Even though a physical supply chain may be integrated, the supporting information systems are often fragmented.  Members of the supply chain – ranging from the source of raw materials to the consumer – keep their own records of asset information, which drives up costs (through duplication & inefficiencies) increases complexity and causes regulatory challenges.

supplychain4

Figure 1 – Simplified Supply Chain

Imagine a world where every participant in the supply chain could share consistent and up to date information irrespective of where the asset is in its life cycle. Imagine one agreed view of the complete asset history, and how this would improve service, warranty and end of life management.

By providing an agreed, shared record of the asset information – as it transits the supply chain – IBM Blockchain can deliver just that.

Let’s take a look at how this would work across part of this simplified supply chain. The Manufacturer creates and populates the new asset registration template, which is loaded onto the Blockchain. The Smart Contract ensures that only an authorized Manufacturer can do this; the template may include provenance of composite parts or subsystems.

The Manufacturer then transfers ownership of the asset to the Distributor, by invoking a transaction on the Blockchain on execution of a (Smart) Contract of Sale. The transaction is verified if all relevant parties agree – this is referred to as consensus – again, implemented by IBM Blockchain.

The Distributor can add asset history / location information again as permitted by the Smart Contract. This update is visible to all members of the supply chain with the right permission. For example, Customers in the network can see new stock availability.

The asset can then be transferred to the Customer again on execution of a (Smart) Contract of Sale. The asset location information on the Blockchain updated for all members of the network with appropriate permissions to see.

This process continues across the supply chain, as the asset passes to the Consumer and eventually to the Disposal Agent – as governed by the Smart Contract – has permission to dispose of or recycle the asset at the end of it’s life.

The benefits from Blockchain usage are shown by comparing the before and after views in Figure 2.

Before : After 2

Figure  2 – Blockchain Benefits


Useful material:

  1. Blockchain for Government
  2. Bold with Blockchain 
  3. IBM Blockchain

Agree, disagree, disinterested?  I’d much appreciate an active debate on this topic!  Contact me through leaving a comment, twitter or LinkedIn!

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