Blockchain Will Radically Disrupt Your Supply Chain: 4 Steps To Take Now

Susan Galer

Blockchain epitomizes network-centric business, and procurement departments must take the lead exploring its possibilities for supply chain disruption. This was the gist of a discussion I heard during an exclusive roundtable at the SAP Ariba Live 2017 event in Las Vegas entitled, “What Value Can Blockchain Bring To The Supply Chain?”

“Blockchain will radically change how we drive transactions and what procurement does as a profession,” said Robert Kain, principal consultant at Nitor Partners. “Being able to create and connect the networks that allow things like digital and mobile payments, bitcoin, data analysis, financial platforms and crowdfunding will create a much faster and secure world where who you are and who you’re dealing with are completely visible.”

Besides every day digital transactions, the distributed ledger can help support an organization’s higher purpose. When purchasers know the details about how materials are sourced, manufactured and shipped, they can do business with companies better aligned to the corporate mission.

The business value of once and done

Blockchain’s promise of faster, better, and cheaper fundamentally disrupts traditional supply chain models. Readily available information can make activities like getting a mortgage, buying a car (think Carfax), signing contracts, or onboarding new suppliers much more streamlined.

“Fast and good has always been expensive, while slow and not so good has been cheaper,” said Kain. “Blockchain says I can do this faster, cheaper, better and more securely at a lower cost. To an extent, SAP Ariba has already established how that can start to look in terms of sending a document back and forth, having that transparency, taking a contract to terms, validation of what’s happening ─ those are activities that blockchain can do.”

Blockchain will radically change what procurement does as a profession

Act now to avoid ceding control to IT

Cautioning that blockchain is immensely complex, Kain encouraged procurement departments to get educated so they can take advantage of its unique opportunity. Now is the time to understand what blockchain is, how it works, and which company transactions might be applicable to its usage.

“Because of where procurement sits in the organization – our interaction with financials, transactions, contracts, sourcing and all of the associated data – we can change the way this conversation happens within our organization before IT takes over. We can help drive procurement’s ability to influence the business.”

Opening windows to instant trust

Using blockchain, procurement would be able to evaluate supplier value and risk in real-time, profoundly changing relationship management, while reducing costs and accelerating business.

“You can see what is actually going on with your supplier the moment it happens,” said Kain. “You can understand how suppliers are performing with you and others. You can see what they’re charging other people because you can see costs across the network. Having that information immediately available can be extremely powerful, not only in driving costs down, but understanding where your costs are actually at in any part of the chain.”

Blockchain stress test

Kain recommended evaluating procurement process candidates for blockchain against four main criteria:

  • The information is on a network
  • The process requires a digital handshake to gather, receive and distribute information
  • Transaction history is extremely valuable. “If transaction history is of little value to a process, then blockchain solves a problem you didn’t have,” said Kain.
  • Security and cost reduction are extremely important

Of course, not everyone is enamored with transparency. Some businesses may not necessarily want to bare the innermost details of their interactions across their networks. “Not everybody thinks transparency is a great idea, especially applied to supply chains. This is a hurdle to overcome as blockchain evolves,” said Kain.

Ready or not, supply chain participants can look forward to a world where there’s nowhere to hide.

This blog was originally posted on SAP Business Trends.

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Blockchain Meets Life Science: Where Trust Is A Matter Of Life Or Death

Susan Galer

Walt Disney, Bill Gates, and Shakespeare have more in common than anyone could imagine, united by the business imperatives embodied in the promise of blockchain technology.

This was just one of the things I learned after tuning into a recent SAP Game-Changers Radio broadcast entitled “Changing the Game in Life Sciences.” Host Bonnie D. Graham adroitly guided three experts through a fascinating exploration of blockchain’s potential to transform the life sciences industry with undreamed-of trust and efficiency for everything from drug discovery and tracking, to patient control of their own data.

Dream it, do it

Peter Ebert, senior vice president of business development and sales at Cryptowerk Corp., had every right to quote Walt Disney’s maxim, “If you can dream it, you can do it.” I saw proof of his company’s co-innovation during a VIDEO interview at SAP TechEd demonstrating a blockchain POC to help the pharmaceutical industry better track drugs. On the radio, Ebert was unsurprisingly optimistic, comparing Disney’s vision for Mickey Mouse in 1928 with blockchain’s potential to change people’s lives.

“Blockchain will not only be a technical technology or technical thing in our lives. It will impact all our experiences,” said Ebert. “If you go to the doctor and you’re getting blood drawn or you’re taking a pill…you want to make sure that this pill is not a counterfeit, that the technology around you and the devices are not counterfeit. Think about the doctor or other people treating you—you want to make sure that they have the education [and] the skills to treat you well and correctly.”

Blockchain’s trust has special significance to #lifescience where digital assets actually mean life or death @SAPRadio 

Ebert thought blockchain’s ability to prove authenticity to any digital asset had special significance to life sciences. “You can infuse this irrefutable trust into your supply chain of digital data assets,” said Ebert. “In life sciences, digital assets actually mean life or death. They’re not just any old assets; they are very precious data that relates to your life, to my life.”

