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Digital Supply Chain STOKED! – Blockchain in Supply Chain

Monthly blog featuring George Bailey, the Managing Director of the Digital Supply Chain Institute interviewing the Blockchain team at the DSCI

George is on the Advisory Board of Lockheed Martin and the American Productivity and Quality Center. He is the Executive Professor of Digital Innovation and Management at Pepperdine University and the Chairman of the Jackson Hole Ocean Sailing Team. George was based in Tokyo as Sony’s Chief Transformation Officer reporting to Chairman Sir Howard Stringer.  Previously he was a member of IBM’s leadership team and the global lead for the PriceWaterhouse Strategy Change business.

“I am lucky enough today to interview my colleagues, Amy Millette , Shawn Muma and Sugathri Kolluru

Amy Millette is the Vice President for Program Operations at the Center for Global Enterprise, where she is responsible for the management and evaluation of CGE’s key program initiatives.

Shawn Muma is the Project Leader for the DSCI’s Blockchain Research Initiative, responsible for the execution of Blockchain Pilots and research initiatives.

Sugathri Kolluru is an Associate at the Center for Global Enterprise, assisting Amy and Shawn in the Blockchain initiatives.

Why is DSCI working on Blockchain PoC?

We realized that the ratio of noise to signal was just too bad in the Blockchain field. Too much hype! The only way to help companies is to find an area of focus, pilot Blockchain, and measure results like crazy.

Will my company be impacted by Blockchain?

Likely, but not for a few years. Considering the attention and hype around Blockchain technology one might assume that is a miracle cure that will provide unparalleled value overnight. It is not. But it is a new technology that might be able to benefit organizations in need of security, scale, trust, and accountability in their business processes, particularly those systems or processes that involve a lot of external collaboration and interaction, like the supply chain. Blockchain could enable business process transformation between companies and across geographies. Many companies are experimenting with Blockchain in their supply chain (e.g., Maersk, Walmart, and the Govt. of Dubai) but no one has rolled it out and ramped it up for full-scale implementation. DSCI works with companies to develop a target part of the supply chain for a pilot and good metrics for the pre- and post-Blockchain state to help evaluate the true impact of the technology.. 

How do I get started with Blockchain?

Because Blockchain is potentially a game-changing transformation technology, DSCI recommends that companies conduct a pilot test to establish how Blockchain can improve results. DSCI has several supply-chain focused pilots underway. DSCI assists with use case selection, establishing success criteria, identifying the best Blockchain partner for the selected use case and measuring and evaluating the results.

To summarize, the following steps are followed to ensure results in discovery through implementation and evaluation:

  • Profile: Evaluate potential Blockchain opportunities and use cases and select the area that will demonstrate results but be less complex to execute
  • Proof of Concept: Identify and create basic Blockchain code for the most lucrative or impactful avenues identified in the previous phase. Establish measures and expected results.
  • Pilot: Pilot the Proof of Concept code and evaluate performance using criteria such as cost, speed, quality, visibility
  • Scale:  Evaluate the pilot against expected cost and benefits and decide to scale, if appropriate. Plan roll-out plan for the affected business areas and consider hiring new skills, retraining and education.

Are companies setting a scorecard/evaluation protocol before they do a pilot and if so what did it show you afterward?

DSCI works with its Member companies to develop a scorecard complete with the most important metrics. In addition, DSCI is working on a proprietary Blockchain Return Index (BRI) to provide a standard benchmark for analyzing Blockchain business cases and their impact. The BRI will standardize Blockchain assessments and enable companies to make strategic decisions about Blockchain implementations across different use cases. We have completed one Pilot and are evaluating scaling across the entire organization. There were significant savings in cost, speed was improved, and the expectation is that revenue will increase.

Does it matter what Blockchain platform you chose? Does it matter if you use public or private Blockchain? 

Yes. The target area in a company’s supply chain where the Blockchain application is applied, the volume of transactions in the process/target area and the company’s need for privacy are a few of many factors that should influence which platform to select. We have seen Blockchain fail, but it is most often attributable to the use-case versus the Blockchain platform.

Does Blockchain play a significant role in emerging markets vs established markets?

Think of Blockchain as a transformation tool that enables supply chain transparency and security. Emerging vs. established markets is not the question as today’s supply chains traverse both markets. When properly used it provides actionable data that enables better business decisions and more efficient operation. Blockchain could help in an emerging market where you do not have perfect knowledge of your suppliers. Some Blockchain providers use the term “provenance” and refer to the ability to confirm the source or origin of the product.

Do you have any additional advice?

You should set your expectations appropriately. Blockchain is an emerging technology with the serious potential to alter the way you manage your suppliers and customers alike. We are talking major structural changes in how your business will operate in the future. However, it is an emerging technology where you need to build knowledge in its capabilities while recognizing that scale adoption requires significant change across internal and external business processes and the systems and skills needed to support those processes.  Investigate, pilot, assess and then position for success.

Thank you Amy, Shawn and Sugathri. I am STOKED about how Blockchain will help companies accelerate their transformation efforts to Digital Supply Chain!