Blockchain is an innovative solution that integrates data analytics and data integrity components. A digital structure, blockchain consists of a growing number of data records otherwise known as blocks that are cryptographically linked together through the usage of timestamped hashes. These cryptographic hashes also contain transaction data and history. The creation of blockchain resulted as a response to lack of data integrity. This ledger of data records can record two-way transactions and is highly resistant to modifications of data due to the inherent system set-up.
Although blockchain technology is still in an initial testing and implementation stage, it has disruptive and transformational potential. Especially within the supply chain industry. It will change the way we produce, market, purchase, and consume products. With the implementation of blockchain technology, our transactions (conducted in real time) will be more secure and reliable. Blockchain will allow supply chain professionals to identify counterfeits, record transactions, avoid malfunctions, and adhere to socio economic restrictions.
Healthcare: SAP (Systems, Applications & Products in Data Processing) is working on a cloud-based platform where pharma wholesalers will verify all prescription drugs prior to consumer sale. Combining SAP and blockchain technology will enable pharma professionals to detect and track counterfeit prescription drugs and medicines throughout the supply chain. It will also allow consumers to verify product codes, expiration dates, lots, serial numbers, and other pertinent data. Blockchain is enabling healthcare professionals to track and maintain patients’ medical records allowing data to be shared with doctors in a very secure, efficient, and timely manner. Establishing these technology-based systems will lead to further transparency and accountability in the healthcare industry.
Food and the Consumer Packaged Goods Sectors (CPG): Blockchain can also track products from producer to consumer. This could be one of the biggest advancements ever achieved in the food and the CPG sectors. As the value stream is constructed now, it exposes various distribution channels to unreliable data and the resulting risks associated with dirty or inaccessible data.
Blockchain will establish distributive ownership amongst the various channels and offer total connectivity from the first to the last lever. This will not be an easy exercise since many of a product’s movements occurs outside of a controlled atmosphere. Therefore, in order to succeed, a partnership model must be built. All channels in the value stream (producer, transporter, manufacture, warehouse and wholesaler) must have one objective: to build trust and transparency with the consumer. With the partnership model in place, and distributive ownership established, the consumer will have full visibility of the entire product roadmap prior to purchase or use.
With the advancements in tracking provided by blockchain, supply chain professionals can now catch counterfeit goods before sending them onto the next channel. This supply chain advancement will ensure greater supplier compliance and obtain consumer confidence. These are just a few of the many supply chain management advancements that blockchain is expected to provide within the next several years.
Machine Learning and Predictive Application: Ever-evolving blockchain technology will help to refine existing capabilities by predicting future value, estimating probability, inferring an unknown, classifying objects, detecting associations, grouping similar products, and identifying corresponding outliers.
Estimating Product Life Span: Further enhancement in technology will allow consumers and producers to view and estimate the product’s life expectancy. Based on this innovative information, the consumer or producer can better ascertain the right price point for purchasing the product or raw material. Future procurement procedures could be based entirely on blockchain software and product life expectancy estimates.
Automotive Supply Chain: A report by Frost and Sullivan indicates that the penetration rate of blockchain technology in certain functional areas such as retailing and leasing, supply chain logistics, and smart manufacturing will hit 37.2 % by 2025. Recent advancements in blockchain technology has made it possible to track vehicle ownership, financing, registration, insurance, and service transactions, providing a huge increase in data reliability.
Efficient Transaction (Contracts and Payments): Using a smart contract, blockchain’s new technology allows businesses, logistic partners, and banks to reliably integrate delivery and payment in real time. A smart contract is a computerized business transaction procedure that automates the terms of a contract. Using a smart contract, the proof of delivery from a logistics carrier automatically triggers the digital invoicing and payments via the banking system. There is almost no wait time between invoicing and payment. The result is a simplification of financial operations and a potential to reduce working capital requirements. All of this automation will have significant positive effects on the bottom line.
Digitalizing Trade and Shipping information – Maersk and IBM have launched a joint venture to use blockchain technology to make pipeline shipping information easily accessible in real time and paperless trade more realistic.
Restructuring Procurement Deals: Procurement deals and negotiations will be based on total company volumes, not on the volume of individual business units. With blockchain, it is possible to work out the exact volume discount based on the total purchase while protecting the privacy of each stakeholder in the chain.
Relief for Data Challenges
Some major challenges to data science include inaccessible data, privacy issues, and dirty data.
Inaccessible Data: When data is missing from a mathematical equation, we can find the missing number using an algorithm or econometrics. However, in the world of digital data, the predicted accuracy sharply declines if a subsequent series of numbers is missing. With the use of blockchain, the right mix of artificial intelligence (AI), and the IoT, we will be able to fix such gaps using the information of cross border transactions.
Privacy Issues: Exclusive privacy rights and compliance are two essential aspects of data management. These two components will continue to apply to blockchain technology as well. Since this technology works on a democratic and distributive notion, the hindrance of information flow wouldn’t be as big of an issue as with more traditional systems. In most industries, supplier and manufacturer relationships hold the key for both upstream and downstream information flow for a product. Therefore, a partnership model between the two entities is likely to ensure compliance and increase communication/information flow.
Dirty Data: It can be a challenge to claim and explore data. The majority of data in a transaction system is usually full of flaws, and over 50% of an employee’s time is spent cleaning the data set. Currently, cleansing data is confined to removing duplicates and assigning a few correct words within the system to capture errors. Challenges increase when we try to correct past data involving more stakeholders, less cooperation, no time to correct, and frequent hierarchy movement or ownership shift. In reality, this painstaking re-work and data cleansing only corrects 10% to 20% of data faults.
How Blockchain Will Help: Through a decentralized agreement, algorithm, cryptography, and blockchain validated data, there will be less need for data manipulation in the system because blockchain ascertains the origin of the data through its linked chains. Blockchain will help to further nurture and advance the overarching concept of Big Data. Handling enormous data sets and the high costs associated with the creation of blocks are some of the main reasons why blockchain appears to be growing at a slow pace. As blockchain technology gains further traction, as professional and operational expertise builds, and as technology costs decrease, businesses should witness extraordinary data transformations and innovations that will revolutionize their entire business.