Technology Revolutionizing Workplace Wellness

Meghan M. Biro

Wellness in the workplace is a huge and growing trend these days. Makes sense, right? A healthier employee is a happier employee—and also a more productive one. That’s why employers are introducing wellness programs in droves, and at the same time turning to technology as a tool to monitor, promote, and reward their employees’ fitness achievements.

Currently, 70 percent of U.S. employers offer a wellness program, an increase from 58 percent in 2008. It’s no secret that investing in employee wellness is worthwhile in the long run. Not only do wellness programs help employers to lower healthcare costs and reduce sick days, but research shows they improve employee engagement and retention as well.

Getting employees to take advantage of a wellness program is not a slam-dunk, however. Participation is sometimes low, with employees citing lack of time or interest as two of the primary reasons. That’s where technology comes in, making getting involved easier for employees—and a whole lot more fun.

The fun kicks in courtesy of a group dynamic that promotes good-natured competition to achieve wellness goals, which aligns with another trend among employers: offering rewards or bonuses to employees who complete health and wellness objectives. Currently, four in 10 employers offer these types of incentives, with another 8 percent planning to implement them within the next year.

So, just how does the latest technology help get—and keep—employees healthy, thereby boosting employer profit wellness? Let’s examine the various options.

Wearables

At any gathering of a half-dozen or more employees, look at their wrists; chances are at least one will be wearing a fitness tracker. Nearly 40 million American adults are currently using such devices, and that figure is expected to double within the next three years.

The most popular brand is Fitbit, but companies like Garmin, Apple, Jawbone, and Misfit are also in the wearable tracker game. These devices allow employees to monitor various fitness activities, such as how many steps they’ve taken, how many flights of stairs they’ve climbed, and how many calories they’ve burned. Such measurables lend themselves nicely to interoffice competition. Whoever comes out on top will earn company bragging rights—or something more tangible like a trophy or monetary prize.

One savvy move for employers wanting to increase workplace awareness is to subsidize wearable trackers for their employees. A lot of companies do that—not only for their employees but sometimes even for employees’ spouses or partners. Whether companies pay for the devices or employees do so themselves, expectations are that wearable technology usage will continue to rise. Xerox Human Resources Services conducted a 2015 survey of 200+ employers, in which 37 percent reported using wearable technology; another 37 percent said they were planning to adopt the technology in the years ahead.

Gamification

Gamification marries technology and game-playing in a way that engages participants and helps them achieve their goals. There are three components of an effective gamification strategy: rules, rewards, and social interaction. The best thing about gamification is that it is a great motivator. Participants strive to win a challenge, whether it’s losing weight, eating healthier, or achieving measurable fitness goals.

Implementing a gamification strategy with monthly or quarterly incentives is a great way for employers to build a wellness-oriented culture. With the camaraderie and feedback that such competitions generate, employees have stronger incentives to reach their goals.

Apps

Apps for fitness trackers are just one of many tools that allow employees to monitor their health. There are mental health apps like Headspace, which features proven meditation and mindfulness techniques. Sleep apps, which track users sleeping habits and in some cases help them drift off to sleep with calming music, words, and sound effects are popular. And food tracking/nutrition apps, which keep tabs on caloric intake and the nutritional content of the food the user eats. Wellness-minded employers will encourage employee use of those apps that best fit the fitness and health objectives of the workplace.

Program analytics

There is also technology that allows employers to analyze their wellness programs and redirect them to meet the needs of their employees better. It’s not just about return on investment, but also about employee satisfaction. Analytics allow employers to pinpoint aspects of their wellness program that are receiving less-than-favorable ratings. Responsive employers will then use this information to make modifications that will improve their employees’ satisfaction and boost participation.

Social media

Dr. Rajiv Kumar, founder/CEO of corporate wellness platform ShapeUp, identifies social interaction as the biggest technological trend over the past decade. How do you add social interaction to a workplace wellness program? Kumar recommends focusing on these four elements: peer coaching, friendly competition, group support, and social accountability. There are many social tools for encouraging interaction, including apps, forums, and Facebook groups—to name just a few. Social media has the power to drive such interaction, which increases employee interest and ultimately determines the success of a corporate wellness program.

In the future, we expect even more employers to adopt wellness programs. And why wouldn’t they? With technology advancing so rapidly, the ease of implementation is great—and the rewards for employer and employee even greater.

For more strategies that promote employee wellness, see Mapping A Healthy Workplace.

