Any blockchain expert will tell you the technology is having an impact on supply chain management.
Supply chain managers often oversee remote suppliers carrying out tasks independently. Even the most organized supply chain managers can’t do this alone. Several companies are testing blockchain as an aid to supply chain managers, with promising early returns.
It’s only a matter of time until more blockchain solutions for supply chain managers emerge. While industries like entertainment have proven lukewarm to blockchain, supply chain managers have a better understanding than most about blockchain’s untapped potential.
The problems plaguing supply chains haven’t changed much over the years. Products are routinely lost, but this term may just as well read “stolen.” A breakdown in one stop on the supply chain hinders the entire operation, and there’s nothing a supply chain manager can do about it.
So it’s no surprise that supply chain managers are receptive to blockchain technology. Its powers of automation and its status as a shared, distributed ledger could cut costs and establish real accountability.
These experts gave us their perspectives on the state of blockchain in supply chain management.
1. Bhagat Nainani, Group Vice President of IoT and Blockchain Applications Development, Oracle
“People are already starting to realize what’s possible with blockchain in the supply chain. With blockchain, the real innovation is in the accuracy and trustworthiness of the data and the efficiencies that are created by a more transparent mode of operation.
The businesses that are early adopters of blockchain tend to be big, complex organizations with large trading networks and multi-tier supply chains. Early use cases for blockchain in the supply chain have resulted in increased productivity, reduced dispute costs and improved quality assurance.”
2. Kelly Marchese, Principal, Supply Chain & Network Operations at Deloitte Consulting
“Blockchain offers solutions where other technologies in the past have failed — relieving the challenges of lack of visibility, partner collaboration, and data security.
There is an ongoing shift from siloed supply chain activities to an always-connected environment that solves many of the issues supply chain organizations have tried to tackle for decades. Blockchain offers the ability to seamlessly connect to partners and customers on a secured platform that can not only hold transaction data but can also process tasks leveraging connected technologies such as internet of things (IoT), sensors, and item identification data.
The adoption of blockchain has been slowly increasing as more organizations experiment and launch pilots. Most of the known efforts are focused around two key supply chain issues: asset tracking and supply chain visibility.”
3. Sylvie Thompson, Associate Partner for Supply Chain Optimization with Infosys Consulting
“While it’s still in very early stages, blockchain within supply chain management continues to advance with experimentation, numerous proof of concepts, and the launch of specific use case pilot programs.
Most are linked to food and pharma-specific supply chains, driven by the need for traceability from raw materials to the end consumer. We are not seeing as much exploration [of blockchain] in traditional hard goods or industrial supply chains.”
4. Marc Degen, Co-founder of Modum
“Many companies are trying to figure out what blockchain can do in their system. Most of them are piloting to prove “it’s too early and it does not yet deliver what we want” because of an immature ecosystem around it.
On the other side are paybacks periods way longer than in traditional systems, as the full value of a blockchain/network based business model needs to be deployed in rather large consortia, which takes way more time than we expect today.”
5. Steve Treagust, Global Industry Director at IFS
“Some organizations see blockchain for the supply chain as a partner to cryptocurrencies, some can’t justify adoption (usually simple chains or smaller companies in the chain), while others understand its potential to disrupt long, complex supply chains among larger groups of organizations.
One example of a visionary team is Maersk and IBM, who together launched ‘TRADELens’, the world’s first blockchain-enabled shipping solution. More than 90 organizations signed up to take part in this open standard, blockchain-driven platform, including more than 20 port and terminal operators and customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru.
TRADELens lets the organizations interact seamlessly and securely, sharing real-time access to internet of things (IoT) and sensor data such as temperature control or container weight, as well as providing standardized protocols and processes.”
6. Gert Sylvest, CTO and Co-founder and GM of Tradeshift Frontiers
“One way of thinking about the whole blockchain space is as the world’s biggest economic laboratory. There are lots of experiments happening and there’s a lot of promise, but it’s very early days.
Blockchain must deal with critical issues around governance, adoption and scalability before businesses begin full implementation. There is also a shortage of effective, easy-to-use blockchain applications that solve real-world problems. We’re excited about the prospects, and we’re conducting our own trials so that we’re ready to jump in, but there’s a ways to go before blockchain transforms supply chains.”
7. Ralph Rio, Vice President at ARC Advisory Group
“On one hand, none have truly “crossed the chasm” using Geoffrey Moore’s terminology for technology adoption. The food supply chain is very close. This is where the business case around narrowing the size of a recall is particularly powerful. I have little to no doubt that this application will eventually have broad adoption.”
8. Christiaan Sluijs, CFO of T-Mining
“There is a clear consensus on the natural fit of blockchain technology for supply chain use cases. International trade and logistics is marked by a high number of parties clearly lacking a central source of truth that could optimize data exchange and thus operational performance.
Today, we observe a proliferation of blockchain initiatives in logistics. However, adoption is still in its early days, with most initiatives still being proofs-of-concept and some early pilots or production use cases.
