Let’s start with the basics. What exactly do we know about blockchain? What is it? How does it work?
To begin with, blockchain was invented by Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. If you weren’t following the evolution and meteoric rise of bitcoin, you probably never even heard about blockchain until just a couple of years ago.
So why now?
Like bitcoin, blockchain has evolved and its evolution has taken blockchain technology well beyond the realm of bitcoin. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.
This makes blockchains potentially suitable for the recording of events, medical records, and other records management activities, such as identity management, transaction processing, documenting provenance, food traceability, and voting.
As a distributor, you have probably picked up a few keywords in that description, namely: transaction processing, provenance, and traceability. Key elements in supply chain management (SCM). Indeed, in a flurry of recent articles, we find blockchain touted as the next big thing in SCM, the technology that is going to revolutionize the field of SCM in the not so distant future.
A recent article in MH&L (Materials Handling & Logistics) quotes FedEx CEO Fred Smith saying: “We’re quite confident that it [blockchain] has big, big implications in the supply chain, transportation, and logistics. It’s the next frontier that’s going to completely change worldwide supply chains.” He uttered these sweeping statements while speaking at a blockchain conference in New York last month.
Does it surprise you to know that are even blockchain conferences taking place? Clearly, blockchain is no longer spoken of in the same breath as bitcoin. It’s becoming a tool for secure transaction processing and traceability. What does the future look like for blockchain? According to FedEx CEO Smith: [“Unless a company embraces new technologies such as blockchain, it will face] probably, at some point, extinction.”
Extinction? That’s rather dire. But only time will tell.
As a company that implements ERP software systems for manufacturers and distributors, Strategic Systems Group (SSG) will continue to report on blockchain developments. We have a keen interest in understanding the role that blockchain will play in streamlining and securing SCM for our clients.
For more information, call us at 310.539.4645 or email us at info@ssgnet.com. We look forward to speaking with you soon.
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