Real Time Inventory Visibility Through Blockchain

Abstract

 Globally, blockchain is revered as being the most revolutionary technology advancement since the advent of the internet; however, the maturity of this technology leaves industry leaders apprehensive to apply it to one’s enterprise information systems, even though studies have quantified the problems in current solutions to be upwards of $3.1 trillion a year (Redman, 2016). In 2018, there have been the applications of this technology on various industries; ranging from healthcare, finance technology (FinTec), and supply chain. The most prominent application of this technology is to a firm’s supply chain, as the technology would greatly increase the traceability of a product’s provenance, This paper is written four months after Wal-Mart sent their suppliers information regarding the Food Traceability Initiative Fresh Leafy Greens; developing a user-friendly, low-cost, blockchain-enabled traceability solution to enable a leafy green farm to table (Walmart, 2018). There has been a surge in literature covering this topic; however, they have failed in concisely communicating the feasibility of the application and the far-reaching benefits of the application. More notably, the impacts of the technology during a product recall. This paper aims at addressing the issues in the current supply chains, evaluating characteristics of the current blockchains, and identifying the requirements needed to create and apply a Decentralized Application (DApp) to increase the visibility to a supply chains; enabling a real time inventory visibility.

Keywords: blockchain, supply chain, provenance, transparency, hyperledger fabric, product recalls, risk mitigation, collaboration, smart contracts, IBM, global network optimization, technological integration, customer integration, strategic sourcing

 

Real time Inventory Visibility Through Blockchain

 In the past few years, there has been an exponential increase in both the impact of recalls to business firms, as well as the increase of regulatory laws put into practice. The most prominent impact of recalls is on the food and beverage industry; impacting the industry, the firm, and all of the upstream suppliers. The time speed in which a firm can identify the impacted products contributes the largest variable playing into the financial impact; mitigating the elapsing time window will increase the likelihood of decreasing the overall risk to the firm. Furthermore, the process in which a firm tracks their inventory will ultimately determine the accuracy and speed of their identification of these products. In the current state, most companies currently utilize the traditional bar code system or Universal Product Code (UPC) system; however, this method yields a fraction of data storage as other coding systems available today.

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  Furthermore, the technology being used for inventory management are cumbersome, prone to errors and bad actors, and hinder any members in the supply chain to react quickly to unforeseen events. The advent of blockchain is relatively new; although, the largest benefit of this technology is on the process of storing and sharing information among the collaborators of the database. Currently, these Centralized Database (CDB) stores all of the information in one location and does not allow for flexibility during supplier integrations; Blockchain uses a data infrastructure called Decentralized Databases (DDB), which encourage the sharing data among all users of the database.

 Moreover, through the adoption of this technology a firm would enable the following, but not limited to: increased risk mitigation throughout their supply chain, technological continuous improvement, quantify and track the processes in their supply chain, decrease the time needed to integrate customer and supplier infrastructures. Many case studies have been conducted on the application of this new technology onto a firm’s supply chain but failed to capture the deep-rooted benefits it could yield to a firm’s profit margins; especially in the case of product recalls. This paper will analyze the impact of applying blockchain technology to product recalls, since recalls pose the most inertia to significantly impact a company; however, this paper will also analyze the feasibility of this integration to benefit residual aspects outlined in the book Diagnosing Greatness: Ten Traits of the Best Supply Chains” written Chuck Poirier and Morgan Swink.

Method

Product Recalls

 Recall Overview

  The United States Food and Drug Administration (FDA) was established in 1906, with the passing of United States’ first regulation on both the food and drug industry called the 1906- Food and Drugs Act (FD). However, it was not for another 29 years when the 1938-Food, Drug, and Cosmetic Act (FDC) was signed did the FDA receive jurisdiction to enforce the laws embedded in the act (FDA, 2018). The FDC remained as the national guideline to industry overseen by the FDA; however, it received a much-needed revamping to the laws, which needed to encompass the expanded distribution of products offered to Americans. This led to the fortification of the FDA’s justification, with the passing of the Food Safety Modernization Act (FSM) in 2011. The FSMA gave the FDA authority to conduct an investigation on a firm’s records if they had reasonable doubt of a potential defect of a food product, where the previous FDC required the FDA to have substantial and credible evidence to conduct a like investigation. With the passing of the FSM came the increased risk to the food and beverage industry; especially to a firm’s liability to their supply chain and suppliers. In the FSM era, Supply Chain Mangers were continually looking for new and innovative ways to increase their supplier collaboration, improving their operational processes to increase quality control, and standardizing the data flow in and out of their supply chain infrastructure.

 The FDA describes recalls as a process in which a firm decides to voluntarily remove their product from the market; however, this could be initiated by the firm, by the FDA, or through the statutory authority of the FDA (FDA, 2018). The most prominent catalyst for a food recall, is either from consumer complaints; ranging from complaints of foul smell to death of a person. Through these complaints, the FDA investigators will compile information, conduct sampling tests, and publish the results to the food product’s owning firm.

 The FDA currently classifies recalls into four main categories of severity: Class I; event which has a high probability that the product could cause dire health consequences if exposed to or consumed, Class 2; event which has a likely chance to cause temporary or irreversible medical implications if exposed to or consumed, Class 3; event which high unlikely chance to medically impact a person’s health if exposed to or consumed, and Market withdrawal; event that violates one or more of the FDA’s regulations and the firm is to remove the item before legal action is taken (FDA, 2018).

 In addition to the classification of a recall, there are multiple levels of complexities of recalls, which the FDA classifies as Consumer, Retail and Wholesale Level; classifying the complexity involved with a recall, as an effect of the product’s distribution (FDA). The extent in which the product’s must be accounted for, disposed of, and ultimately destroyed, is dependent on the FDA’s classification of the recall’s depth. Consumer level requires full supply chain accountability and retrieval of the product from the consumer; receiving the most complex scenario, as it requires a mature and disciplined Warehouse Management System (WMS) The Retail level requires the product to retrieved from all downstream retail locations offering the impacted product; receiving the moderate level of complexity, as the downstream retailers should have accountability of historical Purchase Orders (PO) and in-store inventory levels. The least complicated depth of a recall is the Wholesale level, which requires the retrieval of the impacted products from wholesale distributors; requiring minimal effort, since the fulfilled POs would’ve been is bulk and this minimizes the impacted stakeholders needing contact by the firm’s product compliance department.

 Supply Chain Implications of Recalls

 Since the FSMA was signed into law the food and beverage industry has seen an exponential increase of FDA actions; rising over 90% since 2011 (Beech, 2018). Each recall event yields both short- and long-term impacts for the impacted firm, where the companies with a smaller supply chain and operational footprint are unable to withstand the costs associated to the indirect costs (impact to the firm’s Customer Lifetime Value (CLV), increased public relation costs, and re-vamping of the supply chain to increase inventory visibility)  and direct costs (fees associated to the FDA’s investigation, lawsuits from the impacted consumers, disposition of current stock, and customer refunds) associated a recall (Good, 2017).

 Moreover, both the indirect and direct costs associated to recalls, when combined, can equate between $35 to $75M; depending on the severity and depth of the recall (Tyco Integrated Security, (2012). Recall severity, is the FDA’s classification; depth of the recall identifies the impact to the firm’s supply chain; although the most prevalent recall severity and depth, is a Class I- consumer level Recall. In a Class I- Consumer level recall the food product is actively harming the consumers currently being exposed to the product, and a large quantity (over 50% of the circulating stock) is distributed among consumers.

 An example of a food recall’s impact on the food industry occurred in 2006, when 195 consumers became sick and another 5 consumers died, between 25 states; resulting from the bacteria named Escherichia coli (E. coli). As a byproduct of this recall the spinach industry experienced a direct cost of $45M within eight days. A year after the recall was first initiated, the industry reported a sales reduction of 20% reduction; equating ~$300M loss. Unlike the Spinach recall of 2006, most recalls average $10M in direct costs and last an average of 55 days; costing the recalling firm $182K per day that the recall is open with the FDA (Heneghan, 2016). Of the various components, it is estimated 25% of a firm’s time is spent tracking down inventory; accounting for the impacted units and reporting to the FDA (FDA, 2018). In the event the recall followed the industry trend of an average $10M direct cost impact and lasted 55 days; implications of inventory visibility yield a cost-association of ~$2.5M. Supply Chain Managers are continually seeking to adopt a technology that will capitalize on this entitlement, where many are seeking the application of blockchain to fill this void.

Blockchain

 History of Blockchain

 Blockchain was first introduced in a white paper, which was published by Satoshi Nakamoto in 2008, which is a concept of having a publicly distributed ledger to store and verify data between all of the participants. This would allow all users to share data without the verification from a third party and these transactions (or transferring of data) are immutable in nature; mitigating the risk of data manipulation or tampering.

 Blockchain is revolutionary, since it chains data components together called chaining. Chaining is the concept of chaining data together starts with a parent transaction of a select asset (Perboli, Musso, & Rosano, 2018). All of the succeeding transactions are chained together through hashing, where a transactions identification is comprised of the previous transaction’s identification; enabling a person to track the transaction upstream to the parent traction of a select asset, as seen in Figure 1.

