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The Supply Chain with Blockchain Benefits You Must Know

Posted by SCOPE Recruiting on Jan 2, 2018 7:12:00 AM
The Supply Chain with Blockchain Benefits You Must Know

The world's leading companies rely on computerized enterprise resource planning (ERP) and supply chain management software. Products are tracked all the way to trash bins. Yet these companies have limited insight as to where their products actually are. This is a world without widespread blockchain benefits.

It's the world we live in. We saw it in action in 2015 when an E. coli outbreak at Chipotle Mexican Grill outlets left 55 customers ill. The resulting PR disaster smashed Chipotle's stock price to a three-year low which it has yet to recover from.

Blockchain technology promises a radical solution.

Keep reading to find out how blockchain works, what a supply chain with blockchain benefits looks like and why you should be implementing it.

What Is Blockchain?

Well, for starters, it's a lot like Wikipedia. Or a bit like Google Docs.

To make things simple, it's a ledger. A digital, decentralized ledger of cryptocurrency transactions. This is where blockchain benefits for companies come in.

How Does It Work?

The Basics

Picture an old school ledger. The kind where you note down transactions with a pen.

Now, picture a digital version of that ledger. You're probably picturing something like Excel. You've got the right general idea, but we just said that blockchain works like Wikipedia or Google Docs.

This is where things start to get interesting.

If you're picturing Excel, picture Google Sheets instead. A platform with the same basic functionality of our Excel Ledger, right? Except that multiple people can view and add to it at any given time.

Now you're heading in the right direction.

A Decentralized Digital Ledger

With a blockchain, several users can write entries. This same community web of users can also control how the information within that collective ledger is changed and updated. Like Wikipedia or Google Sheets, the full collection of information that makes the ledger isn't the product of a single person.

No one person controls all the information either.

It's a similar idea as Wikipedia. But how blockchain works on a ground level is different.

Wikipedia works by allowing a user with a registered account to change information. But control of the overall database remains with Wikipedia. Anytime a user goes to this site, they see the amalgamation of updates, the 'master copy' of a page.

That's not quite how blockchain works. That's why blockchain benefits are such a big deal.

Blockchain Backbone

Unlike Wikipedia, blockchain works on a distributed database. Basically, it eliminates the need for a trusted party to oversee the flow of information.

Here's what happens.

The most recent transactions in a blockchain are the blocks. Once the block is completed, it becomes part of the blockchain. But unlike Wikipedia, where the input of several users editing one page is compiled to one master copy, every block is updated independently of all the others.

In other words, each block in the chain is its own unique master copy.

Once added to the blockchain, each block becomes part of the permanent database. These blocks are organized chronologically from the first block in the whole chain to the most recent.

One other thing about blocks. The system is designed such that each individual block, once added to the chain, cannot be changed, copied or deleted. They can, however, be shared.

And that's the heart of blockchain benefits.

What Are Blockchain Benefits?

In four words: visibility and information control. Plus a few others.

Visibility

Chipotle and other companies with a complex supply chain have a major problem. They can't see where their products are all the time. Even though these goods are constantly being tracked.

The problem is an analog gap.

Think of it this way. Once a product is shipped, all you have is the shipping label. In theory, this is useful. In practice, the shipping label is just a copy of a printout. And the shipping number will only tell you where the box is and who signed for it.

Basically, companies have tracking information. The problem is that little of this information is actually useful. Blockchain benefits companies by allowing them to see the information they're missing along the way.

Information Control

Blockchain benefits also allow companies to see all the information they need. And they can share it without bringing in a trustworthy third party to supervise the information swap.

Think of it this way. Before blockchains and bitcoin came on the scene, the only way for two companies to agree on a data set was to bring in a middleman to account for all the numbers.

The problem is this involves a whole lot of power plays and negotiations before information can ever change hands. Power plays that significantly slow the entire process.

Blockchain benefits all involved parties because it removes the need for a central middleman. How? By synchronizing all data across a shared network. Every involved participant verifies the calculations of others. It's this level of impressive redundancy that keeps the whole system secure.

Blockchain grants access to the whole picture. The useful parts of the picture, for all involved parties, at every step along the way.

Secondary Benefits

Blockchain benefits aren't limited to just visibility and information control. Here are a few more key supply chain benefits to keep in mind:

  • Reduced administrative costs
  • Improved corporate reputation through transparency (remember Chipotle's PR disaster?)
  • Improving public trust of shared data
  • Reduce public relations risks due to faulty practices in the supply chain

When it comes down to it, blockchain benefits are more than just what you can see. When you digitize a company's physical assets to create an immutable record of all transactions, one that all involved parties can see, it helps reduce fraud along each step of the supply chain.

This is important for high-value goods. But it's also important for food companies who attain their ingredients from a whole ecosystem of suppliers.

