Technology convergences are driving a creative destruction and expansion of traditional business models. As the costs of sensing, computing, and cloud storage drops, algorithms become democratized and traditional challenges can be solved in innovative ways. Two significant inefficiencies in sourcing and procurement are insights into the provenance of materials and total costs of supply, particularly in risk management.
The sheer lack of visibility across the supply stream has led to the industry adoption of several piece meal solutions, leaving the question of integration versus connectivity?
70% of companies experienced at least one supply chain disruption in the last year resulting in lost productivity, increased costs, and customer complaints. The problem will get worse as supply chains become more complex and information sharing is delayed across the ecosystem.
AI has the potential across many domains to disrupt traditional supply chain practices. AI has proved helpful in tackling challenges and risk for the benefit of society. A few examples are crisis response, adding value in validating information, and automating decision response. In supply chain execution, AI supports natural-language processing, reinforcement learning, and structured deep learning across the traditional processes of plan, source, make, and deliver. The marriage of AI in analytics, the ability to perform a task that exceeds human capacity (in terms of scale and accuracy) is disrupting traditional ways of working and will become the norm. Using structured deep learning to analyze, derive insights, and cascade decision making is mind-blowing. Moving to prescriptive analytics is powerful because in the past it would be super human to ingest copious amounts of externalities, parse thru millions of data points to derive causals and make recommendations. AI facilitates this action in seconds.
The promise of blockchain can create trust, transparency, and one source of the truth. Traditionally, supply chains focus on the plan, source, make, deliver model. In supply chain transformation, the difference is more around the promise to the customer, how do they see it, feel it, trust it. This extends to our trading partners and the embedded integrity necessary to meet customer expectations. Using different platforms, partners, processes, with one common language, blockchain creates a conduit, a highway for centralized exchange of compensation, documentation, and information exchange. I am most excited about the honesty in sustainable decision-making, whereby blockchain can be leveraged for real-time visibility and transactional effectiveness to understand provenance in the ethical sourcing and procurement of goods. Blockchain is capable of saving lives in instances of product recall creating capabilities of multi-tier track and trace to lot, batch, or raw material source. I don't think we've scratched the surface of blockchain's potential. It very well may change the way we connect and communicate across traditional intermediaries and boundaries for years to come.