The Air Force Institute of Technology (AFIT) has releases free “Blockchain for Supply Chain” tools for supply chain professionals to learn about and use the power of block chain technology. AFIT recently published a live blockchain application that can be accessed from any computer or smart phone, along with a complementary series of tutorial videos that presents blockchain simulation. These videos can be used as a stand-alone classroom module, or the video and the blockchain website can be incorporated into classroom exercises or business meetings.
Blockchain has become very important in many supply chain management circles. Wapack Labs has exposed numerous past examples of how cyber-attacks have targeted vulnerable supply chain companies targeting many critical infrastructure sector businesses. Cyber experts have predicted that blockchain will revolutionize the way we think about designing and operating the digital infrastructure for future supply chains. By providing a secure record of transactions between multiple parties, a blockchain can improve transparency and increase trust across all of the tiers in a supply chain. This is crucial to safe and secure cyber operations.
Blockchain provides higher visibility into their extremely complex logistics network, such as military logistics. Current information systems often struggle to track vital parts and components that are sourced from one region, and then assembled into equipment that is deployed internationally. A blockchain digital ledger could be a sophisticated solution to this extremely complex supply chain challenge. For many, it is difficult to understand what makes a blockchain different from a traditional database. While the potential opportunities of using blockchain is enormous; real life introduction of any new technology (like blockchain) into an international organization takes patience, understanding, solid strategy, and approval of C-suite level decision-makers.
AFIT, working together with SecureMarking, a private supply chain security firm, and the University of South Dakota Beacom School of Business, AFIT developed a multi-echelon supply chain scenario and creating a blockchain application around it. In their scenario, an Air Force program manager issues digital “tokens” to upstream suppliers. These tokens are then assigned to components. The tokens are transferred from one company to the next in the blockchain, at the same time as the physical products move through the supply chain. Some of the companies in this scenario are able to add additional information to a token. For example, when a component is assembled into a product, this can be recorded to the blockchain. Companies at any tier can see the end-to-end supply chain for all of the parts they have handled. But only the original program manager has complete visibility to all of the parts from all of the companies, and at any time.
It is possible to track this information in current and traditional database, but using a blockchain helps to ensure that all of the policies are enforced at each step in the process and every transaction is permanently recorded. Given the distributed nature of the blockchain, each participant has their own absolute copy of the record. This distributed way of accounting and coordination is a revolutionary advance in how goods/products/parts are tracked across organizations. Blockchain technology provides all supply chain participants with a higher level of confidence in their digital records and in their physical product distribution.
In the process of developing this scenario, the Air Force team confronted basic decisions that any company will need to address when designing their blockchain.
- Will the blockchain be public, allowing anyone to join, or will it be private, meaning only pre-approved companies can participate in transactions?
- What activities will each company in the blockchain be allowed to perform?
- Will participation be compulsory or will there need to be an incentive structure?
- How much visibility will each company have into the overall supply chain?
An important point of this technology is that it tracks the entire lifecycle of a component from its point of manufacture to its eventual decommissioning and disposal. This is important because many supply chains now face a challenge of having used products re-introduced and sold as new by dishonest businesses. These used products can lead to dangerous and costly complications and harm the reputation of the original manufacturer. In some situations, tracking disposed parts can be useful for ensuring that hazardous materials are properly disposed of, or that that they are recycled. Blockchain technology has been reviewed numerous times by Wapack Labs and analysis revealed its valued uses. Employing blockchain within industrial supply chains will provided numerous advantages in security, accounting, and product longevity. Now our friends at the US Air Force are offering this technology training for free.
Full demonstration of “Blockchain for the Supply Chain” is available as a series of YouTube videos. Publications can be viewed at:
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