Invisibility

Tomorrow, if a business can’t link to a trading partner’s blockchain, that business won’t really exist

Are your teams having to manage thousands of portals
Are you still on paper or on the phone?

Your teams have EDI to move the data, but it still takes forever to connect.
Do you even deal with suppliers or customers without EDI?

Working with a business is as simple as and no more complex than getting their trading address, much like a web address: think “blockchain://business.com”.

All your business transactions and events ‘drop into’ your public blockchain, with the appropriate security. Any companies you do business are ‘subscribed’, and events and transactions flow between your organizations as they occur.

This is the second in a series of blogs examining supply chains as ‘digital computers’, and the varieties of ways adopting digital ideas will completely change the nature of supply chain evolution, fitness, and competitiveness. Invisibility falls into the “Network” element of the model digital supply chain.

I’ve discussed supply chain blockchain to many executives in the last few years, and I get a… “this is on a hype cycle” response fairly often. There was a great article by Clifford Stoll in Newsweek 1995 — Google it and weep — where we were led to believe that Google and Amazon were destined to fail in a giant bonfire of hubris.

Yes, in 1995 it was all a hype cycle too:

“Visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms. They speak of electronic town meetings and virtual communities…

Then there’s cyberbusiness. We’re promised instant catalog shopping — just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete.”

I don’t need to really say more but suffice it to say that if your business is not “On Internet” today, it effectively doesn’t really exist.

No catalogs, no ordering, no delivery tracking, no… “how does it look in your house in 3D”!

Amazing to consider where we are today. But now to think about how much further we will go.

Blockchain is where we will go much, much further.

Put “bitcoin” and blockchain out of your mind, and invest more time in thinking about securely sharing every relevant event, transaction, inventory flows, logistics information, customer inquiries, factory line yield percentages…

Every element of information you could conceivably share as business-relevant information between your company and a supplier, or service provider, or customer will be in a great endless ‘blockchain’.

You, your suppliers, customers, and service providers will connect via blockchain and use to drive their businesses, much as your laptop connects to a “Google Drive” with effectively endless capacity for storage.

A diagram illustrating blockchain at this point would be effective

This data clearly is sensitive — The blockchain your core will use will be tamper-proof.

The blockchain your “supply chain machine” core uses will be completely secure against unwanted visibility

• the data will be effectively and unbreakably encrypted
• the blockchain your core will use will be tamper-proof
• any alteration to a block cannot be stored because the multi-party validation between your business and the business you connect to will fail

If your business hasn’t shared a blockchain address, it will not be visible to other businesses, and if a business attempts to access your blockchain, it won’t even get a response since it’s not ‘whitelisted’. When a transaction, event, or other piece of business data is stored, it will be ‘visible’ to business partners within a fraction of a second, near real-time.

If it’s so great, why isn’t it everywhere yet.

Maybe it is, and you’re not aware. As we speak Fortune 100 companies, have active, global blockchain systems storing contracts, orders, deliveries, material specifications, supply chain events, test data, serialization, and more. These have been implemented far beyond the scope of ordinary EDI-based or portal-based transactions.

Their key benefit is to completely secure from the original to the consumption key the high-tech materials which have a very high value. Paying for the ‘gold standard’ part and getting the ‘rusty nail’ substitution can be quite expensive, and payback in preventing counterfeits is large.

The challenge for the early adopter blockchains has been to get businesses connected naturally. A business operating on email and portals by passing EDI straight into blockchain is not an easy leap, but it is taking place today.

Open-source tools and networks are freely available now to connect businesses directly, through gateways, or to host the blockchains for them. The technology is quite surmountable.

The interesting notion is what happens almost immediately — there are businesses which are connected, and ones which are not connected. The connected businesses secure more business almost immediately. The the most connected business are the easiest to work with– the most transactions, the most events, the most visibility to contracts, orders, deliveries, specifications, events, test data, and more, and they naturally… get more business. This is no longer a choice it is now a requirement of doing business for large companies.

But now everyone looks on ‘the web’ — If you’re not there, you’re invisible

Which brings us back to my original point. It used to be the case that ‘being on Internet’ was optional, you could still function as an ongoing concern without a web presence, without catalogs and orders and status messages. But now everyone looks on ‘the web’ to find businesses they want to work with.

If you’re not there, you’re invisible, and likely to be not too functional (unless invisibility is essential to the business — the domain of dubious enterprises, but even there we had ‘dark web’ exchanges!. I’d have to say that if you aren’t indexed on Google, for all intents and purposes you don’t really exist.

Similarly, supply chains are linking with each other via blockchain — slowly at first, but soon to be increasing geometrically. Each enabled party will want to connect to other enabled enterprises. As with all technology which dramatically increase scalability and reliability of supply chain simultaneously decreasing costs. Most importantly blockchains are increasing the ‘adaptability’ of supply chains to rewiring fast… the early adopters will race ahead of competition in market share and in the supply chain evolutionary race.

Companies linked in blockchain groups or ‘consortia’, are already reaping benefits. The first number I’ve seen is “0.5%”. That’s the hard cost reduction in direct materials procurement using blockchain-linked commerce to create ‘frictionless’ and errorless flow. And as they say, that’s landed, and expanding.

Ask Amazon, or Google how valuable “the web” has been since 1995!

Internet has connected companies for what I’ll say are “product, positioning, pricing, promotions and purchasing” which from the standpoint of evolutionary speed was a dizzying leap. Adapting to competition has become so rapid, it’s hard to even be aware of the constant minute adjustments.

As internet has accelerated sales & marketing evolution, blockchain is now prepared for supply chain. The time of months-long trading relationship setup, shifting supplier scenarios for supply chain disruptions, tortuous tracking and past-due planning is over. The time for highly accelerated evolving supply chain is ready.

When you see Samsung or Wal-Mart or Apple or Amazon requiring blockchain for inventory or collaboration or audits or services you will know the future has arrived.

Be visible first!

Opinions expressed here are solely my own and do not express the views or opinions of my employer, Accenture. Please feel free to reach out to me directly on joseph.d.francis@alumni.caltech.edu if you have any questions or would like understand how these blogs may apply to your supply chains.