Tag Archives: Technology

How Can Blockchain Technology Disrupt Supply Chain Finance?

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How Can Blockchain Technology Disrupt Supply Chain Finance?

How Can Blockchain Technology Disrupt Supply Chain Finance?

Supply chain finance is essential for ensuring smooth transactions and cash movement amongst supply chain players. The traditional supply chain finance system, on the other hand, is frequently plagued by inefficiencies, a lack of transparency, and expensive costs.

With its decentralized and transparent nature, blockchain technology has the potential to revolutionize supply chain finance. This article will look at how blockchain technology can disrupt supply chain finance while also providing major benefits to organizations involved in supply chain operations.

Recognizing Supply Chain Finance

The financial activities and processes involved in managing cash flow and working capital within a supply chain are referred to as supply chain finance. It covers a wide range of financial services, including invoice finance, trade credit, factoring, and supply chain risk management. Traditional supply chain finance systems rely primarily on intermediaries, manual processes, and paper-based paperwork, which causes delays, inaccuracies, and inefficiencies.

Blockchain Technology is Disrupting Supply Chain Finance

Increased Transparency

Blockchain technology creates a decentralized and transparent ledger that records and validates supply chain transactions. All supply chain actors, including manufacturers, suppliers, distributors, and financial institutions, can access a shared, immutable ledger in real time.

Cost savings and increased efficiency

Traditional supply chain finance processes entail a lot of paperwork, manual verification, and a lot of middlemen. These procedures are time-consuming, prone to errors, and have substantial administrative costs. Blockchain technology automates and simplifies these operations, removing the need for intermediaries and minimizing the requirement for manual intervention.

Transaction Settlement in Real Time

Transaction settlement delays in the traditional supply chain finance system are common, affecting organizations’ cash flow and working capital. Blockchain technology provides real-time transaction settlement since it runs on a decentralized network that instantaneously validates and executes transactions.

Improvements in Supply Chain Visibility and Traceability

Blockchain technology allows for complete visibility and traceability of goods and transactions throughout the supply chain. Each blockchain transaction provides information such as product origin, manufacturing methods, transportation, and funding.

Access to Alternative Financing Alternatives

Blockchain-based supply chain finance platforms can help organizations gain access to alternate financing solutions. Physical assets or bills can be turned into digital tokens and traded on blockchain networks through tokenization.

Read more at How Can Blockchain Technology Disrupt Supply Chain Finance?

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How to analyse third-party risks in the supply chain

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How to analyse third-party risks in the supply chain

How to analyse third-party risks in the supply chain

What are the cybersecurity, financial and other risks posed by third parties in the supply chain, asks Sri Rangachary, a Senior Director with ISG
Do you truly know your exposure to risk? With every third-party supplier an organisation uses, there is increased risk of being exposed to a security breach, a damaging reputational issue, or a human rights or environmental issue that could be buried within the supply chain.

We tend to think of disruptive events as happening once in a lifetime, but in reality, we should plan for them to be a regular feature of supply chains and manage them accordingly. Proper governance and rigorous supply chain review are critical.

What are the risks posed by third parties in the supply chain? The most obvious risks are cyber security or financial. Imagine if one of your supplier’s suppliers has a ransomware attack that spreads up the chain. Your security is only as strong as the weakest link in the supply chain. An event like this could severely disrupt your ability to do business.

But there are less obvious, newer risks from suppliers. Increasingly we’re seeing emerging threats from areas like environment, social and governance (ESG), and human rights.

Perhaps there are modern day slavery practices that you haven’t spotted, deeply embedded in the supply chain, or a supplier has been found guilty of corruption, or other unethical behaviour. It’s not enough anymore to claim ignorance, and you could lose your hard-won reputation by association with such practices.

You need the right processes in place to catch and head off these kinds of issues, early on.