 

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About Meghan M. Biro

Meghan Biro is talent management and HR tech brand strategist, analyst, digital catalyst, author and speaker. I am the founder and CEO of TalentCulture and host of the #WorkTrends live podcast and Twitter Chat. Over my career, I have worked with early-stage ventures and global brands like Microsoft, IBM and Google, helping them recruit and empower stellar talent. I have been a guest on numerous radio shows and online forums, and has been a featured speaker at global conferences. I am the co-author of The Character-Based Leader: Instigating a Revolution of Leadership One Person at a Time, and a regular contributor at Forbes, Huffington Post, Entrepreneur and several other media outlets. I also serve on advisory boards for leading HR and technology brands.

Creators: Zipline Offers Drone Aid to Remote Health Clinics

Stephanie Overby

Keller Rinaudo, co-founder and CEO, Zipline
Image Credit: Flickr CC: TED Conference

Drones get a bad rap. Unmanned aerial vehicles (UAVs), first introduced decades ago, have a largely negative connotation in modern life—from the Predator drones used to conduct targeted killings to law enforcement drones engaging in potentially unwarranted surveillance to mishandled consumer drones menacing the public.

Credit: Zipline

Keller Rinaudo, co-founder and CEO of Zipline International, sees the technology instead as a lifesaving mode of transport. In 2016, the Half Moon Bay, California, based drone delivery service signed its first partnership with the government of Rwanda to make the last-mile delivery of blood to transfusion facilities throughout the country. In August 2017, the company signed a larger deal with the government of Tanzania to provide 2,000 medical deliveries a day to its far-flung health facilities.

But Rinaudo’s drone dreams are even bigger: to enable on-demand, low-cost delivery of medicines and other products for the planet.

Pivotal Pivots

Rinaudo earned a degree in biotech from Harvard, where he built DNA computers. After spending a few years on the professional rock-climbing circuit, he shifted to robotics. Rinaudo was particularly interested in how smartphone components could open up new doors for robotics, ultimately launching the company Romotive in 2012 with the Vegas Tech Fund.

Romotive raised some US$7 million and spent more than two years developing an app-controlled robotic toy for iOS devices before Rinaudo determined he wanted to do something more impactful with robotics. Robots are really good at repetitive tasks, so Rinaudo spent a year exploring seemingly mundane tasks that were ripe for disruption, ultimately settling on an area where he thought robots could have the most impact: medical logistics and delivery.

The Last-Mile Problem

Zipline’s aircraft, called “Zips” can fly 10 times the distance of existing commercial UAVs. Credit: Zipline

In 2014, Rinaudo traveled to Ifakara Health Institute in Tanzania, where he met a grad student working to digitalize part of the country’s medical supply chain. The student had built a mobile alert system that enabled health workers to text requests for emergency blood and medical supplies for critically ill patients. However, owing to the country’s difficult topography and its slow and inefficient medical supply chain, there was no way for the government to deliver many of these materials.

Browsing the growing backlog of medical supply requests that the student had collected, Rinaudo says he realized he was looking at a “database of death.” More than 2 billion people around the world lack adequate access to essential medical products, according to the World Health Organization, often due to challenging terrain and gaps in infrastructure. Over 2.9 million children under age five die every year and up to 150,000 pregnancy-related deaths result from lack of access to safe blood.

Robotic aircraft could solve the problem. Rinaudo established Zipline and moved to develop the Zip, a first-of-its-kind drone delivery service, as the final link in the medical supply chain for problematic geographies.

An Inside Job

Zipline’s team of 60 includes seasoned aerospace engineers recruited from companies like SpaceX, Google, Boeing, and NASA. “They’ve been drawn to the mission,” Rinaudo says, “using cutting-edge technology to save lives.”

The fixed-wing aircraft that Zipline has developed are capable of flying farther on less power and in more variable weather than the multirotor machines typically referred to as drones. The Zips can fly 10 times the distance of existing commercial UAVs. The company has built the robotic systems for launching and landing their Zips, as well as the algorithms in the flight computer and air traffic control software, in-house. “Off-the-shelf quadcopters can’t get the job done,” Rinaudo explains. “We need a purpose-driven vehicle capable of making deliveries at a national scale.”

Rwanda’s Leap of Faith

Zipline began its deliveries in Rwanda, which is known as the country of a thousand hills. The topography makes for a striking landscape but challenging logistics. “The government was ready to step forward and make a national commitment to expanding healthcare access with technology,” Rinaudo says. Because Rwanda is one of the most densely populated countries in Africa, with a land area the size of Maryland, Zipline could serve almost half of the nation’s population from its single distribution center. (Ultimately, the Rwandan government has said it wants to ensure that delivery of essential medical supplies is no more than 30 minutes away from all 12 million Rwandans.)

“Millions of people across the world die each year because they can’t get the medicine they need when they need it. It’s a problem in both developed and developing countries.We can help solve it with on-demand drone delivery.”

