Blockchain technology has been one of the most significant developments in the information technology space over the past few years. This technology helps in cultivating an environment of trust among the partner members by helping create a shared, distributed ledger of information that can be accessed by all member entities, giving everyone access to the same up-to-date information in real-time. It also helps in reducing the presence of middlemen across the value chain, helping bring down the administrative expenses incurred throughout. By making the stored records immutable, it offers enhanced security and data integrity. The decentralized ledger of the Blockchain also allows for increased transparency over the underlying data, and hence better tracability and accountability across the value chain. The fact that the ledger is reconciled by the consensus over the network and not by each participant in their siloed systems, means that overall cost of reconciliation is drastically reduced.
Transformational use case of Blockchain in Semiconductor industry
There are a number of potential use cases where the Blockchain technology can be influential in providing tangible value adds in the Semiconductor industry space. Counterfeit parts identification is one of the most important use cases, which can transform Semiconductor value chain. Blockchain allows for provenance tracking of any asset in the value chain. As such, it makes it possible to verify in real-time if the underlying asset has been fabricated or tampered with, throughout the semiconductor value chain. The integration with blockchain technology essentially means that each asset in the value chain has a registered code in the distributed ledger, which can be authenticated, making the records truly tamper-resistant.
While blockchain brings transparency to the semiconductor supply chain, and provides unambiguous audit trails, provenance tracking allows to keep a check on the product quality being delivered as well by discouraging unethical sourcing of goods and materials from the black market by unscrupulous suppliers and third-party vendors. It also helps in keeping track of the maintenance and repair history of the assets in real-time. Better transparency also improves workflow and real -time visibility on the status of the shipments across the global supply chain, assisting in transit tracking and transfer of ownership across the value chain. Also, payments recorded on the blockchain cannot be fabricated, which reduces the risk of fraud and also tackles the problem of double spending.
We are working with clients in the health products and hi-tech sectors, who own global supply chains with hundreds of peers such as suppliers, distributors, laboratories, transporters and warehouses. Using blockchain, we endeavor to bring all these participants on a single platform, where the information is replicated across organizations without the need to spend time and effort in reconciling between individual organizations. With the blockchain acting as an immutable source of truth, dispute resolution becomes easier and so does auditing.
Blockchain is a very powerful medium which has the power to bring down the cost of transactions and reshape the global collaboration space, enabling tracability, transparency and driving positive change. However, there are certain challenges, like limited processing speed, that must be dealt with in order to make blockchain integration truly massive and scalable. Hyperledger Fabric, Hyperledger Sawtooth and Microsoft’s Coco frameworks are some of the most prominent developments in the past 12 months, which have improved the scalability of blockchain systems.
The regulatory aspect of blockchains and the fact that several organizations participate in them, makes it challenging to formulate regulatory frameworks. But the true benefit of blockchains can be realized when even regulatory and government agencies participate in consortiums. A good example of this is the participation of customs in supply chains, which can reduce leakages and delays.