Page 18 - Logistics News June 2019

Book Review

A Consensus on the Truth?

Blockchain Applications in

Supply Chain Management

This MIT Center for Transportation & Logisitics Roundtable
Report, compiled by Andrea Meyer and Dana Meyer, discusses
blockchain applications in supply chain management.

REPRESENTATIVES FROM nine manufacturers, discussed. To the
eight transportation companies, eight start-ups, extent that blockchain
a retailer and an industry association joined can facilitate both
experts from MIT for a highly interactive one-and- transparency and
a-half-day roundtable on the use of blockchain greater opportunities
technology in the supply chain. A variety of for secure transactions
industries were represented, including health care, between parties, it
aerospace, food, mining, electronics, chemical, could enable some
fashion and logistics. members of a supply
The fi rst half-day consisted of a series of chain to eliminate
lectures focused on blockchain technology itself, intermediaries.
to give participants a basic understanding and a Blockchain has the
common language for subsequent discussions. potential to force many supply chain actors to
Blockchain technology was defi ned as a data rethink their value proposition.
structure that stores data in a continuously Participants wondered whether existing
growing series of time-stamped blocks, and centralised databases and cloud computing could
operates as a distributed ledger where participants not solve supply chain management problems
must reach consensus before recording any in a more cost-eff ective way than a blockchain.
new input. Roundtable attendees learned about Some participants suggested that in many cases
the main constituent elements of blockchain where blockchain is currently applied, a simple
technology, including hash functions, public-key centralised solution might be an easier, more
cryptography and consensus mechanisms. effi cient way of dealing with the problem. Other
On the second day, the roundtable explored participants highlighted that blockchain makes
supply chain applications of blockchain in sense when there is a lack of trust in the dominant
four areas: traceability, sustainability, trade supply chain players, technology vendors or
documentation and dispute resolution. For each governments that might develop, deploy and
application, pre-selected participants described an oversee the data management systems.
example wherein they were using blockchain. Each Informal polling suggested that most
specifi c, real-world example led to a wide-ranging participants thought blockchain would create
discussion. some changes to their business but not be
Participants discussed the main challenges transformational. Opinions on the time required for
to using blockchain and how those challenges blockchain to add value were evenly split across a
might be overcome. There was an overall 1-2 year, 3-5 year, 5-year plus time horizons.
agreement about the need to ensure the collection
and recording of accurate data, to develop The future of blockchain in supply chain
interoperable standards, and to understand and management
promote incentives for adoption. The potential Will blockchain technology be widely applied
impact of blockchain on intermediaries was also in supply chains? Does it have the potential to

16 June 2019 | Logistics News