Blockchain Secures Global Supply Chain

Emerging technology adds layer of security to movement of critical components

Global supply chains are more connected and far-reaching than ever before. In 2017, about 1.83 billion metric tons of goods were shipped across the world, almost 17 times more than in 1980.

At every port of entry, warehouse dock, and freight yard, a new link in the supply chain is formed. As the supply chain grows, however, so do the opportunities for counterfeit, pilferage, fraud, and conducting other physical and even digital harm to critical goods, supplies, and information. How can supply chain members ensure security as goods move from one node to another in increasingly longer supply chains?

Blockchain enables supply chain solutions

Enter blockchain. Blockchain technology was introduced in 2008, originally as a primary means of running the popular Bitcoin cryptocurrency service. Blockchain digitally encrypts ledgers and transactions, which are synchronized across every node, or copy, of the blockchain. The earliest iterations of blockchains were “unpermissioned,” or open to anonymous participation, and designed to automatically deal with the possibility that some member nodes could maliciously compromise the blockchain ledger.

Within a few years, blockchain proponents recognized that the basic technology had uses beyond cryptocurrencies and identified potential applications in finance, healthcare, supply chain management, and other areas routinely involving transactions among independent entities. In 2016, SAIC began evaluating the technology in a wide range of uses, particularly supply chain security and integrity enhancement. This work has also encompassed the development of a proof-of-concept blockchain solution for research data provenance for an SAIC customer, as well as work on securing voting systems with blockchain technology.

SAIC is working to integrate permissioned blockchain technology within its integrated logistics toolkit (ILT), a suite of open source logistics and supply chain management applications that plays a critical role in successfully executing uninterrupted deliveries of supplies.

Our blockchain integration solution leverages industry-standard Electronic Data Interchange (EDI) message standards to securely communicate and record business transactions among supply chain partners. These encrypted messages are only visible to counterparties involved in the transaction — a critical security arm enabled by the blockchain.

“The more secure the messages that pass among supply chain participants are, the more secure the end-to-end system is,” said Jim Tyson, an SAIC blockchain expert. “The supply chain is only as secure as its weakest link.”

The use of EDI-standard messages enables the SAIC blockchain solution to provide the capabilities and benefits of a commercial third-party EDI Value-Added Network without added costs.

 

Blockchain_digital padlock
Blockchain was originally introduced to support cryptocurrency transactions.

Rolling the blockchain out to customers

We see blockchain as a transformative technology to protect elements of supply chains. Recently, we collaborated with a long-term supplier partner to further bolster and secure supply chain transactions. We announced in February a collaborative pilot program that will support our Department of Defense customers in addressing some of the complex supply chain challenges on our Global Tires Program. The program has had SAIC’s support for more than eight years, delivering more than 1.5 million aircraft and vehicle tires to members of the U.S. armed forces worldwide, with a 97% fill rate. The pilot is intended to enrich the service customers already enjoy due in part to the capabilities yielded by blockchain technology.

SAIC plans to integrate data from Internet of Things (IoT) sensors to further enhance real-time supply chain track-and-trace capabilities. If weather or a mechanical breakdown delays a truckload of aircraft tires, we’ll know about it instantly and be ready to take immediate steps to ensure our customers’ critical material readiness requirements aren’t impacted.

 

Blockchain_SAIC Tires
SAIC is conducting a blockchain pilot, investigating its implementation to our DOD supply chain in programs.

Blockchain’s future

Blockchain is becoming less a novelty and more an established approach to securing multi-party transactions. A 2019 Gartner study shows that blockchain will have a “transformational” impact across most industries, including supply chain, within five to 10 years.

The trick now is educating more customers about blockchain capabilities.

“Frankly, the technology is there; proven in successful production deployments at scale in multiple industries,” Tyson said. “The challenge moving forward is in helping people to understand what the technology is really about, what the costs and benefits are, and what are the best governance models for trusted, permissioned blockchain implementations. SAIC has been an early adopter of the technology; we expect that our supply chain customers and partners will continue to work with us in leveraging blockchain to our common benefit.”