How BlockChain is Implemented in Supply Chain
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With the revolutionary changes that blockchain has contributed to the industrial world, many companies are already exploring, experimenting, and considering the use of this innovation. Of course, some concepts need to be considered before implementing blockchain to prevent implementation mistakes.
The question is, how is blockchain implemented in the supply chain? Read on to find out more.
There are three types of blockchain. Before implementing this innovation, it is imperative that you first know these three types and their differences.
1. Permissionless blockchain
The permissionless blockchain does not require permission to join and transact with. The very prime example of this blockchain type is Bitcoin. It is the first to use a permissionless blockchain type. It enabled any user to access and participate without restrictions.
Sure, it is an open trade to anyone interested, but it doesn’t mean that it is not secure and anonymous. It still offers secure, traceable transactions, immutability, and a decentralized system.
This is why it is still widely accepted and used by millions. This type is mainly used in digital identity, voting, and fundraising. However, there are also disadvantages to using permissionless blockchain:
- Transaction speed is slow due to the number of users of permissionless blockchain.
- It can only validate and authenticate a limited number of transactions.
- Some permissionless blockchain requires complex numerical and computational skills for validation purposes that, unluckily, not everyone has.
2. Private permissioned blockchain
Private permissioned blockchain is the complete opposite of permissionless blockchain type. This type limits the participants who may be able to join. It requires a set of standards and special permission from the main network administrator or owner before joining.
So, why the need to use private permissioned blockchain? This is because it creates a platform that is invisible from the prying public eyes. Financial institutions are the best examples that use this type of blockchain.
The advantages of this type are the following:
-Transactions are valeted by central controlled governance
– Operations are customized according to the standard of the organization.
– It is efficient and is scalable.
– Offers anonymity and transparency
But of course, there is a disadvantage:
-This is because the organization relies on its member’s integrity, making it susceptible to manipulation.
Lastly, this blockchain is commonly used in research, food tracking, banking and payments, asset ownership, internal voting, and managing supply chains.
3. Public permissioned blockchain
ublic permissioned blockchain offer non-restrictive participation to anyone who intends to explore it. Anyone can access the information regulating around the platform, allowing them to contribute and participate in the core activities of the network. The downside is that there is an insufficiency of privacy and anonymity and the heavy power consumption necessary for maintaining the distributed public ledger.
To further proceed, you also need to recognize the signs your organization or business needs a blockchain system to run it. Here are five questions you have to consider or discuss with your members:
- Does our company need secured file storage?
- Is security one of our top priorities?
- Are all writers known? (Consider this question when you are choosing which type of blockchain type to use)
- Are all writers trusted? (Consider this question when you are choosing which type of blockchain type to use)
- Is data validation important?
You will also need to consider transaction speed and regulatory approval when implementing blockchain.
Speed of Transaction
Transaction speed is the rate at which the data is transferred to another system. This is a crucial mechanism that needs to be considered if you aim for a company with a better result. It assures the customer’s satisfaction, provides more availability and progress in the operational system.
Currently, blockchains are not able to handle more than 14 transactions per second. The bitcoin, for instance, can only accommodate seven transactions per second.
Implementing blockchain can be difficult in some cases due to industry-specific legislative restrictions. Depending on the industry niche you are in, specific standards may not comply with the standard regulatory requirements. This is why it is crucial to review, comply with, and seek the general data protection regulation in your area.
If you are aiming to improve your company or is just about to start one, here are some pointers you need to base on when implementing blockchain:
1. Do more research
Researching the importance, history, challenges, types, and other relevant information about blockchain will prevent you from committing mistakes and help you fully utilize it. It will help you determine the reasons you should be using it to improve your current company. And it will also help you avoid mistakes from applying it.
Learn from those who are already using this innovation to avoid the same mistakes they have fallen into, so you can devise a more effective use for the blockchain.
2. Understand and determine the use of blockchain
Understanding the use of blockchain will enable you, your members, and your company to embrace blockchain without a shred of doubt whether blockchain is effective or whether you need it or not. Also, you will be able to navigate through the platform without trouble, given you, your members become fully equipped with the knowledge on how to utilize the blockchain.
3. Find the expert blockchain partners and members
Let us say you have a blockchain master plan prepared along with the project blueprint for development. But, if you are still an early bird in the area, you might find moving to the subsequent development hard. Or, your tech members do not have the resources and lack the experience to proceed.
This is why finding or employing members who are already experts in the platform is a must. And here are the factors that need to be considered:
- Technical Blockchain Skills and Experience
Having a skilled and experienced blockchain partner will not only help you with your progress but will ensure that your important priorities and tech stack requirements are met. Hire a person who can and is willing to work at breakneck and on time with schedule.
This will save from frustrations caused by missed deadlines and slacking off. Given that blockchain is a complicated system and it will become more complex with its evolving nature, it is imperative to hire someone who is flexible and can keep up with the changing trends.
Before hiring someone, make sure to review the following if you want to ensure promising results and performance:
–Assess their Experience in developing and using blockchain.
-Rate their knowledge on the blockchain.
-Review their work ethics and work samples.
-Assess and test the skills in actual performance.
-Ask for recommendations and feedback from their previous employer.
-If the applicant does not have experience yet but has an extensive educational and training background, ask for feedback from his/her trainer and instructors.
2. Availability and Commitment
Projects can take a long duration of success achievement, and along the way, technical difficulties, lack of determination, and other problems may occur. With this, you will need someone who will not leave you hanging. Find someone with work ethics which is readily available when unexpected difficulties arise. When you already launched projects, you will also need someone who knows how to fix and handle possible bugs that may occur, consistent maintenance, and upgrading procedures.
Remember, finding the right partner and employee will save you from trivial matters and will only focus on growing your business. This is why before accepting someone in your company, make sure you ask about the following:
-Project management methodologies
-Discuss how they face and handle sudden changes and when difficulties occur
-Ask about their post-project services and maintenances
4. Choose a suitable blockchain technology for you
With the different blockchain types present in the platform, make sure to choose the right type suitable for your organization and company. Make sure it is in line with your company standard, goals, and purposes. And remember, do not attempt to follow the hype. Consider what type of industry you will be entering and base your choice on that. For instance, if you aim to open a financial sector, your best bet would be permissioned blockchain.
More importantly, make sure to seek counsel from the blockchain experts who will present you with relevant information before choosing what type of blockchain to execute.
5. Recognize and prepare for possible difficulties
Difficulties will inevitably arise during implantation or transactions. This is why you and your members will need to prepare for them. Consider setting aside some allocated funds that would cover the expenditures you will be having with fixing the problem.
You can also discuss the possible difficulties with your team so you can set not only hypothetical solutions but also practical ones.
Blockchain may be a huge milestone when used in your company organization but remember. It is a complex platform that requires in-depth understanding and research otherwise, and you will only be wasting time, money, and effort.
Now that you know the essential concepts that need to be considered in implementing blockchain in your company, make sure you will find the right partner, employ the right people and smartly manage it to ensure your progress.