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.
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.
