Once data is saved to a blockchain, it is virtually impossible for anyone to delete or edit that data.

Blockchain: what is the hype about and what’s in it for you?

As with many technologies blockchain has been hyped as the next big thing in IT. To find out more, and put things into perspective, Stephen Cherlet reached out to industry expert Noam Eppel of the Morpheus Network.
 
^ Once data is saved to a blockchain, it is virtually impossible for anyone to delete or edit that data.

Article by Stephen Cherlet
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We hear and read a lot about blockchain in both the financial and supply chain news. Can you please, in layman’s terms, explain what blockchain is?

“A blockchain is a way to store data. It is similar to a database, but with some very interesting properties. A blockchain is distributed and decentralized, which means that there can be multiple copies of the data in different geographical locations without having to trust a central entity to manage the data. This ensures that it is censorship resistant. It is also immutable, which means that once data is saved to a blockchain, it is virtually impossible for anyone to delete or edit that data. This provides you with a high degree of confidence that the information found in a blockchain has not been altered. Blockchain is also more secure than other record keeping systems because each new transaction is encrypted and linked to the previous transaction. There are public blockchains which allow everyone to participate and view all information which provides a lot of transparency and there are private blockchains where data is kept encrypted and confidential. For these reasons, blockchains are often called a, “decentralized consensus mechanism” because it allows multiple parties to agree on something without a centralized organization in the middle, and “trustless” because the parties do not necessarily have to know or trust each other.”

Now that we have an overview of the terminology and a simple definition, what does it all mean for my business? Is there a value proposition to be made or is this all fear of missing out regarding the newest topics to emerge?

“Any industry which has multiple parties which need to securely store and exchange data and agree on the data can benefit from a blockchain. Let’s look at the supply chain process. To ensure the flow of goods, there are multiple parties including forwarders, insurers, customs brokers, border agencies, governmental bodies and many more. All of whom have multiple systems and platforms which need to communicate with each other. This encompasses different ERP and warehousing systems, forwarding interfaces, EDI, documentation and payment layers, just to name a few. All this information is stored in data silos and these parties may be reluctant to share information which may be considered confidential. Blockchain provides a shared platform which can record transactions (a payment for example, ed.) and events (a package arriving at a port for example, ed.), as well as securely retaining related documents (a bill of lading for example, ed.). Every stakeholder across the supply chain would have instant access to all relevant data and information pertaining to any specific business process, in a secure, decentralized and distributed immutable database.”

Where do my primary business systems, like ERP (Enterprise Resources Planning), and others fit? I need to leverage what I already have.


“Ensuring that your ERP, CRM, etc., is blockchain-compatible is as important today as it being web-compatible. Blockchain technology opens up a whole new way to store, secure and share relevant data with third parties. Using systems that cannot take advantage of blockchain technology will become a significant disadvantage for your business.”

What are examples of some of the use cases and perhaps which one(s) should companies focus on first?

“To identify use cases where blockchain technology can be of benefit, look for processes or areas in your business where some or all of these are true: multiple parties need to share data; multiple parties need to update data by providing new information; participants need high confidence that the recorded data is accurate; intermediaries add complexity/removing them could reduce complexity and cost; interactions are time sensitive and reducing delays have business benefits; transactions created by different participants depend on each other; participants need shipment tracking for near-realtime visibility into the supply chain.”

Can you provide us with a (real-life) case study that you have been involved with, and what were the benefits?

“My company, Morpheus Network, is a supply chain optimization and automation platform which uses blockchain technology as well as other emerging technologies such as IoT, RFID, QR code, Machine Learning, etc. We have customers around the world including Federated Co-operatives Limited, one of the largest companies in Canada. We have experienced rapid growth in part because we are able to demonstrate and quantify the business value of adopting technology such as blockchain. With Federated Co-operatives Limited, they were able to use our platform to manage their supplier documentation and ensure regulatory compliance. Blockchain provides them and their suppliers with a highly trusted, single source for information so they can quickly determine if their supplier is in compliance with their requirements, as well as a record of their historical compliance. The equivalent in the valve industry would be the ability for buyers to manage supplier documentation while offering the same visibility to end-users. This could include customs documentation, certificates of compliance, material test reports, and acceptance test reports in secure, shared environment. Imagine the benefits of eliminating the emailing of these documents both externally (from supplier to buyer) and internal (between departments; even between people in the same department). This is but one example.”

How do I get started in my own company after reading this article?

“Blockchain is a tool, no different than a hammer. It is not the right tool for all situations, but by finding the right situation you can see tremendous results. Identify the areas in your business where you feel blockchain could save time, cost and reduce complexity and run a focused pilot with a limited scope. Once you can demonstrate ROI, you can confidently expand the pilot to more parts of your organization.”

What do you see happening in the next five years? What’s new, wonderful or eye-catching?

“If you recall using the web in early 1990’s, it was a horrible experience; attempting to shop online was slow and insecure, movies were low quality with poor audio, etc. Many people predicted that the web could never compete with real stores and movie theaters. Yet technology has the tendency to rapidly improve and advance. We have a tendency to greatly overestimate the short term effects of a new technology, but massively underestimate the long term effect. I cannot claim to be able to predict what the future will look like, but my hope is blockchain technology will enable more people to interact and conduct commerce with each other securely and privately. Blockchain is still a young technology, but it has the potential to have a revolutionary impact on so many industries.”

 

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