Blockchain technology may be shaking up a supply chain close to you. It’s smarter, it’s faster, and it gets more participants on board.
In the recent piece at Harvard Business Review, Michael J. Casey and Pindar Wong remember that blockchain — a web-based globally distributed general ledger that monitors transactions via online “smart contracts” — will produce “dynamic demand chains rather than rigid supply chains, producing more effective resource use for all.” They remember that many startups are springing up around blockchain-enabled supply chains, and companies such as Walmart, IBM and BHP Billiton are launching efforts to improve track the movement of merchandise and data.
Blockchain — enhanced by electronic tracking technology — can only help speed up supply chains, while adding greater intelligence along the way, they argue. “It could be especially powerful when coupled with smart contracts, through which contractual rights and obligations, including the terms for payment and delivery of merchandise and services, may be automatically executed by an autonomous system that’s trusted by all signatories.”
A panel discussion held at the recent 2017 SAP Ariba LIVE conference in Sin city grew more animated if the subject of Supply Chain Books came out. The panelists, tech leaders at SAP Ariba, explored the potential for advanced cloud services in aiding to make use of artificial intelligence and machine finding out how to an array of business supply chain processes. Dana Gardner, principal analyst at Interarbor Solutions, moderated.
Blockchain “will have huge impact on the best way people go through the business network,” predicted Dinesh Shahane, chief technology officer for SAP Ariba. “Blockchain reaches in the market to the boundary of one’s network, to faraway places that we are really not even connected to, and brings that in a governance model where all your processes and all sorts of your transactions are captured in the central network.”
Blockchain will work in enabling more intelligence business processes for the distributed trust and transparency, which will take more people into connected supply-chain networks, said Sanjay Almeida, senior v . p . and chief product officer of Network Solutions for SAP Ariba. “We have more than 2.5 million buyers and suppliers transacting for the SAP Ariba Network – but you can find vast sums of individuals that aren’t for the network. Obviously we’d like to have them. If you are using the blockchain technology to bring that trust together, it’s a federated trust model. Then our supply chain would be many more efficient, much more trustworthy. It’ll help the efficiency, as well as the risk that’s connected with managing suppliers will probably be managed better through the use of that technology.”
The energy in blockchain is its capability to scale, Almeida continued. “You want the scale of your SAP Ariba, hold the scale in the quantity of suppliers, the volume of business that takes place for the network. So you’ve to have a scale and technology together to produce which occur.”
You will find challenges that should be addressed before blockchain can proliferate across supply chains, however. First, you have the need to overcome embedded, calcified corporate thinking. Business leaders and organizations need to open up to the sharing of data with mainly unseen network partners. “Enterprises aren’t accustomed to really exposing that kind of data in a shape or form – or they are very secretive over it,” said Sudhir Bhojwani, senior v . p . with the product suite for SAP Ariba. “For them to suddenly participate in this implies a change on their side. It takes seeing ‘what may be the benefit to me, what’s the value which it offers me?'” These kinds of thinking is slowly coming around, he added. “You hear more companies – especially for the payment side – beginning to participate in blockchain…. It’s still a technology only until the companies want to say, ‘Hey, this is actually the value … however have to change myself as well.'”
In their article, Casey and Wong also remember that overall governance and standards are challenges to implementing blockchain to control supply chains on a global scale. There is also the open, public blockchains, but, “inevitably, private, closed ledgers run by a consortium of companies also arise, for their members look to protect business and profits.” In addition, “there needs to be interoperability across public and private blockchains, that will require standards and agreements.”
Legislation — which consist of place to place — also pose a challenge to global scaling of blockchain, Casey and Wong add. “Even before governments may be convinced to aid this effort, also to do this within a globally coordinated way, industry must concur with recommendations and standards of technology and contract structure across international borders and jurisdictions.”
But alterations in thinking are inevitable, Bhojwani believes, noting that major shifts have occurred in the consumer world. The incoming generation of employees and business leaders can help drive this modification as well. “I personally believe in next 3-5 years when you can find more-and-more Millennials in the workforce, you will note people adopting blockchain and new ledgers at the faster pace,” he predicted.
For more details about Supply Chain Books go this popular resource: visit site