The first thing to understand when discussing blockchain is the importance of governance. Without a governance framework, a blockchain system is not as valuable as it could be. Governance is the framework that determines the rules of the system, including data sharing, encryption, access, and scope of IoT and smart contracts. As a result, the adoption of blockchain may have implications for pricing decisions and inventory allocations, making the supply chain more transparent and accountable.
The latest developments in the use of blockchain have spurred great interest. For instance, HSBC Holdings, the world’s seventh largest bank, announced plans to migrate $20 billion in assets onto blockchain technology. The move to digital technology will allow the bank to transfer assets from paper records to the Digital Vault system. And meanwhile, State Street Bank has announced plans to lay off 100 blockchain development employees, citing its “unique potential as a game-changer.” Several other industries have also been prime candidates for blockchain adoption, including finance, supply chain management, and healthcare.
Blockchain can be used to trace faulty products, identify production batches, and recall products. It can be used to monitor perishable goods and their temperatures automatically, such as those in refrigerated containers. Similarly, it can alleviate concerns about the authenticity of returned products. Without verification history on blockchain, counterfeit goods have no history. However, blockchain can be used to improve customer service levels. This is equivalent to a surprising move made by the last second in a supply chain game.