency and improve security, by providing end-to-end digital surety across an entire supply chain. As a digital ledger, blockchain can record supply chain transactions between two parties onto blocks of data, which cannot be altered without breaking the cryptographic signing of each block. Blockchains also provide transparency, traceability and real-time logistics tracking, making anyone on the network accountable for their actions in the supply chain. Processes including electronic funds transfer and smart contract management, as well as negotiations support and procurement, can also be connected via a blockchain to build trust and confidence with new suppliers, partners and colleagues.
By securely and chronologically logging each transaction, blockchains can eliminate suspicious and duplicate transactions. Once verified, using a consensus algorithm, and cryptographically sealed into data blocks, the transaction is set in stone or ‘immutable’.
Public vs Private
While blockchain is seen as a major disruptive technology for supply chains, the industry is yet to harness its full potential at scale. This may be because the first blockchains were originally associated with Bitcoin and enabling the management of cryptocurrencies. These public blockchains are fully decentralised where there is no single entity in overall control and anyone can download the software, view the ledger and interact with the blockchain. Not necessarily what you want in a supply chain scenario.
That’s why Haidrun has developed a flexible and scalable private blockchain platform built on an advanced architecture that uses AI engines to help accelerate intelligent business automation and deliver secure and transparent transactions. Unlike public blockchains, private blockchains are ‘permissioned’ and retain control so no one can enter this type of network without proper authentication. This helps eliminate illicit activities, provides a high degree of regulation and can be run by an enterprise on-premise or as a Blockchain-as-a Service.
Haidrun removes much of the complexity and variable expense of public blockchains and supports simple interoperability with third-party systems to provide a platform for trusted collaboration. Underpinning the Haidrun platform are three core features: container technology, dynamic block sizing and a new advanced blockchain protocol, Larad, which uses a fast and efficient voting-based, consensus algorithm. Working together with the platform’s integrated AI engines, these features deliver the next generation of smart contracts and with standard REST APIs they can easily integrate and interoperate with other enterprise systems, databases and blockchains.
The fundamental Haidrun value proposition is to unlock the real business benefits of supply chain finance and blockchain technology to provide fast, secure, scalable and cost-effective solutions for digital supply chains and eCommerce. Blockchain technology stands to boost the global economy by $1.7 trillion in the next decade according to a report published last year by PwC and enterprise blockchain deployments will deliver much of these gains.
Speak with our industry-leading experts today on how we can implement blockchain technology in supply chains for you.