Managing supplier relationships

The key to good supplier management is good information. What information do you need to mitigate your risk? I’m often asked: “How do I assess the risks from my supply chain?” The answer is in the information you get from that chain.

Look first at the information you have internally available. What is the acceptable risk level in your own business? Every organisation will have a different appetite for risk. A risk heat map is a great way to visualise the impact and likelihood of different risk categories, so you can develop the appropriate response.

The role of technology

It’s simply not possible for a person – or even a full team – to monitor every change and movement that could pose risk within the supply chain. This is where technology can help.

A good third-party risk management system can give you the information you need to monitor and mitigate risk, as well as keep on top of contractual commitments and the performance of your suppliers (including their ability to meet those commitments).

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AI This. Not So Fast.

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AI This. Not So Fast.

AI This. Not So Fast.

Grounded during this pandemic, and unable to interact with clients in person, I try to write 3,000 words a day. Morning after morning, fueled by good black coffee, I type away. I share insights, based on research, for the supply chain leader. I write for this blog, craft reports from research for our newsletters, create blogs for Linkedin, and build articles for Forbes. I am also developing a framework for my new book. Stay tuned.

Frequently, when I post about an issue, a well-intending consultant or an aggressive business development executive will tout the evolution of the autonomous supply chain as the answer. The comment is usually something like, “Implement RPA or AI to solve this problem.” Or, “If you need an answer, implement my solution.” When this happens, I sigh. This type of response is just not helpful. Everyone tries to be a cool kid with over-zealous comments on posts, but unfortunately, there is no truth in advertising in the supply chain market. (If the industry were grounded in truth in advertising repercussions, there would be far fewer signs in the airports from consultants and technology providers.)

Background

The autonomous supply chain is a vision, but it is not today’s reality. I find in my Supply Chains to Admire research that 96% of companies (when compared to their peer groups) are unable to drive improvement while delivering higher performance year-over-year on a balanced scorecard of growth, inventory turns, operating margin and Return on Invested Capital (ROIC). I define supply chain excellence as year-over-year performance better than the peer group on this balanced scorecard. Ecolab, L’Oreal, and TJX are exceptions. They did it. Each company ranks in the 4% of companies beating their peer groups.

Shifts in Technology

Data science and cloud-based delivery offer promise, but supply chain planning is morphing slowly. …and at the edges. No technology company is attacking supply chain planning at the center.

Let’s celebrate that over the last two years, there were four significant acquisitions by traditional supply chain planning providers to deepen analytics capabilities:

  1. 07/2018 JDA purchases Blue Yonder (Purchase price confidential.)
  2. 11/2017 Logility acquires Halo for 9.3 M$
  3. 10/2019 Llamasoft merges with Opex (Amount not disclosed.)
  4. 06/2020 Kinaxis buys Rubikloud for 60M$

Examining The Current State

The analyst mindset is to track software evolution by taxonomy where like solutions are grouped, named and tracked. Supply chain planning is a subset of the decision support technology taxonomy. Other forms of decision support include revenue management, trade promotion management, cost-to-serve, and network design. Now in its fifth decade of evolution, supply chain planning is starting to change. The shifts are happening slowly at the edges. I am celebrating, but my hope is to drive seismic changes from the center. What we have now is not good enough, and I have my fingers crossed that COVID-19 will drive a significant and positive shift by highlighting the deficiencies.

Read more at AI This. Not So Fast.

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Is Virgin Hyperloop One going to change the supply chain game?

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Here is a breakdown of the potentially industry disrupting impact points that the integration of hyperloops into global supply chain could have.

Speed

So, let’s say we get a hyperloop built in the kingdom that runs from the port city and modern commercial hub of Jeddah in the West, to the city of Dammam in the East. The 844 mile journey takes over 12 hours by road. With its projected top speed of 760mph, Virgin Hyperloop One’s train could cut that travel time to just over an hour.

