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How IoT and Blockchain can Revolutionize SCM in the Future

Last updated on March 22, 2018 by Dotsquares

Gartner have predicted that “By 2021, one in 10 warehouse workers in established economies will be replaced by autonomous mobile robots”. Whilst it seems we are already on our way to make Supply Chain autonomous, why aren’t processes looking drastically different than they were a few years ago? In further thought what will be the new technologies that will redefine the way we see supply chain now?

These questions were answered in a report on Blockchain that was recently published by Forbes. The report has put into perspective how Blockchain can be the final solution to the trust related SCM (Supply Chain Management) issues that multiple industries are struggling with at present.

 A Brief History of Supply Chain

Earlier, during the emergence of mass production and distribution of products, these trust issues were resolved by branding. In that age, branding was regularly maintained by the manufacturers themselves, but as the scale of distribution grew, the need for a more efficient chain was acknowledged as important and found its solution in the present supply chain mechanism.

However, gradually, for the sake of more ‘efficiency’ and ‘optimisation’, quality of the products being sold continued to diminish, to the point where the whole SCM of varied industries regardless of their brand’s repute in the market, was put in to question. One evident example was that of MNC grocery retailer Tesco.

Automated Supply Chain Management

Analysts have since suggested many solutions for maintaining the SCM credibility, no solution, however, seems as plausible as that of automation. In today’s age, when we have the support of technologies like cloud and big data this solution sounds more plausible and even inevitable than it would have at any other time in the history.

So the proposed solution for the automation of Supply Chain, as suggested by the report, lies in the blended use of IoT and Blockchain.

Blockchain, a technology that was originally described in 1991 as a method for time stamping the digital documents, was actually put into use in 2009 by Satoshi Nakamoto for the mining and transaction of Bitcoin, a digital currency.The technology, as adequately described in this blog, can have multifarious applications including that of optimising the SCM processes for more secure and credible transfer.

At present, the long supply chains that literally run across the globe have brought logistics to the point of zero visibility, where end consumers have virtually no means to verify that the products they are consuming are actually the ones that they claim to be, and not something that was entered into the chain through some fraudulent methods.

With Blockchain, this issue can be solved to a high level degree. The idea is to create immutable digital records of the items that are dually protected by cryptography and distributed ledger system. This will eliminate the risk of meddling with the details of the products that the manufacturer had assigned to them.

To mitigate the risk of real-world products themselves being tampered with, IoT presents rather intriguing solutions. Dr Jemma Green, co-founder and chairperson of Power Ledger. io, states that using tools like infrared sensors and GPS in the logistics, the system can substantially be rendered as automated, which with the strength of Blockchain can bring the SCM to the point where it is remarkably incorruptible.

Resources:

https://www.forbes.com/sites/jemmagreen/2018/03/19/how-blockchain-is-replacing-branding-as-a-source-of-trust/#ac9d5a4fb1bc

https://www.gartner.com/smarterwithgartner/gartner-predictions-for-the-future-of-supply-chain-operations-in-2018/