Recently in the news for its decision to enter the ASIC chip manufacturers’ arena, Samsung is contemplating life on the blockchain in other ways as well.
The North Korean giant is a virtually ideal case study in blockchain management of supply and logistics. Samsung’s extensive network of component and service suppliers and it’s massive reach across the globe have management contemplating a blockchain construct to optimize their operations.
As the world’s largest manufacturer of semiconductors, smartphones and also a huge swathe of electric appliances, Samsung’s deployment of a blockchain management system would utilize the technology that enables virtual coins like Bitcoin to improve efficiency and existing protocols.
Blockchain chief at Samsung SDS Co., the group’s logistics, technology and information arm, Song Kwang-woo, said that blockchain “will have an enormous impact on the supply chains of manufacturing industries.”
Song is also SDS Vice President. “Blockchain is a core platform to fuel our digital transformation,” he said.
The company could foreseeably employ a blockchain ledger to track its myriad global shipments, amounting to tens of billions of dollars annually. SDS anticipates handling some 488,000 tons designated as air cargo and a million 20-foot-equivalent (TEU) shipping units in 2018. The freight this year includes Galaxy S9 and other smartphones, as well as organic light-emitting diode displays, all products of Samsung Electronics, the conglomerate’s jewel.
Various companies from all over the world have mooted blockchain applications, as varied as documenting the life-cycle of retail store poultry and cross-border payments. Song also pointed out that a blockchain ledger system could cut the company’s shipping costs by up to 20 percent, a massive saving when seen against the sheer volume and cost the company experiences each year.
The Samsung Group is among the first truly global manufacturers seriously contemplating and evaluating blockchain technology’s potentially beneficial impact on their operations. SDS is mapping out a working implementation for the pinnacle company in the giant’s stable, Samsung Electronics.
Cheong Tae-su, a professor at Korea University in the industrial engineering faculty, pointed out that employing a decentralized ledger system may enable the company to narrow the gap between announcements of new products and their actual shipping.
This would make it more competitive and able to rapidly pivot based on consumer preferences and competitors’ offers in an emerging market like China, he said. According to Cheong, the system would “[cut] overheads and eliminate bottlenecks.”
Cheong added that “It’s about maximizing supply efficiency and visibility, which translates into greater consumer confidence.” Samsung is one of the biggest and most dynamic corporations to be openly discussing blockchain’s benefits. Now a household term, blockchain has been dragged into the limelight mostly due to the huge and public volatility of Bitcoin during 2017. Many businesses are investigating the new way of recording, verifying and sharing transactional data.
Although in the early days of uptake by corporates, analysts Gartner Inc. predict that blockchain-related businesses will generate around $176 billion in value by 2025. The shipping industry is already looking into revolutionizing the laborious and paper-heavy protocols that govern it, with proponents saying that the technology shortens the time required to dispatch paperwork between parties and also when coordinating with port authorities.
According to International Business Machines (IBM), the company working with A.P. Moeller-Maersk to track cargo shipments and minimize shipping paperwork by employing blockchain technology, the documentation costs alone for container shipping are over double that for the cargo’s transportation.