Zipline launched its first blood drops from Rwanda’s capital, Kigali, late in 2016. The company flies 15 planes (which weigh about 14 kilograms fully loaded) simultaneously, using data provided by GPS and Rwanda’s Civil Aviation Authority to guide the flights. Powered by lithium-ion battery packs and twin electric motors, the Zips don’t have to be refueled.

To make deliveries, the planes fly about 40 feet above what Zipline calls the “mailbox” near a clinic (an area approximately the size of two parking spots) and drop the packages to it. The clinics do not need to install any infrastructure. To begin service to a new site, Zipline performs a survey flight to map the area and can start deliveries within two days.

One of Zipline’s central innovations is the aircraft landing system at its distribution centers. “We need to take off and land from the same place with limited space,” says Rinaudo. Mimicking the wire and tailhook systems the U.S. Navy uses to snag jets onto its carriers, Zipline engineers developed a pair of robotic arms that hold a wire. On approach, the plane sends a signal to the robotic arms, triggering them to raise the wire to the right height for the plane to snag it before stopping on an inflated landing mat nearby. The solution enables the planes to decelerate from 100 kilometers an hour to zero in half a second with no runway.

Developing the technology to operate and land the UAVs safely and effectively was easy, Rinaudo says, compared to integrating with Rwanda’s national health system. There were challenges with back-end systems integration. Zipline has also had to consider local air traffic and health regulations and develop education and training for distribution center workers. “We work hand in hand with military and civil aviation authorities, the national blood center, clinics around the country, hospital staff, and members of the surrounding community,” Rinaudo says. “All of them have a key role to play. And building those relationships while strengthening the overall operation takes time.”

Reverse Innovation

A healthcare professional collects air-delivered supplies. Credit: Zipline

Last summer, the government of Tanzania signed a deal with Zipline to develop the largest national drone delivery service in the world with four distribution centers and more than 100 drones. The initiative aims to serve 10 million Tanzanians (approximately the population of the U.S. state of Georgia). Zips in Tanzania will deliver not just blood but also emergency vaccines, HIV medications, antimalarial drugs, and critical medical supplies like sutures and IV tubes.

Although Zipline is focused on its East African operations, its approach could prove valuable anywhere. “Millions of people across the world die each year because they can’t get the medicine they need when they need it. It’s a problem in both developed and developing countries,” Rinaudo says. “We can help solve it with on-demand drone delivery. And African nations are showing the world how.”

The company has worked with the U.S. government to explore tests of medical supply drone delivery to remote communities such as Smith Island in Maryland, Pyramid Lake Tribal Health Clinic in Nevada, and the San Juan Islands in Washington. It plans to expand within the United States in 2018.

Taking Drones to New Heights

Rinaudo’s focus on using drones to deliver items that have a significant impact on someone’s life has attracted prominent funders, including Sequoia Capital, Google Ventures, Microsoft co-founder Paul Allen, and former Yahoo CEO Jerry Yang.

It’s not clear yet whether drone delivery cuts costs. A report published in 2016 by the Johns Hopkins Bloomberg School of Public Health and the Pittsburgh Supercomputing Center noted that using UAVs to deliver vaccines in low- and middle-income countries may save money and improve vaccination rates. Zipline executives have reported that its deliveries for routine restocking are more expensive than standard trips by road, but responding to emergencies costs less.

To evaluate Zipline’s impact, global health researchers from the Ifakara Health Institute and the University of Glasgow will assess how deliveries from one of its planned distribution centers affect the clinics the company serves.

The value in lives saved is clear, says Rinaudo, and that is fueling development. Costs will come down over time, he adds, and the practical use cases within healthcare will expand. Eventually, Rinaudo envisions, Zipline’s approach could be practical for a range of possibilities beyond medical supplies. Meanwhile, the success of companies like his could serve as a springboard for a new category of aircraft more reliable and durable than cheap consumer drones but less expensive than multimillion dollar unmanned military aircraft. D!

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Digital Transformation Making Steady Inroads In Healthcare

Andrea Kaufmann

Breakthrough technologies and digitization that have impacted almost every industry in the last few years are now also starting to bring about sweeping digital transformation in healthcare. Feeling the pressures of accelerated change, healthcare organizations are recognizing the importance of digital transformation and slowly—but surely and methodically—piloting new programs. They are realizing that current organizational capabilities to integrate and leverage data to drive better decisions are not sufficient to stay competitive and drive continuously improving quality care; they need to implement new technology systems and platforms that can deliver value, solve business challenges, and transform their traditional business models.