Find blockchain architects for life science

While Deloitte reported 35 percent of surveyed health and life sciences organizations plan to deploy blockchain by 2018, Eric Piscini, principal, financial services practices, injected some caveats. His inspiration was a Bill Gates quote that stated, “We always overestimate the change that will occur in the next two years, and underestimate the change that will occur in the next 10. Don’t let yourself be lulled into inaction.”

“In the next two years we’ll talk about the blockchain, and 10 years from today we will not talk about blockchain anymore because blockchain will be embedded into everything that we do,” said Piscini.

The number-one challenge is finding people who understand both blockchain and life sciences.

“You need someone who understands what blockchain is capable of, the limitations, the challenges, and the opportunities from a technology point of view,” said Piscini. “You also need someone who can understand clinical trials, content management, and adverse effect management from a business point of view, and bring all of that together.”

Love all, trust a few

Joe Miles, global vice president of life sciences at SAP, turned to Shakespeare’s quote “Love all, but trust a few,” to describe how blockchain can deliver trust that helps patients and the medical industry.

“Blockchain is one of the many things that has a capability to really help simplify and automate trust,” he said. “To ensure that the appropriate people are seeing your information or your business information across all the different constituents that you deal with daily in a way that is productive and efficient.”

Miles thinks blockchain can streamline clinical trials, getting lifesaving products to market faster and more safely. “How do we reduce the time from compound to approval? How do we get this in the hands of the patients who need it to save lives all over? It’s expensive, it takes a lot of years,” he said. “Blockchain presents an opportunity to streamline that process to make it more transparent.”

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How Will Digitization Effectively Transform Agriculture?

Cedrik Kern

“If you eat, you’re in agriculture.”

That old adage is more true today than ever before. It’s expected that by 2050 our world population will approach 10 billion. That’s double what it was only thirty years ago in 1987. Increased land, water, and resource use for the growing population competes directly with farming needs to feed that population. It’s fortunate that digitization is helping to connect agricultural concerns around the world. But what will the future of farming look like?

How will digitalization effectively transform agriculture?

Though robotic farming may seem far-fetched, it’s here today. Much like yesteryear’s use of satellites for precision agriculture, the additional data provided through the Internet of Things (IoT) allows us to grow more food with fewer resources on less land. With analytics, a farmer in Kenya uses a drone to release beneficial insects in a problem patch. A Kansas wheat farmer helps keep the water table pure by only fertilizing areas in need. Yields are boosted without waste through very specific irrigation management. Total corn production savings can reach 4.5% with yield mapping, 2.4% with GPS soil mapping and 2.7% with guidance systems. Here are some recent innovations we’ve helped bring to life.

What does palm oil’s future look like?

Planting a palm oil plantation requires strong long-term planning. But what does the future hold for this important crop? As palm oil’s popularity has grown, so have the industries it services. Biofuels, cosmetics, and other industries are all impacted by palm oil production in addition to its traditional uses in food. Fortunately, there’s a strong push to improve sustainability in the palm oil industry.

Most palm oil production in the past has been based on overall yields. But tomorrow’s plantation can determine production by every plant. IoT technology allows tracking the exact growing conditions of the palm tree. This means its exact needs are met to maximize yield and minimize waste. But how does this happen?

Aerial photos play a vital role in this process. Drones, planes, and satellites provide imagery to help producers make smart decisions in oil palm plantation management. Sensors provide climate, soil condition, and other data. This collection of data and strong analytics options let the producer manage stressed areas while boosting production in other parts of the plantation.

This process is being moved forward through collaboration across multiple sectors. Research, genetics, machinery, inputs, and the farmer all work hand-in-hand to provide more palm oil with less waste and a more sustainable environmental impact.

The future is sweet with sugarcane production

Though it’s still one of the world’s top sweeteners, sugarcane has also branched out recently into the biofuel and electrical production sectors. A single ton of sugarcane produces 120 kilograms of sugar, 85 liters of ethanol and 25 kilowatt-hours of electricity. But the tropical origins of the plant means it’s always been planted in developing countries with plenty of land and labor. That made it a cheap crop to grow.

Today’s population growth is limiting sugarcane production. This means more care must be taken in crop techniques and inputs to provide maximum results on minimal land. To complicate matters even further, the land it is raised on is often very different. This requires different approaches to achieve these results.

Different climates require the use of different techniques and methods. Ratoon planting allows the crop to be grown from the prior year’s plant stubble. But the number of years can vary greatly. Production-leading Brazil replants new cane every 5 or 6 years. As second-highest producer, India’s climate demands planting new cane every two or three years.

