As we define future supply chain technology, I think we need to take "a hard left." Up to now, we have been
moving at a steady pace down a road that is well-known and safe. But this road is no longer sufficient to meet today's
supply chain challenges. We need to change our direction. Here I clarify the path less traveled but more promising for
supply chain leaders.
What do I mean? Let me explain. Supply chains currently use closed and proprietary technologies. Processes are based on
relational databases with rows and columns. I believe we need to move to open source technology. In other words, get used to
hearing the terms "blockchain" and "hyperledger." These are two new concepts that are here to stay.
What is the reason for this move to open, distributed technology? Currently, there are "dark holes" in the supply chain that
I believe will not be closed with the current approaches. These dark holes are typically handshakes, or interface points,
between applications where data does not flow, stopping visibility across the network. A dark hole could be the unloading of a
container from a ship, the receipt of a shipment, a transfer of ownership, a return, or a change in status. Dark holes usually
happen with the transference of ownership or change in status between two parties.
Let's examine the problem. Currently the product road maps for conventional technology providers are not focused on closing
these dark holes. Instead, the focus is on refining today's enterprise applications. It is unrealistic to think that vendors
like Infor, Microsoft, Oracle, and SAP will ever work together to erase the dark holes of information in the supply chain.
Likewise, it is very clear that while enterprise resource planning (ERP) systems will continue to be the backbone or system
of record for transactions within the enterprise, they are unable to form the backbone or system of record for a global value
network that consists of complex, nonlinear interactions between supply chain partners.
This transition from closed and proprietary solutions to open source capabilities will not happen quickly. I see adoption
occurring over the next five years. But if it works, I think that blockchain—which is defined as a distributed database
that acts as a shared, immutable ledger for recording the history of transactions—will be embedded in all of today's
current technologies.
While many may know blockchain as the engine powering the cryptocurrency and payment system Bitcoin, the possible use cases
for the technology in the value network are far more pervasive and powerful. Particularly promising is the
Hyperledger project, an open source blockchain platform started in December 2015 by the Linux Foundation to enable
blockchain-based distributed ledgers.
The Hyperledger project aims to bring together a number of independent efforts to develop open protocols and standards by
providing a modular framework that supports different components for different uses. This would include a variety of
blockchain technology variants with their own consensus and storage models and services for identity, access control,
and contracts.
What are the possibilities? Before I continue, let me make a confession: I am not a technologist. I cannot write code, and
when I worked for a software company, I quickly discovered that writing software requirements was not the best use of my
skill sets. Instead I like to paint big pictures and help others to fill in the gaps. But here are some use cases that
I developed through talking to technology experts and that we at Supply Chain Insights are considering testing as part
of our new Network of Networks Group.
Community registry. Today network registration involves onboarding to every network as an individual or as a company.
It lacks a system of reference for division/company or company/industry. What if we could have a community registry where we
have a single sign-on that could be accessed by all value networks? This schema would be carried in blockchain messaging,
enabling users to write information once and provide safe/secure communication across the network.
Replacement of EDI. Today EDI or electronic data interchange is the workhorse of the supply chain. Messages are transmitted and opened safely and securely. However, it operates in a batch manner, and there is latency as the message is opened. In addition, the passage and receipt of EDI requires sophisticated IT groups. As a result, it is more costly. Could blockchain replace EDI?
This is a stretch objective, but I think it's possible.
Lineage/track and trace. Tracking and tracing goods across multiple parties is cumbersome and lacks reliability.
Blockchain offers the ability to embed the origin and transfer points, destinations, and lot codes in the chain. This
could help companies better track and trace food, manage gray market goods (genuine branded goods sold by
unauthorized dealers) to eliminate counterfeit items, ensure compliance, and streamline recalls.
Safe and secure supply chains. As goods pass through the supply chain, multiple parties handle them. Blockchain
technologies enable companies to create a chain of custody. In the process, the handling requirements for each product could
be communicated on receipt.
Tracking social responsibility goals. Tracking a product's carbon footprint and point of origin for compliance with
internal or external social responsibility requirements is difficult. One thing is clear: Audits do not work. As we tackle
issues like fair labor, clean water, Congo metals/conflict minerals, and carbon consumption, blockchain can track the chain
of custody and help us to better understand and measure energy consumption, carbon emissions, and other social responsibility
goals.
