Redwood’s Rempel: supply chain doesn’t know blockchain, blockchain doesn’t know supply chain

 Zaki Manian, Chris Kirchner, Eric Rempel, Kylen McClintock, and George Abernathy. ( Photo: FreightWaves )

Zaki Manian, Chris Kirchner, Eric Rempel, Kylen McClintock, and George Abernathy. (Photo: FreightWaves)

FreightWaves’ coverage of Distributed 2018, a leading enterprise blockchain conference, continues. On Friday afternoon, George Abernathy, the Chief Revenue Officer of FreightWaves, moderated a panel on the Internet of Things. Panelists included Slync CEO Chris Kirchner, Redwood Logistics CIO Eric Rempel, Kylen McClintock of Flux IoT, and Zaki Manian, Executive Director of the Trusted IoT Alliance.

The panelists began by introducing themselves. Manian said that the Trusted IoT Alliance is composed of about 50 companies, all of which are under two years old, and that the goal of the alliance is to provide some level of support and guidance to finding the entry point solution for IoT and blockchain. Manian said that the wedge into the market for blockchain-enabled IoT has been somewhat elusive, and he’s working with young companies, some of which have promising use cases and no money, and some that have funding but are still searching for their identity. 

Kirchner said, “Slync started a little differently than a lot of software companies. People are trying to find a way to fit blockchain into a problem—we started the other way around and spent six months just talking to customers. Every enterprise has a list of the 10 things that suck in their business, so we had a lot of frank conversations with people, not selling them anything, just playing therapist, and then going from there. We aren’t searching for a problem, we started with a problem and are building a solution.” Kirchner explained that while Slync offers businesses supply chain digitization and automation, he doesn’t lead his pitch with blockchain, noting that it’s just a small piece of the technology that helps Slync’s customers. 

Rempel spoke about the work that still has to be done for blockchain to actually improve the transportation and logistics industry: “The industry itself—specifically logistics and supply chain—is so fragmented, so broken apart, that you have everything from companies with IoT sensors in their tires measuring pressure and predicting accidents to companies being run off Excel spreadsheets. People in the blockchain space don’t know a damn thing about supply chain, and people in the supply chain space don’t know a damned thing about blockchain. There is much intellectual property on both sides that has yet to mesh—we’re still embryonic here.”

Flux Protocol, said McClintock, focuses on the intersection of agriculture, blockchain, and IoT. Flux wants to marry the two technologies to be able to prove fair trade and organic status, localize food supply chains, and help growers make decisions like “what seed should you plant in a quickly drying sub-Saharan region that  also regenerates topsoil?” In other words, Flux’s work is on the first part of the agricultural supply chain—establishing the provenance, quality, and other attributes of the ag product before it goes on a truck.

In response to Manian’s statement the Trusted IoT Alliance was making slow progress in finding go-to-market strategies for blockchain-powered IoT devices, Kirchner drew on his experience sounding out enterprise customers and executives tasked with making technology investments. “My feelings are all driven by what I hear from customers,” said Kirchner. “I’m hearing the problem is that the solutions being presented are great theoretically, but they’re not grounded with operational knowledge of what’s realistic or possible in a business. The biggest thing that factors into any buying decision is if I’m in ‘Company X’ and I’m looking to buy software I have two criteria: is this going to get me promoted, or is this gonna get me fired? When you look at a nascent, unestablished technology with unproven ROI, you have to ask yourself ‘is this worth my career?’”

Rempel agreed with Kirchner and spoke from the perspective of an innovation officer determined to integrate the aging, disparate systems being used in the transportation industry. “The value of IoT is there if you can connect, but we’re in an industry where EDI is dominant,” said Rempel. :There aren’t standards around how these big dumb businesses can consume this data. They’re waiting for a single document they’re going to accept and their IT doesn’t have the slightest clue where to integrate the data into their value proposition. These companies have to change how they look at technology and how to implement it without risk.”

Manian, looking to advise his alliance’s partners, asked the other panelists a question: “What are the signals going to be that this is the time [for the adoption of a new technology]?”

Kirchner pointed out that the simple existence of a better technology did not mean that it would become widely adopted. “A lot of people are still using Microsoft Excel,” Kirchner lamented. “How long have better systems been out than Excel? Blockchain has sparked interest and started the conversation to talk about these things, the first signal that the time is coming—we’re having these conversations.”

Eric Rempel also responded to Manian’s question: “My answer is shrinking margins. When you find out in the boardroom that your competitor has a device that increases their margins by 10%, then you get it, then someone else does, then eventually it can reach a tipping point.”

McClintock thought that a first mover in supply chain transparency would be enough to create a new consumer expectation. “Once someone opens up their supply chain and becomes transparent, that will become the gold standard,” McClintock said.

Rempel was skeptical. “Who’s gonna be the first business to open the kimono? Most of these companies don’t have good enough dashboards to see inside their own businesses. They aren’t data-driven yet, so they don’t even know what’s gonna be exposed.” 

Manian wrapped up the dialogue by offering an answer to his own question: consumer education. Until people know what’s possible, they will never expect the level of supply chain transparency that blockchain and IoT together can bring. “Consumer education is a potential wedge into this space. You know, some of the members of the alliance have these massive warchests to deploy, and that might be one of the ways they do this, to move the market. It does continue to feel like we’re on the cusp of something big happening, but we’re still just on the cusp.”

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