Remember Chipotle's E. coli outbreak? With blockchain, they would be able to see how ingredients pass between subcontractors. Then they could see where mistakes were made.

Having this information broadly available within the company also helps them avoid their earlier snafu. This is a public health risk caused by a lack of awareness regarding where their ingredients were between the supplier and the end customer.

Because information is available and visible, blockchain also grants companies greater control when they outsource manufacturing. Everyone has access to the same information, which makes transfer errors and communication issues easier to spot.

In other words, instead of worrying about checking and rechecking incomplete data, they can focus on delivering to their customers.

Implementing Blockchain

Verifying data in a world of digital data is a hair-raising prospect. Especially because it's easy to convince yourself that all that data can be revised, deleted or incorrectly entered without anyone noticing.

Blockchain offers a way to solve these concerns. The thing to keep in mind about blockchains, though, is that it is ultimately a foundational technology.

The benefits that blockchains potentially bring could rewrite the foundations of our economic and social institutions. It changes how we relate to data. But changes on that scale take time.

The first application of blockchain technology was bitcoin. This system of digital currency sidesteps a central authority that would typically be responsible for issuing currency, initiating transactions, and shifting ownership.

Using blockchain technology in bitcoin, for example in stock transactions, could shrink down the entire process. And the cost of the process. Basically, it allows both parties' ledgers to update simultaneously.

How to Use Blockchain in Your Supply Chain

You might be asking: if it will take years for the entire system to adapt and use blockchain, why should I be using it now?

Simple. If your supply chain demands are not being met by today's databases, then you need blockchain to stay ahead.

You might view the supply chains of today as static. The supply chains of tomorrow won't be.

And the problems can still be solved for companies that rely on multiple suppliers. We keep referencing Chipotle, but they're not the only one. Walmart and IBM partnered to track the movement of pork in China using a blockchain.

Technology and Human Intelligence at SCOPE

We know supply chains and operations. That's why we founded SCOPE Recruiting - to bring together some of the best people in the industry to the benefit of our clients.

How? Like a blockchain, we build with our partners one step at a time. We start with a thorough intake of your shareholders so they understand everything they need to know. Then we construct a custom job search strategy based on what's most important to you, evaluating candidates against your criteria.

We do this by combining human emotional intelligence with the best new technology. This includes our fully integrated candidate database and industry network, paired with our experienced recruiters to evaluate each candidate.

Why? Filling supply chain jobs is vital to your bottom line. Using a high-quality recruiter like SCOPE can help you get there faster and get back to business.

 

Contact Us Today

Topics: Industry Trends

How to hire Talent during the looming Supply Chain Talent Crisis

Posted by SCOPE Recruiting on Aug 3, 2017 6:09:00 AM

The demand for supply chain professional exceeding supply could reach as high as 9:1 by 2020. Companies need to utilize new technologies and prepare the next generation to succeed in a rapidly changing industry according to a DHL survey.The report ‘The Supply Chain Talent Shortage: From Gap to Crisis’ was commissioned by DHL and authored by Lisa Harrington, president of the lharrington group LLC.

"Leading companies understand that their supply chains – and the people who run them – are essential to their ability to grow profitably," observed report author Lisa Harrington. "However the task of finding people with the right skillsets required to run these highly complex operations is increasingly difficult – especially at the middle and upper management levels."

Today, the ideal employee has both tactical/ operational expertise and professional competencies such as analytical skills. Some 58% of companies’ said this combination is hard to find. But tomorrow’s talent must also excel at leadership, strategic thinking, innovation, and high-level analytic and technological capabilities.

In addition to an changing skill requirements, her study says other reasons for the personnel shortage includes an aging workforce and a lack of personnel development. One third of companies surveyed have taken no steps to create or feed their future talent pipeline. 

"We recommend that companies start with prioritizing the development of their current talent pool to adapt to the changing job requirements through training programs, and then retaining staff through clear career paths," noted Louise Gennis, DHL Supply Chain vice president for Talent Management/Acquisition, Learning & Development.

The industry is still contending with the impression that other fields are more prestigious and offer more opportunities, fueling lack of interest in the industry within the world’s future workforce.

Harrington added: "We strive to combat misconceptions surrounding working in the supply chain through highlighting the technological developments which are digitizing the industry and that are attractive to younger demographics," 

"New technologies and fundamental areas of the supply chain have changed, meaning [companies] now require that a person has a different and much larger skillset than required when most of the current workforce began their careers." she continued. 


In our recent blog post "Why work with Procurement Recruiters" we highlight the advantages that come from working with specialized supply chain recruiters.  