Supply chain finance. The origin of blockchain is a desire to ensure safe and secure payment. Could we disintermediate
banks as we know them? Each time a supply chain transaction passes through a bank, there are charges. Could we drive a massive
restructuring of world banking to reduce bank charges for credit cards, wire transfers, and electronic fund transfer (EFT)/
automatic clearing house (ACH) payments?
Document sharing. In supply chain, we spend hours upon hours negotiating terms and conditions of contracts. After
completion, the filed contracts are never used again. We do not connect the contracts to supply chain execution. But what if
contracts could accompany a purchase order, and if conditions change, then rules would change the cost based on delivery
conditions? Or they would change delivery conditions, based on availability (dynamic dock scheduling) and weather? I think
this is all possible. I think blockchain along with
cognitive computing will allow value networks to connect supply chain documents to transactions in real time.
Today we do not know what is possible. However, the more I study this technology at the beginning of its hype cycle, the
more promising I think it is. I am excited to be a part of the group that is going to do some serious testing. Supply Chain
Insights has gathered together a cross-industry networking group of collaborative technology users and developers to study
what we are calling the
"Network of Networks." The Network of Networks will address the adoption of distributed and open
technology by the ecosystem of technology providers and business users to drive interoperability in value networks.
In the Networks of Network testing that we have planned, we will be using the IBM version of blockchain
to test the use of Hyperledger to improve network onboarding. Our goal is to test the open source version from IBM in
the digital sandbox/lab environment at Schneider Electric. We issued a call for participants in a webinar on January 11,
2017 and came together as a group at the next Network of Networks Session on April 13-14 at the Grande Lakes
Ritz-Carlton Hotel in Orlando, Florida. The results will be shared publicly at the upcoming
Supply Chain Insights Global Summit on September 5-8, 2017 at the Ritz Carlton, Reynolds in Oconee, Georgia.
We hope to see you there!
Business software vendor Cleo has acquired DataTrans Solutions, a cloud-based procurement automation and EDI solutions provider, saying the move enhances Cleo’s supply chain orchestration with new procurement automation capabilities.
According to Chicago-based Cleo, the acquisition comes as companies increasingly look to digitalize their procurement processes, instead of relying on inefficient and expensive manual approaches.
By buying Texas-based DataTrans, Cleo said it will gain an expanded ability to help businesses streamline procurement, optimize working capital, and strengthen supplier relationships. Specifically, by integrating DTS’s procurement automation capabilities, Cleo will be able to provide businesses with solutions including: a supplier EDI & testing portal; web EDI & PDF digitization; and supplier scorecarding & performance tracking.
“Cleo’s vision is to deliver true supply chain orchestration by bridging the gap between planning and execution,” Cleo President and CEO Mahesh Rajasekharan said in a release. “With DTS’s technology embedded into CIC, we’re empowering procurement teams to reduce costs, improve efficiency, and minimize supply chain risks—all through automation.”
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.
Even as a last-minute deal today appeared to delay the tariff on Mexico, that deal is set to last only one month, and tariffs on the other two countries are still set to go into effect at midnight tonight.
Once new U.S. tariffs go into effect, those other countries are widely expected to respond with retaliatory tariffs of their own on U.S. exports, that would reduce demand for U.S. and manufacturing goods. In the context of that unpredictable business landscape, many U.S. business groups have been pressuring the White House to pull back from the new policy.
Here is a sampling of the reaction to the tariff plan by the U.S. business community:
American Association of Port Authorities (AAPA)
“Tariffs are taxes,” AAPA President and CEO Cary Davis said in a release. “Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses, and increase costs for hard-working citizens. Instead, we call on the Administration and Congress to thoughtfully pursue alternatives to achieving these policy goals and exempt items critical to national security from tariffs, including port equipment.”
Retail Industry Leaders Association (RILA)
“We understand the president is working toward an agreement. The leaders of all four nations should come together and work to reach a deal before Feb. 4 because enacting broad-based tariffs will be disruptive to the U.S. economy,” Michael Hanson, RILA’s Senior Executive Vice President of Public Affairs, said in a release. “The American people are counting on President Trump to grow the U.S. economy and lower inflation, and broad-based tariffs will put that at risk.”
National Association of Manufacturers (NAM)
“Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge,” NAM President and CEO Jay Timmons said in a release. “However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.”
