Supply Chain Management: is Blockchain the new RFID ?

It has been hard lately to work on Supply Chain Management topics without hearing a word about Blockchain technology and all the potential progresses it carries. For people involved in our field it can sometimes sounds as an echo of what happened with RFID technology.

Back in the days, around 2006, Supply Chain world was shivering with the booming of RFID application (Radio Frequency IDentification). From a technology appeared at mid-20th century, the actors of technological appliance development started to create a universal tracking system able to make Supply Chains walk fully into the world 2.0.

RFID: from hot topic approach to pragmatism

Every sector of the market, every actor in the chain, every function in the company would use RFID to improve the logistics performance (right product, right price, right quantity, right quality, right place and right time). And due to an obvious need for product traceability and information chain mastering, it has reached the interest of most of the actors.

Professional fairs and professional press were heavily passing the information around through conferences, round tables and articles. The limit of these exercises was the clear fact that tangible examples of technology application (I mean with revolutionary changes in terms of performance) could be counted on the finger of the hands. Later on, we would also discover that RFID usage touches its limits when the technology is entering the private sphere, enabling to track more than just marmalade pot until the door of the shop.

With hindsight, we can say that no revolution occurred, printed barcode is still the top 1 mean to track and trace products in the Supply Chain; the announced wave has been localized. Facing a more mature technology, we can say that it has been a huge added value for some sectors having identified needs and constraints. Garment retail, high value sub components in industry, handling means tracking (pallets, reusable trays…), these are a few models of successful application.

Blockchain: you don’t master Supply Chain 1.0, try Supply Chain 4.0!

10 years later, RFID is not anymore a hot topic and new concepts appeared that feed the expert debates. On technological axis, the main one is related to Block Chain late development and it sticks with the major stakes existing around Big Data mastering. Started from a need for money transaction the Blockchain protocol is opening a large window for other application areas.

The two main advantages already identifiable are: 1/ the high level of security offered and 2/ the ability to spread data processing between many devices (instead of using one huge, costy and sensible server). Each device involved in the chain is requested to store a small portion of information and counter check the authenticity of data stored by its peers. This kind of protocol is essential to secure financial transaction and this was the starting point for Bitcoin that developed the protocol.

Time passing, we are hearing more and more experts saying that there is no border to this technology and that it can be used everywhere. I was recently attending the Supply Chain Event in Paris and Blockchain was a key concern with one entire morning of conferences dedicated.

As Supply Chain Management is entering in the 4.0 era, the Blockchain is an ideal topic to be launched in the air. But as for RFID sooner, no example of concrete roll out is available today for our jobs (warehousing, transportation, order processing…).

It wouldn’t be a problem if Supply Chains were already mature on 2.0 and 3.0 axis (do you know the difference between these two ?). 90% of Supply Chain Managers are currently fighting in their daily operations to apply basics of organizational efficiency. As far as the concept creation can go, and as much as it feeds experts' lives, companies are still struggling to structure and make work together key logistics processes for tomorrow.

We can easily guess that Blockchain will be a concrete progress for some particular operations, basically each time a Supply Chain deals with external counter parts (not only for financial transaction). But it’s not at the heart of problematics as long as basic Supply Chain Management remains a myth (a statement that I'll develop in another article).