Blockchain technology could be shaking up a supply chain near you. It’s smarter, it’s faster, also it gets more participants on board.
In a recent piece at Harvard Business Review, Michael J. Casey and Pindar Wong notice that blockchain — a web based globally distributed general ledger that keeps track of transactions via online “smart contracts” — will produce “dynamic demand chains rather than rigid supply chains, leading to more effective resource use for many.” They notice that several startups are springing up around blockchain-enabled supply chains, and companies including Walmart, IBM and BHP Billiton are launching efforts to higher track the movement of goods and information.
Blockchain — enhanced by electronic tracking technology — can only help you speed up supply chains, while adding greater intelligence in the process, they argue. “It may be especially powerful when joined with smart contracts, where contractual rights and obligations, like the terms for payment and delivery of goods and services, can be automatically executed by an autonomous system that’s trusted by all signatories.”
A panel discussion held in the recent 2017 SAP Ariba LIVE conference in Vegas grew more animated in the event the subject of Buy Supply Chain Books came up. The panelists, tech leaders at SAP Ariba, explored the potential of advanced cloud services to help to utilize artificial intelligence and machine learning how to a variety of business supply chain processes. Dana Gardner, principal analyst at Interarbor Solutions, moderated.
Blockchain “will have huge effect on the way in which people go through the business network,” predicted Dinesh Shahane, chief technology officer for SAP Ariba. “Blockchain reaches out to the boundary of one’s network, to faraway places that we aren’t even linked to, and brings that in to a governance model where your processes and all your transactions are captured in the central network.”
Blockchain will work in enabling more intelligence business processes due to the distributed trust and transparency, which provides more people into connected supply-chain networks, said Sanjay Almeida, senior vice president and chief product officer of Network Solutions for SAP Ariba. “We have an overabundance than 2.5 million buyers and suppliers transacting on the SAP Ariba Network – but you will find vast sums of other individuals who are certainly not on the network. Obviously we wish to have them. If you use the blockchain technology to bring that trust together, it’s a federated trust model. Then our supply chain will be much bigger efficient, much more trustworthy. It will help the efficiency, as well as the risk that’s linked to managing suppliers will be managed better through the use of that technology.”
The electricity in blockchain is its ability to scale, Almeida continued. “You want the scale of the SAP Ariba, possess the scale through the number of suppliers, the quantity of business that happens on the network. So you have got to get a scale and technology together to make that occur.”
There are challenges that must be addressed before blockchain can proliferate across supply chains, however. First, there’s the have to overcome embedded, calcified corporate thinking. Business leaders and organizations have to open up to the sharing of info with mainly unseen network partners. “Enterprises are certainly not utilized to really exposing that type of info in different shape or form – or they’re very secretive over it,” said Sudhir Bhojwani, senior vice president from the product suite for SAP Ariba. “For these phones suddenly engage in this calls for a change on their own side. It takes seeing ‘what could be the benefit for me, exactly what is the value it offers me?'” These kinds of thinking is slowly coming around, he added. “You learn more companies – especially on the payment side – beginning engage in blockchain…. It’s still a technology only prior to the companies am getting at, ‘Hey, here is the value … however have to change myself also.'”
Within their article, Casey and Wong also notice that overall governance and standards are challenges to implementing blockchain to manage supply chains on a global scale. There is the open, public blockchains, but, “inevitably, private, closed ledgers run by a consortium of companies also arise, as his or her members look to protect business and profits.” Furthermore, “there should be interoperability across public and private blockchains, that may require standards and agreements.”
Laws and regulations — which consist of place to place — also pose a challenge to global scaling of blockchain, Casey and Wong add. “Even before governments can be convinced to guide this effort, and to accomplish that inside a globally coordinated way, industry must concur with tips and standards of technology and contract structure across international borders and jurisdictions.”
But modifications in thinking are inevitable, Bhojwani believes, noting that major shifts have happened in the consumer world. The incoming generation of employees and business leaders may help drive this modification also. “I personally believe in next 3 to 5 years when you will find more-and-more Millennials in the workforce, you will see people adopting blockchain and new ledgers at a faster pace,” he predicted.
More information about Buy Supply Chain Books explore this web portal: check here