Blockchain and the supply chain: what are the prospects? 

First introduced in 2008 blockchain (blockchain) is a technology for transmitting storage and information. Like artificial intelligence and automation, blockchain is helping to drive the field of logistics.

The use of blockchain technology concerns all stages of the supply chain. What can blockchain bring to the supply chain? Procemo tells you more in this article.

What is blockchain?

Blockchain: definition 

It's a blockchain that records transactions carried out and that anyone can consult, in the form of a public register. The Banque de France identifies the main functionalities of this technology: 

• all stakeholders in the system have access to information; 

• each user can enter new data ; 

• this information is secured using cryptography. 

Blockchain is first and foremost a technology, not a blockchain in particular. Its use is a major innovation in various fields. In the banking sector, for example, blockchain enables transactions to be carried out more quickly, without the need for a clearing house. 

Features of blockchain

Here we recall the various aspects of blockchain that explain its growing success: 

• Security : blockchain exists thanks to "nodes" capable of rapidly detecting any attempt at cyber-attack. The constant monitoring and linking of data enables any intrusion into the system to be brought to light. 

• Transparency : the transaction history is accessible to all stakeholders thanks to cryptography and the data retention system. 

• Reliability : transactions are validated solely by users. Thanks to the analysis mining system, members can certify transactions using algorithms. 

• Resilience : blockchain is self-regulated by its users, enabling it to be flexible enough to adapt to situations in real time. 

• Immutability: copies are systematically integrated into the history, so no data or exchange can be permanently deleted. 

• Decentralization : transactions are recorded in the form of blocks at the various "nodes", which are copied before being transferred. 

Blockchain: two categories

According to CNlL, there are two types of blockchains : 

• Private blockchain : these are data networks accessible only to authorized users - ideal, therefore, for ensuring the confidentiality of exchanged data.  

• Public blockchain or permissionless blockchain: refers to data that is open to all. Although companies avoid this type of system, there are security mechanisms such as Proof-of-Work and Proof-of-Stake. 

In both cases, blockchain exists thanks to technological tools such as the hash. This enables data to be traced, by creating a digital fingerprint. 

All blockchains use a double key system: 

• a private key, enabling only the owner to make transactions possible; 

• a public key, accessible to all users, enabling them to verify the authenticity of an exchange.

How does blockchain impact the supply chain? 

Why mention the impact of blockchain on the supply chain? Because digitization is one of tomorrow's supply chain challenges. 

This new technology offers numerous advantages for logistics management, from warehouse management to the last mile. 

Securing supply chain data

Blockchain uses advanced cryptographic techniques to secure your supply chain data: 

• data confidentiality is ensured by the blockchain's "nodes"; 

• sensitive information, such as finances or intellectual property, is secured; 

• the data is protected against the risk of cyber-attack. 

Thanks to these techniques, your confidential information will remain in safe hands. With blockchain, you don't have to worry about the security of your data. 

Developments in logistics flow traceability

In logistics, it's all about anticipation, responsiveness and analytical capabilities. The advantage of blockchain? It gives you greater production and speed : 

• Operators and other services can track products along the supply chain using blockchain technology. You can therefore ensure compliance with current standards, thanks to improved traceability. 

• Thanks to this supply chain data, you'll be able toanticipate peaks in demand. In a blockchain system, a punctual slowdown in deliveries or a strain on stock will be dealt with swiftly. 

• There are no intermediaries. The "nodes" are managed directly by users, speeding up transactions and reducing costs, such as control fees. 

Improved tracking along the supply chain 

A company working in logistics needs communication and trust. Blockchain enables both. 

Transactions are kept in a history thanks to the block copy system. The result: a centralized file of immutable data. All stakeholders can enjoy the same level of transparent information. 

The concrete use of blockchain in the supply chain

Today, blockchain is one of the major developments in logistics. It is one of the new optimization tools, just like Transport Management Systems (TMS). 

What concrete applications can blockchain have on the supply chain? Here are just a few examples:

Anticipate your needs with optimized data management 

Blockchain makes it possible toanticipate needs and inventories. In fact, it enables products to be tracked at all times, so that finished goods or raw materials requirements can be better identified. 

You benefit from optimized data management. For example, a company needing to centralize flow and inventory data in real time can make it accessible in real time to all players in the supply chain. 

A 360-degree view of flows 

Thanks to data collection software, blockchain can also track products from manufacture to delivery. In particular, this makes it possible to control the circulation of products and reduce payment times. 

Management has a 360-degree view of logistics flows. Thanks to tracking, the company's strategy can be rapidly adapted to best meet customer needs. 

Also, blockchain makes it possible to reduce payment times. How? By automating transactions. This is the role of smart-contracts , for example, which we'll be discussing here. 

Smart contracts" to automate decision-making 

Smart-contracts are computer protocols programmed along the blockchain. They automate decision-making between the parties involved. This characteristic blockchain tool enables a new form of trust to be established between the various players. 

Stakeholders need a framework for their transactions, in the form of agreements. The smart-contract remains under control and represents a significant time-saver within your supply chain. However, the implementation of these "smart contracts" requires a prior assessment of the situation , to ensure that all the necessary modalities are in place, such as the choice of software or reference language. 

What does this mean in concrete terms ? 

1. The terms and conditions of each agreement are predefined in advance, by the logistics department for example.

2. Each party can use these pre-determined contracts and modify them according to the planned transaction.

3. Each contract corresponds to a set of data within the blockchain. 

4. In the event of an error in the smart-contract (on payment status, quantities, conditions, etc.), the block is informed and intervention may be required. 

Conclusion

The blockchain technology technology improves supply chains in a number of ways. Among other things, it makes it possible to secure supply chain data, benefit from improved traceability and automate contracts. These innovations explain why blockchain is one of the most important developments in logistics today..