Blockchain's Promise for Defense Agency Supply Chains

Written by Larkin Young and Jaimin Desai

The Power of Blockchain

Blockchain technology can address these problems by providing a single source of truth—a shared, secure, and immutable record of DOD supply chain transactions.

Among the key features:

  • Goods moving through the supply chain can be scanned at each step, with the manufacturer, shippers, carriers, and other intermediaries updating the supply chain blockchain. This information gives DOD logistics teams the visibility into the data they need to accurately track goods and identify problems in real time.
  •  When a supply chain partner adds a record to the blockchain, it digitally signs the data using its private “key”—a secret code—identifying who made the update. Once the data is added, it cannot be tampered with.
  •  Blockchain’s distributed architecture pairs well with Internet of Things (IoT) devices, helping to increase supply chain data accuracy. For example, a shipping container can be outfitted with IoT sensors that automatically update the blockchain with information about the container’s contents, even including data such as temperature and humidity.
  •  Unlike the public nature of the Bitcoin blockchain, where anyone can view transactions, a defense supply chain blockchain is accessible only to supply chain partners. Furthermore, sensitive details such as geographic information, type of goods, and origin and destination, can be encrypted and made visible only to relevant parties.
  • Because of the increased accuracy, completeness, and transparency of supply chain data on the blockchain, DOD organizations can properly account for the movement of goods, and can forecast inventories with a high degree of confidence—reducing inefficiencies and waste.

Blockchain has the potential to significantly transform DOD supply chain networks. And defense organizations don’t have to wait for a full transformation to get started. With the right expertise, they can pilot blockchain-based solutions in parts of their operations and begin to realize the many potential benefits of blockchain technology.

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