TECH & AI
Paul Brody , Global Blockchain Leader at EY , highlights another concept he believes is crucial to understanding blockchain ’ s potential in supply chain management : tokenisation – in other words , turning a product or piece of inventory into a digital token .
“ Tokens are really useful because blockchains manage them very carefully ,” says Paul . “ You cannot , for example , give a product token to your customer without removing it from your own inventory .
“ Because blockchains enforce reconciliation between all token transfers , supply chains that make use of blockchain technology are likely to have much better and more accurate inventory data and share visibility across the network .”
Paul further elaborates on the role of smart contracts and their ability to define tokens themselves , facilitating the creation of all different kinds of assets – from simple fungible assets ( such as money , piles of screws ) to high value non-fungible assets ( such as serialised products ).
This flexibility allows for the modelling of virtually any supply chain by adapting token designs to specific needs .
Smart contracts also govern how tokens move between parties and automate various business operations , including replenishment orders and inventory management .
Improving transparency and traceability Blockchain has huge potential to enhance transparency and traceability .
“SUPPLY CHAINS THAT MAKE USE OF BLOCKCHAIN TECHNOLOGY ARE LIKELY TO HAVE MUCH BETTER AND MORE ACCURATE INVENTORY DATA ”
PAUL BRODY GLOBAL BLOCKCHAIN LEADER , EY
This is particularly important when it comes to sourcing materials in categories where there is a high incidence of corruption , such as the extraction and mining industry , or to identify the source of contamination in food supply chains .
The technology ’ s potential is further amplified when used to complement other emerging technologies , as Simon outlines : “ In combination with IoT , blockchain technology can increase the traceability of products and materials across the entire supply chain , helping identify the location of materials at any stage of the supply process .
“ Sensors in delivery trucks will , for example , be able to provide real-time information about the movement of goods , but also provide information on conditions such as levels of refrigeration .”
152 December 2024