Blockchain Remains Top of Mind for Supply Chain Managers, Says SAP

When the 7th Annual Global Supply Chain Excellence Summit convenes next month at the USC Marshall School of Business, Blockchain will be addressed under the auspices of the conference theme: “Evolution-Revolution-Disruption.”

According to SAP, this was one of the key issues addressed at last spring's Gartner Supply Chain Executive Conference in Phoenix, AZ. Richard Howells, VP, Solution Management for Digital Supply Chain, recently shared his impressions with SCMR in this exclusive interview.

SCMR: With all the skepticism about block chain, can you give us an example of how it is being used by a few multinational shippers?

Richard Howells: We see several use cases for blockchain in complex global supply chains, for example in logistics processes, it has been estimated that 90 percent of global trade is carried out by ocean shipping industry, and the cost of trade related documents and administration is estimated to represent up to 20 percent of the actual transportation cost.

SCMR: And this process relies on a web of disparate systems across freight forwarders, shipping brokers, port authorities, ocean carriers and trucking companies?

Howells: That's right. Imagine if we could digitize the process to collaborate across companies and authorities, reduce the paperwork, streamline cross boarder movements, and reduce fraud and errors. Blockchain has the potential to help enable us to manage and track a “digital twin” of shipping containers across the world.

SCMR: What about tracking and tracing?

Howells: We view this as and ‘Genealogy Process’. In many industries, we are continually pushing for improved traceability by both regulatory bodies, and consumers. For example, in the food and beverage industries, we are seeing an increased demand for local and organic products with a clear proof of origin and sustainability. We see companies leveraging blockchain to track products through the supply chain and providing consumers an app to tell them the provenance of a product, where it came from and the journey from source to store.

SCMR: Any thoughts on Asset Lifecycle Management?

Howells: If you have capital intensive, business critical assets, which are expected to be in use for 10 to even 30 years, it's vital to pay attention to this. Each asset, over its lifespan will go through numerous upgrades, repairs and refurbishments and may also go through numerous owners. This ensures that all the parts used to perform these activities are of high quality, from reliable, legitimate sources and are critical for end user or passenger safety and security. Ensuring the traceability and security of this data is critical to ensure the history and provenance of parts, the or the maintenance and repair history of a capital-intensive piece of equipment.

SCMR: So what is your general conclusion?

Howells: Blockchain, along with other technologies such as IoT, predictive analytics, and machine learning has the potential to manage assets from the design of the product, through manufacturing and throughout its active life and keep a secure, digital twin that can be tracked and analyzed for a complete history of that asset.

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