How blockchain works in SCM
#2 How blockchain works in SCM and general overview of data involved
To understand how blockchains work in a supply chain two serious games or simulations might be interesting to have a look at: Smartys (2021) and CargoLedger (2021). In both simulations (based on the principals of experiential learning) the functionalities of blockchain are demonstrated in the logistics business environment such as International transport. In international transport of goods several sorts of documents are used as follows: Letter of Credit (LC), Bill of Lading (BL), or CMR-waybill (transport document for road transport of goods or in French: “merchandises”).
Besides the data from the above mentioned documents, also a lot of data are used during the transport itself, for instance, temperature and humidity can be measured via sensors during container transport of conditioned cargos such as fruits, and/or medical drugs.
All those data are collected via distributed ledger technology in order to execute smart contracts (will be discussed in post 3 of the series of posts “Blockchain in Business”), to monitor quality during transport, to track & trace the cargo, and to diminish the amount of physical documents in paper like LC, BL or CMR-waybill.
This can improve the cost of handling in international supply chains, as well as improving liquidity (faster payments, because documents are not lost) in the supply chain.
The proof of being original information is secured by time stamps that are used in the distributed ledger technology (DLT).
In a closed Peer-to-Peer or B2B network of companies, the advantages of DLT are clear: No (expensive) physical documents are required anymore , and the processing or cycle time is enormously reduced.
CargoLedger. (2021, December 9). CargoLedger. Retrieved from CargoLedger: https://cargoledger.nl/what-we-do/
Jansen, J. H. (2021). Principles of Supply Chain Finance. Arnhem (NL): Amazon.
Kückelhaus, M., & Chung, G. (2021, November 17). DHL. Retrieved from DHL: https://www.dhl.com/content/dam/dhl/global/core/documents/pdf/g0-core-trend-radar-widescreen-2019.pdf
Smartsys. (2021, December 9). Interactive blockchain workshops. Retrieved from Smartsys: https://2bsmart.eu/smartys-services/
Series of posts “BLOCKCHAIN IN BUSINESS”