Unmasking Blockchain in Supply Chains

This is an excerpt of the original article. It was written for the November 2020 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2020

Supply chains have been in the spotlight like never before over the last eight months. That hasn’t always been a good thing. The perception, reinforced by shortages of products essential to our daily lives, is that supply chains were not up to the task and failed. The reality, as argued by MIT’s Yossi Sheffi in his new book, “The New (Ab)Normal: Reshaping Business and Supply Chain Strategy Beyond COVID-19,” is that supply chains performed as designed—they did what we expected them to do.

Browse this issue archive.

Already a subscriber? Access full edition now.

Need Help?

Contact customer service

847-559-7581   More options

Not a subscriber? Start your magazine subscription.

Today, blockchain is frequently subject to collective eye-rolling. And with good reason. Who doesn’t immediately associate blockchain with the cryptocurrency bitcoin, which has its own curious providence.

Bitcoin was created in 2009 by an unknown person or group of persons. And while a paper from Satoshi Nakamoto is attributed with being the first on bitcoin, no one knows who Nakamoto is.

Bitcoin went through some changes in “ownership” early on, which did little to make the cryptocurrency more transparent despite its consistent reliance on blockchain technology to track and secure transactions. Meanwhile, the value of one bitcoin has ranged from 30 cents to nearly $20,000. As a result, there is wide disagreement from bank CEOs to investors as to the usefulness of bitcoin as a cryptocurrency. Some go so far as to call it a scam.

Most unfortunately, the word clarity is not always associated with bitcoin. And blockchain suffers to an extent from guilt by association. And that is part of blockchain’s current image problem. Any marketing person would tell you that blockchain the brand needs a major repositioning.

Some of that process is happening now as a result of successful and practical initiatives in finance, trade and real estate demonstrate the value of blockchain with regards to transaction governance. In addition, supply chain management, especially purchasing and logistics, is beginning to prove the value of the technology to these complex activities.

That said, we wanted to know more precisely what is holding back blockchain in supply chain. So, we surveyed 115 Swiss shippers and logistics service providers of all sizes in late 2019. Forty-eight percent of respondents are at companies with more than 100 employees with nearly half of that at companies with more than 1,000 employees. More than 40% of the companies have revenues of $51 million plus. The survey is part of an annual survey done by the Institute of Supply Chain Management at the University of St. Gallen on the logistics market in Switzerland.

SC
MR