Exclusive interview: SAP Ariba's Paul Devlin on the growing importance of blockchain
As the late Stephen R. Covey, business and leadership expert and keynote speaker, once remarked: “Trust is the highest form of human motivation. It brings out the very best in people.”
In a business relationship, trust is one of the most, if not the most, vital components.
No self-respecting organisation is going to continue to do business with another if trust has been grossly breached in any way.
And although most business-minded people can usually trust their gut as to whether they should begin to trade with someone, a strong bond of trust between organisations is something that takes quite a while to build up.
With blockchain technology, there is a guarantee of who you’re doing business with and an authenticity surrounding the transaction. That’s why Paul Devlin, SAP Ariba’s General Manager for EMEA and MEE, believes we are about to see a wave of transformation – not just in the procurement industry and across the supply chain, but in terms of global trade itself.
Devlin is clearly a big believer in the technology and recognises how disruptive it is. He also reckons it won’t be long until everyone is embracing it.
“Blockchain is enabling trust in technology almost like nothing else that exists today,” he says.
“It will really be at the root of all global asset movement and that will be regardless of which particular market or commodity we are talking about. In the way that we’ve just taken for granted the fact that we do 90% of our work today on a smartphone, we will think about blockchain in that way in a three-to-five-year window.
“It’s just going to be the way we do things because of the provenance, trust and guarantee that it offers.
“It will then be about how companies want to imagine and innovate the usage of that.”
But, for the uninitiated, what is blockchain? How does it work? And how does it engender the trust, provenance and guarantee that Devlin talks about?
“At its core, it’s a digital ledger of transactions, agreements, contracts, anything which really needs to be independently recorded and verified as to actually having happened,” he explains.
“The ledger is not stored in one place, it’s distributed throughout several-hundred systems globally so, today, it’s virtually impenetrable.
“If you think about some of the biggest issues that companies face, it is around provenance. It is around track and trace, it’s around recall of goods. Think of yourself as the buyer: ‘I know that I bought something, but how can I actually testify to the provenance of the thing that I bought actually being the thing that arrives in my warehouse or on my doorstep?’
“If I then take that a stage further, with track and trace today we can be very clear that something which was ordered has actually arrived in the warehouse. What you can never be clear about, is ‘was the thing that arrived in the warehouse the thing that actually shipped?’.
“’Or was I the victim of fraud?’ So, something legitimate actually arrived but the thing that was actually shipped wasn’t what arrived in the warehouse.
“This whole thing about provenance, actually being able to guarantee that the thing that you bought was what went into the warehouse and was the same thing that actually arrived, is where trust comes from.”
The technology is built upon the global cryptocurrency Bitcoin. Devlin points to the $330mn real estate business launched recently by British tycoon Michelle Mone in Dubai, where property can only be paid for by using Bitcoin, as an example of how the market is really beginning to embrace the security offered by the blockchain.
But that’s just one example of how the technology is currently being used, and he believes that there is potential for far more creative innovation pertaining to the supply chain.
Devlin says: “The transaction is instantaneous, you own that property the second you buy it. And the company that’s sold the property knows that they’ve got the money, they know who it has come from and that it was paid.
“Then, taking that more generally, companies can then ask themselves: by having that guarantee, provenance and trust, can I offer a better service to my customers or the market?
“If the answer to that is ‘yes’, then companies have to start to think about how they develop and move from the analog way of doing business to the digital way of doing business, with blockchain at its heart.
“Then it goes a step further to: ‘What is my purpose as a business and how do I guarantee the purpose, and ensure that it’s actually finding its way into supply chains?’
“An example would be how to guarantee that items being bought in a supply chain are free from parts of the supply chain which use slave labour or child labour. Or, guaranteeing to customers that this supply chain utilises diversity, minority-owned business or comes from supporting emerging countries.
“How do I take that purpose of the company and guarantee to the market that when you buy into it, it actually has a supply chain which guarantees that efficacy? That is what blockchain also brings.
“So, when you buy something, you know the money is safe. You know who the seller is, you can guarantee the thing that you know you were buying is indeed what arrives, and you can guarantee it was made ethically and comes from an ethical supply chain.
“If you start to apply that thinking to the marketplace, then the scope of potential is huge.”
SAP Ariba is already working with a number of companies looking at how the technology is going to improve their business and improve their supply chains. As well as that, the company hopes to launch sourcing intelligence and contract intelligence solutions in the not-too-distant future.
Devlin is passionate about technology, and it certainly ties in with the company’s philosophy of “enabling procurement with a purpose”, but does the Scotsman think that it will make money?
“My gut feeling tells me yes,” he says, after pondering the question for a moment.
“I think anything that engenders better trust and gives guarantees in a supply chain between businesses and between customers and businesses opens up borders.
“There are a lot of companies today who are maybe hesitant to do business in certain territories because they’re unsure of the regulation or the reputation that certain markets or certain places have.
