According to several sources, technology and electronics giant Samsung is seriously considering using a blockchain platform to manage its global supply chains. Samsung are currently the largest manufacturers of smartphones on the planet, so if correct, this would represent the biggest acknowledgement yet as to the logistical benefits that can be brought about by the implementation of blockchain technology
South Korean corporate behemoth Samsung, the world’s largest maker of smartphones and semiconductors, and the world’s 2nd largest IT corporation and 2nd largest shipping company may soon be using blockchain technology to more effectively manage its vast international distribution network. According to Song Kwang-Woo, head of blockchain technology activities at Samsung SDS (the company’s logistics and IT division) Samsung plans to set up a distributed register to track its international deliveries. The sums spent by Samsung annually run into to many tens of billions of dollars, so the implementation of blockchain technology could potentially reduce Samsung’s yearly shipping costs by 20% or more.
As Song Kwang-Woo himself said:
“This initiative will have a significant impact on the supply chains of the production industries. The blockchain is an essential platform for our digital transformation.”
Interestingly, Bloomberg released a similar report on Monday (April 16), this time stating that Samsung Electronics had announced that it already has a blockchain-based system in place to track international shipments, and expects this system to reduce annual shipping costs by at least 20%.
The Bloomberg report also carried a quote from Song Kwang-Woo:
“It (blockchain technology) will have a tremendous impact on supply chains in the manufacturing industry . Blockchain is a key platform to fuel our digital transformation.”
Big Business Spotlight Now On The Blockchain
The incredible surges in value experienced by various cryptocurrencies during 2017 – none more so than Bitcoin – shone the global-business spotlight intensely on the one factor all of those cryptos had in common – blockchain technology. Bitcoin’s valuation rose from less than $1000 in January to just short of $20,000 by November. There were also spectacular hikes in value experienced by Ethereum, Ripple and EOS, to name just three.
Many businesses took note that blockchain technology could completely revolutionize the way transactions are recorded, verified and shared within a company. As a result, multiple companies stated their intent to begin implementing the blockchain, initially limiting this new technology’s involvement to cross-border payments or supermarket monitoring.
Samsung Take The Blockchain Plunge
However, the Samsung Group – one of the world’s largest conglomerates – is the first global manufacturer to seriously consider relying on blockchain technology to handle a vital and key area of their business. Samsung have been in business for 80 years, and employ a global workforce of almost half-a-million people. Samsung products generate well over $300 billion in revenue every year.
Backers of blockchain use in the shipping industry believe that such technology will dramatically reduce the amount of time it currently takes to transmit legal documents and to coordinate with port authorities. Samsung will handle around 488,000 tons of cargo this year, plus a million standard-sized 20-foot containers. These containers are needed to carry the organic, light-emitting diode displays and Galaxy S9 series phones manufactured by Samsung Electronics.
Cheong Tae-su, a professor of industrial engineering at the Seoul National University, believes that the blockchain could help Samsung radically reduce the time taken between launching a new product and shipping it around the world, granting the company more time to respond to the initiatives of its competitors, and better prepared to cater to consumer demand in emerging markets such as India, China and Africa.
“This will help limit their expenses and avoid many problems,” Cheong said. “It’s about maximizing the efficiency and visibility of the offer, resulting in greater consumer confidence.”