Figure 1. Illustration of Chaining. This figure demonstrates the chaining of data capturing through a high-level supply chain. When a product is getting ready to leave a farm (1), the blockchain would capture it as the parent transaction. The product would then be transported (2) to a processing plant (3) and would ultimately end at the retail location (4). A firm would have the ability to identify the origin of a product (A); decreasing the risk or the firm.

Hyperledger Sawtooth

 IBM created the Hyperledger Sawtooth blockchain to solve the problem with other blockchains, which was the concept of permission less ledgers. In the more know blockchain applications, which are being used for supply chain applications, do not have permissions for who can see the content of the ledger. This is a fundamental problem which has historically hindered firms to adopt this technology; potentially allowing competitors to unravel the competitive edge a firm has built.

 Another reason that Hyperledger is a more suitable blockchain environment for Supply Chain Managers, is the versatility the blockchain enables the user to have compared to the more known blockchains. Unlike Ethereum and Bitcoin, Hyperledger Sawtooth was modularly built with multi-tiered application; enabling the user to receive the benefits of the EVM (Ethereum Virtual Machine) for smart contracts and have both a core permission-less blockchain ledger, while keeping their strategic partners on a permissioned ledger (Perboli, Musso, & Rosano, 2018). Supply Chain Managers would be able increase the collaborative efforts by encouraging strategic partners to transmit their data through a permissioned database.

 Lastly, Hyperledger Sawtooth was created to create Decentralized Applications (DApp), which increases the mobility and usability of the blockchain; optimizing the firm’s global supply chain. This is achieved through a simplistic integration of the blockchains Representational State Transfer (REST) Application Programming Interfaces (APIs) to a mobile DApp (Youness, Abdelali, & Houssine, 2018). Since Hyperledger Sawtooth enables this seamless integration, it also has benefits to the firm’s Warehouse Management System (WMS) and the warehouse associates using it.

Results

 Building a mobile DApp built on the Hyperledger Sawtooth blockchain framework, would enable a real-time inventory management system for a firm, while enabling a firm who and when they can see the information stored into the ledger (database) (Petersson & Baur 2018). During a product recall the firm would have the ability to view real time data regarding their inventory up and down stream, without questioning the data for discrepancies, and would assist the firm in the identification of the food-defect’s defect root; resulting from the chaining concept portrayed in Figure 2. The immediate implications to a Supply Chain Manager, is the added benefit to mitigate risk to a firm’s supply chain; mitigating the potential cost impact of ~$2.5M associated to the average product recall (Westerkamp,Victor, & Küpper, 2018).

Figure 2. High-level illustration of a Hyperledger Sawtooth enabled DApp. This figure demonstrates the capability of a DApp, when applied to a firm’s supply chain. When a product is getting ready to leave a farm (1), the blockchain would capture it as the parent transaction. The product would then be transported (2) to a processing plant (3) and would ultimately end at the retail location (4). A firm would have the ability to identify the origin of a product (A), by simply capturing the product’s barcode with a mobile device.

 Utilizing this type of blockchain would enable the firm to apply the latest technological advancement, with the lowest initial startup costs of integrating their current database into the blockchain. The residual benefits of this technology to a Supply Manager far outweighs the effort needed to have complete adoption and application to a firm’s supply chain. As you can see in Table 1, the integration of Hyperledger Sawtooth into a DApp would assist a firm to adopt further traits outlined in the book Diagnosing Greatness: Ten Traits of the Best Supply Chains” written Chuck Poirier and Morgan Swink.

Table 1

Poirier and Swink Ten Traits Enabled by Hyperledger Sawtooth

Supply Chain Traits

Hyperledger Sawtooth Attribute

Sound Supply Chain Strategy Supported by Solid Leadership

Modularly Built for Enterprise Wide Supply Chain

Focus on Financial Metrics

Enables Increased Financial Metrics for Cross-Department Analysis

Commitment to Innovation

Built and Supported by Hyperledger Project

Collaboration with Selected Partners

Dual Permission and Permission less Blockchain Ecosystems

Superior Strategic Sourcing

Permissioned Blockchain Creation for New Strategic Partners

Excellence in Logistics Execution

Increased Capacity Planning

Proficiency in Planning and Execution

Increases Accuracy of Data

High Customer Integration and Satisfaction

CRM Integrations and Consumer Enabled DApp

Ability to Anticipate and Manage Risk

Increased Data Visibility

Globally Optimized Operations

Global Integration of Supply Chain Users

Discussion

 In this analysis, there were many intricate components not mentioned; providing a conceptual feasibility of applying this technology to a firm’s supply chain. The cost and time associated to the purposed integration would need further study to quantify the implications of the development, testing, and implementation of this architecture.  The resources required were also not captured in this study, as this paper’s intent was to communicate the benefits of applying Hyperledger Sawtooth to a firm’s supply chain; especially the potential residual benefits over multiple departments of the supply chain.

 Moreover, this analysis would need require further research both quantitative and qualitative, to better understand the risks (tangible and intangible) associated with current and future stakeholders. The preliminary research showed that conceptually the application would enable a firm to leverage this technology to optimize the flow of information and traceability of products through the supply chain; however, it excluded the humanistic data collection required for an actual application of this technology. Ultimately, the technology is only as useful as the users required to use it, regardless of the benefit of a technology, so future studies would need to incorporate further research methods to better asses the adoption rate of the end users.

 Likewise, further research would need to be conducted on the requirements needed to conduct an enterprise wide integration, since this would require a phased approach for larger companies like Amazon, Wal-Mart, and/or Kroger. This would also require the approval from senior leadership, which has historically faced the most scrutiny. To achieve approval from senior leadership to apply leverage this technology to a firm’s supply chain would require extensive market, cost and industry analysis.

 In conclusion, the supply chain and logistics industry are increasingly depending on Supply Chain Managers to decrease the risk on a firm’s supply chain, while increase optimizing various other aspects of the supply chain. If a firm adopted a like application of blockchain and applied it to their current operational processes, it would have far-reaching benefits to all of the constituents of the supply chain; ultimately increasing the growth of a more sustainable and mature supply chain.

References

Ballou, R. H. (2007). The Evolution and Future of Logistics and Supply Chain Management. European Business Review, 19(4), 332-348. doi:http://dx.doi.org.ezproxy2.apus.edu/10.1108/09555340710760152

Beech, C. (2019) Five Years of Data Show Bacteria-Related Food Recalls Increasing. Retrieved 14 December 2018 from https://www.foodsafetynews.com/2018/02/five-years-of-data-show-bacteria-related-food-recalls-increasing/

Blackwood, J. (2018) How to Introduce Blockchain into Your Company Supply Chain. Retrieved 14 December 2018 from https://mytechdecisions.com/it-infrastructure/blockchain-company-supply-chain/

FDA. (2018). Recalls Background and Defitions. Retrieved 14 December 2018 from https://www.fda.gov/Safety/Recalls/IndustryGuidance/ucm129337.htm

Good, M. (2017) Planning for a Product Recall. Retrieved 14 December 2018 from http://www.rmmagazine.com/2017/10/02/planning-for-a-product-recall/

Heneghan, C. (2016) More Than money: What a Recall Truly costs. Retrieved 14 December 2018 from https://www.fooddive.com/news/more-than-money-what-a-recall-truly-costs/426855/

Perboli, G., Musso, S., & Rosano, M. (2018). Blockchain in Logistics and Supply Chain: a Lean approach for designing real-world use cases. Access, IEEE, PP(99), 1–1. https://doi.org/10.1109/ACCESS.2018.2875782

Petersson, E., & Baur, K. (2018). Impacts of Blockchain technology on Supply Chain Collaboration: A study on the use of blockchain technology in supply chains and how it influences supply chain collaboration.

Poirier, Charles C., Francis Quinn, and Morgan Swink. Diagnosing Greatness, edited by Charles, C. Poirier, et al., J. Ross Publishing Inc., 2008. ProQuest Ebook Central, Created from apus on 2018-11-14 20:16:53.

Redman, T. (2016). Bad Data Costs the U.S. $3 Trillion Per Year. Retrieved 22 December 2018, from https://hbr.org/2016/09/bad-data-costs-the-u-s-3-trillion-per-year

Tribis Youness, El Bouchti Abdelali, & Bouayad Houssine. (2018). Supply Chain Management based on Blockchain: A Systematic Mapping Study. MATEC Web of Conferences, 200, . https://doi.org/10.1051/matecconf/201820000020

Tyco Integrated Security (2012) Recall: The Food Industry’s Biggest Threat to Profitability. Retrieved 14 December 2018 from https://www.foodsafetymagazine.com/signature-series/recall-the-food-industrys-biggest-threat-to-profitability/

Westerkamp, M., Victor, F., & Küpper, A. (2018). Blockchain-based supply chain traceability: Token recipes model manufacturing processes. Ithaca: Cornell University Library, arXiv.org. Retrieved from https://search-proquest-com.ezproxy1.apus.edu/docview/2124645284?accountid=8289

 

Integrating Enterprise Resource Planning Systems and Blockchain: Overcoming Challenges

Abstract

This paper explores the challenges and opportunities that organizations will have when integrating existing Enterprise Resource Planning (ERP) systems with emerging Blockchain technology. Both of these systems have significant value on their own merits and integrating them will provide significant value and security for their respective organizations. This paper is a macro view of the challenges that face organizations in today’s business environment. There will be many changes to business networks and infrastructure that will have an impact on data storage, security and privacy concerns along with regulatory and legal hurdles that may not even exist as of yet. The business goal is to positively influence a firm’s operation, free-up capital, improve transparency, increase security and trust, follow regulatory requirements and increase shareholder value. The analysis will demonstrate solutions for each opportunity that will provide companies a clear path to integrating these systems.

