SCM Insights, Technology
September 18, 2018

Why blockchain must be seen (and implemented) differently

Matching themes: Blockchain, digital transformation, digitale Transformation, Industry 4.0, transport management

Don't rush onto the hype: There are a few points to consider before implementing blockchain technology if it is destined to be successful
Don’t rush onto the hype: There are a few points to consider before implementing blockchain technology if it is destined to be successful

Blockchain has been THE trending technology for quite some time now. Hardly a day goes by without new use cases, initiatives, or companies established based on blockchain technology. It is especially promising in the supply-chain environment. But let’s take a step back and take a more sober look at the blockchain hype: What are the odds of a real technological revolution, and where are the potentials for the supply chain?

Private blockchains are not the solution

Currently the market is trending strongly toward private blockchains. In other words, many carriers and service providers develop their own, proprietary solutions in the hope of being first and dictating the market.

But since these private blockchains have been developed independently of one another, they are by nature not compatible. And exactly this will lead to huge acceptance issues along the supply chain for the companies involved, because no company wants to use different blockchains depending on supplier or customer. On the contrary, the industry has been combating incompatible IT systems for years.

This is precisely what has given rise to collaboration platforms like SupplyOn, which give all participants the possibility of docking on to an independent standard, rather than having to serve countless individual portals. Catchword: Network of networks.

From private blockchain to network blockchain

By now even the first blockchain framework providers have recognized that they require just such collaboration platforms. These are able to establish standards based on blockchain technology, to further their implementation, and also to provide the required support. An authentic blockchain-as-a-service, that is.

Blockchain as a supplement to dedicated use cases

When considering the blockchain use cases discussed in the supply-chain environment (for instance Smart Contracts), it quickly becomes clear that many of these use cases have already been implemented as processes years ago on collaboration platforms like SupplyOn – only without blockchain technology. It is specifically here that one should take a critical look at where – beyond the current blockchain hype – it makes sense, or there is a need, to throw out the established and smoothly functioning standards and processes.

Yet when evaluating use cases which primarily use the core features of a blockchain from a legal perspective, then blockchain technology does indeed make sense. This includes the paperless paying of duties. In this case, we see blockchain technology as a complementary technology integrated into classic systems.

The trick is in the mix: blockchain as complementary technology

The dust raised by the blockchain hype has not yet settled. But if we take a more realistic look at the issue it becomes apparent that the technology will not gain widespread acceptance without an open platform and open interfaces for all organizations. This means that carriers, logistics-service providers (LSP), and tariff systems must all be tied in, for instance via interfaces which provide an open platform like SupplyOn.

And there is another issue which blockchain technology does not in itself solve: the quality of master data. Here too, existing collaboration platforms demonstrate their strengths compared to blockchain frameworks, because they are based on well-maintained and updated master data for the underlying processes. Companies can thereby be integrated into the blockchain process with relatively little expenditure. SupplyOn sees huge potential in this, not only for its 65,000 customers, but for the entire industry.

Dr. Stefan Brandner

Member of the Board

For over 20 years I have been engaged in software solutions for the efficient and reliable management of complex corporate networks. New technologies such as Artificial Intelligence or Blockchain are constantly opening up new possibilities for digitizing complex processes and ideally even automating them. I am always impressed by the passion with which the entire team absorbs and evaluates innovations, and together we strive to generate a significant added value for our customers.

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