Smartphone and semiconductor giant Samsung is looking at using blockchain technology to manage its multi-billion dollar global supply network, according to Bloomberg.
Blockchain chief at Samsung SDS Co., Song Kwang-woo, said that using the distributed ledger system could cut shipping costs by up to 20%. Governments and companies across the world have been turning to the blockchain to facilitate all manner of operations from international money transfers to managing energy usage to monitoring fish stocks. Samsung Electronics is one of the first major technology companies to consider using the blockchain as part of its daily operations.
Song, who is also vice-president at Samsung SDS, added: “It will have an enormous impact on the supply chains of manufacturing industries. Blockchain is a core platform to fuel our digital transformation.”
Using the same technology behind crypto-currencies, blockchain is expected to transform the way transactions are recorded, verified and shared. Research firm Gartner Inc predicts that blockchain-based businesses will create $176 billion of value by 2025 and exceed $3.1 trillion by 2030.
Benefits for the shipping industry could be innumerable as using the blockchain would reduce the time needed to process paperwork and deal with port authorities. According to IBM cargo movement tracking, documentation fees for container shipping are over double the cost than for other forms of transportation.
Samsung’s SDS expects to move 488,000 tons of air cargo and over a million 20-foot shipping containers this year. The launch of new products such as the Galaxy S9 smartphone could be streamlined by the blockchain as the time between launch and shipping could be greatly reduced. This would make it easier for the company to respond to rival product launches and shifting consumer demands in emerging markets such as China.
Professor of industrial engineering at Korea University in Seoul, Cheong Tae-su, told Bloomberg that the technology could cut overheads and eliminates bottlenecks. “It’s about maximizing supply efficiency and visibility,” said Cheong, “which translates into greater consumer confidence.”
There are no specific details regarding the tech giant’s implementation of the blockchain, however, the move signifies a growing trend for larger organizations to embrace this fledgling technology that has seen astronomical growth over the past 12 months.