Keywords:  Enterprise Resource Planning, Blockchain

Enterprise Resource Planning (ERP)

With the coming of age of larger, less expensive and more flexible computer systems, it has become possible to implement infrastructure that could manage and plan many mundane or complex tasks for the facility. The system is name Enterprise Resource Planning (ERP). A high-level definition of ERP is “a business software system that that supports business or enterprise throughout the project in organizing, planning or maintaining, tracking and utilization of resources (Man, Machine, Material, Money), effectively.”(What is ERP (Enterprise Resource Planning) Software | ERP, n.d.) An ERP system is a modular software application that eliminates stand-alone programs and aligns all systems under one. This system of modules has been implemented across many different business environments for many years and have become the backbone for how business manage all operations. There are many system providers in the marketplace such as SAP, Microsoft and Oracle, etc.

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As Figure 1 illustrates, ERP integrates many functions of a business into one system. Prior to ERP, if the Finance department wanted to know how much and what inventory was on hand, they would need to go to that department and get the data, if it was available. It was also common for bureaucracy to stand in the way of gaining of visibility due to overly managed approval processes to acquire the information. If the data were available, there may be a measure latency as it relates to the timeliness and even the accuracy of the data. With today’s ERP, visibility to activities outside of once department are instantly available and accurate to within a day or less. Having such visibility is crucial when making decisions in an environment that could be changing by the minute.

Not all systems are perfect and may lack functionality that will require an extension of ERP such as Advanced Planning and Scheduling (APS) software. “Some of these capabilities include multi-plant operation integration, superplant, real-time operational visibility, and overall throughput enhancement.” (PlanetTogether, 2018) Figure 1, Example of an ERP System. Adapted from “What is ERP (Enterprise Resource Planning) Software | ERP”(n.d.) Retrieved from https://www.saponlinetutorials.com/what-is-erp-systems-enterprise-resource-planning/

While the system is flexible to upgrades, there are opportunities to improve record integrity and security that are currently being developed and implemented.

Blockchain

As a way to increase data security for transaction, a new system that allows these transactions to occur automatically more securely and without an intermediary has been conceived. “Blockchain or (Distributed Ledger Technology) was developed in the aftermath of the 2008 recession to deliver transparency, security, and efficiency in managing transactions between multiple parties” (Melay, 2018). This concept is now being implemented or considered in many business models worldwide.

What really is Blockchain? In its simplest form, Blockchain can be described as a private, secure network that uses” cryptography to keep exchanges secure, provides a decentralized database, or “digital ledger”, of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded.”  (Hutt, 2016)  Figure 2 illustrates the Basic Blockchain Process. Figure 2, Basic Blockchain Process. Adapted from “Blockchain: The Fastest Financial Technology You’ve Never Heard Of”(2017, October 23) Retrieved from https://www.capitalgroup.com/europe/capitalideas/article/blockchain.html

One of the benefits of this system is that once a record is in a Block, it is not possible to alter that record. This provides clear chain of transactional events that cannot be broken which the business world is starting to see as an opportunity to capitalize on as it relates to contracts and other legally binding documents.

Integrating ERP and Blockchain

While the Blockchain technology is relatively new and ERP systems have been established for almost 3 decades, many industries and corporations are looking at how this new technology can be married together. Businesses are vie wing this integration as an opportunity to make their business transactions more robust, transparent and binding. For instance, in Supply Chain many transactions are recorded through the cycle of a product. Conceptually, in a Supply Chain scenario, “these systems build, track, purchase, and ship products, integrating with Blockchain will provide a copy of this information into the network which is immutable and indelible and can be tracked and used for any purpose, at any time.” (Banerjee, 2018) Figure 3 illustrates how this concept integrates with ERP in Supply Chain transactions and how Blockchain records each event.

While integrating these systems provides many benefits, there are still many challenges to overcome, while not insurmountable, they still need to be developed, funded and institutionalized.  Again, the challenges that will be explored are Infrastructure and network, Security and Privacy Concerns, the Cost of Data Storage and Legal and Regulatory issues of integrating these systems.Figure 3, Basic Integrated ERP and Blockchain Process. Adapted from “Blockchain Scheme” (n.d.) Retrieved from https://transmetrics.eu/blog/blockchain-in-logistics-will-it-change-the-industry-part-1/blockchain-scheme/

Challenges and Opportunities

Infrastructure and Network

         To begin with, combining ERP and Blockchain, while there are many hurdles to overcome, all of the challenges are interwoven. One of largest impact to corporations will be that of infrastructure and network capability. These are the backbone of many organizations and without a clear understanding and plan to manage this change could cripple many organizations as well as cause repercussions from environmentalists.

The largest network impact will be that of increased users and power consumption. These networks currently require “the computation of ultra-complex mathematical problems to verify and process transactions and to secure the network. Therefore, combined with ERP, Blockchain systems will consume extra power to run the computers and a considerable amount of infrastructure will be required for cooling and maintaining the systems.” (Shewale, 2019)

At its peak, see Figure 4, the bitcoin Blockchain consumed enough energy that it as a country “would come in 53rd in yearly energy consumption; more than Iraq and less than Singapore.” (Jospe, 2019) With environmental concerns as prevalent as they are for all corporations and many seeking alternative energy sources, there needs to be improvement or significant reduction in energy consumption. The reason for the high-energy consumption and thus taxing networks and infrastructure is how the system, in its current form is with bitcoin.  The bitcoin model “uses the proof-of-work (PoW) algorithm to validate transactions made on the Blockchain and requires the computation of ultra-complex mathematical problems to verify and process transactions and to secure the network.” (Shewale)

As companies migrate to Blockchain they will need to employ, a concept called Proof of Authority (PoA).  A way to describe PoA is that it “allows pre-selected nodes to run a chain, using about the equivalent energy of a light bulb, or 78 watts.”(Jospe) Employing this system will relieve the networks of high-energy demand and ease the burden on the infrastructure. In addition, this will enable a more secure use of the Blockchain between parties.

Figure 4, Bitcoin Energy Consumption Index Chart. Adapted from “When it comes to blockchains and energy usage”(2019, January 8)  Retrieved from  https://medium.com/nori-carbon-removal/when-it-comes-to-blockchains-and-energy-usage-dca8a76b88e

Privacy and Security

As systems change, one of the primary goals is to ensure that data is secure and that all information that is deemed sensitive and private remains that way, especially with our ERP systems. The Blockchain that bitcoin utilizes is an open network that will allows anyone that has made a transaction on the system, access. This open access raises many concerns for data security and privacy. However, industry must take a very different approach than bitcoin when it comes to these standards. Fortunately, “one can customize Blockchain to meet the needs and specifications of the specific ERP system. A Blockchain can be made restricted to others.” (Shewale)  Such that user permissions can be restricted, for those tasks that are required to do their job. As an added measure to the system, “records in the node are cryptographically secured, with no possibility for anyone to change the data, so there is no threat to security.” (Banerjee). The data in a block cannot be changed or misrepresented without raising a security concern or creating a new chain in the block.

Cost of Data Storage

 With Blockchain, once a record is created, it is permanent and needs to be retained, literally forever. This issue is not germane only to ERP systems, bit to all networks that implement Blockchain. As with everything today that increasingly require the storage of data, this system is no different other than the fact that there is more data to be stored. Blockchain data storage systems are inadequate from a standpoint of flexibility. “Because Blockchain has a distributed architecture, it requires multiple processing nodes scattered across multiple participants, both increasing overall costs per transaction while also leading to issues of scalability and performance.” (Bloomberg, 2018) Currently, there are many companies working to understand what it will take to improve the systems scalability and performance issues, but as of this writing no viable solution has been found, but hope is on the way. The issue remains cost. Most companies that handle data storage, charge a monthly fee to store data and as a company’s data need continues to expand, so does the cost.  A company called Airweave is working to solve the problem and has started to change the way data is stored with blockchain. The new approach what “they call ‘blockweave’. It provides permanent and scalable on-chain storage, something that’s never been done before.” (Raviv) The premise is that users pay a one-time fee to store data and not pay a monthly fee and as their needs grow, they pay additional costs to store. The company will take on the cost of managing the data, forever. While this does not solve the problem, entirely, it is an initial start. Another solution that two others, StorJ and IPFS, are working on are “systems that break apart your files and distributes them across specialized nodes that store files economically.” (Kyle, 2018)  Retrieval of your files is not done by using the file itself, but by sending “back unique signatures that identify your files on the network.” (Kyle)

Where companies that want to maintain their own data the need is to have larger, less expensive storage solutions that will allow companies to expand their storage infinitum without causing bankruptcy. In the case of storage, the obvious solution to this challenge is not always the one that is the most obvious or trendy.

