Author Don Tapscott’s latest book highlights opportunities for transformation that blockchain can bring to what the book calls a $50 trillion supply chain industry issue.
Tapscott, who is also co-founder of the Blockchain Research Institute, told Cointelegraph that is the second book in the series being produced by the BRI, noting that over 100 companies agreed to make their research publicly available to interested readers. While the first book in the series introduced blockchain technology as a whole, the second and third books go into specific industry use cases.
Blockchain can minimize pandemic disruptions
begins with a detailed forward in which Tapscott explains blockchain’s critical role for supply chain management and how this has been exemplified by the coronavirus pandemic. On the first page, he wrote, “The pandemic has also revealed chinks in our supply chains.”
Although the use cases in the book focus on topics not specifically related to the coronavirus pandemic, Tapscott explained that the book was published early to help readers understand how blockchain can minimize pandemic-related disruptions occurring in sectors like global trade and food traceability:
“The shortages the world is experiencing due to COVID19 shouldn’t be the case, as this stems from supply chain failures and fear driven by a lack of transparency.”
Tapscott goes on to describe the complexities of today’s supply chains, noting that multiple entities are coordinating and conducting transactions through “a Byzantine network of computer systems with disparate applications like email, phone and fax.”
Due to these outdated systems, supply chain processes are slow, expensive and inefficient. This is especially problematic during a pandemic for example, wherein a lack of transparency into supply chains can cause consumers to hoard items out of fear.
Blockchain: The internet of value
As Tapscott mentions, blockchain has fortunately become the “internet of value.” He wrote: “Individuals and organizations can manage and trade their assets digitally peer-to-peer. These assets can be digital like money, identity and private information; or they can be physical assets represented by digital tokens.”
In order to demonstrate this point, nine chapters written by different industry experts outline specific use cases on how blockchain can transform supply chains. The first chapter features research from Deloitte and details how blockchain can improve global trade operations. The authors note that although global trade has grown in complexity and magnitude, processes remain largely unchanged.
Blockchain can be used to modernize the global trade industry by providing a means to move goods and revenue digitally in a peer-to-peer manner. Moreover, while most global trade participants rely on manual, paper-based processes, blockchain can secure immutable, digital records with cryptography and codified business rules.
The second chapter explains how Taiwan’s Foxconn Technology Group is using blockchain to transform global operations by building digital relationships with its partners, suppliers, products, factories and customers.
Chapter 3 may be one of the most important chapters in terms of demonstrating blockchain’s potential for supply chain management, as it focuses primarily on trust and verification. The billion-dollar diamond industry is highlighted in this chapter, exhibiting how blockchain can provide consumers with knowledge into the provenance of luxury goods.
Chapters 4 and 5 focus on blockchain’s use in tracing food products back to their origins to prevent foodborne illnesses. Walmart’s partnership with IBM is mentioned as an example of how blockchain can increase accuracy and timeliness of data across a complex supply chain.
While chapters 6, 7 and 8 shed light on regulation, technologies that can be combined with blockchain, and how blockchain can be used in manufacturing, chapter 9 contains the most impressive use case of blockchain throughout the entire book, bringing together each point mentioned in the previous chapters to highlight China’s “One Belt Road” initiative. Adopted by the Chinese government in 2013, the initiative aims to minimize friction in cross-border trade and global supply chains.
The Belt and Road Blockchain Consortium is building out the digital infrastructure for this initiative and is applying blockchain to enable digital identities for entities, while automating capital flow through smart contracts.
Is blockchain’s potential apparent?
This book is a must-read for individuals wondering how blockchain can transform a variety of complex supply chains. From global trade to food safety to a powerful use case like China’s One Belt Road, blockchain’s potential for supply chain management is apparent and easily understood.
However, while each chapter focuses on different use cases, some of the information can become repetitive, such as how trust, transparency and governance are major benefits that blockchain brings to the supply chain industry. Some readers may choose to skim through those sections of the book since they would be making similar points to bring the argument across.
Moreover, the technology is continuously evolving, which can quickly outpace books focused on blockchain use cases. Although the research mentioned will be new to many readers, more contemporary use cases are emerging.
However, captures a major theme the blockchain space is seeing today and will continue to witness moving forward: the rise of state machines. According to Tapscott, enterprises are currently moving from supply chains to asset chains:
“A state machine allows enterprises to know not only the state of the supplier, but also about the state of the assets themselves. This goes beyond the chain of custody idea. State machines provide visibility into things like the trustworthiness of suppliers and the assets themselves.”
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