- Many of the challenges that we face in business
involve storing information securely
and exchanging information with our customers and suppliers.
In this video, we'll talk about how blockchains
could help us store and share supply chain data
in a new way.
In practical terms, a blockchain is basically a database
that can be shared by lots of different people.
I think of a blockchain like a shared electronic log book,
which, by the way, is why blockchains are sometimes called
distributed ledger technology or DLTs.
Let's think about how that could be useful in a supply chain
by examining what happens when a company places an order
with their supplier.
It starts when the buyer generates some information,
like a purchase order number
and transportation routing instructions.
At the same time, the supplier creates a sales order
and tracks information like the lot numbers
and the serial numbers of the products
along with prices and scheduled shipment dates.
The buyer and the seller are both tracking information
about that same order,
but they're doing it in completely different systems.
So they have to duplicate efforts
and pass information back and forth,
which often leads to delays and discrepancies.
With a blockchain, they could each be entering
their own information into the same database.
That could speed up the transaction
and eliminate any discrepancies.
And if both companies maintain copies of the blockchain,
then there's less risk of data being lost
due to an accident or a cyber attack.
And if lots of other companies
were using that same blockchain,
they could all have access to the information they need
about the products moving through their supply chains.
In some cases, they might even open up the blockchain
so that other people on the internet
can see what's happening.
That can be useful for auditing and compliance.
Or if they're concerned
about keeping the information secret,
they can limit who can join the blockchain
and what information they can see.
Another interesting feature of some blockchains
is the ability to create smart contracts.
With smart contracts, you can create programs
that execute automatically when certain things happen,
like automatically paying an invoice
when a shipment is received.
Blockchains can also be used to store digital property,
like pictures or music,
or they can store a digital twin of a physical object.
These are called non-fungible tokens or NFTs.
There's a growing trend to use NFTs
to authenticate products to reduce the risk of counterfeits.
Of course, blockchains are also used
for tracking cryptocurrencies like Bitcoin and Ethereum.
And these are growing in popularity
as a way to pay for products and services.
From synchronizing data to implementing smart contracts,
blockchains can help us solve
some of the most common problems that we face
in supply chains.
I think you'll find that the simplicity of storing, sharing,
and securing data with blockchains is going to play
an important role in enabling your digital transformation.