Today it seems that the data storage industry is moving increasingly towards Cloud technology. This would not be a good fit for Blockchain data storage, at least in today’s environment. The cloud has “done the job fairly well up to now, but it has some major flaws. It can be unreliable, unsafe, and costly.” (Raviv, 2018) Compared to current data storage, the primary concerns would relate to the cloud being unreliable and unsafe.

Legal and Regulatory Requirements

With the creation of Blockchain, there are many regulatory and legal questions that arise when it comes to protecting individuals and companies, privacy concerns for all, international ramifications, policing of the system and how to investigate and adjudicate possible crimes.

Within the United States, the government has not acted to regulate Blockchain in any way, with the exception of some states regulating Bitcoin technology to protect consumers. Our government “has shown support for the development of Blockchain regulation and governance within the context of the technology’s growth and expansion.” (Kowlessar, 2019). In this case as in the case of other emerging technologies, the government may be taking a wait and see approach to Blockchain. Allowing the market to drive the development without government interference while ensuring secure commerce will be beneficial for consumers and long-term system development.

However, in 2018, the “U.S. Congress has created the Congressional Blockchain Caucus to handle legislation pertaining to Digital Ledger Technology (DLT) and cryptocurrencies.” (Kowlessar) While no approved legislation has come out of this new caucus, there were several bills introduced in 2018 by Minnesota Congressman Tom Emmer to start the regulation of Blockchain technology. The bills were entitled “Resolution Supporting Digital Currencies and Blockchain Technology, Blockchain Regulatory Certainty Act and Safe Harbor for Taxpayers with Forked Assets Act” (Lanz, 2018) The reason that the Congressman put forward these bills was to “seek to touch on a series of sensitive issues in what can be considered a “grey area” within the North American legal system.” (Lanz) The 115th Congress chose not to act upon these proposals during their session. However, in the 116th Congress, the Blockchain Regulatory Certainty Act was again brought forward and is currently under review for pending legislation. The language of the Blockchain Regulatory Certainty Act “states that “[n]o Blockchain developer or provider of a Blockchain service shall be treated as a money transmitter, and aims to protect these entities from the harsh penalties faced by those who operate an unlicensed money transfer platform.” (Prentiss, 2019) As of this writing, the other bills have not been brought forward to this session of congress for action. While these actions do not pertains to ERP and Blockchain Integration, the proposed actions are initial regulation steps meant to protect users and begin the framework around Blockchain implementation and its use.

On the international landscape, many countries are also starting look at regulations for Blockchain, but mostly, “the regulations are mostly limited to cryptocurrencies and ICOs [Initial Coin Offerings].” (Intellectsoft, 2018)  The cryptocurrency market is the prime concern and how it affects international transactions, as there could be significant disruption in global financial markets if this activity is unchecked. 

This is not stopping countries or unions from implementing laws to protect their citizens. As an example, in 2018, the European Union enacted a law titled, General Data Protection Regulation (GDPR). This seeks to protect the data ownership for its citizens with the requirements for compliance placed on “Blockchain companies to ensure that the EU threshold for data ownership is met sufficiently.” (Chen, 2018) There are many more examples of where governments understand that, “while Blockchain is still in its infancy, governments around the world recognize the value of distributed ledger technology.” (Intellectsoft)

Having the United States and other countries recognize the opportunity with Blockchain and taking a proactive approach to ensure that there are regulations in place to

Conclusion

In summary, when it comes the integration of Blockchain with ERP, this combination will provide significant value and security for their respective organizations. This paper has explored a few of the more significant challenges along with emerging solutions on how to overcome them for organizations that choose to pursue this direction. While the paper took, a macro view of the challenges that face organizations in today’s business environment this technology is emerging daily, with more improvements to come. Overcoming these challenges for implementation should have a long-term positive influence on a firm’s operation and profits.

References

Banerjee, Arnab (2018), Integrating Blockchain with ERP for a Transparent Supply Chain. Retrieved from https://www.infosys.com/Oracle/white-papers/Documents/integrating-blockchain-erp.pdf

Bloomberg, Jason (2018, February 18) Don’t Let Blockchain Cost Savings Hype Fool You. Retrieved from https://www.forbes.com/sites/jasonbloomberg/2018/02/24/dont-let-blockchain-cost-savings-hype-fool-you/+&cd=1&hl=en&ct=clnk&gl=us

Chen, Zhuling (2018, June 25) How Should We Regulate Blockchain? It Depends on Which Country You Ask. http://fortune.com/2018/06/25/blockchain-cryptocurrency-technology-regulation-bitcoin-ethereum/

Hutt, Rosamond (2016, June 17) All you need to know about Blockchain, explained simply. Retrieved from https://www.weforum.org/agenda/2016/06/blockchain-explained-simply/

Intellectsoft. (2018, April 23) Blockchain Regulation: Technology Is Welcomed, Cryptocurrency Regulated. Retrieved from https://www.intellectsoft.net/blog/blockchain-government-regulation/

Jospe, Christophe (2019, January 8) When it comes to blockchains and energy usage. Retrieved from  https://medium.com/nori-carbon-removal/when-it-comes-to-blockchains-and-energy-usage-dca8a76b88e

Kowlessar, Astrid F. (2019, January 21) Blockchain: U.S Regulation and Governance. Retrieved from http://www.financialpolicycouncil.org/blog/blockchain-u-s-regulation-and-governance/

Kyle. (2018, June 4)  Blockchain Issues | #1: Data Storage.  Retrieved from https://www.computerworld.com/article/3331927/how-to-integrate-blockchain-with-legacy-systems-and-whether-you-should.html

Lanz, Jose A. (2018, September 24) U.S. Congressman Tom Emmer to Lead Pro-Blockchain and Crypto Legislation. Retrieved from https://ethereumworldnews.com/u-s-congressman-tom-emmer-to-lead-pro-blockchain-and-crypto-legislation/

Melay, Matthew. (2018, May 18) What is Blockchain: How Integration with ERP is Set to Transform Food and Beverage Industry.  Retrieved from https://blog.vision33.com/what-is-blockchain-how-integration-with-erp-is-set-to-transform-food-and-beverage-industry

PlanetTogether (2018, September 29). 3 Advantages of Master Production Scheduling (MPS), Retrieved from https://www.planettogether.com/blog/3-advantages-of-master-production-scheduling-mps

Prentiss, Tim (2019, January 18) [UPDATED] Congressman Introduces Three Blockchain Bills. Retrieved from https://www.ethnews.com/congressman-introduces-three-blockchain-bills

Raviv, Pini (2018, June 8) How to Solve Blockchain’s Data Storage Issues Once and for All. Retrieved from https://bitcoinist.com/solve-blockchains-data-storage-issues/

Shewale, Mayur. (2019) 5 Biggest challenges in the implementation of Blockchain-based ERP systems.  Retrieved from https://www.mirrorreview.com/5-biggest-challenges-in-the-implementation-of-blockchain-based-erp-systems/

Transmetrics Blog(n.d.) Blockchain Scheme.Retrieved from https://transmetrics.eu/blog/blockchain-in-logistics-will-it-change-the-industry-part-1/blockchain-scheme/

What is ERP (Enterprise Resource Planning) Software | ERP(n.d.) Retrieved from https://www.saponlinetutorials.com/what-is-erp-systems-enterprise-resource-planning/

 

How Blockchain can Transform the Supply Chain

Executive Summary

This report is all about the blockchain and the use of blockchain in supply chain management system. As we know that the blockchain is the growing technology in the field of Information technology and every industry. Blockchain is dominating the organisations or technologies as it uses the bitcoin and the concept of crypto currency. However, with the help of some peer reviewed articles we have mentioned our literature review about how the blockchain is transforming the supply chain management. We have also discussed some case studies. We have given a suitable conclusion about our report. Moreover, this report also gives the arguable reviews of authors and understands the deep concept of blockchain.

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Introduction

An age framework is the course of action of the incredible number of individuals, affiliations, resources, activities and improvement related with the creation and closeout of a thing, from the vehicle of source materials from the supplier to the maker, through to its unavoidable advancement to the end customer. Stock framework the authorities (SCM), the relationship of the improvement of thing and associations, unites the movement and purpose of imprisonment of foul materials, of work-in-process stock, and of finished things from reason behind root to motivation driving usage. Interconnected or interlinked structures, channels and center affiliations participate in the diagram of things and affiliations required by end customers in a stock framework. Stock framework the board has been depicted as the “structure, orchestrating, execution, control, and checking of store system practices with the objective of making net regard, making a convincing establishment, using all things considered coordination’s, synchronizing supply with intrigue and assessing execution totally.