In June, Port Technology magazine interviewed Ryan Kelly, Virgin Hyperloop One’s Head of Marketing raised concerns about the current global supply chain’s ability to measure up to the logistical demands of the coming years. “We are not poised to meet the demand of the coming decades. Today, on-demand deliveries are novel. Tomorrow, they will be the expectation. E-commerce, set to grow to $4 trillion globally by 2020, is driving a dramatic shift in both consumer and business behavior. The market for express and parcel freight is set to grow to $516 Billion by 2025– this expanding market is currently limited by airline/airport capacity challenges.”

Kelly believes that, by being able to deliver goods across long distances, at the speed of air freight and near the cost of conventional trucking, hyperloop technology “can serve as an integrated logistics backbone, supporting the fast, sustainable and efficient delivery of palletized cargo. Deliveries can be completed in hours versus days with unprecedented reliability.”

Sustainability

The ability for this new mode of transportation to support high-speed, high-reliability logistical solutions across vast distances is obviously a game changer for supply chains currently bogged down by air, sea and land traffic congestion. Virgin Hyperloop One’s cargo subsidiary, DP World Cargospeed, will reportedly be a carbon emissions neutral, electrically powered alternative to current freight strategies, given that, according to a UK government survey, “heavy goods vehicles are currently estimated to account for around 17%1 of UK GHG emissions from road transport and around 21%2 of road transport NOx emissions, while making up just 5% of vehicle miles.”

The ability for hyperloops to transport freight that otherwise would make its way via truck, cargo ship, cargo plane (by far the most environmentally harmful form of transportation) and traditional rail freight alternatives is a strong argument for its adoption.

According to Kelly, Virgin Hyperloop One is currently setting its sights on eroding the market share of supply chains currently taken up by air freight. “We’re focused high-priority, on-demand goods — fresh food, medical supplies, electronics — the same goods often delivered via air. Hyperloop doesn’t make sense for carrying things like coal and other bulk goods which can be on the back of a truck/train for weeks with little impact,” he explains. “Air cargo currently accounts for less than 1% of world trade tonnage, yet 35% of world trade value is carried by air. This is an expanding market that is currently limited by capacity challenges.”

Read more at Is Virgin Hyperloop One going to change the supply chain game?

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Turkcell’s supply chain management transformation is driven by technology and communication

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Ali Türk, Executive Vice President of Supply Chain Management at Turkcell, discusses how Turkey’s largest mobile operator is driving efficiency with customers at the forefront

Turkcell, the largest mobile operator in Turkey, has undergone a significant shift in its procurement and supply chain operations driven by a radical ideological change to the business itself. “Turkcell is a unique company, a digital operator,” says Ali Türk, Executive Vice President of Supply Chain Management at the firm. “We are dealing not only with the mobile part, but also the commerce part: it’s one entity.” With a focus on establishing a high quality internal infrastructure, technology and network infrastructure, and meaningful, functional digital services, Turkcell has undergone a structural change that highlights the importance of procurement to its wider strategy. As part of supply chain management’s realignment as a strategic function, Turkcell established a dedicated procurement committee to drive positive change. Meeting every week alongside the CEO, Murat Erkan, the committee makes key decisions on the company’s biggest purchases. While these make up 3% of the firm’s purchases at large, their combined volume equates to 80% of the total made by Turkcell. “All of the company’s top executives are fully involved in these processes, and they acknowledge and evaluate all of the aspects of procurement investments and strategy.” Not only that, but a unification of operations between teams has been achieved through the adoption of agile management methodologies, enabling a consistent thread for supply chain management strategy to follow throughout the organisation.

