Harnessing the ” Power of Hype ” : Blockchain in Supply Chain

Do you get the Déjà vu – The failed RFID Promise ?

I was discussing application of Blockchain in Supply Chains with a senior executive when they mentioned that all this was giving them a sense of Déjà vu – they had experienced a similar hype when RFID was on the horizon as a new technology.

RFID brought with itself many opportunities and expectations. The unfortunate fact is that many of those did not get realized. But a handful of companies were able to leverage RFID in innovative ways to get a competitive edge in their operations. Why some companies were able to harness the promises of RFID technology into reality but the majority of them failed ?

Many of the other technologies that came with a promise of Supply Chain world indeed added value but rather than “transforming” the Supply Chain world, they ended up changing only a portion of it – and that too in a manner unpredicted. You can replace RFID with some other technologies like EDI for instance, but the fact stated will remain the same. Only a handful of companies were able to harness the true benefits. Those that failed, failed in one important aspect – they failed to ride the Power of Hype.

The Power of Hype

All said and done, Supply Chain decision makers are looking for answer to one simple question – ” Is the Blockchain Hype for real ?”

Here is my personal perspective – Blockchian will absolutely have an impact on Supply Chains and that change can be game changing as well – given time. Somehow I get a feeling that expectation from emerging technologies is that they will transform the Supply Chains in a short period of time. That is not going to happen.

But what leaders need to understand that one aspect that leaders can harness in short term is the hype of Blockchain. This hype at this point is more influential than the technology itself and is radically influencing the future of Supply Chain management across the globe.

An evolution of Database

Zach Steelman, professor of Information Systems at University of Arkansas who is one of the leading Blockchain experts in the country believes that it is really just the next stage in the evolution of databases. As per him:

” I view blockchain fundamentally as a distributed database backed by cryptography -It is just a databases that has consensus mechanism to agree on when its distributed. The core technology has been around since the 1960s and 1970s – distributed databases and cryptography -they just didn’t put them together in this format until the late 2000s. “

If you have a balance of depth in Technology and Supply Chain, you can dig into solutions being offered by companies under the broad umbrella of Blockchain and may end up saying – “We could do that with a database.” You can create a chain of blocks on a database. You can program a database to execute a smart contract. You can trace a product to its origin using a database.

You could do almost everything that Blockchain offers to the Supply Chain world by using existing database technologies.

Challenge is not the Technology – it never was

The truth is that the world of Supply Chain has long been aware of the most challenging issues it faces like:

  • Trustworthy collaboration between partners
  • Real time data
  • Alignment on key standards
  • Greater visibility
  • Faster Tracability

And many other bells and whistles that are being promised by Blockchain. And as indicated earlier, existing database technologies can be used to do address many of these.

What is the challenge then ?

One sentence summarizes it all – The world of Supply Chain is highly fragmented. Supply Chain networks contain dozens and dozens of seperate entities with competing agendas. They work with each other but seldom agree on how to collaborate in the most effective way. Data travels in linear fashion, in different formats, from one partner to another, where it is transferred into different systems with different formats.

The power of  Blockchain

Blockchain’s biggest benefit to business therefore is not that it can do things that could not have been done before, though it definitely enables some important innovations and eficiencies.

The key benefit of Blockchain is that it is pushing and pulling Supply Chains towards innovations that should have been implemented 20 years ago. It is forcing many potential users to reengineer and streamline their systems, clean up their data, upgrade their databases and to work across their network to create solutions for the common good.

Personal perspective

Blockchain, in the context of Supply Chain is not disruptive but the Buzz around it definitely is. Leverage it to drive change while the buzz lasts.


Views my Own.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s