A square in a blockchain is an accumulation of information. The information is added to the square in blockchain, by interfacing it with different squares in sequential others making a chain of squares connected together. The primary square in the Blockchain is called Genesis Block. (Mario Dobrovnik 1, 2018)

While the most unmistakable utilization of blockchain is in the cryptographic money, Bitcoin, actually blockchain—basically a dispersed, computerized record—has numerous applications and can be utilized for any trade, understandings/contracts, following and, obviously, instalment. Since each exchange is recorded on a square and over various duplicates of the record that are circulated over numerous hubs (PCs), it is exceedingly straightforward. It’s likewise profoundly secure since each square connects to the one preceding it and after it. There isn’t one focal specialist over the blockchain, and it’s amazingly effective and adaptable. Eventually, blockchain can build the effectiveness and straightforwardness of supply chains and emphatically sway the whole thing from warehousing to conveyance to instalment. Levels of leadership are basic for some things, and blockchain has the hierarchy of leadership inherent.

Literature Review

According to (Nieuwenhuysec, 2018) as a fundamental help innovation, blockchain is a mutual record framework and a computational worldview, which is decentralized, and it is exceedingly perfect with the disseminated financial framework. The appropriated booking model of business assets dependent on the open administration stage is an exhaustive answer for the present circumstance of horticultural industry which is “dissipated, little, confused and weak”, and assumes a significant job in incorporating decentralized asset and making on-request planning. Going for some key issues in the present Chinese open administration stage, this paper proposes an open blockchain of horticultural inventory network framework dependent on twofold chain design, mostly concentrating the double chain structure and its stockpiling mode, asset lease chasing and coordinating component and agreement calculation. The outcomes demonstrate that the chain of horticultural store network dependent on twofold chain structure can consider the receptiveness and security of exchange data and the protection of big business data, can self-adaptively finish lease chasing and coordinating of assets, and extraordinarily upgrade the believability of the open administration stage and the general effectiveness of the framework.

In addition to this, (K. Wüst and A. Gervais, 2018) Blockchain is a praised as a power-driven movement which stipends to change how culture connects and groups up. This bad reputation is clearly owing to its properties of allowing normally addressing segments to trade budgetary respect and accomplice deprived. A blockchain other than gives dependability guaranteed information aggregating and permits to give process truthfulness. In this report we in a general sense separate whether a blockchain is unquestionably the suitable specific reaction for a specific application situation. We separate between assent less (e.g., Bitcoin/Ethereum) and approval (for example Hyperledger/Corda) blockchains and separate their properties to those of a halfway managed database. We give a dealt with technique to pick the proper specific reaction for arrangement with a specific application issue. Given our philosophy, we slow down all around three use cases – “Supply Chain Management, Interbank and International Payments, and Decentralized Autonomous Organizations” and wrap up the article with a plot for further shots.

However, (D. Tse, 2017) Blockchain is being praised as a mechanical progression which licenses to change how society trades and works together. This reputation is explicitly attributable to its assets of empowering regularly questioning components to exchange budgetary regard and partner without relying upon a trusted in untouchable. Blockchain innovation is producing a major blend in coordination and store network the board. This specific innovation got starting consideration for its relationship with Bitcoin and its capacity to make a trusted and straightforward record of exchange data. Presently, as production network executives perceive the conceivable outcomes of this new innovation, there is high potential for lifting straightforwardness. The landing of this innovation is auspicious on the grounds that customers are requesting production network straightforwardness. For instance, shoppers regularly need ensures that fish acquired and expended are not cultivated utilizing illicit netting rehearses or from shut waters. Additionally, adornments buyers need confirmation that bought precious stones are legitimate and not cultivated from war-torn areas of the world.

Additionally, (Moritz Petersen, 2017) also refer to these worries and these worries are aggravated when supply chains are multi-layered and progressively worldwide in degree. Blockchain innovation guarantees to drastically change exchange techniques by giving a straightforward and unchanging record for review, inferring the great story “The Emperor’s New Clothes”. As of now blockchain applications are basically being utilized and created inside the finance area, however the well known press and store network Managers have paid heed and are rapidly applying the innovation to client administration and accomplishing upper hands. Author has recognize straightforwardness as the degree to which data is promptly accessible to both counterparties in a trade and furthermore to outside eyewitnesses. In an inventory network setting, straightforwardness alludes to data accessible to organizations associated with a supply arrange. Store network discernibility use straightforwardness to operationalise hierarchical objectives identified with crude material inceptions and give setting to a final item or administration. Blockchain advances undoubtedly give expanded store network straightforwardness, yet more critically make an unchanging and dispersed part of the care record essentially of the convention which loans itself well to discernibility applications.

Also (Swanson, 2018) (Sara Saberi, 2018) says about the current Blockchain – “Enabled Supply Chain Traceability application” the main delightfulness application surveyed is an endeavor engaged by Ethereum. “From January to June 2016, yellowfin and skipjack fish” were finished all the entire generation organize, from fishermen to wholesalers”. End customers could then track the “story of their fish sandwiches” through a mobile phone and choose information about the creators, suppliers, and frameworks experienced by the completed outcome. Every component of amount (by fish or by catch) was connected with a propelled “token” to affirm a given fish’s beginning stage and finished all the stock system, appearing reasonable model for thing confirmation to an end customer. Every record is another blockchains enabled flavor request for the overall gem industry. The association, which teamed up with Barclays, made a database of million valuable stones enrolled on their blockchain to affirm the finished product gem was legally sourced from “struggle free” territories. Similar actions are being used to make an adversary of phony database for other gainful product, for instance, fine wine and workmanship.

(Thomas Bocek∗†, 2017) Explained in his article about the blockchain those are on the top of the (Gartner Hype Cycle 2016) what’s more, many new companies are incorporating blockchains into their innovation portfolio. While blockchains have risen with regards to money related applications, non-budgetary application regions are of enthusiasm also. In this paper, modum.io is displayed, a start-up that utilizations IoT (Internet of Things) sensor gadgets utilizing blockchain innovation to declare information unchanging nature and open openness of temperature records, while diminishing operational expenses in the pharmaceutical production network. The therapeutic business has numerous mind boggling and severe natural control process (e.g., temperature and mugginess) to guarantee quality control and administrative consistence over the vehicle of medicinal items. The sensor gadgets screen the temperature of each package amid the shipment to completely guarantee GDP guidelines. All information is exchanged to the blockchain where a savvy contract surveys against the item characteristics. As modum.io isn’t the main non-budgetary start-up working with blockchains, a rundown of zones and other new businesses is given that expect to lessen administration, convey the foundation, and sparing costs utilizing blockchains.

However (Shireesh Aptea*, 2016) talked about Blockchain backers guarantee straightforwardness, speed, openness and non-falsifiability as the foundations of this new worldview. Blockchain innovation should make it considerably more troublesome, if certainly feasible, for illegal or fake items, for instance, adultered or rebellious excipients, or products whose preparing is earth impeding to enter authentic supply chains. It would empower end clients to confirm precisely how, where and by whom the item they mean to buy has been amassed and made, in this manner denying a business opportunity for illicit and fake items. Despite of this, (Stanley E Fawcett, 2008) arguing that While the veracity of value-based records (as unmistakable from genuine unfolded occasions), the chain of authority is unalterable, this reality, all by itself, is no sign that an excipient has stayed unaltered in travel or at the purpose of source. Without a doubt, similarly as in current production network check techniques, where maverick arrangement exists inside the store network there can be no assurance that what is executed in the blockchain, (for example, the properties of an authentication of examination) is really compatible with the synthetic makeup of the excipient or material.

Additionally, (Zhu Chaoyong 1, 2018) said a chain of authority exchange records is do not required any certification of the real physical whereabouts of the material on the way from provider to end-client. Because an executed record is automated and ‘blockchained’ does not really infer that its physical world partner material of business has not been altered; all it suggests is that the exchange record can’t and has not, been messed with. Obviously, square chain veracity is dependent on proper review procedures to check each value-based record to guarantee it is exact at the time it is gone into the blockchain. Giving this is done, it isn’t feasible for the value-based record to be accordingly corrupted to stow away, or change, a specific advance to, for instance, change the genuine wellspring of a reagent, endorsement or procedure.

(YongfeiLi, 2019) and (Kshetri⁎, 2018) supporting that, this is a significant development as it implies that any adulteration of the material source must be done tentatively continuously, which is an a lot harder test, than whenever reflectively misrepresent a physical value-based record, where printed version reports can be essentially substituted with new forms containing various certainties. This is a significant development in the verification and approval of supply chains, however it can’t, and was never planned to, supplant customary quality and inspecting procedures required at each progression of tentatively making a value-based record. Indeed, as every one of these reviewing steps are finished they also progressed toward becoming piece of the value-based record, with the goal that somebody toward the finish of the store network can check that fitting reviews have been embraced by properly credentialed specialists and can thus ‘trust’ the entire value-based record. (OHTSUKI1, 2017)

However Blockchain can also provide a solution and these are mentioned below:

      It is the advanced technology for sharing the information.

      It also allows multiple parties for enter fairing and data sharing.

      It checks that, whose entries are verifies and trustful.

      Blockchain forms a public record which is always visile to everyone.

