Blockchain technology might be shaking up a supply chain near you. It’s smarter, it’s faster, and yes it gets more participants up to speed.
Within a recent piece at Harvard Business Review, Michael J. Casey and Pindar Wong realize that blockchain — a web-based globally distributed general ledger that monitors transactions via online “smart contracts” — will produce “dynamic demand chains instead of rigid supply chains, causing extremely effective resource use for all.” They realize that several startups are springing up around blockchain-enabled supply chains, and corporations like Walmart, IBM and BHP Billiton are launching efforts to improve track the movement of goods and knowledge.

Blockchain — enhanced by electronic tracking technology — could only speed up supply chains, while adding greater intelligence along the way, they argue. “It could be especially powerful when along with smart contracts, in which contractual rights and obligations, including the terms for payment and delivery of goods and services, might 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 Nevada grew more animated if the subject of Supply Chain Books Online came up. The panelists, tech leaders at SAP Ariba, explored the opportunity of advanced cloud services to help to utilize artificial intelligence and machine learning to a variety of business supply chain processes. Dana Gardner, principal analyst at Interarbor Solutions, moderated.

Blockchain “will have huge effect on the 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’re not even associated with, and brings that right into a governance model where your entire processes and your transactions are captured in the central network.”

Blockchain work in enabling more intelligence business processes for the distributed trust and transparency, which experts claim provides lots more people into connected supply-chain networks, said Sanjay Almeida, senior second in command 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’ll find hundreds of millions of individuals that aren’t on the network. Obviously we want to get them. If you utilize the blockchain technology to create that trust together, it’s a federated trust model. Then our supply chain could be much more efficient, far more trustworthy. It’ll help the efficiency, as well as the risk that’s associated with managing suppliers is going to be managed better by using that technology.”

The electricity in blockchain is being able to scale, Almeida continued. “You have to have the scale of an SAP Ariba, possess the scale through the number of suppliers, the quantity of business that occurs on the network. So you have got to possess a scale and technology together to produce that occur.”
There are challenges that must be addressed before blockchain can proliferate across supply chains, however. First, there’s the need to overcome embedded, calcified corporate thinking. Business leaders and organizations need to divulge heart’s contents to the sharing of information with mainly unseen network partners. “Enterprises aren’t utilized to really exposing that kind of information in different shape or form – or they may be very secretive regarding it,” said Sudhir Bhojwani, senior second in command in the product suite for SAP Ariba. “For these to suddenly engage in this requires an alteration on their own side. It requires seeing ‘what could be the benefit personally, what’s the value who’s offers me?'” This type 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 before the companies am getting at, ‘Hey, this is actually the value … on the other hand need to change myself too.'”

In their article, Casey and Wong also realize that overall governance and standards are challenges to implementing blockchain to deal with supply chains with a global scale. There is also the open, public blockchains, but, “inevitably, private, closed ledgers operated by a consortium of companies will also arise, for their members seek to protect business and profits.” Moreover, “there should be interoperability across public and private blockchains, that may require standards and agreements.”

Regulations — which vary from state to state — also pose an issue to global scaling of blockchain, Casey and Wong add. “Even before governments might be convinced to support this effort, and accomplish that 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 previously occurred in the consumer world. The incoming generation of employees and business leaders may help drive this change too. “I personally believe in next 3-5 years when you’ll find more-and-more Millennials in the workforce, you will see people adopting blockchain and new ledgers in a considerably faster pace,” he predicted.
For more info about Supply Chain Books Online explore our internet page: read here