Securing commercial supply chains with blockchain

Trust is an issue on the minds of many CIOs. Indeed, it’s what keeps many awake at night! Blockchain presents an advanced digital solution to the problem and is expected to reach a market size of USD 260 billion by 2028.

Companies of all sizes are trying to better understand the ability to implement and deploy blockchain technologies. The issue they face is the high cost and complexity to build, scale and maintain. Blockchain technology is complicated to engineer and implement, and requires specialist expertise to manage.

For blockchain to be truly impactful, it must seamlessly integrate with existing technology – for instance, IoT, machine learning and edge computing. NTT DATA has been looking at how to bridge the gap between customer demand for blockchain technology and its practical application, addressing regulatory, governance and interoperability issues to ensure better accessibility and a lower carbon footprint.

What is blockchain?

At its core, blockchain is a distributed ledger system that records transactions across multiple computers. This ensures records are secure, transparent and tamper-proof. Each unique transaction is recorded as a block. Each block generates a unique signifier known as a “hash”, with each hash containing the signifier of the block before and after it. Together, they link to form an impenetrable chain.

As companies try to manage cyberthreats and data security against government and industry regulation, blockchain provides a highly secure decentralized application. Blockchain is essentially a technological security fortress. It is perhaps why blockchain originated in the financial services industry with payment processes proving the fastest-growing use case of blockchain today.

Sustainable supply chains

It is not just in finance, however, where blockchain delivers value. It can also build resilience into supply-chain models that combine ethics, sustainable principles and efficiency. This delivers a number of additional benefits.

• Improved security: Supply-chain operators benefit from the technology’s unique cryptography providing protection against fraud.
• Trust: Blockchain provides a single source of truth creating new value models in the digitalization of traditional sectors while enabling new financing models such as asset tokenization.
• Efficiency gains: When used in smart contracts, self-executed programs triggered by predetermined conditions can automate processes such as payments and quality checks. This reduces administrative costs while speeding up transactions.

Case study: Tecopesca

NTT DATA worked with a fish processing company in Ecuador to help them guarantee trusted supply chains of tuna. We enabled the solution through our implementation of IoTrace, a proprietary blockchain system that manages traceability.

This demonstrated a paradigm shift in global supply-chain design and management, providing certainty to investors and transparency to retailers. Anyone who buys a can of tuna can scan the barcode label and track its journey from the fishing line to the supermarket.

Tecopesca used blockchain as a key enabler for realizing their sustainability ambitions and integrating transparency into their core supply-chain operations.

The value of an NTT DATA partnership

NTT DATA has specialized in building sustainable blockchain technologies, including Blockchain Reconciliation Platform, a general-purpose, multi-industry reconciliation platform; BlockTrace, which builds and provides applications according to business use cases; StampChain, a document certification platform that complies with the European Union’s General Data Protection Regulation; and KayTrust, a framework for organizations to manage end-to-end customer identities.

When combined with IoT technologies, these proprietary offerings can be leveraged in multiple use cases such as:

• Reducing rates of fraud in the pharmaceutical industry
• Monitoring and controlling the handling of medical drugs in healthcare
• Demonstrating the ethical sourcing of materials in fashion
• Provide a transparent record in agriculture of the origin of the produce, from farm to store
• Tracking renewable energy sources in the utilities industry
• Digitalization of public land registration and identity management

Blockchain is not an easy technology, but its rewards are boundless. It can be adopted by any size of organization and, with the right partner, provides a trusted, transparent and secure supply chain that will help CIOs get a better night’s sleep.