Supply Chain Management: Is Blockchain the New RFID?
Insight 26 Apr. 2017

Supply Chain Management: Is Blockchain the New RFID?

It has become difficult to work on Supply Chain Management subjects without hearing about Blockchain and the hopes for progress that this technology brings. For those involved in our business, this movement is nevertheless reminiscent of the one we have seen around RFID technology. Brief inventory around a subject that is causing the buzz.

Quick flashback, around 2006, the world of Supply Chain was in turmoil with the explosion of RFID (Radio Frequency IDentification) applications. Starting from a technology that appeared in the middle of the 20th century, solution developers began to work on traceability systems capable of bringing the Supply Chain into the era of Management 2.0.

RFID: From a Trendy Subject to a More Pragmatic Approach

Every sector of the market, every actor in the chain, every function of the company would soon use RFID to improve its logistics performance (the right product, the right price, the right quantity, the right place, the right time). Responding to a growing need for traceability and control of the information chain, this technology has aroused the interest of a large audience of professionals.

Trade fairs and the specialized press provided extensive information through conferences, round tables and articles. The limit of the exercise was still marked by the few concrete examples of application and the difficulty in defining a precise framework for arbitration (what needs / what solutions). Not to mention that an ethical subject would soon invite itself into the debate around questions on respect for the private sphere – where traceability begins and where stops – and of the environment – blockchain not being the most ecofriendly technologies through the data it generates.

With a little hindsight we can see that the announced revolution has been contained, bar codes still form the most widespread solution for tracking products in the Supply Chain. Faced with a now more mature technology, we can highlight the needs and constraints that maximize the added value of this solution. The textile sector, sub-assemblies with high added value in industry, handling units in closed loops, here are some successful application models for RFID.

Block Chain: You Don’t Understand Anything About Supply Chain 1.0?
Try Supply Chain 4.0!

10 years later, RFID is no longer a trending topic and new concepts are taking center stage in discussions among business experts. On the technological axis, the most present today is surely the development of the Block Chain, a subject also linked to the control of information but on a more global axis (we are thinking here of big data). Originally designed to secure financial transactions, the Blockchain protocol opens up a wide range of applications.

The two main advantages already identified are: 1 / The high level of security guaranteed and 2 / the ability to divide the task of processing data between several terminals (effectively eliminating the need for expensive and sensitive servers). Each device nested in the chain is called upon to store part of the global information and is used to counter validate the authenticity of the data stored by its peers. The system turns out to be perfect for securing financial transactions and this was the essential point for Bitcoin that is at the origin of the development of this new protocol.

Over time, more and more voices are raised emphasizing the full potential that the Blockchain represents far beyond the borders for which it was created. Participating in the last edition of Supply Chain Event in Paris, I saw that this technology was becoming a major topic with an entire morning of dedicated conferences.

With Supply Chain Management gradually entering the 4.0 era, Blockchain is the ideal concept to bring to the fore. But just as with RFID earlier, there is no concrete example of application for our logistics professions (warehousing, transport, supplies, etc.).

The idea would be very interesting if our Supply Chains were already mature on the 2.0 and 3.0 axes (does anyone have any idea of ​​the difference between the two?). But 90% of Supply Chain Managers are, on a daily basis, overwhelmed by the mere execution of the basics that would allow them to have a good level of operational performance. As far as conceptualization can go, and as far as it fuels the lives of experts, companies are still struggling to structure and make the various logistics processes work together.

Opening

One can easily imagine that the Blockchain will form real progress for certain operations, especially during stages where the Supply Chain opens up to external counterparties (excluding financial transactions). But the gigantic quantity of data required for the implementation of such a technology may appear to be contrary to the objectives of reducing greenhouse gases and of which digital sobriety is one of the counterparts. Responding, moreover, with confidence that this technology will impose itself in the short term in the field of Supply Chain Management would be without counting on those for whom the latter constitutes anyway a myth.

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