Blockchain also provides the opportunities all over the supply chain ecosystem which is split into 6 sections with further sub section:

There are various chains of things which are related to each other in supply chain management system it always started with Raw material which goes to the supplier. Then, supplier sends those raw materials to the manufacturer and after the manufacturing he distributes it and sends it to the distributor. Distributer then sends that to the retailer or shop and at the end consumer receives the material, this is how the chain of things works. Now these are connected between the planning and forecasting to execution and operations.

Planning and forecasting: In this, the planning of products and the forecasting of them is decided. In this Demand Forecasting characterized as the procedure by which the authentic deals information are utilized to build up a gauge of the normal figure of client request. Request Forecasting gives a gauge of the merchandise and enterprises that clients will buy within a reasonable time-frame.

Procurement and manufacturing: Procurement is the path toward getting the items and adventures your association needs to fulfil its game plan. It looks after the

The advancement of product guidelines

Financing buys of products

Arranging cost of products

Merchandise and ventures buys for products

Adjusting buys to organization morals and approaches

Stock control

Transfer of waste items like the bundling

Supply chain financials: supply chain financials will look after the financials for the supply and the products.

Visibility: now the products visibility will be seen here. Control center will now play the role and stock keeping unit will see the inventory system and make the product visible.

Asset management: “Lease management, Insurance management and Maintenance management” will handle the asset maintenance.

Implementation and operations: Brokerage and freight forwarding which is an international trade, digital lead of lading (BOL) and trade compliance will handle all the other things in supply chain management system.

Conclusion

Now the period of engaged clients those request more data about items they buy, as well as supply material and complete assembling history. Gathering this necessity is frequently too difficult, not financially savvy, or even unimaginable given customary store network data innovation; in any case, blockchain comprises the likelihood of tending to this test. This new innovation gives a dimension of production network straightforwardness that permits store network supervisors to acquire the data buyers are requesting and along these lines add to their organizations’ upper hands. The advancement and execution of novel innovation does not ensure that it is going to be utilized and generally succeed. A hypothetical knowledge is obligatory to all the more likely comprehend the hidden sparks and obstructions that will lead organizations, or demoralize them, from receiving blockchain advancements for inventory network discernibility. Past work has indicated the significance of social expectation and its predecessors in influencing innovation use. This paper presents The Hypothesis of getting and Use of Technology to extend the clarification of end client innovation acknowledgment for blockchain recognisability applications. This hypothesis gives a powerful applied structure to clarify these connections and bolster the advancement of blockchain apparatuses. Thusly, this examination presents the conduct hypothesis as a focal point to comprehend the selection of blockchain in the inventory network. A reasonable model is hypothetically determined as a potential system for considerate the selection of blockchain for store network delectability. The calculated model is bolstered by researchable recommendations and offset with store network the executives suggestions and future research proposals.

Bibliography

D. Tse, B. Z. (2017). “Blockchain application in food supply information security,”. IEEE International Conference on Industrial Engineering and Engineering Management (IEEM) , 1357-1361.

Henry M. Kim, M. L. (n.d.). Towards an Ontology-Driven Blockchain Design for Supply Chain Provenance . Towards Ontology Driven Blockchain for Provenance , 1-17.

K. Wüst and A. Gervais. (2018). “Do you Need a Blockchain?,”. Crypto Valley Conference on Blockchain Technology (CVCBT), , 45-54.

Kshetri⁎, N. (2018). Blockchain’s roles in meeting key supply chain management objectives . International Journal of Information Management , 80-89.

Mario Dobrovnik 1, D. M. (2018). Blockchain for and in Logistics: What to Adopt. Logistics , 1-14.

Moritz Petersen, N. H. (2017). Mapping the Sea of Opportunities:Blockchain in Supply Chain and Logistics. ACM: CCS , 1-8.

Nieuwenhuysec, K.-C. (2018). Research on agricultural supply chain system with double chain architecture based on blockchain technology. Future Generation Computer Systems , 641-649.

OHTSUKI1, K. T. (2017). A Novel Blockchain-Based Product Ownership Management System (POMS) for Anti-Counterfeits in the Post Supply Chain. IEEE Access , 223-8522.

Sara Saberi, M. K. (2018). Blockchain technology and its relationships to sustainable supply chain management. International Journal of Production Research , 1-20.

Shireesh Aptea*, N. P. (2016). Will blockchain technology revolutionize excipient supply chain management. Journal of Excipients and Food Chemicals , 1-3.

Stanley E Fawcett, M. W. (2008). Benefits, Barriers and Bridges to Effective Supply Chain Management. Supply Chain Management: An International Journal , 35-48.

Swanson, K. F. (2018). The Supply Chain Has No Clothes: Technology Adoption of Blockchain for Supply Chain Transparency. MDPI , 1-13.

Thomas Bocek∗†, B. B. (2017). Blockchains Everywhere – A Use-case of Blockchains in the Pharma Supply-Chain. IEEE International Symposium on Integrated Network Management , 772-777.

YongfeiLi, 1. B. (2019). Research on Supply Chain Coordination Based on Block Chain Technology and Customer Random Demand. Hindawi , 1-12.

Zhu Chaoyong 1, D. A. (2018). The coordination mechanism of supply chain finance based on block chain . International Conference on Civil and Hydraulic Engineering , 2-5.

 

How Blockchain Is Used in Recruitment Technology

Recruiting is a complex practice that requires keen analysis of the data. In recruitment, various issues are put into consideration before the employer settler in a particular job seeker. Before a hiring decision is reached, there is a various measure that job seeker and employer go through.   During this process, there is a lot of data exchange between the two the job seeker, and the employer that is the job seeker must provide a set of personal information that is essential during the recruitment process. When passing this sensitive information, the job seeker trust that the employer will handle this information with care and on the other hand, the recruiter is entrusting that all information provided by the job seeker is accurate. Failure of either party to uphold their end of bargain eventually lead to delay or to emerge of the issues that prohibit the candidates from filling this gap.

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 To solve this problem, job seekers can seek a leverage blockchain technology to come up with one, immutable chain of personal information that will be used when applying for jobs. During the recruitment process, the employer will easily access the job seekers personal information in the public blockchain based on the experience. The blockchain technology help to improve the candidate experience, enabling job seekers to create a single account for their experience and the information that will be used throughout the entire recruitment period (“How can blockchain improve your hiring processes? | NGA HR”, 2019). Thus, saving time and the concerns that emanate with the manual method of data sourcing. Blockchain technology is boosted by advancement in technology; therefore, the employer can get information on the internet. Thus, with blockchain technology, the employer can streamline job seeker data information during the recruitment process, thus creating an easy time for data exchange.

 The blockchain enables the employer to verify the candidate; the distributed ledger technology provides a means of storing information and keep a record of the data in a ledger. Once the transaction is complete block is placed to the chain, and that chain cannot be altered with. Blockchain has nodes of the network that participate in verification and synchronisation and thus making it hard to tamper with these data. In the human resource side, DLT is not only used for identification but also verification purposes. The employers can obtain the candidate’s qualifications, work history of the candidate and references. Since the blockchain provides the information of the job seeker in full detail, the employer can identify, assess the history of the candidate, verify the qualification and the certification of the candidate in an easy way. the employers can identify talents, skills and experience there are searching in a trusted website. On the side of the job, seeker blockchain helps them to update their resume once to allow the employer to access the information for verification. The burden of the job seeker to keep updating the resume to the job website is eliminated. DTL enables employer who offer contractual job revenue history of the potential candidate regarding the previous contract’s performance, payment and minimum time a job seeker can offer.

Blockchain Decentralization

 Blockchain is an interesting technology since its entirely decentralised.  The data is not put in a central point, thus removing the supreme central authority and instead give authority to the individual to control data. The blockchain technology is decentralised. Thus it lacks central control. Therefore, the absence of the central control makes this system to be fairer and more secure.  This technology enables data to be recorded onto the blockchain programs in a secure process that value the concept of decentralisation (“The Power of Decentralization and the Blockchain Revolution”, 2019).  Blockchain observes the consensus protocol across the network nodes, to assess the transaction and record data in an incorruptible way. the fact that blockchain is not based on a central point makes the cost that is incurred to complete this process to be completely low. Since the system is not concentrated in a central point, the money that are usually collected from these processes is no longer of concern. The only costs that are incurred by the parties involved are the nominal fee that is used to reward the miner who runs the node. 

 Decentralisation acts a key them in the shift traditional pipes to modern platforms. Business pipes rely on a centralised a model of value creation and exchange. Despite blockchain decentralisation it being the new invention, this program has proven to be advantageous. The program has ensured that the rate of fraud has been minimised. Since the blockchain uses open source ledge and all the transaction that are involved are recorded, it makes it easy to identify any fraud that takes place. Thus, the mitigation steps are taken to ensure the data in these sites remain safe. Blockchain decentralisation promotes integrity since the transaction in this site is monitored and validated by the miner every day. The other advantage of blockchain decentralisation ensures that the data is safe from interference from the external hacker. It is tough for the hacker to access every personal account to interfere with the data. Different from how it could be in case of data stored in a central point. Cryptocurrency is more secure since it is not regulated by the central body, which faces risks of being corrupted and mismanaged; the transfer of what is in the blockchain is completely in the trusted environment. Verification is usually conducted by the consensus instead of a single company.