American Apparel & Footwear Association (AAFA)
“Widespread tariff actions on Mexico, Canada, and China announced this evening will inject massive costs into our inflation-weary economy while exposing us to a damaging tit-for-tat tariff war that will harm key export markets that U.S. farmers and manufacturers need,” Steve Lamar, AAFA’s president and CEO, said in a release. “We should be forging deeper collaboration with our free trade agreement partners, not taking actions that call into question the very foundation of that partnership."
Healthcare Distribution Alliance (HDA)
“We are concerned that placing tariffs on generic drug products produced outside the U.S. will put additional pressure on an industry that is already experiencing financial distress. Distributors and generic manufacturers and cannot absorb the rising costs of broad tariffs. It is worth noting that distributors operate on low profit margins — 0.3 percent. As a result, the U.S. will likely see new and worsened shortages of important medications and the costs will be passed down to payers and patients, including those in the Medicare and Medicaid programs,” the group said in a statement.
National Retail Federation (NRF)
“We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America,” NRF Executive Vice President of Government Relations David French said in a release. “But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses.”
In a statement, DCA airport officials said they would open the facility again today for flights after planes were grounded for more than 12 hours. “Reagan National airport will resume flight operations at 11:00am. All airport roads and terminals are open. Some flights have been delayed or cancelled, so passengers are encouraged to check with their airline for specific flight information,” the facility said in a social media post.
An investigation into the cause of the crash is now underway, being led by the National Transportation Safety Board (NTSB) and assisted by the Federal Aviation Administration (FAA). Neither agency had released additional information yet today.
First responders say nearly 70 people may have died in the crash, including all 60 passengers and four crew on the American Airlines flight and three soldiers in the military helicopter after both aircraft appeared to explode upon impact and fall into the Potomac River.
Editor's note:This article was revised on February 3.
GE Vernova today said it plans to invest nearly $600 million in its U.S. factories and facilities over the next two years to support its energy businesses, which make equipment for generating electricity through gas power, grid, nuclear, and onshore wind.
The company was created just nine months ago as a spin-off from its parent corporation, General Electric, with a mission to meet surging global electricity demands. That move created a company with some 18,000 workers across 50 states in the U.S., with 18 U.S. manufacturing facilities and its global headquarters located in Massachusetts. GE Vernova’s technology helps produce approximately 25% of the world’s energy and is currently deployed in more than 140 countries.
The new investments – expected to create approximately 1,500 new U.S. jobs – will help drive U.S. energy affordability, national security, and competitiveness, and enable the American manufacturing footprint needed to support expanding global exports, the company said. They follow more than $167 million in funding in 2024 across a range of GE Vernova sites, helping create more than 1,120 jobs. And following a forecast that worldwide energy needs are on pace to double, GE Vernova is also planning a $9 billion cumulative global capex and R&D investment plan through 2028.
The new investments include:
almost $300 million in support of its Gas Power business and build-out of capacity to make heavy duty gas turbines, for facilities in Greenville, SC, Schenectady, NY, Parsippany, NJ, and Bangor, ME.
nearly $20 million to expand capacity at its Grid Solutions facilities in Charleroi, PA, which manufactures switchgear, and Clearwater, FL, which produces capacitors and instrument transformers.
more than $50 million to enhance safety, quality and productivity at its Wilmington, NC-based GE Hitachi nuclear business and to launch its next generation nuclear fuel design.
nearly $100 million in its manufacturing facilities at U.S. onshore wind factories in Pensacola, FL, Schenectady, NY and Grand Forks, ND, and its remanufacturing facilities in Amarillo, TX.
more than $10 million in its Pittsburgh, PA facility to expand capabilities across its Electrification segment, adding U.S. manufacturing capacity to support the U.S. grid, and demand for solar and energy storage
almost $100 million for its energy innovation research hub, the Advanced Research Center in Niskayuna, NY, to strengthen the center’s electrification and carbon efforts, enable continued recruitment of top-tier talent, and push forward innovative technologies, including $15 million for Generative Artificial Intelligence (AI) work.
“These investments represent our serious commitment and responsibility as the leading energy manufacturer in the United States to help meet America’s and the world’s accelerating energy demand,” Scott Strazik, CEO of GE Vernova, said in a release. “These strategic investments and the jobs they create aim to both help our customers meet the doubling of demand and accelerate American innovation and technology development to boost the country’s energy security and global competitiveness.”