Blockchain, just like any technological solution, is not a silver bullet.
Since the early days of the dot-com boom, we've been engrossed with the power of technology. Even when ambitious properties such as Pets.com and eToys proved unsustainable, we were left with a bevy of tools capable of simplifying and even solving problems.
Now, we live in a time when there is an app for any productivity issue. We can choose from thousands of solutions, each boasting impressive features that help people accomplish more in less time. One such solution that's making waves is blockchain.
Aided by the meteoric rise of bitcoin, blockchain has technological applications that make it a viable resource for any number of industries in which transparency matters. As the food services and healthcare fields show, though, blockchain and technology in general is not a silver bullet. While it has potential to effect change, blockchain can't be the cure-all you might expect if you don't apply the necessary context.
Seeing through the supply chain
Supply chain transparency is a must, especially as it relates to food and health. Take, for example, E. coli. A 2015 outbreak of the bacteria contaminated Chipotle restaurants across 11 states, and E. coli concerns led to three recalls of romaine lettuce in 2018 alone. Recalls, besides being a major health concern, pose the single biggest threat to food vendor profitability, according to Food Safety Magazine.
In healthcare, opaque supply chains lead to other issues. Stolen prescription drugs are contributing to a well-documented opioid crisis in the U.S. In addition, fraudulent billing costs around $455 billion worldwide.
While blockchain can help each industry prosper, there are still questions that both healthcare and the food industry must address as to how blockchain aligns with their goals. For leaders in other industries considering blockchain adoption, ask yourself these four questions to determine if it'll yield the results you envision.
1. How important are product quality audits?
Blockchain has the potential to serve as a global supply chain operating system. If your business sells high-quality goods and it's vital to know where they are every step of the way, blockchain could prove beneficial.
Blockchain promises to document the journey of a product from its raw materials to the finished item sitting on a retailer's shelf. Each time the product goes from one supplier to the next, the transfer is documented in the ledger. According to some experts, benefits could include a reduction in the number and duration of delays, the elimination of human error, and cost savings due to increased supply chain efficiency.
Take a look at where your company stands in quality assurance throughout the supply chain. Analyze the numbers in terms of delays and errors, determine what blockchain can do to solve each, and then decide whether your savings justifies your investment. [Related: 4 Steps to Take Before Integrating Blockchain]
2. Do multiple vendors in your industry supply the same product?
Say Home Depot has three suppliers of the same faucet. When customers run into issues, how does Home Depot find out where the faulty products originated? In fact, the home improvement retailer is currently developing a blockchain initiative to solve such issues, and the benefits don't stop there. According to CFO Carol Tomé, there's occasionally a disparity between what suppliers say they provide and what the company receives.
Do a spot check to see which vendors provide what products and figure out whether any redundancies exist. If enough instances occur, analyze how they affect your bottom line and how blockchain might improve or worsen the situation.
3. Is it important to know where your products originate?
For food vendors, blockchain brings traceability to formerly opaque supply chains. When unsafe products are spotted, they can be quickly linked to a source, producing numerous benefits. In addition to halting the spread of contaminated food and possibly saving lives, blockchain can help companies reduce pricey product recalls and preserve their public image.
If your products are consumed or could impact the user's safety, a traceable supply chain could be a major advantage. Blockchain can be a valuable resource for companies that pride themselves on using sustainably grown or acquired products. If yours does the same, consider making the investment.
4. Is your industry burdened by customer data?
The advent of Europe's General Data Protection Regulation – and similar legislation pending in the U.S. – means that companies must keep firm control of consumers' personal data. A failure to do so can lead to crippling penalties and loss of public trust. Blockchain allows companies to verify customer information without ever exposing it to theft or loss.
Without the burden of compliance and data protection, overhead costs for small businesses can be significantly reduced. If your business currently stores customer information and is struggling to adequately protect it, blockchain could revolutionize the way you conduct transactions.
Ultimately, blockchain is about trust. When customers have faith in you and you trust your suppliers, everybody wins. The current blockchain momentum is undoubtedly driven by hype, but that doesn't mean the tech can't make its mark in a big way. Just figure out if it will make a mark with you.