The U.S. Air Force Institute of Technology (AFIT) has developed a free, interactive tool to help supply chain management professionals learn about blockchain and its potential uses. AFIT recently published a live blockchain application that can be accessed from any computer or smart phone, along with a complementary series of tutorial videos that walk learners through a blockchain simulation. The videos can be used as a stand-alone classroom module, or the video and the blockchain website can be incorporated into classroom exercises or business meetings.
You can view a demonstration of the tool here.
Blockchain has become a hot topic in many supply chain management circles. Some experts have predicted that blockchain will revolutionize the way we think about designing and operating the digital infrastructure for future supply chains. By providing a secure record of transactions between multiple parties, a blockchain can improve transparency and increase trust across all of the tiers in a supply chain.
For the military, this could mean better visibility into an extremely complex logistics network. Current information systems sometimes struggle to track parts that are sourced from one region, and then assembled into equipment that is deployed to the opposite end of the planet. A blockchain digital ledger could be an elegant solution to this extremely complex challenge.
But it can be hard for many people to understand what makes a blockchain different from a traditional database. So while the potential opportunities may be huge, the practical reality is that introducing a new technology like blockchain into a large, global organization takes time, planning, and – most of all – the buy-in of decision-makers throughout the organization.
AFIT is the graduate school for the U.S. Air Force. Its mission is to provide the defense community with the knowledge it needs to make good decisions about the future. Supply chain management researchers at AFIT knew they needed an easier way to study and demonstrate how blockchains work in order to create common understanding between Department of Defense leaders, supply chain managers, and those seeking to help the defense community build the right solutions to solve the most pressing supply chain security and tracking problems.
Working together with SecureMarking, a private supply chain security firm, and the University of South Dakota Beacom School of Business, AFIT developed a multi-echelon supply chain scenario and then created a blockchain application around it. In this scenario, an Air Force program manager issues digital “tokens” to upstream suppliers. These tokens are then assigned to components. The tokens are transferred from one company to the next in the blockchain, at the same time as the physical products move through the supply chain.
Some of the companies in this scenario are able to add additional information to a token. For example, when a component is assembled into a product, this can be recorded to the blockchain. And companies at any tier can see the end-to-end supply chain for all of the parts they have handled. But only the Air Force program manager has complete visibility to all of the parts from all of the companies, at any time.
So what’s special about the blockchain? Yes, it would be possible to track this information in a traditional database. But using a blockchain helps to ensure that all of the policies are enforced at each step in the process, and every transaction is permanently recorded. Additionally, given the distributed nature of the blockchain, each participant has their own immutable copy of the record. This distributed way of record keeping and coordination could be a revolutionary advance in how goods are tracked across organizations. In other words, the blockchain provides all of the supply chain participants with a higher level of confidence in the digital records, and in their physical products.
In the process of developing this scenario, the team faced some of the basic decisions that any company will need to address when designing a blockchain. For example:
• Will the blockchain be public, allowing anyone to join, or will it be private, meaning only pre-approved companies can participate in transactions?
• What activities will each company in the blockchain be allowed to perform?
• Will participation be compulsory or will there need to be an incentive structure?
• How much visibility will each company have into the overall supply chain?
An interesting feature of this demonstration is that it tracks the entire lifecycle of a component – from its point of manufacture to its eventual decommissioning and disposal. This is important because many supply chains now face a challenge of having used products re-introduced and sold as new by unscrupulous businesses. These used products can lead to costly problems such as unexpected breakdowns of equipment. In some situations, tracking decommissioning could also be useful for ensuring that hazardous materials are properly disposed of, or that re-usable components are properly recycled.
The full demonstration is available as a series of YouTube videos that can be completed in 20 minutes.
Researchers and educators who would like more information about this project can contact: Ben Hazen, PhD – U.S. Air Force Institute of Technology ([email protected]); Tim Breitbach, PhD – U.S. Air Force Institute of Technology ([email protected]) or Daniel Stanton – SecureMarking, Inc. ([email protected]