These structural adaptations are bolstered by the application of disruptive technologies, driving efficiency and transparency at Turkcell. However, Türk stresses that digital transformation is, to Turkcell, a tool rather than a goal. “Digital transformation is a must to survive in our era,” he says. “It enables us to focus on optimising costs in a sustainable structure, to increase revenues, and to increase the level of quality we offer our customers.” A particular area of interest for Türk is robotic process automation (RPA) and the benefits it could have for internal teams. He adds that the application of this technology will be based on what those teams themselves view as the areas that would benefit most from automation, and the freeing up of staff from repetitive tasks that it would enable. “We have procurement departments, logistics departments, real estate, construction and site acquisition departments, and they are each highlighting their requirements,” he says. Once those needs are defined, they each collaborate with Turkcell’s ICT department to drive the gradual rollout of RPA through specific digitalisation departments. “For example, supply registration, fee operation, calculation of monthly payments, operation of the tender process, opening site acquisition and scrap sales orders; they’re all operational issues and ritual issues,” says Türk. “Right now, we are developing some use cases and we will forward those tasks to RPA.”

Read more at Turkcell’s supply chain management transformation is driven by technology and communication

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How To Improve Supply Chains With Machine Learning: 10 Proven Ways

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Bottom line: Enterprises are attaining double-digit improvements in forecast error rates, demand planning productivity, cost reductions and on-time shipments using machine learning today, revolutionizing supply chain management in the process.

Machine learning algorithms and the models they’re based on excel at finding anomalies, patterns and predictive insights in large data sets. Many supply chain challenges are time, cost and resource constraint-based, making machine learning an ideal technology to solve them. From Amazon’s Kiva robotics relying on machine learning to improve accuracy, speed and scale to DHL relying on AI and machine learning to power their Predictive Network Management system that analyzes 58 different parameters of internal data to identify the top factors influencing shipment delays, machine learning is defining the next generation of supply chain management. Gartner predicts that by 2020, 95% of Supply Chain Planning (SCP) vendors will be relying on supervised and unsupervised machine learning in their solutions. Gartner is also predicting by 2023 intelligent algorithms, and AI techniques will be an embedded or augmented component across 25% of all supply chain technology solutions.

The ten ways that machine learning is revolutionizing supply chain management include:

  1. Machine learning-based algorithms are the foundation of the next generation of logistics technologies, with the most significant gains being made with advanced resource scheduling systems.
  2. The wide variation in data sets generated from the Internet of Things (IoT) sensors, telematics, intelligent transport systems, and traffic data have the potential to deliver the most value to improving supply chains by using machine learning.
  3. Machine learning shows the potential to reduce logistics costs by finding patterns in track-and-trace data captured using IoT-enabled sensors, contributing to $6M in annual savings.
  4. Reducing forecast errors up to 50% is achievable using machine learning-based techniques.
  5. DHL Research is finding that machine learning enables logistics and supply chain operations to optimize capacity utilization, improve customer experience, reduce risk, and create new business models.
  6. Detecting and acting on inconsistent supplier quality levels and deliveries using machine learning-based applications is an area manufacturers are investing in today.
  7. Reducing risk and the potential for fraud, while improving the product and process quality based on insights gained from machine learning is forcing inspection’s inflection point across supply chains today.
  8. Machine learning is making rapid gains in end-to-end supply chain visibility possible, providing predictive and prescriptive insights that are helping companies react faster than before.
  9. Machine learning is proving to be foundational for thwarting privileged credential abuse which is the leading cause of security breaches across global supply chains.
  10. Capitalizing on machine learning to predict preventative maintenance for freight and logistics machinery based on IoT data is improving asset utilization and reducing operating costs.

Read more at How To Improve Supply Chains With Machine Learning: 10 Proven Ways

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Gartner: top 8 supply chain technology trends for 2019

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According to Gartner, while many of these supply chain technology trends have not yet been widely adopted, they will have a broad industry impact this year.

Gartner has highlighted the key supply chain technology trends which they warned must not be ignored. Christian Titze, research vice president at Gartner, said: “Within the next five years if half of the large global companies are using some of these technologies in their supply chain operations, it’s safe to say that the technologies will disrupt people, business objectives and IT systems.”

