Tag Archives: transportation

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Gartner: Supply chain blockchain pilots stalling because of technology immaturity | Supply Chain Dive

  has summarized Gartner’s survey in this article, which seems to indicate more clearly that blockchain is a solution chasing problems.  The basic problems are “technology immaturity”, “lack of standards”, ‘too ambitious scope”, and a misunderstanding of the use cases.    I think Gartner has made a fair assessment of the situation, if perhaps even a bit too enthusiastic!  So much hype over blockchain, and so much development investment, forces companies to take a look at a technology that basically duplicates what many systems already do.  In short, the use case doesn’t hold up.
We need trust between partners in our supply chains.  Supply chains are all about cooperation, and current systems have nearly the same capacity for verification that blockchain based systems do. What current systems lack is an easy way to provide access for partners, and to control it.  So the trustless paradigm is not immediately relevant.  It might be in some of the commodity tracking uses Gartner details, though how it would prevent blatant fraud is not clear.
Gartner is also right about the impending balkanization of blockchain systems.  Each one is its own chain, but logistics partnerships are shifting constantly.  What’s needed is connections between blockchains so data can be translated between them readily.  Gartner refers to them as APIs;  in the old days, we called them middleware.  It would be great, as one survey participant indicated, to have a replacement for a peer-to-peer system (EDI) which allows many to many communication without the hassle, but that is not what blockchain proponents are suggesting.
Finally, the lack of standards is a major problem for supply chains.  Supply chains are about cooperation, and cooperation requires agreement on standards.  My partner Chris Clott and I have written about the need in the maritime supply chain world, and there’s more coming.  In fact, several groups have started up intending to create standards.  (See the BCG article below.)   Experience shows that standards take a while (read l..oo…oo..ng time) to become accepted.  And there’s substantial evidence that standard setting in a top-down fashion is more likely to fail and less likely to get a good ecosystem of cooperating providers than evolution from the bottom up based on specific solutions to particular use cases.  (See article by Hanseth etal below).
From this viewpoint, it’s actually good that there has not been too much success yet, and that there are still lots of entrepreneurial attempts at creating useful solutions to specific logistics and supply chain problems.  Whether these can use blockchain or some other database technology is uncertain, but the effort is going to yield some progress, though over a longer time frame than we expect.  I’m thinking more in the time frame of ERP’s rise as a must-have system, maybe 20 years.

screenshot-www.supplychaindive.com 2018-01-29 09-45-53-153 via Gartner: Supply chain blockchain pilots stalling because of technology immaturity | Supply Chain Dive

Here’s a link to the actual Gartner report PDF .

Here’s a link to the BCG report PDF.

Here’s a link to the Hanseth etal paper, about standardization projects in Norwegian health care.

 

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Posted on May 9, 2019 by in Advanced Computing, Logistics, Supply Chains

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Globalization in transition

This is a fascinating report about global trade, with many interesting statistics, and with points of view not often presented so cogently.

Authors Susan Lund, James Manyika, Jonathan Woetzel, Jacques Bughin, Mekala Krishnan, Jeongmin Seong, and Mac Muir point out that global trade in services already probably exceeds that for goods. If a fair value is placed on it, we would see the US trade deficit, for example,wiped out and replaced by a larger surplus.  They also point out that labor is a declining factor both in the value of production, and in labor cost’s ability to determine where products get made.  The intellectual property value is much higher, and often moves in reverse fashion to the goods. But it is hard to price into conventional labor statistics.

I can’t wait to read the whole document!

mckinsey-logo1  via Globalization in transition: The future of trade and global value chains | McKinsey  

Here is the full document link.

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Posted on February 9, 2019 by in Logistics, Ports, Production Operations, Strategy, Supply Chains

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Shipper hackles rise as Hong Kong box terminals announce operating alliance

Sam Whelan penned a report on the alliance of four companies managing terminals at the Kwai Tsing terminals in Hong Kong.

Apparently shippers are furious. They believe there will be collusion and rates will rise as a result.  Rates are already higher in Hong Kong than the mainland, and the Hong Kong fees add more cost.

The firms say it’s only to make the port more efficient and gain higher throughput.  Volume handled has been declining in 2018 compared to the prior year.

It’s true that greater cooperation would most likely improve port throughput.  Coordinating yard movements and berth use would offer possibilities for gains. I’m not sure it would have to be at the level of fixing prices.   Improving port and yard bottlenecks is an important activity for firms in port management today.

But you can bet shippers will be on their guard for any collusion on pricing, especially when there’s a falling need for services.  And since it’s China that is involved– these are Chinese firms– we can’t rule out geopolitical considerations that would be collusive.  WE need to watch this one and see how the volumes and prices play out, just like the shippers will.

logo  via Shipper hackles rise as Hong Kong box terminals announce operating alliance – The Loadstar

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Posted on January 10, 2019 by in Logistics, Ports, Production Operations, Shipping, Strategy, Supply Chains

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