COVIDs “deep impact” to Procurement and SupplyChain, Is Blockchain one of the answer(s)?

Covid-19, the genesis of 2019’s outbreak & vivid outcomes challenging mankinds chapter of survival and an “art of preparation” for what can continue to remain a “new normal” for a while.

In the past few months I’ve been reading almost every single post from the McKinsey desk on how procurement and SupplyChain are impacted with COVID.

Every article is a must read and pretty much, every article demonstrates its append of the seriousness as the virus 🦠 outbreak itself.
Believe me, its not in your face sarcasm, but McKinsey at the end of the article asks you to click on something called “The Next Normal”, how companies and leaders can RESET for GROWTH beyond Coronavirus.
Image courtesy By Saurus Icon, ID , the Noun Project

I’m a SupplyChain and Procurement professional and it hits me the most when I see myself scrambling to get PPE for my own family’s safety , i've consumed almost 2 100 qty Masks and Nitrile glove supplies and have put them on a repeat replenishment (monthly)....the new normal also includes the way I shop online from multiple stores and then stock up , not hoard , replenish time to time.

The day the groceries show up at home is a day of implicit workout to move them from Door to Garage and then Garage to Refrigerator ....phew what a new normal we have been exposed to.

Even on the work front , the SupplyChain has beefed up to welcome a new streak of fast track vendors that can meet the needs during the pandemic , new ways of order ack. to safe delivery to  safe receiving , note the word SAFE has become an append to the business process. I think the new Covid streak supplier on-boarding questionnaire will be something like:
Do you deliver in a Socially Distanced mode?
What are your safety norms when it comes to ensuring Safe handling of goods?
How are the Warehouses ensuring sanitized handling of goods?
How quickly can you ship us from a quarantined zone?
Can you change/divert your truck/fleet cross docking zones to non-Covid zones?

…there are endless questions like these that are slammed on the Supply and Distribution network.
(First time I received something like my renewed passport without a POD or a Signature, not even a eSignature at the door, in a Socially Distanced manner”).

Primarily, SupplyChain(s) are at the epicenter of the outbreak with exposed warehouses, Warehouse personnel, etc. 
I don’t think any SupplyChain algorithm was ever built to handle a global pandemic that needs to cater to the enterprise where the work/goods need to be re-programmed to a non Covid location which is not at risk, does a location like that exist, I dont think so.

Risk mitigation doesn't look random to any Random Forest Machine Learning algorithms given every iteration is Covid prone.

In an over-simplified manner, I want to “unquote” that all of my reading has manifested into some of the below strategies like:

(a) Knee Jerk reactions of the SupplyChain.

(b) Near term strategies of the SupplyChain.

(c) Long Term strategies of the Supply Chain

And lastly.

(d) Phase(n) "net new recurrence mitigation" strategies of the SupplyChain.

(e) New Workplace re-design for a pandemic based future.

(f) New Remote working strategies where possible.

(g) New Leadership vision, empathy and appetite to deal with an Outbreak oriented task-force/workforce.

(h) Pandemic Agnostic SupplyChains.

there are several, but these happen to be trending techniques for survival.

I don't even want to detail out each one, as this post can get heavy and emotional at the same time :-).

Just like how we make the adjustments on the consumer side RISK , likewise a similar phased combat for the enterprise side RISK MITIGATION strategies are making copies of itself to keep pace with the virus.

In some cases, phased re-opening of workplaces for non essential workers are also adding to the chaos amidst the essential pieces that have to work for the show to go-on. 

First thing that has been put as a disaster recovery KPI is Supplier Management, followed by decentralization strategies for Distribution Network decentralization planning, re-hashing data governance, scrutiny of data, Provenance and Forensic evidence of the Track and Trace trust co-efficient...and more.

