Supply Chain
Technology Podcast

SUMMARY KEYWORDS

Blockchain, supply chain, security risks, digitalization, provenance, transparency, trust, real-time sensing, cognitive overload, data value, resilience, government incentives, fraud prevention, technology adoption, economic models.

SPEAKERS

Scott Mears, Chris Moore

Scott Mears  00:08

Welcome to the Supply Chain Tech Podcast with Roambee. Scott Mears here, Global Field Marketing Manager at Roambee and one of the hosts of the Supply Chain Tech Podcast. We thank you for joining us today. In this episode, we speak with Chris Moore. Chris is the blockchain and web three executive at IBM, as more and more companies embark on their digitalization journey, the security risks increase. We discuss where we should be investing our time and money and how we remain compliant with the increased adoption of technology and software. We also define blockchain and discuss how, together with real time sensing, it can help us decrease and overcome these security risks. Thank you for joining us today, Chris. I really appreciate it.

Chris Moore  01:01

Great. Thank you for having me.

Scott Mears  01:03

Awesome. I always like to start with a bit of an icebreaker question. It’s always an interesting insight into everyone that comes on to the podcast. And I’d love to know what, what is the best or one of the best pieces of advices you’ve received in supply chain?

Chris Moore  01:22

I think one of the best piece of advice is, best piece of advice is to really understand what’s the problem you’re trying to solve, which sounds very cute, but it really does dictate then a lot of the follow on activity around supply chain. And by that, I mean, are we dealing with a product where consistency is the absolute most important attribute? Are we dealing with something where we’re valuing speed? Is it about price? Is it about the delivery quality and the nuances of the piece of material that we’re shipping? So when you start to understand what is it we’re dealing with, and what are the customers at the end points the supply chain expecting, then you start to make the right upstream decisions around, how do you distribute? What are the people you trust with it? What are the trainings that you need to have? What’s the technology? What’s the cost basis you take into this? But really starting with that end customers expectation, and then designing a supply chain backwards from that is the most important thing you have to do.

Scott Mears  02:26

What a brilliant piece of advice. And, like you said, simple, but something we can we can forget at times. So it’s a really key one that we need to keep to and Hope everyone’s listening to that one, for sure, I want to dive into. I we’re going to be talking about security in this and very much what we’re going to focus in on is blockchain is going to be a big element of what we discussed. So before we get into all the questions, I really want to define blockchain, because it cut that is a bit of a buzz word, and it’s brought up a lot in events and people talk about but a lot of time, when I get into a conversation with people about it, they actually have very limited knowledge on what it is. So I would like to, just before we get on, really into the meat of the into the interview, what is blockchain and what is it trying to achieve in simple terms.

Chris Moore  03:15

So at its most basic element, what blockchain solves is a problem of trust, and you can also set it up in a way that enables transparency. And so what does that? What does that mean? A lot of times, trust requires both parties to agree on some fact, and a lot of times that fact might be arbitrated by a third party, or maybe those two entities know each other, they already have a relationship, and they’ll trust each other, and they can come to agreement, but that’s historically been very difficult. It’s a tax on society in general, whether you look at it from a business perspective, whether you look at it from a relationship perspective, of, should I go talk to this person? Should I go on a date with this person? All of it comes down to establishing trust, and somehow you have to have a mechanism of creating that and in the societal sense, maybe it’s a third party says You two should go meet. Maybe it’s a technology where some kind of a networking application says You two should go meet. If you look at it through a business transaction, it’s maybe a third party says these are trusted vendors that you should engage with. You can trust that they’re going to do something. That whole notion of, how do you establish trust and prove who someone is? Can they do what they say they can do that’s a really long standing, challenging problem. We have a lot of proxies for it, but what we’re now seeing is blockchain is a way of establishing and solving that trust problem, but doing it in a way that doesn’t require a centralized authority. It doesn’t require that trusted third party to say you should go meet. It doesn’t require that trust. Trusted company that says, I can attest that this company will do X, Y and Z. Blockchain gives you ability to go back and establish trust by looking at someone’s history of activity and being able to independently prove that they’re doing what they’re saying they’re doing.

Scott Mears  05:18

I like that. That’s an explanation I’ve heard before. It’s much more clear, and it’s in much more simple way where I can digest it. It’s allowing us to have something that we agree, allows us to trust one another. It’s very much allowing us to build that trust from the evidence, so that that’s really interesting to know, and I’m sure from a lot of people watching this, that’s going to be quite a new way of looking at blockchain as a whole, and it’s going to come on.