It’s clear that blockchain is still a nascent technology. Moreover, blockchain triggers companies to reconsider collaboration with their customers, suppliers, and competitors. This new “coopetition” creates interesting new challenges and opportunities for international trade & logistic companies.”
9. Srinivasan Sriram, CEO and Founder of Skuchain
“Procurement and treasury are beginning to realize the value as pilots are showing positive results. There still is a need to have production systems that bring [a level of] value to be more widely adopted for there to be a broader understanding and recognition of the value blockchain brings.”
10. Daniel Stanton, President of SecureMarking, Inc.
“There’s been a lot of hype about blockchain, and many folks are already starting to become cynical. But there are also a handful of blockchain applications emerging that genuinely could streamline supply chain transactions and solve problems that we’ve been living with and largely ignoring.
In markets where there are lots of players, and there are high stakes for customers, blockchain solutions are starting to emerge as potential game changers. One that I have a lot of hope for is tracking parts that are used on aircraft. This is an industry that is vulnerable to counterfeiting and fraud, and that can lead to catastrophic risks. Another is in tracking products, doing customs clearance, and credit issues in global transactions.”
11. Ian Kane, COO and Founder of Ternio
“Many Fortune 100 companies are testing blockchain in supply chains of all industries. Applications can be tracking produce from farm to store, [monitoring] various commodities, or [implementing] digital items such as online advertising.
The most important thing for deploying blockchain in a supply chain is scalability. Supply chains transact millions to trillions of dollars worth of goods, so you need a blockchain framework that can scale to these needs.”
12. Grant Blaisdell, Co Founder of Coinfirm
“Blockchain is one of the technologies that will reshape the foundation of many industries and the system on which they function. Just like the internet, the potential applications of blockchain are broad and unknown in the near future.
As for logistics, shipping industry companies are doing pilot projects by integrating blockchain. ZIM did the first ever pilot of paperless bills of lading based on blockchain technology, and there are many such pilot cases reported in the media.
The primary goal of applying blockchain is to enable trust and transparency in supply chains while keeping operations sustainable.”
13. John Thielens, CTO of Cleo
“In a word, [blockchain use for supply chains is] experimental. It is a fair observation that classic business-to-business (B2B) supply chain processes are effectively serving to synchronize the buyer’s and seller’s shared understanding of a purchase transaction, including stock keeping units (SKUs) and quantities, pricing and payment, inventory and availability, transportation and logistics.
So blockchain seems like a good evolutionary trajectory. But today we see blockchain not replacing core supply chain processes, but in niche applications for new aspects of supply chain management. IBM Food Trust, recently mandated by Walmart for suppliers of some grocery items, is a good example.”
14. Pervinder Johar, CEO of Blume Global
“Blockchain technology is one of those technologies that has potential, but in the supply chain and logistics industries adoption isn’t yet where it was expected [to be].
There are many theoretical benefits to come from the use of blockchain technology, not the least of which is more secure and transparent tracking of assets. While some big players have started blockchain-powered pilots for logistics that point to future value, mass adoption is years away. Companies should invest in resources that can make an impact today and still allow for growth tomorrow.”
15. William Crane, CEO and Founder of IndustryStar
“At present we see a small segment of early adopters that have functioning blockchain processes being trialed for day-to-day operations. These industry leaders are positioning themselves to leapfrog their competition due to the immense learning [curve] they are working through now. They will then be able to rapidly carry through [blockchain] to broader parts of their businesses.
IndustryStar sees five areas as the best and most prevalent use cases for blockchain in supply chains: smart contracts and cryptocurrency integration, quality assurance, improved planning, expedited legal and auditing procedures, and information sharing.”
16. Scott Carlson, Head of Blockchain Security at Kudelski Security
“Blockchain in supply chain management is still in an experimental stage. Blockchain technology is being experimented with to improve traditional processes in order to help surpass challenges the supply chain faces, such as finding the data, getting participant agreement/standards, and building return on investment (ROI).”
17. Kevin McMahon, Executive Director of Emerging Technologies at SPR
“This year, we should continue to see more users testing proofs-of-concept both publicly and privately. Many eyes within the industry will be on some of the more public blockchain initiatives, like IBM's Food Trust, which launched last year. Walmart, a founding member of the Food Trust consortium, is mandating all its lettuce and leafy greens suppliers join the Food Trust network by the end of 2019. As one of the first wide-scale production uses of blockchain in the supply chain industry, many companies will be watching the results and impacts of the initiative closely for any lessons and best practices that emerge.”
18. David Rajakovich, Managing Partner at Supply Chain Academy
“As far as I’m aware, in terms of actual implementation, there are only a very few small-scale trial implementations of blockchain for supply chain applications (e.g. for tracing the source of food sold in supermarkets, to ensure reliability and adherence to standards). I believe Walmart has also done some trials. For the most part though, there is only discussion about [blockchain’s] potential usefulness in supply chain, rather than actual implementation.”
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