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Blog October 2018

The wonderful world of blockchain in logistics

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Wim Hoek Product Marketing Manager

Blockchain might be the technology that supports cryptocurrency, but for logistics, it’s so much more.

Blockchain is the technology that supports cryptocurrency, such as bitcoin.  It’s a sort of public ledger on a public network of computers where transactions are recorded. Another way to think about it is as a series of records, or blocks. Within each block is data. The latest block contains a hash of the previous block. That block, in turn, contains a hash of the block that came before it, and so on. It’s a chain of blocks, and it’s the hash contained within each block that helps make the chain incorruptible.

So how is this relevant to logistics?  

Blockchain gives the customer transparency

Before a product ever reaches you as the customer – or your customers, for that matter – it goes through quite an array of distributors, transporters, storage facilities, etc. Blockchain illuminates the trail. You can see every leg of the product’s journey before it lands at your proverbial doorstep.

In other words, blockchain tears down the silos. Customers trust what they can see. When they know everything about their product – even where it originated, they develop a trusting relationship with that particular entity in the supply chain. It’s not just supplier information that clients are privy too. Blockchain can show if a company provides realistic delivery expectations for its truck drivers.

Transparency equals better tracking

Blockchains can be tracked at every point in the process, allowing companies to produce accurate information about an asset’s lifestyle, from manufacturing details to supplier information. Imagine how helpful this is in making the supply chain more efficient and productive.

Better tracking gives auditors what they need

The entire history of each transaction is locked into each block. This makes it easier for auditors to understand the story of assets and resources, and where they have one.

Another benefit: when auditing fails to identify overbillings or overpayments, blockchain gives them a finite trail to isolate where the problem happened. Companies can see which operating systems were affected and improve their processes so that it doesn’t happen again.

Auditors can spot attempted fraud

When faced with mountains of data, it’s so easy to miss indicators of attempted fraud, but blockchain makes it easy to identify. Anyone – an employee, for instance -- who goes into the system to amend past events will also change the coding of the event. Because the amended coding will appear so differently, it’s virtually impossible not to notice. This is what makes attempted fraud so easy to spot – and who the responsible party is.

The fact that blockchain is not patch-based, but an entire chain of events, makes it far more secure than many of today’s cybersecurity tools.

Add it all up

Real-time feedback enables scalability. Companies can identify potential trends in blockchain, so that they can respond to possible changes in the market.

From asset tracking to transparency, blockchain seems designed for logistics. The fact is, we don’t yet know the depth of the benefits of blockchain, but in a connected world, time will tell us more.

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