Blockchain technology has the capability to alter the worldwide supply chain and enhance the speed and safety of tackling the flow of products at international boundaries. But researchers say a lot of questions still remain about how the transformation will occur.
Weidong “Larry” Shi, an associate professor of at the University of Houston stated:
“It’s an emerging technology. It’s evolving,”
This was stated in a paper, published in the International Journal of Production Research, which investigates the possible disturbance and assures that blockchain can secure the global flow of products and identifies differences between the private sector and governmental agencies that have to be addressed. The paper is funded by the University of Houston and led by its Department of Homeland Security Center of Excellence.
Shi said this indicates that embracing blockchain to monitor the movement of products globally may benefit both business and agencies charged with ensuring the protection of cargo entering the United States. “It could move items through customs more quickly, and it would allow customs to focus its resources on the minority of cargo that needs closer scrutiny,” he said.
The paper is concentrated on six distribution chain “pain points”: traceability, dispute resolution, freight integrity and safety, supply chain digitalization, compliance, and stakeholder management and trust. And of course, the key challenges for mass adoption.
“The wide adoption of blockchain technology in the global SC (supply chain) market is still in its infancy,” they wrote. “Industry experts project that on average, it may take about six years for the widespread adoption of blockchain.”
According to Shi, one of the challenges is to decide which blockchain technology ought to be utilized. He forecasts which will be ascertained industry-by-industry and also the need for shared standards and applicable regulations and laws.
Widespread adoption may also need organizations to share some information with both governments of the nations by which the products pass, in addition to with their opponents. But the benefits could be considerable, from enhancing the capacity to confirm where products come from and what path they travelled to get to the end-user, to solving concerns about counterfeit solutions.
Blockchain would decrease fraud, Shi said. “The data can’t be changed. Everyone (along the supply chain) has a copy. You can add information, but you can’t change it.”
Three years ago, people didn’t know what blockchain was,” Shi said. “They thought it was bitcoin. Now they understand that it’s a technology.”
The investigators are working with both business and the national authorities, and Shi said they discovered high interest among business, including a couple of pilot projects employing blockchain technology. However, any alternative, he stated, should incorporate the demands and responsibilities of U.S. Customs and Border Protection so as to make sure it meets the objective of pre-clearing most freight before it enters a port. “It is a better way of sharing data, and a better picture of what is going on.”