Samsung To Use Blockchain Technology In Its Logistics Operations
Samsung, the world’s largest maker of semiconductors and smartphones, has indicated that it may turn to blockchain technology to manage the company’s huge global supply network. The South Korean electronics giant is considering the use of a distributed ledger system in keeping track of worldwide shipments that are worth billions yearly. This was disclosed by Song Kwang-woo, the chief of blockchain at the company’s logistical arm, Samsung SDS. According to Samsung SDS, blockchain technology could help the group reduce costs by up to 20%.
While firms across the globe have disclosed plans to use blockchain technology in a wide variety of scenarios ranging from tracking the food supply chain to cross-border payments, Samsung has emerged as among the first manufacturers in the globe planning to employ the decentralized ledger technology in its operations. The system that Samsung SDS is developing will be used by the crown jewel of the South Korean conglomerate, Samsung Electronics.
“It will have an enormous impact on the supply chains of manufacturing industries. Blockchain is a core platform to fuel our digital transformation,” Song said.
Following the spotlight that has been shone on blockchain technology due to the meteoric rise of Bitcoin, the distributed ledger technology has been hailed as revolutionary as it is expected to transform the recording, verification and sharing of transactions. So far there has been a limited impact of blockchain technology in the corporate space but this is expected to change with time. According to research firm Gartner, by 2025 blockchain-related businesses are expected to create value of approximately $176 billion.
Proponents of blockchain in the shipping sector argue that one of the advantages of the technology is that the time required to send documents back and forth is significantly reduced. The technology also enhances coordination with port authorities.
Per International Business Machines the documentation costs incurred to ship containers are double those for transportation. The tech giant is partnering with Moeller-Maersk with a view to tracking the movement of cargo and automating shipping paperwork.
This year SDS projects it will handle air cargo weighing around 488,000 tons and around one million 20-foot containers. Some of the cargo includes Samsung Galaxy S9 smartphones and OLED displays. A distributed ledger system could thus assist the conglomerate to cut the time lag that exists between the launch of products and actual shipments. This would make it easier for Samsung to respond to products from rivals such as Huawei and Apple.