 

Find Supply Chain Talent Today 

Topics: Industry Trends

How to find the Procurement talent that can drive your Business

Posted by SCOPE Recruiting on May 23, 2017 9:11:00 AM

In our recent post “Is there a talent deficit in the Procurement field?”, we addressed the findings from Deloitte that 62% of CPOs do not believe their teams have the skills and capabilities to deliver their procurement strategies, and some of the potential reasons behind their beliefs.

Given this talent deficit facing the Procurement field currently, how can CPOs and organizations find the talent they need to drive their businesses forward?


  1. Utilize outside training to educate the talent you do have. Deloitte found that less than 30% of CPOs are allotting more than 1% of their operating budgets to training. Consider getting your employees certified through reputable agencies such as the Institute of Supply Management (ISM), Council of Supply Chain Management Professionals (CSCMP), or APICS.
  1. Develop a robust internal training program. Look to past winners of the Procurement Leaders “Learning & Development Award” such as Delphi Automotive, Roche, and ABB for inspiration. Delphi, for example, promotes a culture of deep learning through Delphi University “which offers courses in all aspects of Supply Chain Management, [it] is a catalyst for knowledge creation and dissemination. A wide variety of courses are available to SCM employees globally, and it’s one way we instill a culture of deep learning and innovation in our teams.”
  1. Forge partnerships with leading universities for entry-level talent needs. Align with universities like Michigan State, Penn State, MIT, University of Tennessee, and other universities paving the way in Supply Chain education. The creation of Leadership and Management trainee programs is not only attractive to upcoming graduates, but promotes stronger retention among new-hires and builds robust succession plans.
  1. Look outside of your Supply Chain for talent. Deloitte’s study found that 2/3 of CPOs within the manufacturing industry specifically identify training their teams on technical procurement skills as a priority.  Look internally at commodity specific subject matter experts and engineers to fill a technical procurement need you may have, or look to outsource your Procurement through a 3rd party sourcing firm that has strong technical expertise in an area you require.
  1. Create a strong value proposition for candidates to join your organization. Given the shortage of qualified talent within the industry, high caliber candidates have the luxury of being selective. A strong value proposition could include robust employee development plans, competitive compensation and benefits, and various perks and incentives to boost morale and improve the culture.
  1. Utilize a Procurement focused recruiting organization. Given the talent shortage, most high performing candidates are passive job seekers that you will not find through standard job postings. Using a specialized recruiting team with industry knowledge (whether internal or external) will allow you to tap into their vast networks and experience to engage with top-tier talent meeting your criteria.

While each of these 6 areas may come at an expense, every CPO knows the monetary value a highly talented individual can bring to a Procurement organization. With increasing pressure to deliver year over year savings, lead time reductions, process improvements, and technology initiatives, the demand for high caliber Procurement professionals is only increasing. How is your organization building their capabilities to manage this trend?

Topics: Industry Trends

Why is there a talent deficit in the Procurement field?

Posted by SCOPE Recruiting on May 18, 2017 3:11:00 PM

During Deloitte’s global CPO survey in 2016, they polled 324 senior procurement leaders representing $4.4 trillion dollars in global spend. They asked questions regarding the talent gap, and shockingly “62% of CPOs do not believe their team has the skills and capabilities to deliver their procurement strategy.

What has changed in the industry, that CPOs do not feel their teams are up to job at hand?

  1. The traditional procurement function is evolving. With the ability to outsource and automate everything from requisition to requisition to payment management, many traditional procurement roles are being removed from the equation. Organizations are now looking to their Procurement teams to act as critical thinkers, influence business decisions in the use of 3rd party activities, and focus on innovation. This trend is not expected to change, with 19% of CPOs in the Americas planning to increase the level of outsourcing within their procurement functions over the next year. 
  1. 20 years ago, it was rare to find someone in Purchasing who sought out that field as one to pursue. Now, across many Universities you have robust Supply Chain Management programs. Unfortunately, the number of education professionals does not yet match the requirements of the growing industry.
  1. Talent is not being invested in. The Deloitte survey also found that 30% of CPOs spent less than 1% of their operating budgets on training their current employees. With the rapidness of changes within the industry, talent should be invested in now more than ever.
  1. Digital capabilities like cognitive analytics, e-sourcing tools, supplier relationship management tools, auto contract metadata capture, and more are growing increasingly important for organizations to stay current and agile in the Procurement industry. 82% of CPOs say their organizations have started their digital supply chain journey. With new technology coming out every day, often the current talent is not trained or familiar with these new tools.
  1. There is a demand and supply imbalance. The U.S. Bureau of Labor reported that logistics jobs are expected to grow 26% by 2020. Coupled with 60 million Baby Boomers retiring by 2025, Procurement is an area being affected like many others across the US.

Given the talent gap at hand, organizations need to find ways to recruit and retain top-tier talent within the Procurement industry. Follow along as we dive into ways organizations can do just this in our next blog post. 

To view the Deloitte study referenced, click here.


 

Topics: Industry Trends

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