Hand harvesting uses manpower and a sharp hand-tool while providing 500 kg per hour, with rising labor rates making this practice less profitable than in the past. Mechanizing the process allows manual labor to be focused in different area as a single harvester will handle 100 tons of sugarcane per hour. Except for on steep slopes, mechanical harvesting provides a more ecologically sound approach. Satellite-based tractor navigation uses permanent wheel tracks to maximize production while minimizing wasted time and fuel.

Combining sustainable farming practices with economical technological advancement allows us to grow as a people and as a planet. Smarter crop rotation, precision pesticide and fertilizer application, yield mapping and weed sensors are only a few of the advancements farmers will see in the years to come. IoT technology is expected to see a 20% annual compounded growth from 2015 to 2020. New agricultural business models are expected to see a 15%–25% growth in revenue above the industry average.

Farms that add IoT capabilities, Big Data analytics, and similar connected agriculture tools are making strong strides. Imagine yields 10%–20% higher than in the past. They’re also seeing an average increase in profits of 18%. Some farms have seen profit increases of up to 76%.

Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Consumer Industries. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?

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Cedrik Kern

About Cedrik Kern

Cedrik Kern is Solution Owner of Digital Farming at SAP. He drives the development of the SAP platform for digital farming as a key innovation for agribusiness. Cedrik is part of the SAP solution management team for Agribusiness and Commodity Management. This team is responsible for defining our global strategy for agribusiness and commodity management. As an expert for agribusiness and commodity markets, he influences the SAP solution portfolio and has architected co-innovation solutions with global leaders in the commodity trading and consumer products industry. He is a regular speaker at events and conferences presenting SAP’s solution portfolio and innovations for this space.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.


Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?


Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
 
 
 
We deduce the existence of information we don’t yet know about.
 
 
 
We imagine radical new business models, products, and opportunities.
 
 
 
We have creativity, imagination, humor, ethics, persistence, and critical thinking.


There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.


Download the executive brief Human Skills for the Digital Future.


Read the full article The Human Factor in an AI Future.


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About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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How Manufacturers Can Kick-Start The Internet Of Things In 2018

Tanja Rueckert

Part 1 of the “Manufacturing Value from IoT” series

IoT is one of the most dynamic and exciting markets I am involved with at SAP. The possibilities are endless, and that is perhaps where the challenges start. I’ll be sharing a series of blogs based on research into knowledge and use of IoT in manufacturing.

Most manufacturing leaders think that the IoT is the next big thing, alongside analytics, machine learning, and artificial intelligence. They see these technologies dramatically impacting their businesses and business in general over the next five years. Researchers see big things ahead as well; they forecast that IoT products and investments will total hundreds of billions – or even trillions – of dollars in coming decades.

They’re all wrong.

The IoT is THE Big Thing right now – if you know where to look.

Nearly a third (31%) of production processes and equipment and non-production processes and equipment (30%) already incorporate smart device/embedded intelligence. Similar percentages of manufacturers have a company strategy implemented or in place to apply IoT technologies to their processes (34%) or to embed IoT technologies into products (32%).

opportunities to leverage IoTSource:Catch Up with IoT Leaders,” SAP, 2017.

The best process opportunities to leverage the IoT include document management (e.g. real-time updates of process information); shipping and warehousing (e.g. tracking incoming and outgoing goods); and assembly and packaging (e.g. production monitoring). More could be done, but figuring out where and how to implement the IoT is an obstacle for many leaders. Some 44 percent of companies have trouble identifying IoT opportunities and benefits for either internal processes or IoT-enabled products.

Why so much difficulty in figuring out where to use the IoT in processes?

  • No two industries use the IoT in the same way. An energy company might leverage asset-management data to reduce costs; an e-commerce manufacturer might focus on metrics for customer fulfillment; a fabricator’s use of IoT technologies may be driven by a need to meet exacting product variances.
  • Even in the same industry, individual firms will apply and profit from the IoT in unique ways. In some plants and processes, management is intent on getting the most out of fully depreciated equipment. Unfortunately, older equipment usually lacks state-of-the-art controls and sensors. The IoT may be in place somewhere within those facilities, but it’s unlikely to touch legacy processes until new machinery arrive. 

Where could your company leverage the IoT today? Think strategically, operationally, and financially to prioritize opportunities:

  • Can senior leadership and plant management use real-time process data to improve daily decision-making and operations planning? Do they have the skills and tools (e.g., business analytics) to leverage IoT data?
  • Which troublesome processes in the plant or front office erode profits? With real-time data pushed out by the IoT, which could be improved?
  • Of the processes that could be improved, which include equipment that can – in the near-term – accommodate embedded intelligence, and then communicate with plant and enterprise networks?

Answer those questions, and you’ve got an instant list of how and where to profit from the IoT – today.

Stay tuned for more information on how IoT is developing and to learn what it takes to be a manufacturing IoT innovator. In the meantime, download the report “Catch Up with IoT Leaders.”

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Tanja Rueckert

About Tanja Rueckert

Tanja Rueckert is President of the Internet of Things and Digital Supply Chain Business Unit at SAP.