blockchainis 1Everything is blockchain. The technology is the answer to every problem even vaguely connected to data and security. At least that’s what the current buzz surrounding today’s darling technology. But is blockchain actually going to replace the various technologies that underpin today’s supply chain? Let’s look at just a few of the issues that will need to be addressed before this can happen.

Security

Blockchain is touted to be inherently secure because of its underlying design. This is probably the most valid of the various things that are being said about the tech. It’s secure because of the way transactions are recorded then duplicated across some number (possibly thousands) of locations that can be located anywhere. The fact that transactions are identified only by an account number means that even if the transactions are identified and traced, they remain anonymous because the id is only known by those who have the cypher.

Distributed ledger

The distributed ledger that makes blockchain secure and impervious to data loss is also one of its main limitations and a big reason that the tech isn’t suitable for something as transaction heavy as today’s supply chain. Managing the blockchain that underpins bitcoin is notoriously compute intensive requiring tremendous computing engines. Iceland’s rise as a haven to bitcoin miners (https://www.bloomberg.com/news/articles/2018-07-03/extreme-bitcoin-mining-aids-an-unexpected-revolution-in-iceland) and their draw on the country’s energy supply is well know. And the number of bitcoin transactions is miniscule in comparison with the volume of transactions that make up the supply chain. For that matter the speed of a single bitcoin transaction (https://coincentral.com/how-long-do-bitcoin-transfers-take/) can take 10 minutes. That kind of delay will simply not support the supply chain.

Translations

Blockchain is a database technology just like SQL or any other. Just putting an EDI transaction in a blockchain doesn’t magically eliminate the need to translate the content into a common schema. Each trading partner’s version of their transaction still needs to be translated to the format of the other partner.

Adoption

When EDI was introduced it was adopted by those trading partners that saw an advantage to the technology. It wasn’t until Walmart forced its suppliers to adhere to the format that EDI became ubiquitous. At least one of those two factors must be in place if anything that poses such a significant shift is to be adopted. Either the parties involved must perceive an advantage to the way they do business or they need to be pushed into complying and have a reason to commit resources to doing it. At this point there is no compelling reason for a massive shift to adoption of blockchain technology as a global standard for the supply chain.

While blockchain may offer security and data redundancy it is still in its infancy in terms of being a viable technology that will scale to the needs of the supply chain.

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