Of the 11 leading disruptors identified by Deloitte and MHI in the 2018 MHI annual industry report¹, Blockchain ranked #10 from the top (i.e., the second slowest – just ahead of artificial intelligence – for adoption over the next five years.) It seems that a clear understanding of the technology is a key barrier to adoption (29 percent), followed by the lack of a clear business case (26 percent). These sentiments were supported by the panelists and audience.
As supply chain practitioners, the questions foremost on our minds are, “Does it matter? Will Blockchain pass or is it here to stay?” Now, we can only guess, yet we all need to inform ourselves to make the best calculated decision to set the course for future success. If or when there is a mass adoption of the technology in supply chain, we better enable ourselves to accommodate it as it may – than be a case of survival.
The panel discussion was led by industry experts: Jean-Louis (JL) Marechaux, Head of Technology at JDA Software Labs; Andy Moses, SVP, Product Management at Penske Logistics; Troy Schenk, Warehouse Systems Manager at DOT Foods; and Gaurav Malhotra, EY Digital Supply Chain & Operations, IoT and Blockchain Leader.
Adoption of Blockchain will be dependent on standardization. No standard means no way to ensure Blockchain framework interoperability (i.e., Blockchain X could not talk to Blockchain Y). The lack of standards also raises the problem of which Blockchain framework to select. Will the Blockchain frameworks be interchangeable? There are a couple of initiatives around standards such as Blockchain in Transport Alliance (BiTA), Hyperledger, the Trusted IoT Alliance, the Enterprise Ethereum Alliance, and the International Organization for Standardization: ISO 307 (Blockchain & Distributed Ledger).
Leading the charge on Blockchain in supply chain is the Hyperledger Foundation. Hyperledger is an open source collaborative initiative to advance cross-industry Blockchain frameworks. That said, leaders will not only come from technology providers, but also emerge from users and industry disruptors, like the organizations represented by the panelists that participated in the FOCUS session.
Penske Logistics sees potential benefits for its customers operating in the manufacturing, food and beverage sectors, as well as other industries. The company is interested in the potential opportunities that Blockchain can deliver. So much so, that Penske became a corporate member of BiTA in the past year.
BiTA is a relatively new organization that provides a forum to promote and educate, while encouraging the development of Blockchain applications and standards, within the transportation industry. Since joining BiTA, Penske has continued to learn more about the benefits of Blockchain. “We are actively monitoring any emerging technologies, including Blockchain, that can position us to drive efficiency and find better solutions for our customers,” said Penske Logistics’ Andy Moses.
Blockchain is recognized as a disruptor to the way supply chains operate. It is acknowledged that it will become an integral part of the macro supply chain network. However, the interdependence on players is key to driving both the pace of adoption and achieving the envisioned footprint. Understanding how Blockchain could be leveraged to address specific business problems in your organization is critical. If you don’t have the skills internally to start a Blockchain initiative, we recommend that you find a skilled partner.
Learn more about good uses for Blockchain and download JDA’s POV on Blockchain.
1The 2018 MHI Annual Industry Report Next-Generation Supply Chains: Overcoming Barriers to NextGen Supply Chain Innovation, Deloitte and MHI, 2018, https://www.mhi.org/publications/report.
Thank you ElMarie for sharing these insights on this emerging technology, especially the 4 use cases.