Blockchain is here to stay and to regulate transactions between various players and, therefore, may in the near future leave companies that do not know how to invest in this technology and trend off the business stage!
This technology, Blockchain, was initially created to secure the Bitcoin platform, but quickly adopted for non-financial business segments, such as logistics flows.
In reality using Blockchain is nothing more than being available to share data in a decentralised but secure environment, where information cannot be modified and is subject to numerous acceptances by the players that make up the network or information bank. The data navigating the decentralised network, once validated, is encrypted and thus becomes a non-alterable online asset.
A process in Blockchain groups several steps that occur quickly and consistently, of which we highlight:
- transaction initiation – two or more entities decide to start a data sharing process;
- The blockchain/data bank – information enters within a decentralised information network;
- Consistency – a set of validations and rules is defined that the computers/network stakeholders execute in order to validate the consistency of the information that has been put into circulation;
- Cryptography – once the information is validated, a block of encrypted data is constituted;
- Execution – the transfer and sharing of information is carried out between entities.
Practical examples of this technology in logistics are beginning to proliferate around the world especially in large business groups with strong investment capabilities.
Business segments, such as clothing, food, medicine, for example, it is crucial to establish unalterable agreements in which their phases can be constantly controlled throughout the supply chain, such as the flow of transport and knowing where the goods are going, verifying the installed production capacity and knowing when the purchased lot is being produced, verifying expiry dates and even knowing how and in what conditions they are stored.
The optimisation of all the variables in a logistics and distribution chain provides greater efficiency, establishes credible and trustworthy relations between the economic agents, ensures transparency in all the phases of the processes for the interlocutors involved, significantly reduces the appearance of faults and, in the end, allows costs to be rationalised and optimised.
Being a technology that is being well accepted and gaining more supporters in the logistics world, the adoption or non-adoption of these concepts and practices jeopardises the long-term competitiveness of companies, which invariably leads us to discuss the Portuguese business fabric and its way of being in relation to investment and data sharing.
99.9% of the Portuguese business fabric is made up of SMEs, of which 96% are micro-companies and only 0.5% medium-sized companies. The investment rate of Portuguese companies (non-financial) is around 20%.
These indicators alone are not very favourable to technologies such as Blockchain and if we combine some reluctance in sharing data among SMEs it could be a major obstacle to the development of this way of doing logistics and being thus connected to the big players.
It will be important the emergence of entities that promote the demystification of data sharing and good tax incentives for investment in technology to allow our companies to also contribute with information to the blocks and databases that proliferate daily in Blockchain chains thus making the logistics world more efficient for all its agents, whether suppliers, intermediaries or end customers.
Nuno Sacramento
Logistics Director Tempus
In Supply Chain