Notice the word Decentralization is also making copies of itself to the top of the priority checklist.
I think Blockchain was built to narrate the importance of Data Decentralization and its speed and accuracy and trust in a time-bound equation.
Blockchain’s favorite word to ensure risk mitigation via decentralization, provenance, track and trace are the answers to illustrate trust in parties that participate in commerce.
I think Blockchain was built for something like this and it will become the priority in the short term working with AI and ML and IOT.

Real physical SupplyChains cannot physically  decentralize, but the underlying systems can be, the underlying data can be and also IOT can help place that evidence on the ledger that proves that the Supplier/Warehouse/Parties in a commerce transaction are meeting the COVID standards of Social Distancing based commerce needs that can be trusted, without demonstrating trust.

Resiliency of people, processes are in a tandem grind like ping pong balls colliding with each other, but we have found a way, we always will and that is the hope I am leaving you with.
We just need to stay focused, be brave, be sensible and keep it together.

I will continue with future posts on Covid and the SupplyChain series of blogs to follow.

Is Procurement really new to Blockchain concepts like State Transitions, Smart Contracts & Consortiums ?

Is Procurement really new to Blockchain concepts like State Transitions, Smart Contracts & Consortiums ?

Procurement is not new to automated state transitions, can you guess why ?

Intelligent Procurement Processes.

• eAuctions demonstrate the native needs of smart contracts where bidding rules can be defined in a way where we can go straight from source to settle. 
• Release orders both scheduling agreements and POs resulting as release orders off of a Operational contracts are native state transitions.
• Sourcing strategies to cut POs off a RFQ/Quota Arrangement, Source List,Info record are also state transitions with some programmed and forecasted intelligence.
• MRP runs, intelligent forecasting algorithms that transition state based on inventory re-order points coupled with IOT based shelf driven ordering, driving Scheduling agreement or POs or Contracts are a thing of the past.

Image courtesy #thenounproject By Nithinan Tatah, TH

These are just some working examples of how procurement is demonstrating state transitions based on rules and logic to drive an end state automated decision or follow-on process 

What’s not locked in these state transitions is tokenization, consortium based organization and business process structures, that too is not a big deal if procurement goes the extra mile with “settling embed” in the source process at all logical end point state transitions.

How can procurement align with Blockchain 

...procurement still has underlying trust issues when it comes to 

• contingent staffing of verified resourcing.
• ATP commitment from suppliers.
• SupplyChain disruption due to changing dynamics of external factors affecting SupplyChain like epidemics (Corona virus SARS Ebola etc) or Brexit or some outlier like GDPR.
• Business Network, OnPremise based ERP systems to Consortium based Sourcing, Distribution and SupplyChain systems.

Viewing Business Networks as lean Consortiums as a head start for transformation

When we talk about the above processes we are still locked in via a business network like Ariba or Coupa or Trade-shift pretty much that most enterprises are locked into ....

....just coin a thought in your mind if each of these self contained enterprise ledgers were consortium driven based on some logic that brought them all together..

A scenario where eAuctions could be consortium operated or even operated in DLT/Blockchain mode where if nodes that bid on contracts that never depended on the security of one node being one company rather being decentralized and distributed consortiums of subscribed enterprises .....

If you were looking at FINALITY for settlement of the winning bid that is a given assuming everyone understands what staking means in the scheme of things 

We can have a new eAuction type called Proof of Stake eAuction where bidders stake a part of the bid and act as validating nodes on the eAuction to ensure there is competition and trust manifestation in the complete transaction....I think it’s just a configuration of 2 addl. parameters to an already state machine process with an added layer of trust running on a private or semi permissioned private blockchain ....

Conclusion

In closing I’d like to state that what if the business networks all came down due to a hack on the cloud that hosted these business networks, we still have a Decentralized Distributed network of Participating nodes comprising of Suppliers , Customers , Freight forwarders , shippers , container companies , warehouses, clearing houses , banks and financial SupplyChain entities that will keep the show on....

Procurement was never new to Blockchain concepts ...it’s an extension to an already intelligent process that …exists with some form of state transition intelligence across business objects.