Tech Companies Can Drive Real Solutions with Blockchain Technology
In March the White House announced a new initiative to fix the issues facing supply chains. Nobody has been immune to the challenges and congestions that all supply chains have faced lately. Although consumers have only been feeling the pain in more recent years, the truth is that supply chain problems have been decades in the making as they’ve suffered from underinvestment, outsourcing, and offshoring.
To address the challenge, the Administration announced the launch of Freight Logistics Optimization Works (FLOW), an “Information sharing initiative to pilot key freight information exchange between parts of the goods movement supply chain.” It includes 18 initial participants including private businesses, warehousing, logistics companies, ports, and more. But unfortunately, what it doesn’t include right now is technology providers.
Supply chains are fairly archaic in their management and communication methods, still often relying on spreadsheets, emails, paper contracts, and even whiteboards. Although there have been fits and starts to digitize the industry, much of it remains siloed and task specific.
Technology – specifically blockchain technology – promises to drive effective supply chain solutions. Created to help power cryptocurrencies like Bitcoin, blockchain sounds complicated, but it is really just a new, better form of database. Inherent in blockchain technology are security, transparency, decentralization, and visibility. But most importantly, trust.
The reason why blockchain was developed for cryptocurrencies is that it allows for trust between two parties that may not otherwise trust each other (such as in a money exchange), or even know each other! As a transaction is initiated it creates a block that is validated by cryptography and algorithms. It then gets added to the ledger (chain) and links back to the previous block. The block is broadcast to all the permissioned nodes in the network and then the transaction may be executed. Everyone in the network can see this distributed data, and the information in each block is immutable – it can’t be changed or altered, by anyone. Ever.
Blockchain’s ability to handle high levels of data with speed and transparency make it well-suited for an industry like the supply chain where many organizations must work together to have a functioning chain. If all parties can trust the data the whole process becomes faster, more efficient, and less costly. Blockchain applied throughout a supply chain management system enables smart contracting, track & trace from end-to-end, and easy auditing. All of this rich and trustworthy data allows the use of AI & predictive models so that companies can more proactively manage shortages, bottlenecks, and maintenance. These are all features that the U.S. Government and commercial companies will seek in new and improved supply chain management systems.
So, we, at WaveDancer, fully support the Administration’s initiative but we sincerely hope that the Department of Transportation, which is launching the FLOW initiative, makes room for technology – specifically blockchain – at the solutioning table. Because otherwise, they will be missing a critical piece of the puzzle.
Source: Fact Sheet: Biden-Harris Administration Announces New Initiative to Improve Supply Chain Data Flow, 3/15/22