 On the other side, blockchain decentralisation is not effective in some ways. These sites, since they lack central control, they have become preferred sites for criminals. The criminals can keep their data safe in these sites since no one can access the personal account of the individuals. Therefore, these sites keep off the investigation agencies from accessing harmful information stored in these sites. Blockchain decentralisation raises the storage issues; storing information in these sites can be a problem to people who are not tech Savvy. This program becomes somewhat complicated when it requires one to purchase cloud storage.

Solution for the effective recruitment process

Systematic hiring program

The challenges that are faced during the recruitment process can be solved by having a recruitment strategy and framework that the HR follows. The frame should be well programmed to incorporate all the key factors that are necessary for the recruitment process. This framework should lead the recruiter expressing themselves to the job candidates in the best way possible while collecting enough and accurate data from the job seeker. The framework should ensure the recruitment process is systematic, and it follows a certain order. Successful recruitment depends on how the recruiter is prepared, how they carry the process the kind of job seeker attends the interview, and how the screening of these candidates are taken.

 The successful hiring process is systematic, and it involves some steps to ensure the recruiter get the right candidate to fill the gap. In the first step, the recruiter should prepare job description effectively. This step is achieved by writing down an effective job description to attract only the right candidate to apply for the job. Thus, it helps to save time for keeping screening and assessing the unqualified candidates. The job description has the following components. The position title to be filled should be clear and is understood by everyone in that industry; the recruiter should avoid using a unique job title. The job description should provide clear information about the company that is hiring this help candidate to make a decision depending on the firm’s condition. The job should be well described, in the job description should inform the job seekers what task they will be performing. The qualification of the applicants should be clear and should the candidate how they will apply.

 Step two of the recruitment process should ensure that the right recruitment tools are used. This step involves cross-checking whether the firms are using a way to get the candidate. In this case, two factors are put into consideration; one is the company’s budget and the second one is the type of candidates the firm is searching (“5-step recruitment plan for small businesses”, 2019). The third step is the most critical part of the hiring process; it points at which the firm has screens the applicants.   This process occurs after the firm has received the applicant’s resume; the initial selection is of the interested candidates is done. Then the recruiters screen the candidates; this calls for the interview to request the candidate’s to provide more information, testing the applicant’s skills, talents, values, cognitive skills and emotional intelligence. And finally checking their past performance by assessing their previous work. In step four of the recruitment process, the best candidates are interviewed; this gives the recruiter a chance to chose the best candidate to fill the gap.

Improving the recruitment program

 Improving the recruitment process will offer a solution to the recruiter to help them recruit efficiently. The recruiters should refine the recruitment process to make it pleasant to both the job seeker and the hiring team (Systems, 2011). There are various ways to improve the hiring process. The HR department should craft a clear and attractive jobs ad. Effective job ad allows the firm to assess job seeker on the job-related criteria. Thus, this help to create a job description that provides useful and clear information about open roles. It calls for the firm to indicate the duties, the project the new hire will perform or the team they will be working with. Boosting candidate sourcing will offer a solution to the recruitment process. People always seek to get a new opportunity. Boosting candidate sourcing helps the recruiter to reach any candidates, and thus they will be having a variety of qualified job seekers to choose from the list.

 I am improving the recruitment process to help to improve recruitment efficiency and candidate evaluation. Recruitment is promoted by building the checklist for standard process. Checklist help to get organised and they should be used to prepare the interviews and screening process this help the recruiters to get the information they require efficiently without much struggle. The firms should install the recruiting software in the firm, to help the hiring teamwork efferently. Such video recruiting software. This software solves the problem of time consumed when interviewing remote candidates. Applicant tracking software can be used to manage the hiring stages, help keep the applicant’s document, storing the candidate’s profile in a searchable database.

 Evaluating candidates is made effective when the firm has improved the hiring process. This revolves around the assessment method that results in the selection of the most qualified candidates. Some of the methods that are used to improve the assessment process include Review of the sample works and assignment. It is done by requesting the candidates complete some of the assignment as part of the hiring process (McEntire, 2011). This method helps to measure the qualification and competence of the candidates. Try test are also used to improve candidate assessment process, this calls for the recruiters to ask the candidates to take standardised tests, it reduces the number of the candidate in the interview and thus saves time. the assessment work and assignment should be combined with other assessment methods since they alone cannot offer the best choice of the candidates.  Structured interviews should be used to predict job performance consistency. To ensure that the interview is structured prepare it in advance, by preparing the interview question before and tie them to the job requirement.

It is improving the hiring process to help to enhance the candidate’s experience. The interaction between the candidate and the recruiting team ensure should help to shape the impression of the candidate to the company. Positive experience since it helps to build the healthy pipeline. Some factors help to improve the candidates experience in the hiring process. the application process should be shortened. Experience shows that most of the candidates quit from a lengthy application process. the application needs to be brief, and it should only ask for relevant information. the company to improve the hiring process require to keep updating the career page. Passive and active candidates keep on visiting the companies career page to get more information about the company. the career page should consist of the following features; it should be formative, this is achieved by using the employee’s quotes that describe firms benefits (“8 Critical Steps to Effective Recruiting”, 2019). The users are friendly and genuine. The improved hiring process should ensure that the candidates kept updated. The company should set reminders to follow up the screened candidates; this can be facilitated by ATS’s built-in email temperate that allows communication at every hiring stage. This platform helps to send rejection information emails to disqualified candidates.

The hiring team should be trained to improve the hiring process. The hiring team are trained to ensure they have conducted the hiring process in the right way by ensuring they have adhered to the best practices and the legal requirements. This program is done frequently enough to ensure that the hiring team remain updated and offered the best skills throughout the hiring process. the reason why training should be conducted regularly is that interviews are conducted when they only need, also one interview is independent of the other thus the hiring team may not be aware or remember the best practices and the legal issues. The hiring team when left alone to conduct the hiring process, they might talk too much and fail to listen since they don’t know the best question to ask and the information they are looking. The firm should ensure that its HR managers and the recruiting team have attended a training session to certify them to interview effectively. The class are made to include more of roleplaying, coaching and how to provide the feedback.

The firm should ensure that talent identification is made continuously. The HR department is responsible for sourcing the most qualified candidates over time and ensure that these candidates are available to fill the gap when it occurs. This program ensures that recruitment process is not under pressure, waiting until there is a gap to start souring the candidate will not be effective since the HR will not have enough time to assess and select the best candidate. During the interview, the applicant should be rated and ranked, and the information they provided should be kept in a safe place so as when there is a chance, they become the first people to be invited to fill the gap. This method helps to save time and resources of preparing recruitment process every time. The firm should also recruit internally; the internal employees are usually the best source of talent and experience since they are aware of the firm’s policies goal and working process.

Implementing hiring strategies

Implementing the employment strategy can be used to offer a solution to ensure the hiring process is effective. The recruitment strategy helps to outline the recruitment goal and the need as well as the best way of achieving these goals. The hiring goal is aimed at ensuring that the recruiter gets accurate information, and they have been able to get the best candidate to fill the gap. Hiring strategies include the use of recruitment agencies. These employment agencies help the firms to get short term employees to fill the gap. This strategy helps the quickly fill in the gap if the vacant have been created within short notice. Thus, allowing the firm to carry out the recruitment process without pressure (“8 Proven Recruitment Strategies Used By Successful Recruiters”, 2019). The firm may use the social media strategy to get job applicants. There are billons of people who are using social media. Thus, the firm can use this chance to source the best candidate to fill the chance in their organisation. Social media provides a platform where the candidate is able to get a chance to a to have a preview of the firm’s policy and its culture, in the same sight depending on how the candidate interacts with people in the social media they are able to get their personality before hiring them in their firms (Frey, 2017). This platform ensures the firms can get a candidate with a social media talent.

The use of referral can help the firm to get the candidate they are searching. Previous research conducted by Oracle revealed that hiring through referral is the most successful strategy of recruitment. The HR resource requests the existing worker to provide referral who help to fill in the gap effectively. Referral recruitment ensures the firm has identified the most qualified candidates within the shortest time. This method is cost effective since money is not spent on advertisements. The referral ensures there are conveniences in the employment process. In the firm, some position requires specialised training that is not always available in the firm thus employment program referral provides a way to get this candidate easily since the employees interact with people with the same profession thus provide the network. Hiring on referral help to ensure the retention rate is high since these people have a lot of organisation information from the people who referred them.    

The organisation should hold an event where they will identify the best talent and skill they want to help them to fill the gap. During these events, ‘ employer can interact and network with the employees. Since the attracts professionals from all over, and the program are not intentional, the candidates can reveal their talent genuinely without exaggerating. Thus, the hiring team can get the best candidates from these events. The firms should also use Campus recruitment in the hiring process. They should target the top-notch campuses and best technical institutions to get a student who performs best. This strategy provides the best way of acquiring the right information about the job candidate since it comes from trusted sources. This strategy saves time for the organisation to keep seeking qualified candidate from the public. the organisation is more confident that while seeking workers from these institutions, they will get them quickly. High qualified candidates are obtained, when the organisation approaches Campus and technical institution for referrals, they refer them genuinely based on merit. In this case, the firm has a variety of choice to choose since the candidates are many.

