Earlier this month, Supply Chain Matters had the opportunity to attend the MIT Enterprise Forum of Cambridge, Emerging Applications of Blockchain for Supply Chains symposium.
This was a very timely session with the audience literally filling-up an MIT lecture hall that could accommodate upwards of 150. The session consisted of a panel of various participants and companies having initiatives and development efforts related to blockchain technologies and their application to supply chain management process needs.
The panel consisted of the following: (in alphabetical order)
Dan Doles, CEO, Mojix
Dan Harple, Founder and CEO, Context Labs
Bill McBeath, Chief Research Officer, Chainlink Research
Brigit McDermott, Vice-President, Blockchain, IBM
Samantha Radocchia, Co-Founder and Chief Product Officer, Chronicled
Moderating the panel was Michael Casey, Senior Advisor-Blockchain Research, MIT Media Lab, and a former tech journalist for The Wall Street Journal.
The moderator established an introductory context for the symposium and explained that blockchain technology serves as a distributed and de-centralized ledger to provide a more transparent approach to transactional activity that can address a challenge of trust. No single entity controls such interactions and there is no dependence on a centralized body. The technology can be applied to environments of common interest which includes a number of supply chain management focused process areas.
Each of the panelists shared their introductory comments which helped to enhance for this audience, the potential use cases for blockchain technology. Highlighted were environments that could include unknown suppliers or trading partners, or spot markets that deal with shared resources such as the leasing of trailer truck chassis used for transporting ocean containers on roads.
The technology addresses challenges of discovery and trust, and could allow small to medium sized emerging economy suppliers to participate more readily in larger supply chains. Another process opportunity is where multiple serial steps of paperwork slow a process, with examples noted as global trade or supply chain finance. Cargo security, anti-theft, asset management and other potential use cases were mentioned as-well.
IBM has been working with select consumer goods companies in addressing blockchain use for food safety and traceability. Tech provider Chonicled, indicated customer pilot efforts for ledgering transactions or product environmental factors related to pharmaceuticals and drug supply chain movements including serial number tracking compliance. Mojix shared the vision, in the analogy of Uber, of dynamically driven product demand leading to self-managing supply chains
During interactive discussion, and audience Q&A, there were consensus areas among the panelists:
- Blockchain is a technology tool that has to be configured to address a specific business problem, thus it initially requires technical consulting assistance.
- Similar to RFID technology, blockchain can facilitate end-to-end supply chain visibility when applied to well defined use cases.
- As with any newly deployed technology, standards are fundamental as is interoperability with current EDI or B2B Business Networks. Some panelists observed that current standards need to be modified but added that ongoing innovation will lead to learning and revised standards. The area of standards applies to education of major value-chain players as well as regulators. Standards in-itself should not serve as a roadblock for pilots.
- Trade finance is ripe for innovation especially in lower tiers of the supply chain.
- There is some architecture risk and implementation teams need to be aware of such risks.
- There clearly needs to be defined, well-articulated and broadly understood business cases and teams need to accept realities that process change does take time. As one panelist pointed-out, that includes the challenge of building of a supply chain ecosystem when history depicts a litany of sour relationships.
- A final consensus takeaway shared by panelists was that application of blockchain should not be in the context of a centralized system, but rather a federated system and process approach.
This was by many accounts, a very informative session that provided important insights on a technology that is gaining increasing interest in supply chain management circles. Like any other advanced technology, the symposium reinforced that education and pilots will govern adoption cycles, with some industries moving faster than others.
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