For 55 years, the Council of Supply Chain Management Professionals (CSCMP) has been the go-to professional association for supply chain management and logistics professionals. CSCMP has over 80 chapters, known as Roundtables, around the world. Last week, I, with my Clarkston colleagues Kim Kuesel and Sean Burke, had the opportunity to engage in a seminar around automation and technology in the supply chain with the local Chicago Roundtable.
The seminar included sessions on how Uber Freight is trying to change the relationships between carriers and shippers, the use of drones in warehouse inventory management, distribution center automation, a keynote speech from Duke Professor Missy Cummings on artificial intelligence, and a panel on blockchain featuring our very own Kim Kuesel, supply chain leader and Associate Partner at Clarkston Consulting.
Kim’s panel explored the evolution of blockchain from its inception to modern day uses to what the future holds for the technology. The panel discussion also highlighted some of the lingering questions and challenges that supply chain leaders have when it comes to blockchain. Given that, and Kim’s considerable supply chain background, Sean and I sat down with Kim after the panel to dive deeper into some of the questions and critical points from the discussion.
What are some of the practical uses of blockchain?
There are plenty of ways blockchain can be utilized throughout a business, from providing clarity in business contracts to reducing the carbon footprint of a company, to reducing contract fraud. But looking at blockchain from a supply chain angle, we see the greatest potential benefits in the ability to efficiently track the product through the supply chain, view inventory in vendor’s warehouses, and enable effective communication between partners.
That said, the food and beverage and pharmaceutical industries would seemingly have the most immediate, demonstrative, and vested interest in developing blockchain capabilities. Some are already exploring how blockchain could improve their supply chain – leading food processor and distributor Golden State Foods has partnered with IBM to pilot their Food Trust Blockchain solution.
Let’s say I’m a supply chain leader looking to explore blockchain for my business, where do I start?
First, you should have a clearly defined idea of the challenge you believe blockchain can address in your business. While blockchain is a hot topic right now, trying to force it in your business without understanding why is a recipe for disaster.
Next, the business should decide what are the high-level requirements that need to be met. From there, you should evaluate the processes impacted and how blockchain technology could be integrated. In many cases, there will be many intermediate steps you will need to take to modernize your processes before you are ready to adopt blockchain technology. From a tactical perspective, my first suggestion would be to look at your paper or manual processes and understand how you can automate them before jumping straight to blockchain.
So, we should wait and see and prepare. What is going to be the “green light” that lets companies know it is time to truly move forward with blockchain?
Blockchain technologies are going to continue to be an area of interest. As it stands now, the blockchain field is rife with new entrants, large and small, all competing to capitalize on the hype around the technology. As the technology becomes more ubiquitous, we’ll see some consolidation of blockchain tech providers – particularly as the larger tech players look to acquire the differentiated and industry-focused capabilities that the niche blockchain companies are bringing to market.
That said, the coming years will still see the biggest players in the industry making substantial internal investments and working through the initial bumps along the road to blockchain. Just recently, SAP announced intentions to apply the company’s technology to the agricultural supply chain by a way of its farm-to-consumer initiative. SAP will also continue to integrate blockchain into its current track and trace platforms. Amazon announced a plan to pair up with blockchain start-up Kaleido to make it easier for customers to use blockchain.
These are just two examples of Fortune 500 companies making investments in blockchain, and I expect we will see more investments in the coming years. As big companies invest in blockchain as a whole, it will become more easily applicable to your business processes, while also lowering uncertainty about potential risks around the still relatively new technology.
As usual, the CSCMP event brought with it great opportunities to network and learn from the most forward-looking minds in the supply chain field. Increasingly, it’s clear that how companies navigate, adopt, and institutionalize next-generation tech with their established business processes will define their success in the coming years.