The top 8 supply chain technology trends in 2019 are:

#1 Artificial intelligence (AI)

According to Gartner, AI technology in supply chain operations is all about augmenting workers. Thanks do developments in self-learning and natural language processing, AI is now advanced enough to automate numerous supply chain processes such as predictive maintenance and demand forecasting.

#2 Advanced analytics

Thanks to the increase in IoT data and extended external data sources such as weather or traffic conditions, analytics is going to get a lot more advanced. Gartner predicted that organisations will be able to anticipate future scenarios and make better recommendations in areas such as supply chain planning, sourcing and transportation.

#3 IoT

Gartner has reported seeing more supply chain practitioners exploring the potential of IoT. However, according to Gartner, new IoT applications involve more than just passive sensors.

#4 Robotic process automation (RPA)

Excitement has been building around RPA for some time now, and its place in the enterprise has seen a lot of maturing this year. Like AI, RPA, according to Gartner, is about augmenting workers.

#5 Autonomous things

Autonomous things use AI to automate functions previously performed by humans, such as autonomous vehicles and drones. They exploit AI to deliver advanced behaviours that interact more naturally with their surroundings and with people.

#6 Digital supply chain twin

A digital twin is a digital replica of a physical asset, whether that is a product, person, place or system.

#7 Immersive experience

Augmented reality (AR) and virtual reality (VR) technologies have long been touted as the next big thing. For all its promise mass adoption by enterprises have, in reality, always seemed to be on the horizon.

Read more at Gartner: top 8 supply chain technology trends for 2019

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Separating Long-Term Supply Chain Technology Developments from Temporary Industry Disruptors

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While technological innovations can revolutionize how supply chain businesses advance, it’s important for all participants to be a little bit skeptical when supposedly new game-changing technologies are introduced.

Third-Party Providers Navigate Supply Chain Technology Trends

Technology partners with a long-game approach to development and implementation understand that trends come and go, and it can make little sense to heavily invest in trumpeted technological advancements just because they’re “the new thing.”

While technological advancement brings with it solutions that can revolutionize how businesses in the supply chain interact, it’s important for all stakeholders to be a little bit skeptical when any company introduces a supposedly game-changing new technology.

First Adopters of New Technology

3PLs are typically the first adopters of new technology, as a huge part of their value proposition to their clients is their ability to utilize advanced technology to solve their supply chain challenges.

These logistics providers constantly keep their ears to the ground attending conferences and researching the latest technologies seeking new capabilities. 3PLs can make a single investment in technology and leverage that capability across many shippers.

Technology Partners

Technology partners aren’t simply there to help companies adapt to new technologies. Technological advancements in the supply chain have brought increasing amounts of logistics data to industry stakeholders.

This has, in turn, led to a jump in advanced analytics to turn that data into actionable information, a skill in which technology providers excel. Shippers are using analytics in conjunction with real-time visibility data to identify bottlenecks within their own processes and providers’ networks. This visibility allows them to estimate when shipments will arrive at the intended destination with greater certainty. The future is very bright in this area due to improving visibility technology, more advanced analytics, and integrated collaboration tools.

Technology Advancements

Rapid advancements in technology are changing the industry for the better, and at SMC³, our goal is to incorporate these new technologies into the supply chain processes of our clients. SMC³ truly is a neutral third party; we work for the good of the entire supply chain, helping supply chain companies separate lasting supply chain advancements from temporary industry disruptors.

SMC³ accomplishes this flexibility and adaptability by building our solutions for fast, painless integrations to TMS systems and other applications. SMC³’s goal is always to help our clients get up and running as quickly as possible, so they can start consuming data via our solutions and begin to optimize the lifecycle of their LTL shipments.

Read more at Separating Long-Term Supply Chain Technology Developments from Temporary Industry Disruptors

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Graph Blockchain Solutions Targets $15.5 Trillion Global Supply Chain Management Logistics Sector

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Blockchain Data Management & Global Logistics Market

With globalization and the increased consumption of various products worldwide, efficient supply chain management and the role of freight and logistics has become increasingly complex.