Chris Moore  05:46

If we, if we double click on that for one second, because this also starts a little bit the question of, well, why should I use a blockchain? Should I use a blockchain? And the answer is sometimes yes and sometimes no. And let’s talk about the no side of that. There could be a lot of instances in life where the best way to establish trust either because of how it’s historically been done, or the cost involved, or just the societal norms around it, sometimes the best way of establishing trust is to go to a third party and to rely upon them. And there’s downsides to that. That means that you have to trust the third party. The third party has to continue to provide that service, etc, etc. So there’s downsides to it, but there’s times when that makes a lot of sense. You could think about certain institutions, the government’s a little polarizing, but the government is a third party that people tend to trust. The blockchain is not going to come replace the services the government provides around police, protection laws, etc. There are other things, though, that a blockchain could be very good alternative for. There’s things that today people are forced to trust that they maybe don’t like to and are maybe forced to pay fees that are a little bit outlandish because that entity has established themselves as the only arbiter of that piece of information. A lot of clearing houses around data really fit into that if I wanted to go look up some piece of information about you and independently verify some facts about you. There’s only a handful of places that I could really go to establish that trust, and they might charge for that. And is that something that could be abstracted away from that centralized gatekeeper, that piece of information and instead put onto a blockchain where it can be independently verified, and you can provide that service of establishing trust at a much lower price point.

Scott Mears  07:49

No, I appreciate you adding that on. It gives us, again, a further insight into really, where this can and can’t it can’t be as a way you should be thinking about using it, and I know we’re going to get into through this question where blockchain, where it’s going to is going to support, and where it maybe there’s other parts of challenges where maybe it’s not right for this. And I wanted to highlight first is, what do you feel are some of the biggest security concerns in in supply chain today?

Chris Moore  08:19

I think provenance is a big concern. And I think as we come out of COVID, this notion about understanding where something came from and the journey of its manufacturing, and then ultimately delivery, is becoming increasingly important. We’ve seen some really interesting examples and different nations where they thought they had an incredibly diverse supply chain around a essential medical product, for example, and then when all of a sudden, certain nations had COVID restrictions and they closed ports, or they closed Manufacturing, what looked like a very diverse set of suppliers ultimately all dried up at the same time. You might say, well, if I’ve got such diversity suppliers, why’d they all dry up? Well, no one realized that the root of all these endpoints was actually highly concentrated and was not literally as diverse. And those are information problems that are very challenging for supply chains today to resolve, and I think it’s one of the key things that we’ve got to get much more sophisticated around, is understanding where those risks, what’s the provenance and what’s the reliability about our supply chains.

Scott Mears  09:39

And taking that challenge, the right there. Do you feel as an industry where focusing our expertise and spend accordingly to defend ourselves against these challenges, the challenge that you mentioned, then the future challenges coming when it comes to security?

Chris Moore  09:58

Yeah. I don’t think historically we have I do believe that’s changing. But let’s talk about historically where we were. Supply chains have been pushed to in most cases, where someone has a core competency around manufacturing, and sometimes that core competency could be a specialization. And you see this a lot in semiconductors. For example, there’s only a handful of people around the world that have the expertise to make a certain type of semiconductor on a certain type of FAB and all that kind of stuff. So you can have specialization and localization in certain regions due to expertise. In other cases, you’re seeing it due to cost. So there’s a lot of regions around the world where manufacturing costs, the labor costs, access to energy, etc, are at a price point that other regions can’t match. And so that then attracts manufacturing and the beginnings of supply chains to certain regions around the world. And so we historically, we’re really optimizing on kind of that expertise or cost or maybe a few other things that we could pick up. But let’s just kind of boil it down to that so we can move on at the question. What I think we’re now seeing is a realization that you can’t just focus on that, because if you have some kind of a fundamental disruption and you’ve overly centralized on some key competency that a certain region or certain company might have that creates risk as you try to take that product and then expand it around the world. And so now, what you’re seeing a lot of governments enforce, and you’re also seeing a lot of supply chain expertise experts ask is, How do I value and drive the market to price and resilience? Because resilience is kind of one of those externalities that generally doesn’t get priced into a supply chain. You generally when you’re trying to optimize on those core competencies, resiliency something that you generally don’t value nearly as much as you do the others. So if the market isn’t going to innately value it, how do you over index and reward resiliency and reliability in our supply chains? Because it’s not something that the normal construct is going to prioritize.

