How Companies Can Leverage Blockchain And IoT To Digitize Their Supply Chains
Ifyour company executes anything with a supply chain, then you need to know about blockchain technology — and how it is going to disrupt the entire process from start to finish.
Let’s start with the definition of a supply chain: “the sequence of processes involved in the production and distribution of a commodity.”
Companies that use supply chains are responsible for distributing products and goods from beginning to end — which could be another company or a consumer. Any given supply chain can be made up of hundreds of different checkpoints where goods are transferred from party to party, making it extremely difficult to know for sure all the little things that happen along the way.
This is precisely where the challenge lies.
Let’s say you want to order a really expensive bottle of wine from the South of France. Well, that bottle is going to touch a lot of hands before it arrives at your doorstep. How do you know if the bottle you ordered is the bottle you actually received?
This is a very basic example, and one that our team at Chronicled actually solved for with something called a cryptoseal. First, we embedded encrypted microchips into wine bottles to prevent them from being copied, cloned, or corrupted (counterfeiting is a big problem in the wine industry). Then, wine collectors had the option of verifying the bottles they received by scanning the microchip with their smartphone using NFC/BLE. And finally, if the end consumer wanted to, they could learn more about the history of any registered wine — such as the complete provenance, history of the product, notes from the winemaker, and so on.
Because with the blockchain, we could ensure that nobody had tampered with the bottles. And for wine collectors (and wine distributors), that’s extremely important.
Now let’s take a look at a more complicated example:
Blockchain technology has the ability to entirely disrupt the pharmaceutical supply chain, because pharmaceutical supply chains are extremely inefficient. (Or, I should say, could be tremendously more efficient.)
Today, pharma companies have to adhere to industry requirements through the use of temperature-stabilized trucks and containers, which are very expensive. These containers are supplied by third-party logistics companies.
However, most medicines do not require temperature controlled environments.
Ah-hah, another opportunity (and challenge).
This is a project we are currently working on at Chronicled: working with various partners and pharmaceutical manufacturers on what are referred to as “cold chain” solutions.
The two products we have created are the NFC and BLE temperature loggers, which integrate with our accompanying software platform. What is unique about this approach to temperature control is we have built more than just a hardware player with a software platform, but also a software player that works with any existing software — with the added benefit of the blockchain.
In addition, our BLE temperature logger replaces traditional CTLs that only track temperature through the supply chain, which requires that the data be manually downloaded on the other end. Our next step here is to release a Bluetooth temperature logger (on Sept 25th, to select clients) to increase operational efficiency by automating the download of data at the end of the chain.
How the process currently works in today’s industry is like this: shipments enter the warehouse, temperature loggers are removed from the products and plugged into a computer with a USB stick, and the data is downloaded.
It’s slow. And incredibly inefficient.
What we’re working toward, and what I believe is possible for the industry as a whole, is to create a supply chain automation system on the blockchain so that when shipments enter a warehouse, the BLE beacon (inside the warehouse) signals to the BLE temperature-logging sensors that the products have entered the area. The sensors then automatically upload their data to the BLE beacon/router, and then to the cloud.
No human intervention necessary.
The possibilities for disruption in the supply chain space are endless. It’s a topic I am fascinated by, because I believe it is one of the most promising areas for blockchain technology to thrive.
For anyone interested, I’ll actually be speaking at MIT on September 12thabout how to leverage blockchain and IoT to digitize supply chain processes. Would love to see you all there!