Blockchain for Responsible Sourcing – Where Does It Fit?
(Source: SupplyShift blog)
June 25, 2019 — Santa Cruz, CA
Blockchain is a revolutionary technology — without a doubt. The next-level security, transparency, and efficiency of blockchain technology will redefine many industries and business processes, especially those dealing with transactional data. It’s no surprise, then, that blockchain has created a buzz in the supply chain management industry.
Does the vast potential of this promising technology mean that companies of all sizes and stages should be rebuilding their responsible sourcing systems from the ground up to include it? Or is blockchain still an experiment relegated mainly to the process of tracking products from the source through known supply chains, without much to offer companies looking to comprehensively evaluate environmental and social risks within the supply chain?
At SupplyShift, we’re excited about a future where fully transparent and sustainable supply chains are a reality for every global business. Here we examine the role that blockchain will likely play in furthering transparency and responsibility goals and evaluate current applicability for companies that are developing responsible sourcing programs.
How Blockchain Works
Before we jump into the reasons why we believe it is somewhat premature to consider blockchain as a singular responsible sourcing solution, let’s run through a quick primer on how the insurgent technology works and what it does uniquely well.
Blockchain first gained prominence as the platform that powers the cryptocurrency Bitcoin. It functions as a shared electronic ledger upon which transactions are recorded and visible to all users. Unlike an Excel spreadsheet stored on an individual computer or on a cloud-based server, the blockchain ledger is distributed across thousands of computers in a worldwide network, which provides an element of trust for users that the information is authentic.
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