Tue, Apr 17, 2018 - Page 10 News List

Samsung eyes blockchain to manage supply chain

Bloomberg

The world’s biggest maker of smartphones and semiconductors might use the technology behind cryptocurrencies to manage its vast global supply network.

Samsung Electronics Co is considering a blockchain ledger system to keep track of global shipments worth tens of billion of US dollars a year, said Song Kwang-woo, blockchain chief at Samsung SDS Co, the group’s logistical and information technology arm.

The system could cut shipping costs by 20 percent, SDS said.

While companies around the world have said they are planning to deploy blockchain technology on everything from cross-border payments to tracking the life cycle of supermarket chickens, Samsung Group is one of the first global manufacturers to take a serious look at using the distributed ledgers in its operations.

SDS is working on the system for Samsung Electronics, the conglomerate’s crown jewel.

“It will have an enormous impact on the supply chains of manufacturing industries,” said Song, who is also a vice president at SDS. “Blockchain is a core platform to fuel our digital transformation.”

Thrust into the spotlight by bitcoin’s meteoric rise, blockchain technology has been touted as a breakthrough that is to transform the way transactions are recorded, verified and shared. While its effect on the corporate world has been limited so far, Gartner Inc predicts that blockchain-related businesses are to create US$176 billion of value by 2025.

Blockchain proponents in the shipping industry say that the technology reduces the time needed to send paperwork back and forth and to coordinate with port authorities.

Documentation costs for container shipments are more than twice as big as those for transportation, said International Business Machines Corp, which is working with A.P. Moeller-Maersk A/S to track cargo movements and automate shipping paperwork.

SDS expects to handle 442,706 tonnes of air cargo and 1 million 20-foot-equivalent shipping units this year. That would include organic light-emitting diode displays and Galaxy S9 phones made by Samsung Electronics.

A blockchain system might help the company reduce the time lag between product launches and actual shipments, making it easier to respond to rival products and shifting consumer appetites in emerging markets like China, Korea University professor of industrial engineering Cheong Tae-su said.

“It cuts overhead and eliminates bottlenecks,” Cheong said. “It’s about maximizing supply efficiency and visibility, which translates into greater consumer confidence.”

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