Digital Supply Chain – If The Answer Isn’t Blockchain What Is?
John Straw highlights some long and short term solutions to successful digital supply chains
As Knut Alicke pointed out in his insightful piece on the role of Blockchain in the digital supply chain (DSC)- it’s something of a solution looking for a problem – I think the answers that provide the foundation for a highly efficient DSC at some point do reference Blockchain-like tech but also take into account some very near term implementable tech than can move the sector forward.
Before I move into the new upsides let me add some more reality to Knut’s article;
– Blockchain does not support high speed transactional processing at this time – I’m hearing of transaction latency (i.e. the amount of time taken between in the instigation of a verification process and the end) can be around 4 hours at the moment – not exactly ideal for a high volume supply chain environment
– 60% of the world’s Bitcoin miners (who do the verification task for each transaction) are in China due to subsidised energy – Bitcoin mining is super energy intensive and currently consumes a whopping 0.12% of the world’s energy generation. If you build Blockchain into your everyday supply chain operations you then become beholden to change in policy from a foreign government (although private blockchains can reduce energy consumption and latency whilst protecting from political influence).
So that’s the end of the bad news. . .
The upside is alternative, more performant networks
Ethereum for example, is starting to look commercially viable in the next few years. . . and that leads to something very interesting. . .
As Knut pointed out – simply connecting end to end in the supply chain provides little benefit in itself – however – there is a really interesting upside coming out of Ethereum called the Smart Contract.
Think for a moment how many contracts you have in your supply chain and then think how clauses in those contracts that trigger some form of action on your or the suppliers behalf – classically that might be a payment when a certain action is performed and verified. At the moment that process can be manual and inefficient and sometimes open to abuse. . . but think of an IT based DSC that adds action derived sensors from the Internet of Things (IoT) to the security and confidence layer (Ethereum) to automatic contract execution (Smart Contract) and you give birth to the truly efficient organisation – the newly created acronym of DAO – the Decentralised Autonomous Organisation.
Someone in your space will have it in plan right now
It’s going to happen – combining the 3 elements of IoT, secure transactional environment and the smart contract is highly compelling – so, a long term upside – but what can you do to bring life to the short term upside of the DSC?
The answer may lie in Robotic Process Automation (RPA).
Referring back to Knut’s article – many processes in the supply chain are the manual joining together from different and disparate computer systems that can’t talk to each other requiring manual data entry from an “data processing operator” (going back to my 1980’s computing roots). . . RPA can replace the human operator with a clever and easy to use facility that simply automates keystrokes and replays them – see this video from IBM:
The Digital Supply Chain has near term and medium term potential for exponential increases in efficiency and flexibility – are you ready to grasp the opportunity?