October 22, 2019 – As we are looking at the forefront of the 2020 decade, we often think and speculate about how things will change in the new decade and beyond. Technology was and will be a driving force that will continuously reshape businesses and economies. With technology as a refining agent, systems such as the supply chain, has undergone changes that marked the use of computers, advance systems and smart tracking to optimize its overall performance.
With emerging technologies such as Blockchain, Artificial Intelligence and the Internet of Things (IoT) that are disrupting the concept of how supply chains function. These impact technologies are a catalyst in further ingraining intelligence into the system through traceability, transparency, real-time tracking and quantifying the hidden measures in the supply chain.
Blockchain and Supply Chain
How do we further unlock value and push efficiency towards new levels of optimal performance in the most complex supply chain that are integrated with a meshed financial system involving bonds, guarantees, insurance and pay out to all participants? The answer is to simplify and automate the governance of information in order to seamlessly, let the cash flow without the traditional time spent on waiting based on clearance desks and the dependency on finance managerial decisions.
Through Blockchain’s distributed ledger in the multiple participants of a supply chain, a case system of trust based on utility and moving financial transactions to mirror asset or value movements can help vendors realize cost-efficiency margins leading to better returns in their economic participation.
Blockchain’s benefit of realizing value proposition is not merely limited to participants, but it also extends to the fight against smuggling as ports will be operating jointly on parallel Blockchains – leaving no room for unregistered cargo. The quality and value of goods will be able to be enter the market at their pristine condition as the movement has been automated – leading to fresher, better condition quality of the goods destined for markets.
This impacts economies that are reliant on domestic and local supply chain, leading to greater reduction of the loss aspect, in which economies will flourish based on optimal condition of its credits and goods.
In one of the most challenging supply chain use cases involving the shrimp exported from India to the United States, IBM has joined forces with Walmart for an “end to end” blockchain use case of traceability of shrimp exported across the ocean. The project started in 2017 under IBM’s Food Trust platform, a Blockchain enabled food supply chain. The impact of IBM’s shrimp use case extends also towards the aquatic farming community of Andhra Pradesh, where farmers are able to benefit from the program’s skills training and development for sustainable and responsible farming.
Internet of Things and Supply Chain
In the future, the real-time tracking of singular cargo and individual items will become a reality. Through the working of sensors that continually send, receive and transpose data from its supplier and the parties involved. The futuristic application enables a higher level of value to be unlocked based on this use case. First is the customization and retelling of the product’s journey from processing towards its market destination. It will be possible to trace each item in a freight based on packaging. The second value states that the operating conditions such as shipment and the travelling conditions are being monitored through scientific analyses. This puts the supply chain at an evolving capacity as it is learning the best occurrence of what conditions are the ones best met to achieve pristine quality of goods upon arrival. The third realization of value is the traceability of its whereabouts, which has a high stake in the values of fulfillment and finances that are ready to be moved upon the recipient of these goods.
IoT presents an aspect of automation where port technologies can effectively “see-through” these containers of goods, where sensory systems can help prepare port conditions to quickly extract and move these goods to their second consignment destinations.
IoT will impact not only the supply chain but also its adjacent industries of logistics, shipping and warehouse in terms of operating smarter with a higher level of awareness based on goods and their travel conditions. The impact of these automation and smarter degree of operating will enable supply chains to drastically cut down on their expenses based on losses.
Artificial Intelligence (AI)
Artificial Intelligence in application will allow supply chain systems to make decisions on route, consignment and contingencies based not on human intuition, but based on analytical awareness of the situation. AI systems will be able to navigate the clustered, complex and thousands of moving parts of the supply chain with awareness on their status and operating conditions – much better than a team of veteran administrators.
With the resources involved in the creation of smarter AI that focuses on complex learning curves and deeper decision making based on simulated scenarios, AI systems in the supply chain can be integrated as a vital backbone in order to manage some of the most complex scenarios in the chained decision making. AI systems can be applicable and be working in harmony with other catalysts such as Blockchain and IoT – therefore forming a new structure of efficiency based on automation.
IBM once again takes the lead in reimagining the Supply Chain based on the convergence of impact technologies such as Blockchain, AI and IoT. With the launch of Sterling Supply Chain Suite, it allows IBM partners and clients to integrate their data networks through the many API services running under the Sterling Supply Chain. It can be noted that IBM is currently partnered with Maersk in the creation of a Blockchain network of interoperability for the logistics and shipping industry.
Reinforcing Supply Chain with Security and Sustainability
As supply chains are increasingly reliant with unified networks in order to maintain operations, the increasing risk when it comes to network vulnerabilities on 5G, 4G and mobile signals have also been stated by security experts. With the exponential expansion of supply chain with each embedded technology, the risk factors associated with the practice also increases. What could potentially hurt these smart supply chains are the risk actors and agents that are yet to be discovered where these are serious points of exploit.
In the defensive measures to combat risks, the more complex the system is, the more complex are the escalating risk factors in the point of an incursion or security breach. Businesses and industries are aware of the steep learning curve of the evolving threat models and are putting AI at the forefront of the operations where AI are monitoring, learning and applying timely patch updates as a base deterrent.
KT, a South Korean telecom leverages Blockchain technology to bolster its network security and using it as a foundational structure in building a more complex and secured operations network.
Using AI’s discovery ability that are augmented by machine learning to outline threat evolving models based on simulation of threat cases, AI are problem solvers based on multiple cases of thinking. Traditionally, security teams are hard pressed to keep up with the escalating and evolving threats, but with an AI backed threat analysis and monitoring system, the supply chain is in a better position to discover and breakdown the occurrence of these threats that can help administrators enact contingencies and policies to bolster the overall security of these systems.
Automation as a Catalyst Leap
From manual supply chains to automated supply chains, the huge strides in terms of structure, technology and efficiency are determinants where the business or economy is maximizing its gain while suppressing its losses incurred. While there are advanced supply chains operating in the most advance cities or ports in the world, there are still fragmented or manual supply chains that are operating in the developing regions of the world.
These impact technologies of Blockchain, AI and IoT are transformative systems that will lead to greater realizations of value and profit while driving down the rate of losses. The results are businesses are able to operate seamlessly with a highly dependent supply line while economies are able to maximize their participant dividends due to new levels of value proposition being reached. In a way, supply chains are transforming economies to a more efficient and optimal deliverance methods. That is a catalyst of improving local economies in the years to come.
This article is published on BitPinas: [Feature] Impact Technology as Catalyst in the Supply Chain
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About the Author:
||Randy Knutson is the President / CEO of DynaQuest Technology Services Inc. He is a former CIO and CTO executive, with over 35 years of experience, in looking for technology innovative solutions for business.Most recently he has started several Philippine specialized BPO companies, with a focus on Blockchain and Cryptocurrency in the Fintech and Healthcare service sectors.|