A procurement executive is urging professionals in procurement and supply chain jobs, whether permanent employees or supply chain interims, to familiarise themselves with blockchain technology.

Writing for Information Age, Iain Steel, chief procurement services officer at the British law firm, TLT, began with a description of blockchain. It is a database, or ‘ledger’ distributed across a network of computers simultaneously. When a new record or ‘block’ is entered, it automatically bears a timestamp and a distinct fingerprint of the previous block in the chain of data – a ‘hash.’ That forges a link between the new and the preceding block, creating a ‘chain’ of blocks. When there is a new entry, a majority of the computer-operatives in the network must agree to its validity before the record is encoded as a new block.

One direct benefit of this technology for procurement professionals arises in the work of due diligence, as anyone holding procurement jobs can testify, this is usually labour intensive and aims at building trust throughout the supply chain. Blockchain promises to end the need for human intermediaries to spend time on assuring stages of the transaction, automating the management of transaction risks instead. It also promises ‘smart contracts’ – sequences of code sitting in an individual block that automate actions when predetermined conditions are met. The author of the code defines conditions, ensuring that obligations are automatically met without breaching deadlines.

While an exaggeration to claim that blockchain is ‘hack-proof’ the danger of malicious actors gaining access and making mischief are reduced. Over 50% of the computers in the network must ‘agree’ to the transaction, and hackers would have to meddle with all copies of the record throughout the distributed network concurrently. Claiming that blockchain technology is set to become a part of everyday business life shortly, Steel concludes that, by embracing it, the procurement community “could see tangible benefits across our real world supply chain.”

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!