Blockchain technology has garnered much attention from supply chain and logistics companies for its ability to replace legacy pen and paper systems with a digital, distributed environment, characterized by high levels of transparency, availability, and traceability. Currently, the largest supply chain companies have far exceeded regional boundaries, evolving into a large scale complex network of operations, and business relationships that extend at a global level. Managing this intricate web of operations as well as balancing different scheduling requirements, legal issues, and documentation is a daunting task where even the smallest error can lead to costly delays that can have deep ramifications across the whole chain of operations, and in some cases, it may even compromise the entire shipment.
Due to its inherent characteristics and unique architecture, blockchain positions itself as a major disruptor, capable of removing overhead costs associated with third-party intermediaries while mitigating the negative effects generated by friction points. Transparency, trust, data immutability, and traceability are highly sought after by any company regardless of the sphere of activity. The value of this technology stems from its ability to guarantee these values. This is because blockchain tracks every step.
Blockchain stores data in structures called blocks, that are linked together to form a chain that continuously expands as new transactions are added. Each block contains the hash of the previous block, a unique identifier that links the two together, as well as additional information such as digital signatures and time stamps which indicate precisely when the information was added to the blockchain.
As an append-only structure, the information stored on a blockchain cannot be modified retroactively or deleted. This implies that each version of the information is stored in blockchain’s immutable logs. New additions or modifications are made on top of the existing information. Blockchain tracks every step because it records the exact date, time, as well as the user who performed said modifications.