Blockchain technology might be shaking up a supply chain in your area. It’s smarter, it’s faster, also it gets more participants fully briefed.
In the recent piece at Harvard Business Review, Michael J. Casey and Pindar Wong remember that blockchain — an online globally distributed general ledger that tracks transactions via online “smart contracts” — will produce “dynamic demand chains instead of rigid supply chains, resulting in more effective resource use for all.” They remember that a number of startups are springing up around blockchain-enabled supply chains, and corporations such as Walmart, IBM and BHP Billiton are launching efforts to improve track the movement of products and knowledge.

Blockchain — enhanced by electronic tracking technology — are only able to help you speed up supply chains, while adding greater intelligence on the way, they argue. “It could be especially powerful when joined with smart contracts, in which contractual rights and obligations, including the terms for payment and delivery of products and services, might be automatically executed by an autonomous system that’s trusted by all signatories.”

A panel discussion held with the recent 2017 SAP Ariba LIVE conference in Sin city grew more animated if the subject of Supply Chain Books Online showed up. The panelists, tech leaders at SAP Ariba, explored the potential for advanced cloud services in helping to apply 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 impact on just how people glance at the business network,” predicted Dinesh Shahane, chief technology officer for SAP Ariba. “Blockchain reaches to the boundary of the network, to faraway locations that we are really not even connected to, and brings that in to a governance model where your processes and your transactions are captured within the central network.”

Blockchain work in enabling more intelligence business processes because of its distributed trust and transparency, which experts claim will take more and 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 more than 2.5 million buyers and suppliers transacting on the SAP Ariba Network – but you can find vast sums of others who are not on the network. Obviously we want to have them. The use of the blockchain technology to create that trust together, it’s a federated trust model. Then our supply chain will be many more efficient, much more trustworthy. It is going to enhance the efficiency, as well as the risk that’s related to managing suppliers will be managed better through the use of that technology.”

The ability in blockchain is its ability to scale, Almeida continued. “You want the scale associated with an SAP Ariba, have the scale in the amount of suppliers, the amount of business that occurs on the network. So you’ve got to have a scale and technology together to produce that occur.”
There are challenges that need to 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 confide in the sharing of data with mainly unseen network partners. “Enterprises are not accustomed to really exposing that type of data in different shape or form – or these are very secretive regarding it,” said Sudhir Bhojwani, senior vice president with the product suite for SAP Ariba. “For these phones suddenly participate in this calls for a change on his or her side. It requires seeing ‘what could be the benefit to me, what’s the value who’s offers me?'” This kind of thinking is slowly coming around, he added. “You hear more companies – especially on the payment side – beginning to participate in blockchain…. It’s still a technology only before companies mean, ‘Hey, this is actually the value … on the other hand have to change myself also.'”

Of their article, Casey and Wong also remember that overall governance and standards are challenges to implementing blockchain to control supply chains with 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 seek to protect business and profits.” Furthermore, “there should be interoperability across public and private blockchains, which will require standards and agreements.”

Regulations — which vary from nation to nation — also pose challenging to global scaling of blockchain, Casey and Wong add. “Even before governments might be convinced to aid this effort, and to do this in the globally coordinated way, industry must agree with tips 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 already taken place within the consumer world. The incoming generation of employees and business leaders might help drive this change also. “I personally have confidence in next less than six years when you can find more-and-more Millennials within the workforce, you will see people adopting blockchain and new ledgers at the considerably quicker pace,” he predicted.
To learn more about Supply Chain Books Online check this popular web portal: read more