Scott Mears  12:18

And with that lack of prioritization, that what do you feel drives this, this prioritization of of defending ourselves and setting up companies in a way where they can defend themselves against these challenges?

Chris Moore  12:31

I think it’s going to take some very strong leadership from supply chain executives and from governments and so let’s talk about the Supply Chain Leaders. For example, it’s very easy to always go back to the same manufacturer you’ve always used, because you’ve always used them and they produce a product that you’re comfortable with, to actually stand up and invest the time to have a relationship with a secondary supplier, or to help someone get off the ground, to maybe even co invest, and through financial arrangements, incentivize someone else to enter into a market that’s hard, that takes real leadership, and you see the same thing through governments. You’re seeing governments create tax incentives to mobilize people, to make supply chains more resilient, and to relocate them into certain parts of the world where governments are more comfortable with them existing. So on the government side, you kind of see both a carrot and a stick. The stick being a lot of reports coming out saying we don’t have this capability. You entities and private enterprise are bad because we have lost this capability. But you also see the incentives around tax and other things, investment credits that are allowing people to reshape their supply chains. And it’s going to take leadership again, on both the private sector and from public from governments, to really rethink this.

Scott Mears  14:00

Now it’s a great point. It’s very much leading the right way and leading to really take this into consideration, and taking this into consideration something that I’m very aware of. And you see at the many events, I mean, even the event we we met at logify in Boston this year, many companies are on their digitalization journey, and there’s a real shift that that this creates within the company, from the amount of technology and software they’re adopting and to maintain all that new software and technology and and I had this discussion at a recent event as well, is that the first presentation was about cognitive overload. They’re just overloaded with so many different softwares and trying to maintain them and understand what they what they achieve and how to implement them. How confident are we in people’s ability to demonstrate compliance when there’s so much going on?

Chris Moore  14:59

Yeah, I think. Think we while we see great progress on a daily basis, I would argue we’re still fairly early in our interactions with technology, and so by that, I mean most of us are still communicating with our phones through some kind of an on screen keyboard, or we’re using laptops and we’re typing, and we are using technology that you could say goes back to the era of typewriters or back to the printing press as our primary mechanism of communicating. You and I are not typing messages back and forth in a chat. We’re having a interaction. We’re reading each other’s body language. We’re using the totality of our senses. I think avoiding cognitive overload is going to require computers catching up to where humans are and being able to present and absorb information in the totality of senses. And until we get there, you’re going to see some some really creative and amazing work arounds, around reporting and summarization and all sorts of things that are going to feel magical. But I don’t think they’re the end game. I think the end game is getting computers to a point where they’re interacting with us and totality of senses that humans have been interacting with each other.

Scott Mears  16:26

It’s an interesting taken and insight on this. And it’s it’s definitely something very, very aware of as I speak to more and more companies within within pharma, and I really want to now get into understanding how we can overcome some of these security challenges, and especially blockchain. How do you feel based on what we’ve discussed is, how can I use blockchain in my company to overcome some of these challenges that you’ve recognized today?

Chris Moore  16:58

I think one of the key things that you could do with Blockchain is have a better way of understanding that provenance that we talked about. So through a blockchain, you can start to attack attributes, and you are not going to be at the same risk of a supplier, either up or downstream of you, not revealing information that you need. Now there’s a contractual, legalistic element about how you exchange information, but when you start to put information onto a blockchain and you start to grant rights about how people can look at it, you begin to take away your reliance on that third party to either maintain information to maintain access to a system, sometimes their ability to revoke information, that provenance, and then that ability to have objectively verifiable facts, is very important. Another thing about blockchains that is really interesting we haven’t talked about so far is you can use them to create self sustaining economies. And so what do I mean by that? Right now, if you were to need a piece of information from a vendor so you could operate your supply chain, you are imposing a cost on that vendor. They probably look at your requests, about the shipment, about all these other things as a cost that they have to bake into their IT systems, and they probably also view that as a lookup feature that they somehow want to limit. So maybe they got some reasonable usage clauses, or they don’t want you to download gig and terabytes of information, because that’s expensive to them, and it’s an unbounded cost for them. Sometimes you’ll see people do chargeback mechanisms and all sorts of stuff, but that it gets really messy, really fast. When you take information and you put it in a blockchain, you can create an economic model wherein people are incentivized to maintain that blockchain, and through accessing the blockchain, you can then reward the people that are maintaining it. And that’s a really powerful concept, that if you can create this kind of self funding, self adjusting mechanism of sharing information, then suddenly you take what are, in effect, kind of a tax, a hard to predict tax on enterprises, and you can put it outside the enterprise, and you can more fairly allocate the fees associated with accessing information. And you can also incentivize people to participate if, if you have some type of information that is being accessed extensively, and people are paying information for it, and your response times are getting slower, or it’s harder to maintain, other parties could see that that information is very valuable and very interesting, and can then start to supply their infrastructure to maintain that blockchain. Because. They want some of the rewards that people are paying for accessing that information. And so you create this kind of supply and demand balance around IT infrastructure and it doesn’t have to live within the core walls of a single enterprise. It’s now a market feature, and that’s a really interesting way of creating a much more sustainable economic proposition around supply chain data and supply chain information and exchange.