According to a recent study by SAP Center for Business Insight, conducted in collaboration with Oxford Economics, healthcare organizations agree on the fact that digital transformation will bring positive changes, such as driving down costs and improving patient outcomes. The survey, based on a study of 400 global C-level healthcare executives, identified the impact—and progress to date—of digitalization efforts. In addition, healthcare organizations offered insights into the key technology investments in use today as well as their anticipated investments in the next two years.

The findings from the study reveal interesting trends about the state of digital transformation in healthcare. While some results were predictable to insiders and providers in the healthcare industry, others were a bit more surprising. Here’s a look at five key findings from the data.

1. Digital transformation is critical to survival

Anyone in healthcare will admit that the industry has been slow to adopt new practice models, business processes, and technologies to adapt to rapidly evolving regulations and shifts in payment models, making digitization a slow grind. Patient records jumpstarted the first wave of transformation in the industry, as most have moved from their paper-based origins to electronic health records (EHRs).

Now, other pieces in the healthcare value chain are following suit. “Digital transformation in healthcare is making forward progress but it is a long journey,” says Martin Kopp, global general manager, healthcare providers, SAP Health. “Healthcare organizations are increasingly open to pulling in the best practices found in other sectors and realizing that they have to run operations in a more data-driven fashion. Doing so will help them manage value and improve the quality of care.”

The survey showed that healthcare executives know that digital transformation is necessary and will have a great impact on the success of their organizations. Digital transformation is seen by the greater percentage of companies to be important or even critically important (61 percent) to their survival today. In two years, that importance climbs to 76 percent. In five years, it rises to 86 percent.

“Healthcare organizations are looking for new care delivery models and cost-effective services they can provide to patients in hospitals and beyond their borders,” says Dr. Anette Grossmeuller, expert precision medicine, SAP Health. “These models require the reimagination of existing business processes and depend on new types of digital technologies driving the access to many new data sources”

Regarding long-term growth, most healthcare organizations (58 percent) believe that digital transformation has helped to increase their profitability and allows them to readily enter new markets. Digital transformation is also believed to help them attract and retain talent.

2. Technology investments are increasing

The survey showed that technology is clearly viewed as essential to healthcare organizations’ growth, retaining competitive advantage, and improving customer experience. The organizations believe that their greatest competitive advantage in the digital economy will come from using the latest technology (82 percent). The organizations also expect to see more value coming from their existing investments.

Technology spending will be shifting somewhat over the next two years, with organizations investing in Big Data and advanced analytics, cloud, and mobile. The shift to connected digital health networks is also elevating the need for improved security investments. Several emerging technologies will get a booster shot, as healthcare organizations plan to invest in Internet of Things (IoT), machine learning/AI, robotics, and virtual reality (Learn more about this survey finding).

These technologies are part of the digital transformation prescription aimed at improving patient care. “The major health organizations are collecting and sharing all types of digital patient data, including imaging and genomic information,” explains Enakshi Singh, senior product Specialist, SAP Health. “Healthcare organizations are starting to get insights from these data sets that they didn’t have before. New technologies can cleanse, harmonize, and analyze data.” She notes that the next step in digitization is to integrate applications that provide the analytics needed for real-time clinical decision support.

3. Healthcare organizations are in the early stages of the digital transformation journey

Despite progress, healthcare organizations are still in the preliminary phase of increasing investments in technology. Many are only planning or piloting digital transformation initiatives at the departmental level to bring about the changes they perceive to be critical to their ability to compete and thrive. Very few healthcare organizations in the survey (2 percent) responded that their digital transformation was mature across the enterprise.

Some of the early successes in digital transformation have come from centers focused on treatment of a particular disease, such as cancer. “Cancer care is a unique trailblazer, as it has genetic components and is a molecular disease,” says Singh. “By using analytics platforms, healthcare providers can better evaluate the role of genetics and drug interactions on particular types of cancer. As we get more and more data, we can start to better understand cancer and its causes and treatments.”

4. Digital transformation is a core business goal

While healthcare lags behind other industries in digital transformation, it is starting to catch up. “Healthcare organizations are actively considering how to compete in the new world. They are moving to digitalization to help measure and improve the quality and value of services delivered across the continuum of care,” says Kopp.

The survey showed that the percentage of total budgets dedicated to digital business initiatives will rise during the next two years, and several factors are fueling this increase.  In the survey, 63 percent of companies said their digital transformation efforts allow them to compete more effectively with large companies. And 60 percent said that digital transformation is a core business goal.

5. Digital transformation is necessary for the shift to value-based care

Digital transformation is helping healthcare organizations raise their reputation and visibility in their communities. In the next two years, healthcare organizations expect technology investments to provide value in customer satisfaction and engagement and innovation.

