Blockchain and AI in the supply chain
Technology is changing the world, and if you are not involved in it, then you are not going anywhere, as explained this year at Collision 2019. And there has never been a technology that has captured everyone’s attention like blockchain.
And that is why the procurement and supply chain industry has no option but to take up the challenge. For long, the industry has been languishing for lack of transformation. A modern chief procurement officer’s job seems to be focused on adopting new methods to meet the needs of users. The future appears to be holding for those without proper insight into technology.
So how will the industry survive in the future? What will it take for everyone in the industry to understand technology is the future of procurement? Let’s find out.
What is the roadmap of the profession?
Procurement organizations look more or less like white-collar jobs of the 1970s. There is too much manual process in the industry. Most key players in the industry still rely on manual ways of doing things.
Even though automation is transforming the business models, there are still so many things that are yet to be done. In simple terms, procurement officers need to work harder towards embracing technology. Some of the issues that still come up when things don’t work according to plan include lousy user experiences, incomplete functionalities, and missing on advanced features.
So what does an effective, responsive system look like?
We have all shopped or have seen someone shop on Amazon, Alibaba, and other e-commerce stores. These services offer a great selection of products. You can compare items based on specification, price, shipping options, warranties, and customers support, among other features.
As a buyer, there nothing better than having the power to compare different items according to needs, And to make things better, it is easy to receive the products within the shortest time possible.
Yet there are still users who have to go through the struggles of dealing with poorly designed systems. They are forced to accept poor decisions made on their behalf with these systems.
It is sad to imagine that even after two decades of technological deployment, there is still a great struggle in most organizations. Most of them cannot get a comprehensive view of how they spend and how much time is used.
Many cannot still get past the time-consuming routines, hard transaction activities, pricing, awards for contracts, and monitoring supplier performance. All these activities are still being done by procurement workers who take a long time putting the pieces together.
But if technology were applied, it would take only a few seconds for everything to be compiled. It is only when the right tech is put into action that we can get results.
The case with ERP
ERP applications seemed to be the best option for a lot of companies. However, they turned out to be nothing but a complete failure. The process has, on many occasions, proven to be a stumbling block to excellence. They don’t help in the progression of the industry based on user needs. Instead, systems like Ariba and Coupa have only caused significant failure.
They are loathed by procurement users more than they are hated by business users. These systems are still rigid and hard to understand as most businesses still struggle to understand their expenditure.
Supply chain management can now enjoy linking and combining cross-functional data from outsourced and internal sources. They were to uncover where problems originate from. ERP was supposed to be the technology that transformed the procurement industry.
But this promised that included creating a flawless system failed to deliver. The main reason for this could be that there is too little time for growth and coming up with innovative ideas.
The landscape in the procurement industry is based on two parallel processes. On one side is sourcing activities and on the other is procure-to-pay. The processes are wrapped by analytics and governance.
However, the complexities in day-to-day procurement seem to be getting bigger. The great suite migration of 2008-2010, for instance, left many small companies struggling in under giant players. They remained to experience minimal market share and limited influence.
Since then, enterprises have had to pay for expensive systems hoping they would change something – they don’t. And we cannot blame tech vendors for this since most have entirely ignored the phenomenon.
In essence, supply chain and procurement are on the verge of extinction. The technologies meant to handle everything have become a means of destruction.
How to undo it
Trying to turn a blind eye on AI, RPA, Blockchain, 3D printing, and similar techs will make things even worse. There are a few procurement processes that are already automated.
AI, Blockchain, and Internet of Things have completely revolutionized user experience. The way people interact with technology is no longer a problem.
The simple truth is the digital revolution in supply chain management is the way to the future. Companies like Amazon have already digitalized procurement. Now all that remains is for companies to get into the system and adopt new ideas coming up.
It is no secret that procurement organizations have an essential role to play. And anyone can start using blockchain technology by first adopting related technologies. When automation came, IT was not disrupted, and blockchain is not going to disrupt procurement.
Get automated systems into place, and you are good to go. It does not take out human involvement but only makes it better simplifying tasks.
Modern IT systems are self-managing, diagnosing, and repairing. That means you have a chance to make your processes more manageable.
Why is it essential to act now?
With the changing world of technology, there is every need for procurement managers to adopt new systems. If you don’t take action now, here are some of the things you will be missing on.
Ø Complete automation. Blockchain locks information making repetitive actions possible.
Ø Clean data. With error-free data, you keep all parties informed. This means excellent collaboration throughout.
Ø Increased labor management through performance measurement of activities. You can keep records and project performance.
Ø And increase in contractual obligation adherence. Each party involved understands their obligations.
Ø Reduced counterfeit products. This is the greatest threat to modern businesses. Blockchain can identify the history of a product.
Ø Easy claims settlements and
Ø Reduced costs of compliance.
What are the first steps?
Understand that the supply chain is an integral part of a company’s operations. This is why the part forward starts from a paper road map. Managers must make the right decisions through real-time decisions.
Start by understanding the impact of digital transformation on the supply chain. The traditional method of doing things will be completely disrupted.
You don’t have to get rid of traditional systems such as procure-to-pay. They lay the architecture through a more flexible ecosystem hence making the field even.
Every company needs a digital foundation. They can then capture, analyze, access with ease, and interpret information. The basics involve robotics and AI, which digitalize simple tasks.
Driving the digital transformation by using cryptocurrency
Blockchain technology has revolutionized the way many companies operate. It is the future of business, and the supply chain and procurement managers need to adopt it.
Using cryptocurrency makes payments more straightforward and faster. This new currency seems to be gaining a lot of popularity. With so many talking about it, it is only a matter of time before it is fully recognized as a global currency.
No third party in the transactions means less fee and better service delivery. There is no blockchain without mentioning cryptocurrency.
We can succeed together or fail separately as summarized by Justin Trudeau, Prime Minister of Canada at Collision 2019.
About The Author:
Charlotte de Brabandt, Institute for Supply Management®’s (ISM®) 30 Under 30 Rising Supply Chain Stars 2017 Megawatt Star and member of ISM’s Thought Leadership Council.Charlotte de Brabandt is a Technology and Negotiation Keynote Speaker & Host with ample global industry experience in the field of automotive, timepieces, technology, pharma, consumer goods and medical devices. She has been known for hosting the TEDx Lugano event on professions of the future. She specializes on digital technologies, automation and AI. Furthermore she recently became famous for winning the 30 under 30 ISM 2018, Rising Supply Chain Star Megawatt award.www.charlottedebrabandt.com