Scott Mears  20:24

And I’d love to add to this, because I’m loving this answer, and I’d love to go even a bit further with now, with with real time sensing capability out there. How do you feel this supports what you’re discussing here with Blockchain?

Chris Moore  20:41

I think it absolutely does. And I think the interesting about real time sensor capture is some of it may never be utilized, and some of it’s going to be absolutely essential, and it’s probably very hard to know at the moment of collection in which category that that falls. And what you can do through blockchain technology is you can create a model whereby all the information is captured, but then you monetize certain elements of it, and as people require more and more access to it, then people pay more and more, and the blockchain starts to incentivize greater data capture, and it rewards people for coming onto the system. And you create this flywheel of people wanting to gather information, knowing that some of it might not ever be used. Some of it might be used a lot. You then compliment that with people that are maintaining the blockchain, because they’re seeing, Oh, there’s utility in this information, and people pay for it. And if I help contribute to the infrastructure making this available, then people will reward me, and then you get the consumers, the customers, buying this data. So now you got this flywheel between incentivizing capture, incentivizing system maintenance, and then people consuming it. And that just continues to accelerate, accelerate, bringing on more people to capture, more people to maintain, more people to buy the data, because it’s becoming richer and ricer.

Scott Mears  22:03

So am I right in saying saying you’re saying here that what blockchain is allowing us to put a real value to the data we’re capturing and almost a currency to the data we’re capturing. So we can really value which data is being is most valuable to us based on what we’re using, what’s been most impactful. Is that what you’re saying here, where we’re putting a currency to it and value to the data?

Chris Moore  22:29

Exactly, it incentivizes people to to capture and publish data, because that might be monetized, and at the time of capture, you have no idea if, if someone’s going to pay for that or not, some piece of information you could probably predict. You know, this is pretty this is probably pretty useful, or this is regarding a high value shipment. I bet someone’s going to care. A lot of other stuff. You just might not care at all. If you look at some of the blockchain based information networks that are out there right now, they’re just passively listening and gathering all sorts of information, and a lot of it’s going to be noise, and it won’t overlook up, but you have to create an incentive for those people to stand up the infrastructure to capture the data, so that you then have access to that one piece of information that you do want. And what this blockchain technology, and then this infrastructure maintenance, and then the marketplace where people can secure and buy data that creates a flywheel that incentivizes everyone to participate, not knowing at the time of capture if the information would ever be used or not. You’re creating the infrastructure that makes the market for that, for that transaction.

Scott Mears  23:35

Which is an ongoing problem that we have. I think we can all agree that we have mountains of data. We’re not short of of the amount of data we have. It’s the but it’s the struggle to understand what what is useful to me. Do I? How do I cleanse this data? That’s a task on its own, even that can be a very complicated task, and this is allowing you to identify what is, what you need to focus on. And I like that, because it’s just such an ongoing challenge. I know companies face with understanding they’re just feeling overloaded with, with what where their attention needs to be.

Chris Moore  24:16

Yeah, absolutely. And then as you get more and more data, and then as computers, to my earlier point about figuring out how to interact with humans, some of this data cleansing becomes much, much easier. You know, there’s a kind of another way of phrasing my earlier point, which is we’re still in the era of humans needing to adjust their style to interact with computers, whether it’s data cleansing like you just brought up, whether it’s inputting and interacting with data through keyboards and monitors and mice like I talked about, and just that very limited totality of senses that we’re using today when computers are able to flip the script and. And interact with us in the ways that we want, versus us changing ourselves interact with them all this becomes much easier. And whether it’s data cleansing, whether it’s interacting with technology, etc, becomes a much richer environment.

