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Cryptography is the technology that powers online encryption, digital authentication, credit card processing, and online banking. Even if youre not familiar with the technology, you likely rely on cryptography on a daily basis.

Now, with the rise of cryptocurrencies and blockchain technology, cryptography may become even more important in the supply chain.

In procurement and logistics, cryptography and blockchain technology could help to improve transparency and build trust between third parties.

New challenges in logistics and procurement

Transparency and trust are more important than ever for supply chain professionals. Customers want more information about the goods they buy, including where they come from and how they were transported. As the supply chain becomes more complex, establishing trust between parties responsible for different aspects of logistics can become more challenging.

At the same time, supply chain operations of all kinds face a range of emerging cybersecurity threats. Cyberattacks are on the rise and hackers seem to be targeting companies that manage logistics and procurement more and more often.

A successful attack can have serious consequences. Already, major businesses, like Expeditors, have fallen victim to cyberattacks that took key company systems offline slowing global operations and likely costing millions of dollars.

These challenges are likely to become more severe in the future as consumer expectations rise and cybercrime becomes more common. Cryptography and related technologies like blockchain could help logistics and procurement experts manage these developing challenges.

Cryptography and blockchain

For most businesses, cryptography will be most important in improving network security. A variety of critical business security tools rely on cryptography to function. One example is email encryption, which uses cryptography to protect the contents of important emails. Only authorized users, who have the right decryption key, are able to unencrypt the email and access its contents.

In practice, the technology can help companies protect the information contained in confidential emails or similar communications. Encryption also plays an important role in authenticating log-ins, protecting remote or cloud storage, and peer-to-peer secured messaging. Businesses that want to keep important resources and communications safe from unauthorized third parties can use platforms that offer encryption to protect this information.

In the near future, cryptography may also support physical devices that could help businesses track the authenticity of goods. Cryptographic ID tags small enough to fit on almost any product could be used to verify the identity and authenticity of products. The ID tags could help prevent the counterfeiting of goods and ensure customers that they have received a legitimate product.

Using blockchain to manage transparency

Blockchain the digital record-keeping technology best known for powering cryptocurrencies like Bitcoin is another technology that relies on cryptography and may provide significant benefits for the supply chain.

Experts believe the blockchain may help businesses accelerate deliveries, enhance traceability, improve coordination between supply chain partners, and streamline access to financing.

Blockchain is effectively a distributed ledger a digital system for recording transactions in a way that makes altering existing records extremely difficult. As a result, the system is more tamperproof than the average ledger tool, which should help stakeholders remain confident that blockchain transaction records are accurate.

For example, stakeholders could use a blockchain ledger to centralize information about their shipping operations and provide a single source of truth on partnered logistics.

The technology could be used alone or in combination with other tools for managing transparency and traceability in the supply chain like audits or the use of RFID and GPS tracking solutions that can monitor goods as they move through the supply chain.

A number of major businesses, including MasterCard, IBM, Hayward, and Emerson, are currently working with blockchain technology in the supply chain.

Preparing for the future

Most businesses already use cryptography on a daily basis for purposes like encryption and identity authentication. In the near future, cryptography could play a bigger role in supply chain management.

Tools like cryptographic tags and the blockchain could improve transparency and traceability in the supply chain. With these tools, businesses could manage some of the most significant challenges the supply chain faces right now.

Shannon Flynn is a technology writer and the Managing Editor at ReHack.com. Shannon's written for sites like TechDayHQ, Re-Work, and Innovation & Tech Today. Follow ReHack on Twitter to read more of her work.

Originally posted here:
The Role of Cryptography in the Supply Chain and Procurement - EPS News