This post was published on Hortonworks.com before the merger with Cloudera. Some links, resources, or references may no longer be valid.
We are entering a new era of efficient transportation decision-making, where people, businesses, and consumers can move goods around with more certainty.
But there is much work to be done. Estimates suggest as many as 91 percent of carriers use fleets of six vehicles or fewer, which causes fragmentation and delays decision-making. However, pioneering transport companies are already using the cloud, big data, and blockchain to create a digital supply chain.
This digitalization allows transport and logistics firms to reduce costs and increase efficiency. Transportation companies with digital supply chains respond 25 percent faster because of real-time information and complete data visibility, according to the Boston Consulting Group.
So, what does a great digital supply chain using blockchain look like?
Embracing Digitalization
The digital supply chain is in an almost-constant state of evolution. Twenty years ago, enterprise resource planning (ERP) was a mainstay of the supply chain. ERP is still present today, but organizations that are looking to create an integrated view take a more digital approach.
The modern supply chain is a broad ecosystem that includes more participants than ever before. To keep in touch with partners, businesses—such as those in the transport sector—must use digital platforms to communicate and collaborate. The cloud will play a key role.
Partners within the supply-chain ecosystem can use cloud-based services to send transport updates to other participants. This can take place across various journey touchpoints, including the port of arrival and destination.
Blockchain represents another stage of this new, collaborative form of efficient transportation decision-making. Through its distributed ledger, blockchain provides a high level of trust. It offers data immutability. Stakeholders in the chain agree to maintain and manage the data points, and create a single and verifiable version of the truth.
Taking Advantage of Blockchain
The use of blockchain is moving in the right direction. Amazon recently announced its plans to offer blockchain-as-a-service to its enterprise cloud clients. Called Kaleido, it will be the first blockchain SaaS available in the AWS Marketplace.
While this is a bold move, it’s worth remembering that, according to analyst Gartner, just one percent of CIOs have any kind of blockchain adoption within their organizations. However, the potential use case already exists for using blockchain in the digital supply chain—and transport executives must pay attention.
With the immutability blockchain provides, your business can be certain that transactions are taking place. In the case of a supply chain, this immutability means participants can be sure that transactions, which are complex and involve multiple parties, are acknowledged across the chain. Participants will know which information came from which parties and how data was used, creating a single version of the truth everyone trusts. The potential strengths mean that more transport firms must explore how to make the most of the digital supply chain. Some pioneers are already using the technology in their operations.
Putting Technological Advances Into Action
Transport specialist Trimble is using a connected network of seven different blockchains. It’s a system that relies on the interaction of advanced technologies, including IoT, big data, and blockchain. The result is a next-generation transport management system (TMS) that is available as a service.
This approach is helping Trimble move its customers from a monolithic TMS to a digital service, where all participants in the supply chain can seamlessly communicate and see payments, shipments, and responsibilities. Everyone in the transport chain can be assured that movements are proceeding as expected.
This next-generation approach represents a significant shift. For example, prior to adopting blockchain, Trimble’s request for proposal (RFP) stage involved a mix of processes, including paper-based manual interactions. It was a time-intensive process that could take many days. Now, with a blockchain-enabled digital supply chain, the request process takes hours. Data is automatically pushed to the right location, whether that’s a master system, transport system, or logistics system. This automated process leads to cost savings and efficiencies for the business, and also improves the customer experience.
Building Use Cases
Organizations that are looking to digitize their supply chains must first get a grip on their data. By bringing information together from multiple sources, businesses can develop a much stronger understanding of the things that are happening. Trimble has used Apache NiFi to bring information together and create a single data lake.
Employees can use this lake to sift information and to ensure that only the most important knowledge is passed to the blockchain. Through this approach, the blockchain only receives the best of your firm’s records, and clients can use this information to make game-changing decisions—around RFPs or through subsequent big data analysis.
The implementation of a data lake should be the starting point for your move toward a digital supply chain. While you hesitate, other members of your supply-chain ecosystem might already be using blockchain. Don’t risk losing a competitive advantage. It’s time to help your organization become aware of how blockchain can help power your supply chain.
If you’re going to implement blockchain, run a pilot. Take a specific slice of your supply chain and think about use cases such as inventory management or stock replenishment. Also, make sure that your third-party partners are included in the trial. This inclusive approach will allow you to make sense of the challenges involved.
Gauging the challenges of blockchain now will help you to think about the benefits in the long term. As Trimble’s use of the technology shows, blockchain represents a game-changer in terms of efficient transportation decision-making. Just as the IoT and the cloud have already impacted the digital supply chain, so too will blockchain—so embrace the opportunity now.
Read more about the advantages of blockchain technology.
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