This Month in SMT007 Magazine—IBM: Supply Chain Blockchain

Estimated reading time: 2 minutes

IBM’s Michelle Lam and Christophe Begue, along with Nolan Johnson, discuss the basics of blockchain, and how it enables a more secure and traceable supply chain. They also address some of the applications for this technology and what the future holds.

Nolan Johnson: Maybe we could start with an introduction from each of you, your background, and your title?

Michelle Lam: I’m a senior technical staff member in IBM’s System Supply Chain Engineering organization. Among many roles I have, counterfeit prevention program manager is one that got me into working on blockchain.

Christophe Begue: I’m the director of solution strategy in the industry team for the electronics industry at IBM. My job is to bring the various things that IBM does, and solutions from our partners, and package them together to specifically address the various needs of our clients—which spans from semiconductor to consumer electronics.

Johnson: That’s exactly the space that we’re hoping to talk about—the electronics supply. For those of us who don’t really know, what is blockchain? What does it do, and why is it good for this sort of application?

Begue: Blockchain is, at its core, a shared ledger. It’s a way to record a transaction that involves multiple parties in a ledger, which is shared by these parties. Instead of recording your accounting transaction with another partner—which is recorded when completed in two separate ledgers—here is a ledger that accounts for the transaction that brings you two together. In the life of doing business, you and this other party do business with many other parties. If you design the blockchain to include all these different parties, there would be this ledger which records the set of transactions that brings two or multiple parties together as they relate to each other. It’s novel because of the way it reaches across multiple organizations and manages the information, security, and immutability. Its record of history cannot be changed, so it’s a new way of looking at multiparty processes and transactions.

Lam: Christophe summarized it very well, but I want to add that there are so many different types of blockchains. The one we’re talking about is the permissioned blockchain, instead of the permissionless, anonymous blockchain where anyone—even if they don’t know each other—can join.

Begue: That’s a very important point. Here, we’re discussing the use of blockchain in the context of business processes and enterprises, which are dealing with each other. They have names, locations, and reasons for doing business. We’re not talking about cryptocurrencies and anonymous participants.

To read this entire conversation, which appeared in the August 2020 issue of SMT007 Magazine, click here.