Jim Hull
Senior Director (Industry Strategy, Retail) Blue Yonder
Our goal is to drive visibility through supply chain
Amidst the hype surrounding blockchains as a magic cure for traceability related issues, Jim Hull, Senior Director of Blue Yonder, discusses with Subir Ghosh the current challenges - the lack of a standard and slow tech adoption that is limiting its usage.
There has been a lot of hype about blockchain and people have known about it for a few years now. But then, beyond cryptocurrencies and beyond fintech as such, the revolution so far has not kind of happened. How do you react to that? Do you think these are still the early days?
Blockchains in supply chain can work differently than those in financial institutions as there are fundamentally different levels of requirements between a blockchain supporting a cryptocurrency and one supporting transparency of a supply chain. As it relates to the financial applications, the challenges with blockchain are well known, such as the lack of a standard and slow tech adoption that make it limiting. In addition, the fact that there have already been a couple of well-known issues, like the Ethereum / Ethereum Classic split and the NXT $1.6 billion theft, show that blockchain may not be the end-all for financial transaction tracking. All indications are that we are less than five years away from a functionally available quantum computer, which could render much of the cryptography that the public blockchains depend on less secure.
That said, the goal of a supply chain blockchain is not specifically to safeguard financial transactions, but rather to provide visibility to provenance of products back to the point of origin. In this setting, the distributed ledger approach can be very valuable. We are already seeing versions of track and trace for products where proof of origin has an influence on the purchase decision; products such as diamonds, sustainable fish, offshore clothing producers, etc. There is a lot of data showing that these considerations are more pronounced in the emerging generations like Gen Z and millennials. As those generations increase their purchasing power, the importance of a trusted, verifiable source of origin will also increase.
What are the implications private blockchains can have? What is the Blue Yonder perspective?
A private blockchain may be challenged to meet the need for a trusted, verifiable source of origin. Given that all the control over the blocks are maintained by the company trying to prove the provenance, a private chain is simply less transparent than a public chain, basically undercutting the benefit of the visibility message.
There are many supply chains and applications where the level of traceability provided by the blockchain technology is simply overkill. For example, certain grocery chains have an extremely high level of trust from their customers; if they say that their produce is locally sourced, it is unlikely that they will need a distributed ledger visibility programme to prove it. The customer will simply take their word. Similarly, things like nuts and bolts just don't inspire the passion around sourcing that we see in softlines. Therefore, it is unlikely that the additional investment in complexity would have any payback in terms of changing customer shopping behaviour.
From a Blue Yonder perspective, we have taken the approach with our Luminate Control Tower that we leverage APIs to consume a host of IoT and transportation information, including the blockchain information, but not manage the blockchains themselves. We have attempted to be technology-agnostic, which allows us to continue to capture sourcing and handoffs information even as the technology develops-and possibly a new standard begins to form.
Who would be your ideal client in terms of blockchain implementation?
Since our goal is to drive visibility through the supply chain, our ideal client really can be any player along the supply chain-the brand/ retailer, the manufacturer or all the way back to the fibre producer. By layering in our predictive AI technology, we can provide not only the visibility needed by each of these players, but also leverage the numerous data streams to predict potential disruptions and pivot ahead of an actual failure.
What is the future of blockchain like?
I would say the future of blockchain is still being sorted, but here at Blue Yonder we have taken the position to be flexible and responsive to be able to leverage this data stream if it makes sense for our clients. (PC)
Published on: 22/01/2021
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
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