“Digital innovation will fuel the next wave of breakthroughs in healthcare and accelerate the broader shift toward data-driven care for health organizations,” says Kopp. “Unlocking actionable data insights in real time is critical for the future success for value-based care.”

Delivering value with digital transformation

Healthcare organizations recognize the potential cures brought about by digital transformation. With increased cost pressures, healthcare organizations are striving to standardize and streamline administrative processes for greater efficiency and improved operations. They also have an increased focus on providing value, which can be achieved with new technology platforms.

With aging demographics and the rise of chronic diseases, healthcare organizations are investing more in digital transformation technologies that can support improved decision-making by providing data-driven insights for personalized clinical treatments and optimized patient outcomes.

Want to learn about how SAP Health is helping healthcare providers on their digital transformation journey? Download the “The Future of Digital Health” white paper.

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Andrea Kaufmann

About Andrea Kaufmann

Andrea Kaufmann is the global head of marketing and communications for SAP Health. She is responsible for the development, planning and execution of the marketing and communications intiatives for the SAP Health division.

The Blockchain Solution

By Gil Perez, Tom Raftery, Hans Thalbauer, Dan Wellers, and Fawn Fitter

In 2013, several UK supermarket chains discovered that products they were selling as beef were actually made at least partly—and in some cases, entirely—from horsemeat. The resulting uproar led to a series of product recalls, prompted stricter food testing, and spurred the European food industry to take a closer look at how unlabeled or mislabeled ingredients were finding their way into the food chain.

By 2020, a scandal like this will be eminently preventable.

The separation between bovine and equine will become immutable with Internet of Things (IoT) sensors, which will track the provenance and identity of every animal from stall to store, adding the data to a blockchain that anyone can check but no one can alter.

Food processing companies will be able to use that blockchain to confirm and label the contents of their products accordingly—down to the specific farms and animals represented in every individual package. That level of detail may be too much information for shoppers, but they will at least be able to trust that their meatballs come from the appropriate species.

The Spine of Digitalization

Keeping food safer and more traceable is just the beginning, however. Improvements in the supply chain, which have been incremental for decades despite billions of dollars of technology investments, are about to go exponential. Emerging technologies are converging to transform the supply chain from tactical to strategic, from an easily replicable commodity to a new source of competitive differentiation.

You may already be thinking about how to take advantage of blockchain technology, which makes data and transactions immutable, transparent, and verifiable (see “What Is Blockchain and How Does It Work?”). That will be a powerful tool to boost supply chain speed and efficiency—always a worthy goal, but hardly a disruptive one.

However, if you think of blockchain as the spine of digitalization and technologies such as AI, the IoT, 3D printing, autonomous vehicles, and drones as the limbs, you have a powerful supply chain body that can leapfrog ahead of its competition.

What Is Blockchain and How Does It Work?

Here’s why blockchain technology is critical to transforming the supply chain.

Blockchain is essentially a sequential, distributed ledger of transactions that is constantly updated on a global network of computers. The ownership and history of a transaction is embedded in the blockchain at the transaction’s earliest stages and verified at every subsequent stage.

A blockchain network uses vast amounts of computing power to encrypt the ledger as it’s being written. This makes it possible for every computer in the network to verify the transactions safely and transparently. The more organizations that participate in the ledger, the more complex and secure the encryption becomes, making it increasingly tamperproof.

Why does blockchain matter for the supply chain?

  • It enables the safe exchange of value without a central verifying partner, which makes transactions faster and less expensive.
  • It dramatically simplifies recordkeeping by establishing a single, authoritative view of the truth across all parties.
  • It builds a secure, immutable history and chain of custody as different parties handle the items being shipped, and it updates the relevant documentation.
  • By doing these things, blockchain allows companies to create smart contracts based on programmable business logic, which can execute themselves autonomously and thereby save time and money by reducing friction and intermediaries.

Hints of the Future

In the mid-1990s, when the World Wide Web was in its infancy, we had no idea that the internet would become so large and pervasive, nor that we’d find a way to carry it all in our pockets on small slabs of glass.

But we could tell that it had vast potential.

Today, with the combination of emerging technologies that promise to turbocharge digital transformation, we’re just beginning to see how we might turn the supply chain into a source of competitive advantage (see “What’s the Magic Combination?”).

What’s the Magic Combination?

Those who focus on blockchain in isolation will miss out on a much bigger supply chain opportunity.

