U.S. retail giant, Target, is seemingly another company that is now realizing the benefits and prospects offered by the nascent but extremely promising blockchain technology. In a recent blog post made by the Vice President of Architecture at Target, Joel Crabb, it is stated:
Blockchains and distributed ledger technology have been big buzzwords in recent years, but when you look closely at this technology, you can see that it is really just a new tool to solve a long-standing challenge: ensuring multiparty trust across enterprises doing business together.
The blog post explores the benefits offered by blockchain alongside the challenges that it brings with its usage. Open source blockchain gets special attention in the post as in open source projects all the participating parties determine the governance model of the software and thus the companies using it can focus on building the solutions.
The post states that in the mid of 2018, the retail giant started experimenting with a blockchain proof-of-concept to help manage the certification of suppliers in the company’s branded paper product manufacturing ecosystem. It is highlighted that although setting up a blockchain is easy, the difficulty lies in deciding what data will lie on it. The work that was done on a certification blockchain has been now open sourced as ConsenSource. The post states:
“As ConsenSource progressed, Cargill’s [a major food supplier of the company] work in creating supply chain middleware to store data and transactions on a blockchain came to our attention. As we learned more about the effort, Cargill and Intel took the project to Hyperledger, an open source collaborative hosted by Linux Foundation, and it became Hyperledger Grid! I’m proud that Target will support the Hyperledger Grid project, and that we’re committing dedicated engineering resources to build out components in the Grid architecture!”
Hyperledger Grid focuses on reforming the supply-chain framework by utilizing blockchain and solving issues such as food safety, trade settlement, traceability etc. in the area of food retail.
This news of using blockchain in the industrial arena does not come off as new. In the past, we have seen big giants like Pepsi, BMW, Walmart, LVMH, Intel and many others get interested in the prospects offered by blockchain. While Pepsi is looking into using blockchain to improve its supply-chain efficiency, the luxury brand LVMH is using this technology in order to authenticate high-end luxury goods. Besides, use-cases of this nascent tech are also being found in industries like pharmaceutical, content-creation, music and much more. In short, blockchain technology is slowly but surely taking hold across various industries.
But why does blockchain carry so much importance? The answer lies in its decentralized nature. Unlike centralized networks, blockchain networks have nodes controlling and maintaining the network instead of a single governing party. The transactions that are taking place on the network are registered by all the nodes participating in the network as the record is distributed. As a result of this distributed-ledger technology, a trustless and transparent system of operation is established making sure no unfair policies or bias is introduced by the centrally controlling party. The record is also immutable meaning it cannot be changed once the transactions are put in the ledger.
In supply-chain specifically, blockchain finds its prime usage in tracking goods. The amount of complexity that is currently present in industries is extremely high. Extraction of raw materials, transfer across borders and movements across various units are just some examples of how the supply-chain framework of big conglomerates work. In between these steps, a lot of mishaps or accidents are bound to happen. With blockchain, the issue of authenticating items is resolved by putting their record on a blockchain (which is immutable) and tracking them from raw materials to the finished products. Besides this, blockchain also finds its use-cases in other areas such as logistics. All in all, each process which requires transparency can benefit from blockchain technology.
With the pace at which blockchain is advancing on both the technological and legislative fronts, it is expected that it will become an integral part of industry 4.0, which essentially involves incorporating revolutionary technologies like artificial intelligence, machine learning, internet of things, big data in industrial frameworks to improve the efficiencies overall. With big names like Pepsi, BMW, Walmart etc. exploring this tech, it is likely more and more companies will realize the potential carried by blockchain and will adopt it to improve their own frameworks in the future.