References

Systems, S., (2011). 5 Tips for Effective Recruiting & Hiring. SSRN Electronic Journal. doi: 10.2139/ssrn.1739342

5-step recruitment plan for small businesses. (2019). Retrieved from https://www.bdc.ca/en/articles-tools/employees/recruit/pages/recruiting-plans-small-businesses.aspx

McEntire, L. E., & Greene-Shortridge, T. M. (2011). Recruiting and selecting leaders for innovation: How to find the right leader. Advances in Developing Human Resources, 13(3), 266-278.

8 Proven Recruitment Strategies Used By Successful Recruiters. (2019). Retrieved from https://www.cleverism.com/8-proven-recruitment-strategies/

8 Critical Steps to Effective Recruiting. (2019). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/critical-steps-effective-recruiting.aspx

Frey, C. B., & Osborne, M. A. (2017). The future of employment: how susceptible are jobs to computerisation?. Technological forecasting and social change, 114, 254-280.

The Power of Decentralization and the Blockchain Revolution. (2019). Retrieved from https://medium.com/haloplatform/the-power-of-decentralization-and-the-blockchain-revolution-bacc099180b

How can blockchain improve your hiring processes? | NGA, HR. (2019). Retrieved from https://www.ngahr.com/blog/how-can-blockchain-improve-your-hiring-processes

 

Causes and Effects of Blockchain Technology in the Real Estate Industry

INTRODUCTION
Amid the institutions that are currently facilitating the world trade such as corporations and legal systems, there is a new innovative institution that is significantly changing the way how the community can exchange value and is named “ The Blockchain Technology ”.
Blockchain Technology is a decentralized database able to store a ledger of assets and transactions across a peer to peer network. (Bettina Warburg, 2016)
Those assets and transactions are secured through cryptography. Their history gets locked over time in blocks of data that are subsequently cryptographically linked together and secured. Consequently, through this process is possible to create an immutable, unforgeable record of all the transactions across the entire network. This record is subsequently replicated on every single computer device that uses the network. Furthermore, the Blockchain Technology can be described as an open infrastructure that stores different types of assets such as the history of custodianship, ownership, and location for assets like the digital currency Bitcoin, other digital assets like a title of ownership, a certificate, a contract, real-world objects, and personally identifiable information.
The following essay will examine the causes and effects of the use of the Blockchain Technology related to a specific asset: the Real Estate Industry.
PROPERTY FRAUDS – INDIA CASE STUDY
India has looked into Blockchain Technology as a possible solution to complicated land registry problems as they have many issues with the property frauds. In 2013 Mumbai reported 173 cases of property fraud. Furthermore, during the same year New Delhi has also reported 181 cases of property fraud. (Rajarshi Mitra, 2018)
To counter this issue the governments of Andhra Pradesh and Telangana have partnered up with a Swedish Startup  ChromaWay to put their Land Registry on the Blockchain Technology. One of the many interesting innovations they brought is the introduction of cryptographically secure digital fingerprints.
To give a better idea of the new technological method, follow below the description of the process in a few steps. A landowner hashes the geo-coordinates of their land along with the description. This hash is then associate to the owner’s ID and the result is hashed again and added to the blockchain. Since hashes are always a unique value, every plot of landowner will have a unique ID when linked together. Furthermore, because of the immutability of the blockchain, no one can tamper with the records. Consequently, this creates a system of verifiably owned land that can easily be transferred, bought and sold in a cryptographically secure manner.
HIGH COST OF TRANSACTION AND SLOW TRANSACTION
Real Estate is an incredibly complicated Industry. Either the selling or buying transactions come from a land or a home, it is an ordinarily time-consuming, complex, and risky operation. Above all else, it can also be considerably expensive. Home Inspectors, Real Estate Agents, Banks, Local Governments: all of those figures need to get involved in the process to check and approve the transaction before it can get done. And obviously, all of them take a commission to conduct the transaction. (Blockgeeks, 2018)
To outline how Blockchain Technology can make a difference in the process of buying and selling Real Estate, it is important to start analyzing the process from the origin.
When buying Real Estate, the rules can be daunting. They vary wildly depending on which city, state or country the client is looking to buy, what type of property he is trying to buy and how he is going to buy it. All of these complexities and regulations require multiple intermediaries and consequently, the client has to pay a large part at every single turn because it is just too complicated for him to navigate alone. That is the point where the Blockchain Technology can make a difference.
By codifying local, provincial and national housing rules and regulations on the blockchain, smart contracts could be used to drastically simplify the process. A prospective seller would simply send a location, desired price, and some other ownership information to the contract. Then, extracting from the database of rules and regulations around the sale of real estate in the seller’s location, the smart contract could generate contracts, deeds, tax records, and anything required to make a sale of the house instantly. A prospective buyer could then meet with the seller, agree on pricing in terms and then send their digital signature to the contract, verifying their purchase and updating all the documents as required. The process would possibly require some back-end work having provable and verifiable identities on the blockchain to ensure that the transactors are who they say they are and there can be no disputes with regards to signing. Similarly, the land would need to be securely and clearly registered on the blockchain to ensure easy transfer of ownership.
HOW BLOCKCHAIN CAN AVOID PROPERTY FRAUDS AND CREATE TRUST
Identity, ownership, and verification are three fundamental elements required to establish trust. Blockchain Technology permits users to prove their identities through the use of digital signatures. In fact, each user has a set of two digital codes, capable to prove identity and to authorize a transaction. Furthermore, Blockchain Technology protects the ownership of digital assets through the “cryptographic hashing” technology. A cryptographic hash is a piece of data that has been transformed into a shorter piece of data through a math function. (Doug Galen, 2019)

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In the Blockchain Technology, each block contains a hashed representation of the data in the previous block. If any previous piece of data is changed, that change will reflect throughout the chain and the system will be able to identify and consequently reject fraudulent attempts to manipulate the data. In conclusion, Blockchain Technology can solve the verification problem by allowing users to publicly verify that a transaction is true, without the need of a trusted intermediary.
NO INTERMEDIARIES IMPLY FASTER AND COMPETITIVE TRANSACTION AND WIDER ACCESSIBILITY IN THE REAL ESTATE MARKET
Institutions like Banks, Lawyers, and Brokers have been long part of the Real Estate Industry. However, Blockchain Technology is making a relevant impact in their roles and participation in Real Estate transactions. There are now new platforms capable to cover functions such as payments and legal documentation. As a result of the introduction of those new platforms and marketplace, buyers and sellers are, therefore, able to save their money from commissions and fees charged by the regular intermediaries. Furthermore, this innovation can make the process quicker as the back-and-forth between these intermediaries gets cut out.
An example of innovative trading platforms able to support Real Estate transactions more comprehensively than regular Real Estate Industry has been introduced by ATLANT.
ATLANT has developed a platform that uses Blockchain Technology to simplify transactions related to Real Estate and Rental Property and give wider accessibility to anyone who is keen to take a position in the Real Estate. By tokenizing Real Property, ATLANT consent to trade the assets similarly to stocks and permit to complete the transactions entirely online. In fact, it allows the sellers to tokenize assets, handling them like stocks sell, and liquidating with tokens sale through the platform. The tokens that have been collected can then be exchanged for fiat currency, with the buyers that own a percentage stake of the property. (Joe Liebkind, 2019)
CONCLUSION
The aim of the research was to determine the causes and the related effects of applying Blockchain technology into the Real Estate Industry. After analyzing two specific causes and effects of the Blockchain Technology in the Real Estate Industry, the conclusion that has been derived is that a decentralized exchange technology through a distributed ledger can build greater trust in the Real Estate Industry. In fact, since information can be verifiable across a peer to peer network making data transparent and immutable, fraud attempts can be lessened. Furthermore, buyers and sellers can have more confidence in conducting transactions and diminish the intermediary high-cost of transactions.
REFERENCE LIST

Bettina Warburg, (2016). How the blockchain will radically transform the economy. Retrieved from https://www.ted.com/talks
Blockgeeks, (2018). Real World Blockchain Applications – Real Estate. Retrieved from https://blockgeeks.com
Doug Galen, (2019). Blockchain for Social Impact: Moving Beyond the Hype. Retrieved from https://www.gsb.stanford.edu
Joe Liebkind, (2019). How Blockchain Technology is Changing Real Estate. Retrieved from https://www.investopedia.com/news
Rajarshi Mitra, (2018) . Why The Blockchain Technology Is Going To Stop Property Fraud. Retrieved from https://blog.springrole.com
Uzair, M. M., Karim, E., Sultan, P., & Ahmed, S. S. (2018). The Impact of Blockchain Technology on the Real Estate Sector Using Smart Contracts. Retrieved from https://mpra.ub.uni-muenchen.de