Many experts believe emerging technologies will work with blockchain to digitalize the supply chain and create new business models:

  • Blockchain will provide the foundation of automated trust for all parties in the supply chain.
  • The IoT will link objects—from tiny devices to large machines—and generate data about status, locations, and transactions that will be recorded on the blockchain.
  • 3D printing will extend the supply chain to the customer’s doorstep with hyperlocal manufacturing of parts and products with IoT sensors built into the items and/or their packaging. Every manufactured object will be smart, connected, and able to communicate so that it can be tracked and traced as needed.
  • Big Data management tools will process all the information streaming in around the clock from IoT sensors.
  • AI and machine learning will analyze this enormous amount of data to reveal patterns and enable true predictability in every area of the supply chain.

Combining these technologies with powerful analytics tools to predict trends will make lack of visibility into the supply chain a thing of the past. Organizations will be able to examine a single machine across its entire lifecycle and identify areas where they can improve performance and increase return on investment. They’ll be able to follow and monitor every component of a product, from design through delivery and service. They’ll be able to trigger and track automated actions between and among partners and customers to provide customized transactions in real time based on real data.

After decades of talk about markets of one, companies will finally have the power to create them—at scale and profitably.

Amazon, for example, is becoming as much a logistics company as a retailer. Its ordering and delivery systems are so streamlined that its customers can launch and complete a same-day transaction with a push of a single IP-enabled button or a word to its ever-attentive AI device, Alexa. And this level of experimentation and innovation is bubbling up across industries.

Consider manufacturing, where the IoT is transforming automation inside already highly automated factories. Machine-to-machine communication is enabling robots to set up, provision, and unload equipment quickly and accurately with minimal human intervention. Meanwhile, sensors across the factory floor are already capable of gathering such information as how often each machine needs maintenance or how much raw material to order given current production trends.

Once they harvest enough data, businesses will be able to feed it through machine learning algorithms to identify trends that forecast future outcomes. At that point, the supply chain will start to become both automated and predictive. We’ll begin to see business models that include proactively scheduling maintenance, replacing parts just before they’re likely to break, and automatically ordering materials and initiating customer shipments.

Italian train operator Trenitalia, for example, has put IoT sensors on its locomotives and passenger cars and is using analytics and in-memory computing to gauge the health of its trains in real time, according to an article in Computer Weekly. “It is now possible to affordably collect huge amounts of data from hundreds of sensors in a single train, analyse that data in real time and detect problems before they actually happen,” Trenitalia’s CIO Danilo Gismondi told Computer Weekly.

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials.

The project, which is scheduled to be completed in 2018, will change Trenitalia’s business model, allowing it to schedule more trips and make each one more profitable. The railway company will be able to better plan parts inventories and determine which lines are consistently performing poorly and need upgrades. The new system will save €100 million a year, according to ARC Advisory Group.

New business models continue to evolve as 3D printers become more sophisticated and affordable, making it possible to move the end of the supply chain closer to the customer. Companies can design parts and products in materials ranging from carbon fiber to chocolate and then print those items in their warehouse, at a conveniently located third-party vendor, or even on the client’s premises.

In addition to minimizing their shipping expenses and reducing fulfillment time, companies will be able to offer more personalized or customized items affordably in small quantities. For example, clothing retailer Ministry of Supply recently installed a 3D printer at its Boston store that enables it to make an article of clothing to a customer’s specifications in under 90 minutes, according to an article in Forbes.

This kind of highly distributed manufacturing has potential across many industries. It could even create a market for secure manufacturing for highly regulated sectors, allowing a manufacturer to transmit encrypted templates to printers in tightly protected locations, for example.

Meanwhile, organizations are investigating ways of using blockchain technology to authenticate, track and trace, automate, and otherwise manage transactions and interactions, both internally and within their vendor and customer networks. The ability to collect data, record it on the blockchain for immediate verification, and make that trustworthy data available for any application delivers indisputable value in any business context. The supply chain will be no exception.

Blockchain Is the Change Driver

The supply chain is configured as we know it today because it’s impossible to create a contract that accounts for every possible contingency. Consider cross-border financial transfers, which are so complex and must meet so many regulations that they require a tremendous number of intermediaries to plug the gaps: lawyers, accountants, customer service reps, warehouse operators, bankers, and more. By reducing that complexity, blockchain technology makes intermediaries less necessary—a transformation that is revolutionary even when measured only in cost savings.

“If you’re selling 100 items a minute, 24 hours a day, reducing the cost of the supply chain by just $1 per item saves you more than $52.5 million a year,” notes Dirk Lonser, SAP go-to-market leader at DXC Technology, an IT services company. “By replacing manual processes and multiple peer-to-peer connections through fax or e-mail with a single medium where everyone can exchange verified information instantaneously, blockchain will boost profit margins exponentially without raising prices or even increasing individual productivity.”

