There's been a lot of buzz in the business world about "blockchain" technology, but what exactly is it, and how does it apply to supply chain management? These are the questions that Enrico Camerinelli, vice president of CSCMP's Italy Roundtable, tries to answer in the new CSCMP's Hot Topics publication, "Blockchain in the Supply Chain."

Blockchain is basically a database that runs across a global network of independent computers, writes Camerinelli. It serves as an open ledger, where every transaction on the network is recorded and available for all participants to see and verify. By providing a common view, a blockchain eliminates the need to transfer information between organizations through such things as e-mails, spreadsheets, direct electronic connections, and phone calls, and it helps to reconcile any differences in data between suppliers and customers. For this reason, Camerinelli says that blockchains have the potential to revolutionize the way companies conduct transactions with one another.

The five-page paper provides a good introduction to the technology and starting point for considering whether it should be applied within your own organization. In the paper, Camerinelli succinctly defines key terms and provides examples of how the blockchain concept could be applied in the supply chain. For example, blockchains could be used to handle such things as supplier quality certificates, proof of ownership, vendor quotes, and purchase orders. It could help companies quickly resolve delivery discrepancies by retrieving data collected throughout the order-to-receipt processes, and it could provide proof to auditors that materials come from certified environmentally and socially responsible areas.

"Blockchain in the Supply Chain" is free for CSCMP members; nonmembers can purchase a copy for $20.