Blockchain and the Supply Chain

In the August 29, 2016 edition of Bloomberg Business Week in the opening remarks section there is article by Olga Khariff and Peter Coy about Blockchain, a software that came about to control Bitcoin and other electronic currencies.  This software is about controlling a large system, such as a currency system and making it visible. It limits a given item such as money token to one use per person.  In my mind’s eye it reminded  me of a complex supply chain.  So what is the value of Blockchain to the supply chain? It is a system software, so in situations of drastic change such as a large natural disaster this software will have limitations, because the system cannot easily transform. So after writing the software probably can not handle a disaster, I will turn around and say this will be great software for post disaster planning and getting the right support items.

The dreamers of this software, and yes you need dreamers to innovate, champion, and execute any new idea, see as a way to end corporations forever with a group think management style.  No more CEO’s.  Everybody in the system will be equally powerful. Since most of these people hate bureaucracy and corporations, I suspect they have not spent time looking how organizations survive and prosper through change management with a champion at the top. You can dislike wage disparity between CEO’s and everyone else, and still see a need to have a constructive organization direction.

So don’t let the political rhetoric distract for the value of this software which allows all parties to use their resources in the system to create an action, and in the supply chain that will be about getting something moving or stored.  The software specializes in making transaction visible, so a second tier supplier actions would be visible to the primary supplier and the end user, useful information to manage the system efficiently. In a set up supply chain that is running relatively smooth over a period of time, the attraction of this software should be self event.

But the software is not going to predict a change like going from DVD’s to music apps and then back to long running records. Or a earthquake in Japan knocking out sizable production, and new alternatives will be needed much faster than the software can be changed. The needs of the market place will fundamentally change. Any software which promotes a system will be a hindrance in drastic change situations

Speaking of disasters, I see a good use the Blockchain software might be very useful in a post disaster situation. Frequently after disasters, the blizzard of donations after the terrible event rarely meets the needs of what is needed. You might have to few blankets, but way too many pots and pans. I could see non-profits finding value of a software where one could see what is needed and make the donation. Much of this type of demand can reasonably anticipated so software can mostly be set up in advance and activated on short notice.

It will be interesting to see how this plays out.

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