“Anything you do that engenders trust can only open those markets up and that creates choice, which tends to improve competition, drive down pricing, bring more people into the market and improve innovation so that you’re then in that continuous cycle.
“In my mind, there is absolutely no doubt that it will impact companies’ bottom lines, and their top lines as well, with new markets that they will be able to go after, new opportunities that they will be able to pursue and, frankly, new customers that will come into their market because trust exists.”
And just how far does Devlin believe that this technology can be taken?
“I think companies will be limited by their own imagination,” he answers.
“More and more companies are realising if they’re going to do business in the digital age, then they’ve got to think about their company as a software company. They’re taking things that were once analog and figuring out how to digitise that thing or that process.
“If you think about blockchain in the middle of that, then it’s going to have a massive, massive impact.”
RAIN RFID, IoT and AI are key to a proactive supply chain
Across supply chains around the world, we have seen leading companies rely heavily on technologies like AI and IoT during the pandemic. These digital solutions have enabled businesses to accurately capture and ultimately use their own first-party data to drive efficiencies and protect increasingly fragile bottom lines.
However, what is less commonly known is the increasing role of RAIN RFID technology in supporting IoT solutions. By using RAIN RFID to capture item data and then feed that data into AI systems, businesses can identify inefficiencies within the supply chain and make informed decisions.
What is RAIN RFID?
In short, RAIN RFID is a powerful IoT technology that enables itemised data collection. By applying small, battery-free tags to items, organisations can identify, locate, and authenticate each of those items, scanning up to thousands of items simultaneously with a variety of devices, including hand-held, fixed and wearable readers.
RAIN RFID solutions dramatically improve the operational capabilities of an organisation by ensuring they have exactly the right items, in the right quantities, at the right locations, at the right time. During the pandemic, RAIN RFID solutions have been key to limiting disruptions in retail and manufacturing supply chains, most notably by increasing inventory and asset visibility and improving the management and flow of goods.
Three ways RAIN RFID helps solve supply chain concerns
RAIN RFID is used to streamline processes, maintain real-time inventory, increase productivity, and help manage labour shortages. We see three key ways RAIN RFID helps solve supply chain concerns:
- Automate shipment verification: Today, significant labour is required for multiple, manual barcode scans during the shipment process. RAIN RFID tags can be read automatically without a direct line of sight, erasing the need for workers to pause, locate a barcode, and scan it. By using RAIN RFID, supply chain leaders can automate their shipment verification process and improve warehouse efficiencies by up to 25%.
- Deliver real-time visibility: Retail Systems Research says that 76% of supply chain survey respondents reported that real-time inventory visibility was their leading focus for improving performance. When supply chain managers lack information about the status of assets and shipments moving into and out of warehouses, confidence and productivity suffer. By using RAIN RFID, supply chain leaders gain real-time visibility into an item’s identity, usage, and location. With this information, they can quickly find inventory and assets, and reduce the cost of asset investments.
- Improve order accuracy: Today, companies rely on redundant manual checks to verify that the right cartons are loaded onto the correct pallets. By using RAIN RFID, supply chain leaders can automate pallet build verification to streamline the process and increase order accuracy. In fact, a recent study by Auburn University found that RAIN RFID can help an organisation achieve up to 100% order accuracy, eliminating claims costs and unhappy customers.
RAIN RFID can increase value of AI-powered analytics
In today’s AI-driven, rapid decision-making business environment, RAIN RFID is uniquely capable of making systems more effective. This is because it provides item identifiers for tracking and locating billions of items, from clothing to food, pharmaceuticals, tools, packages, pallets, and more.
It also works without line-of-sight, providing visibility into places and processes not previously available. The data provided by a RAIN RFID system can give AI-powered solutions the ability to see individual items throughout the supply chain, understand how the entire supply chain is functioning and identify which areas can be improved.
As companies accelerate digital transformation, we expect to see a rise in interconnected data as investments into new technologies and IoT surge. But as the volume of real-time and accurate data about the movement of goods rises, so too do the demands on operations teams to make sound business decisions quickly and with confidence, often using AI-powered systems that thrive on improved data to make better decisions.
As an example, over the past several years, Delta Airlines transformed its customer experience by investing in technology including real-time RAIN RFID bag tracking and automatic check-in via the Fly Delta mobile app. Delta is now leveraging this set of investments in their implementation of an AI-driven platform that analyses millions of operational data points, from luggage movement to aircraft positions to flight crew restrictions to airport conditions. This system simulates operating challenges and creates hypothetical scenarios that help Delta’s professionals make critical operational decisions that improve the overall customer experience.
The need to drive digital transformation rapidly during the pandemic has made supply chain and logistics professionals increasingly tech savvy. As we prepare for a post-pandemic era, companies’ increased know-how and awareness of solutions like RAIN RFID, IoT and AI will play a key role in evolving the industry’s approach to solving supply chain issues from reactive to proactive, setting them up for future success.