Supply Chains will think for themselves, but will your CTO?
If we stop to slip into the figurative shoes of the CTO of a modern enterprise, his quandaries become apparent quite soon. Starting from his buddies at the conference, to his doctor at the chamber, from his brother over beer, not to mention his technical lead and a dozen developers, everybody quizzes him frequently on his ideas around investments for future technology proofing of his entire supply chain… While he’s very willing to voice his opinion on various improvements, the discussions seem to effortlessly and uncannily veer toward specially tricky domains like the overlap of AI and Blockchain and IoT, well, he had to admit to himself that makes him, a bit uncomfortable… It’s a thing he’s been grappling with for a while, after all everyone and their brother seem to be thinking about it. And why wouldn’t they, a combination of AI and IoT, is indeed transforming the supply chain industry. Our man understands this very well, he sees examples of use cases in the trade journals and new technology collaborations between major players in newspapers. He genuinely feels excited about all this buzz around supply chains that can run themselves; production, warehousing and transport ready to become lights-out operations without any human intervention and the likes. All this stuff doesn’t feel like a pie in the sky or a fad that fades out like last season’s fall colours, no, at the cusp of technologies, he’s sure, lies a genuine game-changer, undeniable in it’s promise and power. In fact, given what he’s seen recently, it seems Artificial intelligence can already automate much of supply chains and perhaps also make a supply chain that learns and adapts by itself. Today there is enough AI firepower going around in the supply chain operations domain that can run complex multi-lined manufacturing and distribution operations unattended for very long periods, maybe even indefinitely. A cursory look through this strange thing called the Internet reveals that the emergence of such overlapping domains of knowledge can only be ignored at the risk of mass ridicule. While our man is busy thinking about befitting replies to his tormentors and basking in the glory of his imaginary success of elevating his supply chain to the technological moon, he also can’t ignore the image of his business sponsor with his quizzical expression and bushy eyebrows. “Alright” he would boom “tell me again in commercial terms, how you will quantify the benefits of this disruptive investment”? That is a burning question indeed as a top adoption challenge seems to be understanding blockchain/AI business value. A recent survey (Nov 2017) done by Cognizant technologies among an assortment of CTOs and other business decision makers across the industry reveals that over half (56%) of respondents felt that understanding blockchain use cases and the challenge of developing a business case for blockchain, were among the most frequently named adoption barriers, specifically evaluating cost-benefits of use cases (46%) and uncertainty around when benefits would accrue (42%). So, our CTO’s anxiety over his boss’s query is very valid to say the least and the answer doesn’t seem to be as apparent. Given this reality, we at Onometra believe that in their efforts to identify the specific business areas where blockchain can streamline operations or open new business opportunities, manufacturers/distributors/shippers, should recognize that blockchain benefits are typically achieved over the long term and may not be easily quantified in a short timeframe. So, we suggest don’t wait until costs and benefits are clear. Learning will be iterative, and costs and benefits may only become defined more clearly as the project progresses. In addition, many reasons to move forward are strategic in nature and cannot be quantified at the outset.