Scott Mears  25:13

That’s a great way of putting it, building technology that works with us in a way we want, rather than us having to change to to work with because that is, again, another challenge, and a question rolls straight on to the next question, actually is, is, as our companies go, the companies go through the digitalization journey, there’s, there’s a big parts of the company that never even grew up with a laptop, never even still to this day, don’t, don’t know what blockchain is. So how do we fire? How do we upscale our companies to become more compliant and build stronger prices to deal with this?

Chris Moore  25:50

I think part of it is blockchain should become one of those words that’s never uttered, because it’s not it’s not a application. It’s a it’s a technology, it’s a protocol. It’s it’s sort of similar to back when the internet first took off, to going into senior executives office and saying, you know, we really need to kind of get behind this HTTP thing, talking about and we’re still in this mentality of talking about blockchain, when really we need to be talking about I could give you access to information that’s variably priced, and you only buy what you need, and you’re incentivized to share it, etc, etc, when you start talking about it in that top line business facing, revenue generating, supply chain, enabling term. It’s much more interesting. Just like today, we don’t talk about HTTP or things like that. We talk about, well, we’ve got this network, cause it’s a share information, and we could do it real time, and I could send you a message, I could send you an email, I could download this. I could look at this shipment status. All those are built upon those internet protocols. And we don’t talk about the internet protocols. We talk about what we can do with them, and we still haven’t really made that pivot blockchain yet.

Scott Mears  27:09

That’s, yeah, that’s, that’s really good to hear your insight on this. And I want to finish off one final question. We’ve We’ve spoken very much about internally in the company, how we can evolve, but I want to think about the customer for a moment here. And I mean fraud, fraud is a is a huge challenge, and something that visibility companies are trying to understand how they can help with this, from having specific tags and numbers to the specific items. But how, how do you feel blockchain can help with with overcoming this sort of problem for our customers.

Chris Moore  27:43

So I think blockchain, and this is actually maybe a great way to circle back to the opening point. It’s a point about trust. Through blockchain, you’re able to trust things. A serialized number on a product isn’t something overly trustworthy. It’s a deterrent against fraud, but it doesn’t really, doesn’t really solve a whole lot, and as we see fraud move from petty criminals into more even state sponsored stuff, a lot of the information Interpol has been producing in various industries such as pharmaceuticals and others, is really showing that a lot of the really sophisticated fraud is is state sponsored activity. And I would invite your listeners to go out and look at that, because it’s absolutely shocking and fascinating what criminal enterprises and and and actors are doing. Blockchains give us an ability to have a much more sophisticated understanding of what is this product, what is its provenance, who’s touched it? Does all this seem believable now? Is blockchain going to eliminate all fraud? No, I don’t think anyone should ever promise to eliminate all fraud, because the the criminal element is is so sophisticated, but I do think it can allow us to have a much higher confidence level on a product or interacting with a transaction that’s taking place, the likelihood that we’re going to get paid all those increase when you can have that information liquidity and transparency that a blockchain can provide.

Scott Mears  29:25

I feel that’s a great end, and it’s I absolutely understand blockchain to a different level now, understanding where it plays a part and what it can really support with and I know that people watching this, listening to this, will will have been waiting to just understand really what is blockchain all about and and I feel this is going to give them a real depth understanding on where we can use this and where it can really build towards in our companies in the future as well. So thank thank you very much. Chris. So I appreciate you coming on to the episode, and I’ll just say, do a final little wave to the camera. You do a just throw your hand up there. We go a little way.

Chris Moore  30:08

Absolutely.

Scott Mears  30:09

Social media guys love that. Thank you very much, Chris. I appreciate you.

Chris Moore  30:14

Thank you for hosting me and hearing my thoughts speak to you again.

Scott Mears  30:18

Thank you, bye bye. Hi, my name is Scott Mears, and I’m one of the hosts of the Supply Chain Tech Podcast with Roambee. On this podcast we talk to supply chain heroes from around the world about everything, ranging from the disruptions related to supply chains, their personal experiences with tracking technologies, strategies to build resilience, and much, much more. We already have some recommended videos for you to the side of me, and if any of this sounds interesting to you, do subscribe to our Youtube channel and hit the bell icon so you don’t miss another Roambee video. I’ll see you next time.