But the potential for blockchain extends far beyond cost cutting and streamlining, says Irfan Khan, CEO of supply chain management consulting and systems integration firm Bristlecone, a Mahindra Group company. It will give companies ways to differentiate.

“Blockchain will let enterprises more accurately trace faulty parts or products from end users back to factories for recalls,” Khan says. “It will streamline supplier onboarding, contracting, and management by creating an integrated platform that the company’s entire network can access in real time. It will give vendors secure, transparent visibility into inventory 24×7. And at a time when counterfeiting is a real concern in multiple industries, it will make it easy for both retailers and customers to check product authenticity.”

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials. Although the key parts of the process remain the same as in today’s analog supply chain, performing them electronically with blockchain technology shortens each stage from hours or days to seconds while eliminating reams of wasteful paperwork. With goods moving that quickly, companies have ample room for designing new business models around manufacturing, service, and delivery.

Challenges on the Path to Adoption

For all this to work, however, the data on the blockchain must be correct from the beginning. The pills, produce, or parts on the delivery truck need to be the same as the items listed on the manifest at the loading dock. Every use case assumes that the data is accurate—and that will only happen when everything that’s manufactured is smart, connected, and able to self-verify automatically with the help of machine learning tuned to detect errors and potential fraud.

Companies are already seeing the possibilities of applying this bundle of emerging technologies to the supply chain. IDC projects that by 2021, at least 25% of Forbes Global 2000 (G2000) companies will use blockchain services as a foundation for digital trust at scale; 30% of top global manufacturers and retailers will do so by 2020. IDC also predicts that by 2020, up to 10% of pilot and production blockchain-distributed ledgers will incorporate data from IoT sensors.

Despite IDC’s optimism, though, the biggest barrier to adoption is the early stage level of enterprise use cases, particularly around blockchain. Currently, the sole significant enterprise blockchain production system is the virtual currency Bitcoin, which has unfortunately been tainted by its associations with speculation, dubious financial transactions, and the so-called dark web.

The technology is still in a sufficiently early stage that there’s significant uncertainty about its ability to handle the massive amounts of data a global enterprise supply chain generates daily. Never mind that it’s completely unregulated, with no global standard. There’s also a critical global shortage of experts who can explain emerging technologies like blockchain, the IoT, and machine learning to nontechnology industries and educate organizations in how the technologies can improve their supply chain processes. Finally, there is concern about how blockchain’s complex algorithms gobble computing power—and electricity (see “Blockchain Blackouts”).

Blockchain Blackouts

Blockchain is a power glutton. Can technology mediate the issue?

A major concern today is the enormous carbon footprint of the networks creating and solving the algorithmic problems that keep blockchains secure. Although virtual currency enthusiasts claim the problem is overstated, Michael Reed, head of blockchain technology for Intel, has been widely quoted as saying that the energy demands of blockchains are a significant drain on the world’s electricity resources.

Indeed, Wired magazine has estimated that by July 2019, the Bitcoin network alone will require more energy than the entire United States currently uses and that by February 2020 it will use as much electricity as the entire world does today.

Still, computing power is becoming more energy efficient by the day and sticking with paperwork will become too slow, so experts—Intel’s Reed among them—consider this a solvable problem.

“We don’t know yet what the market will adopt. In a decade, it might be status quo or best practice, or it could be the next Betamax, a great technology for which there was no demand,” Lonser says. “Even highly regulated industries that need greater transparency in the entire supply chain are moving fairly slowly.”

Blockchain will require acceptance by a critical mass of companies, governments, and other organizations before it displaces paper documentation. It’s a chicken-and-egg issue: multiple companies need to adopt these technologies at the same time so they can build a blockchain to exchange information, yet getting multiple companies to do anything simultaneously is a challenge. Some early initiatives are already underway, though:

  • A London-based startup called Everledger is using blockchain and IoT technology to track the provenance, ownership, and lifecycles of valuable assets. The company began by tracking diamonds from mine to jewelry using roughly 200 different characteristics, with a goal of stopping both the demand for and the supply of “conflict diamonds”—diamonds mined in war zones and sold to finance insurgencies. It has since expanded to cover wine, artwork, and other high-value items to prevent fraud and verify authenticity.
  • In September 2017, SAP announced the creation of its SAP Leonardo Blockchain Co-Innovation program, a group of 27 enterprise customers interested in co-innovating around blockchain and creating business buy-in. The diverse group of participants includes management and technology services companies Capgemini and Deloitte, cosmetics company Natura Cosméticos S.A., and Moog Inc., a manufacturer of precision motion control systems.
  • Two of Europe’s largest shipping ports—Rotterdam and Antwerp—are working on blockchain projects to streamline interaction with port customers. The Antwerp terminal authority says eliminating paperwork could cut the costs of container transport by as much as 50%.
  • The Chinese online shopping behemoth Alibaba is experimenting with blockchain to verify the authenticity of food products and catch counterfeits before they endanger people’s health and lives.
  • Technology and transportation executives have teamed up to create the Blockchain in Transport Alliance (BiTA), a forum for developing blockchain standards and education for the freight industry.