The global logistics market involves all activities of Supply Chain Management (“SCM”), including transportation, warehousing, inventory management, and the flow of information and order processing.

As previously published by Transparency Market Research, this market is estimated to reach US $15.5 Trillion by 2023.

Multi-national global logistics and freight companies such as FedEx, UPS, and Purolator have openly acknowledged their endorsement of blockchain technology, with all three joining the Blockchain in Trucking Alliance (BiTA), noting that it will bring efficiencies to their industry through consistent, transparent and immutable data.

“We’re quite confident that blockchain has big, big implications in the supply chain, transportation, and logistics,” FedEx CEO Frederick Smith said at the Consensus 2018 conference.

On their company’s press release, Linda Weakland, UPS director of enterprise architecture and innovation, said: “Blockchain has multiple applications in the logistics industry, especially related to supply chains, insurance, payments, audits and customs brokerage.”

Tied to global logistics, South Korea has one of the world’s highest e-commerce rates, however, they have lagged in keeping pace with warehouses and distribution centers. As such, as reported by the Wall Street Journal earlier this year, there has been a wave of investment into high-specification logistics projects across the country, both by the South Korean government through incentives and into Korean logistics properties by institutional investors such as the Canada Pension Investment Board.

Graph Blockchain Solutions

With the growth of this sector as a tactical objective, Graph’s foray into the global logistics industry commenced with providing solutions to divisions of Samsung and LG corporations. Both companies are South Korean based multinational conglomerates, known to be the world’s largest manufacturer of mobile phones and smartphones, and the world’s second-largest television manufacturer, respectively.

By participating in the development of technology that could revolutionize logistics for multi-nationals, Graph has secured a solid position with the goal of becoming a leading solution provider in the sector, focusing on building a global logistics eco-system wherein the graph blockchain solution would reduce downtime by providing real-time monitoring, tracking and business intelligence analytics.

This will enable companies to realize cost savings by mitigating delays and minimizing the impact of lost goods due to cargo theft and fraud, while at the same time driving efficiencies across their SCM.

Read more at Graph Blockchain Solutions Targets $15.5 Trillion Global Supply Chain Management Logistics Sector

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The Growing Maturity Of Blockchain

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Speakers from the technology community included Anant Kadiyala, Director of Blockchain & Industry Solutions at Oracle; IBM’s David Noller, Executive Architect Watson IoT – Blockchain and Industry 4.0; and Steven Kim, a Senior Director at SAP. The user community was represented by Jeff Denton, the Senior Director of Global Secure Supply Chain at AmerisourceBergen.

Blockchain technology is incredibly elastic. It can be shaped in different ways, to fit different processes, network node architectures, and participants. It is difficult to generalize about blockchain for business in a way that is universally true. But IBM, Oracle, and SAP – probably the three largest players in the business application blockchain space – were all addressing this topic in a very similar way.

One point all participants agreed on is that blockchain for business applications is not Bitcoin. Bitcoin was the first blockchain application, it is an unregulated shadow-currency, and it is widely seen as a mechanism more conducive to financial speculation than conducting business.

IBM, Oracle, and SAP all built their blockchain platforms on Hyperledger, a technology more suitable to building business applications. Like blockchain for cryptocurrencies, there are mechanisms to make sure transactions are authenticated across a network of participants with distributed databases.

There are several differences between cryptocurrencies and blockchain for SCM. Business blockchain does not include a cryptocurrency, although there may be network style applications that develop that will punch out to the banking system; it is not an open community that any participant can join, but will instead generally involve closed networks of supply chain partners that have been invited to join (permissioned blockchains); blockchain for managing an end to end SCM process can, and probably will, include more business logic and can even utilize IoT sensor data.

Read more at The Growing Maturity Of Blockchain For Supply Chain Management

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