According to the World Economic Forum, “digital transformation in the Oil and Gas industry could unlock approximately $1.6 trillion of value for the industry, its customers, and wider society.”
While we’ve broken down the overall benefits of blockchain and its specific benefits for fleet management, there are still some challenges that need to be overcome in order for this technology to become standard in the industry.
Buy-In from the Entire Supply Chain
Having all participants in the supply chain collaborate and be fully bought-in is essential. Participants must agree on what information is going to be stored on the blockchain, the format in which that information will be stored, the access rights to the distributed ledger, and many more important questions.
Because blockchain is such a new technology, many participants in the supply chain aren’t familiar with it and have a “wait and see” attitude. But as first-movers with this technology, they can get in on the ground floor and get ahead of the competition.
Adopting blockchain for the supply chain is not an incremental update to existing systems – it’s a total revamp of them. Existing systems of participants would have to be completely replaced all at once in order for the blockchain to work as intended.
A lot of groundwork has to be laid before the system goes live, so collaboration between all participants is vital. The supply chain has been using the current outdated technology for years now, so the transition to a modern system could have some pains – but it will all be worth it.
Technology and Security
With blockchain still being in its infancy for the supply chain, there will be rapid improvements to the technology in the near future. Blockchain stores every transaction in a distributed ledger, so with multiple parties on the blockchain – and the supply chain has a massive number of participants -- this can add up quickly.
While there is no legal or regulatory framework in place for blockchain yet, it is currently being developed due to the rapid growth of the technology. One of the many advantages of blockchain is the immutable record for transactions, so participants can be confident that what they’re seeing is accurate.
Outdated systems and processes have bogged down the supply chain for far too long. With blockchain technology, full transparency can finally be achievable – along with potentially unlocking even more value throughout the supply chain.
Vertrax is proud to have a blockchain partnership with IBM, so be on the lookout for more information.
Contact us today to hear more about what the future holds and how you can benefit from our suite of supply chain solutions.