It’s likely that the first blockchain-based enterprise supply chain use case will emerge in the next year among companies that see it as an opportunity to bolster their legal compliance and improve business processes. Once that happens, expect others to follow.

Customers Will Expect Change

It’s only a matter of time before the supply chain becomes a competitive driver. The question for today’s enterprises is how to prepare for the shift. Customers are going to expect constant, granular visibility into their transactions and faster, more customized service every step of the way. Organizations will need to be ready to meet those expectations.

If organizations have manual business processes that could never be automated before, now is the time to see if it’s possible. Organizations that have made initial investments in emerging technologies are looking at how their pilot projects are paying off and where they might extend to the supply chain. They are starting to think creatively about how to combine technologies to offer a product, service, or business model not possible before.

A manufacturer will load a self-driving truck with a 3D printer capable of creating a customer’s ordered item en route to delivering it. A vendor will capture the market for a socially responsible product by allowing its customers to track the product’s production and verify that none of its subcontractors use slave labor. And a supermarket chain will win over customers by persuading them that their choice of supermarket is also a choice between being certain of what’s in their food and simply hoping that what’s on the label matches what’s inside.

At that point, a smart supply chain won’t just be a competitive edge. It will become a competitive necessity. D!


About the Authors

Gil Perez is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Tom Raftery is Global Vice President, Futurist, and Internet of Things Evangelist, at SAP.

Hans Thalbauer is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Dan Wellers is Global Lead, Digital Futures, at SAP.

Fawn Fitter is a freelance writer specializing in business and technology.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

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The “Purpose” Of Data

Timo Elliott

I’ve always been passionate about the ability of data and analytics to transform the world.

It has always seemed to me to be the closest thing we have to modern-day magic, with its ability to conjure up benefits from thin air. Over the last quarter century, I’ve had the honor of working with thousands of “wizards” in organizations around the world, turning information into value in every aspect of our daily lives.

The projects have been as simple as Disney using real-time analytics to move staff from one store to another to keep lines to a minimum: shorter lines led to bigger profits (you’re more likely to buy that Winnie-the-Pooh bear if there’s only one person ahead of you), but also higher customer satisfaction and happier children.

Or they’ve been as complex as the Port of Hamburg: constrained by its urban location, it couldn’t expand to meet the growing volume of traffic. But better use of information meant it was able to dramatically increase throughput – while improving the life of city residents with reduced pollution (less truck idling) and fewer traffic jams (smart lighting that automatically adapts to bridge closures).

I’ve seen analytics used to figure out why cheese was curdling in Wisconsin; count the number of bubbles in Champagne; keep track of excessive fouls in Swiss soccer, track bear sightings in Canada; avoid flooding in Argentina; detect chewing-gum-blocked metro machines in Brussels; uncover networks of tax fraud in Australia; stop trains from being stranded in the middle of the Tuscan countryside; find air travelers exposed to radioactive substances; help abused pets find new homes; find the best people to respond to hurricanes and other disasters; and much, much more.

The reality is that there’s a lot of inefficiency in the world. Most of the time it’s invisible, or we take it for granted. But analytics can help us shine a light on what’s going on, expose the problems, and show us what we can do better – in almost every area of human endeavor.

Data is a powerful weapon. Analytics isn’t just an opportunity to reduce costs and increase profits – it’s an opportunity to make the world a better place.

So to paraphrase a famous world leader, next time you embark on a new project:

“Ask not what you can do with your data, ask what your data can do for the world.”

What are your favorite “magical” examples, where analytics helped create win/win/win situations?

Download our free eBook for more insight on How the Port of Hamburg Doubled Capacity with Digitization.

This article originally appeared on Digital Business & Business Analytics.

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Timo Elliott

About Timo Elliott

Timo Elliott is an Innovation Evangelist for SAP and a passionate advocate of innovation, digital business, analytics, and artificial intelligence. He was the eighth employee of BusinessObjects and for the last 25 years he has worked closely with SAP customers around the world on new technology directions and their impact on real-world organizations. His articles have appeared in publications such as Harvard Business Review, Forbes, ZDNet, The Guardian, and Digitalist Magazine. He has worked in the UK, Hong Kong, New Zealand, and Silicon Valley, and currently lives in Paris, France. He has a degree in Econometrics and a patent in mobile analytics.