Just as no man is an island, no business operates entirely on its own. We all have a supply chain, a support network of businesses providing the products and services we rely on to get our own work done.
This supply chain has always been a major risk point for businesses – we count on our suppliers to get their work done to standard and on time, but also to protect our interests, and in many cases our data and that of our clients and customers.
Monitoring and measuring this risk can prove a demanding task, requiring understanding of multiple systems and processes outside the sphere of our own companies. We need to know exactly what data has to be shared with suppliers, what they will be passing on further down the chain, what practices and controls they have in place to protect that data, and how they go about verifying the security of their own providers and sources.
In large firms with complex solutions, this can get seriously complicated, involving dozens if not hundreds of third-party firms down the supply chain. A recent Ponemon study found that only just over a third of companies thought their third-party risk management processes were up to scratch.
This backs up a similar study by Crowdstrike we reported on back in July, which found one in three respondents (all senior IT pros) considered the supply chain a serious concern, and 80% saw it as the fastest-growing threat vector.
In the past we’ve provided detailed checklists of everything you need to consider when managing a third-party relationship, but as supply chains lengthen this becomes a serious drain on resources. What’s needed is a simple, verifiable, tamper-proof universal solution to tracking all this information.
This is where blockchain steps in, of course. Touted by many as a panacea to solve all manner of problems, supply chains are one area where blockchain is already proving a major advantage.
Take the food industry as an example – using blockchain, food can be tracked all along the line from field to supermarket shelf, allowing every component of a frozen ready-meal to be traced back to where it was grown and by whom, via all the processing, testing, transportation and storage stages along that route.
Such an approach should be ideal for pretty much any supply chain process, but it could be dangerous to think of it as an easy, foolproof solution. Simply saying “we will use blockchain to manage all this” is just the first step – the magic lies not in the concept, but in the implementation.
Blockchain is a relatively new technology, an area which continues to evolve and remains short in readily-available expertise. Off-the-shelf solutions may suit some use cases, but at least some customization is almost certain to be required. Proper design and implementation of the processes required to operate a blockchain-based tracking system is crucial to getting the most out of the technology.
Whatever approach is used, getting independent, third-party validation of a blockchain implementation is a vital, as well as cost-efficient step in ensuring everything runs as expected, delivering maximum benefit with minimum risk.
Whether you choose a fully custom solution built in-house, a standard pre-built solution, or a bespoke toolkit developed by specialists in the field, getting an expert appraisal from a third party is highly recommended.
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If you want to talk about how you can implement blockchain technology securely, get in touch. We’re here to help.