Samsung Considers Blockchain Tech for its Supply Chains
Samsung Electronics Co is considering a blockchain ledger system in order to keep track of its global supply shipments.
Song Kwang-Soo, Samsung SDS Co.’s blockchain chief, told Bloomberg that implementing a blockchain system could cut shipping costs by 20%. It can also reduce the time between product launches and shipments.
“It will have an enormous impact on the supply chains of manufacturing industries,” said Song. “Blockchain is a core platform to fuel our digital transformation.”
SDS said it expects to handle 488,000 tons of air cargo and 1 million 20-foot-equivalent (TEU) shipping units this year. That would include organic light-emitting diode displays and Galaxy S9 phones.
A blockchain system may help the company reduce the time lag between product launches and actual shipments. It makes it easier to respond to rival products and shifting consumer appetites in emerging markets like China, said Cheong Tae-su, professor of industrial engineering at Korea University.
“It cuts overhead and eliminates bottlenecks,” Cheong said. “It’s about maximizing supply efficiency and visibility, which translates into greater consumer confidence.”
Blockchain and Samsung
While companies worldwide have said they’re planning to utilize blockchain technology, Samsung is one of the 1st global manufacturers. The company is taking a serious look at using the distributed ledgers in its operations.
Blockchain is the technology behind cryptocurrencies, but the ledger system can have widely applicable uses. It will transform the way transactions are recorded, verified, and shared.
Gartner Inc. predicted blockchain-related businesses will create $176 billion of value by 2025, though the tech’s impact on the business world is limited as of now.
Blockchain proponents in the shipping industry said the technology pose numerous benefits. It lessens the time to send paperwork back and forth and to coordinate with port authorities. And documentation costs for container shipments are more than twice as big as those transportation, according to IBM, which is working with A.P Moeller-Maersk A/S to track cargo movements and automate shipping.
Meanwhile, 2017 was a busy year for Samsung. The company established connections will all avenues of blockchain industry, ranging from investment to entrepreneurship.
Moreover, the company launched their own enterprise-grade security platform Nexledger in April. A July investment into Blocko, and an August entrance to Hyperledger, an open-source blockchain consortium.
Late last year, SDS closed a deal with the Seoul Metropolitan Government to improve the city’s bureaucracy using blockchain.
“Samsung SDS’ blockchain technology and consulting capabilities will contribute to Seoul’s leap as a top-rate global city,” SDS CEO Hong Won-Pyo said.
Samsung hasn’t confirmed when it will make its decision on whether to deploy blockchain across its supply chain or not.