SAP clear­ly wants to engi­neer its line of solu­tions with advanced DNA and the abil­i­ty to inte­grate with the emerg­ing tech­nolo­gies now com­ing to mar­ket. In the sup­ply chain man­age­ment (SCM) are­na, the ​“next big thing” is blockchain. 

That’s why SAP is now engi­neer­ing blockchain com­pat­i­bil­i­ty and adop­tion oppor­tu­ni­ties into its sup­ply chain man­age­ment solu­tions. This action is part­ly the result of an SAP sur­vey designed to get the facts from more than 4,000 blockchain com­mu­ni­ty experts and cus­tomers this year.

Aug­ment­ing, Not Replac­ing Sup­ply Chain Systems

The respon­dents to SAP’s sur­vey said that blockchain will be valu­able in terms of ​“aug­ment­ing, but not nec­es­sar­i­ly whol­ly replac­ing” exist­ing sup­ply-chain-relat­ed deploy­ments. SAP’s SVP of dig­i­tal assets and IoT Gil Perez has not­ed that ​“We’re [still] very ear­ly in the game in terms of adoption.” 

“Aug­ment­ing not replac­ing” may make some think of ​“not wav­ing but drown­ing.” There is still arguably a lot of uncer­tain­ty over blockchain. Many are won­der­ing whether it’s a sen­si­ble, scal­able way to address some of the chal­lenges with­in sup­ply chain management. 

What Is Blockchain Again?

Let’s just go back to define blockchain 101 for a moment. As many ASUG read­ers may already know, blockchain is a ledger sys­tem that aims to be immutable and tam­per-proof by virtue of its decen­tral­ized and dis­trib­uted nature. It exists on many machines, so it can­not be com­pro­mised in one sin­gle place. Pub­lic blockchains are large and dis­trib­uted, while pri­vate blockchains are small­er and restricted. 

Ini­tial­ly devel­oped to serve the cryp­tocur­ren­cy mar­ket (bit­coin and the rest of the fam­i­ly), blockchain as a trans­ac­tions- and records-cen­tric data stor­age approach has been embraced as applic­a­ble to a near-infi­nite vari­ety of oth­er use cases.

What Blockchain Brings to Sup­ply Chain Man­age­ment

Blockchain has imme­di­ate and direct (if not obvi­ous) rel­e­vance, due to a sup­ply chain’s need to record trans­ac­tions and know the sta­tus of any prod­uct or ser­vice at any giv­en time. Sup­ply chains need to be vis­i­ble, accu­rate, and authen­tic as they deliv­er infor­ma­tion on any sin­gle item. And these three fac­tors are built into any blockchain-based sys­tem of records.

SAP is now refin­ing its approach to blockchain in sup­ply chain man­age­ment by work­ing along­side a hand­ful of phar­ma­ceu­ti­cal, tech­nol­o­gy, retail, and ship­ping enter­pris­es to devel­op what could even­tu­al­ly be an auto­mat­ed blockchain-based sup­ply chain track­ing system.

Built-In SAP Blockchain as a Ser­vice

In oth­er words, this is SAP pro­vid­ing ​“blockchain as a ser­vice (BaaS)” in the form of an abstrac­tion lay­er with built-in inte­gra­tion for SAP appli­ca­tions. SAP also hopes that cus­tomers will use SAP Leonar­do to inte­grate blockchain with oth­er tech­nolo­gies, includ­ing big data ana­lyt­ics, machine learn­ing, and Inter­net of Things (IoT) applications. 

Accord­ing to SAP, ​“SAP Cloud Plat­form Blockchain as-a-ser­vice (BaaS) pro­vides the eas­i­est, low­est-risk gate­way to exper­i­ment­ing with dis­trib­uted ledger tech­nol­o­gy in the cloud.” SAP hopes that it will appeal to cus­tomers who want to fast-track a blockchain imple­men­ta­tion at their organizations. 

Appli­ca­tion Zones for Sup­ply Chain Management

As for real-world appli­ca­tions using any ele­ment of SAP blockchain-dri­ven sup­ply chain man­age­ment, these may fall into areas including: 

• SAP Trans­porta­tion Man­age­ment: to help man­age e‑bills and doc­u­ment sign­ing for freight and haulage. 
• SAP Glob­al Track and Trace: for mon­i­tor­ing and report­ing objects and busi­ness process­es across sup­ply chain networks. 
• Farm to Con­sumer: to give com­pa­nies the abil­i­ty to trace the ori­gins of food prod­ucts through the entire sup­ply chain and help main­tain food safety. 
• SAP Advanced Track and Trace for Phar­ma­ceu­ti­cals: to com­ply with seri­al­iza­tion and glob­al report­ing reg­u­la­tions in the effort to fight the ille­gal trade and coun­ter­feit­ing of drugs

To quote SAP on the last of these zones, ​“Because gov­ern­ments around the world are enact­ing leg­is­la­tion to fight the fal­si­fi­ca­tion of drugs — requir­ing phar­ma­ceu­ti­cal seri­al­iza­tion and report­ing to insti­tu­tion­al data­bas­es and sup­ply chain part­ners. Our glob­al track and trace soft­ware makes it eas­i­er to achieve this compliance.” 

A Tip­ping Point for Blockchain Imple­men­ta­tions?

Giv­en the still-exper­i­men­tal nature of sup­ply chain tech­nolo­gies as they now get bol­stered by the com­bined forces of data ana­lyt­ics, Inter­net of Things track­ing, and blockchain, it is still too ear­ly to call this a tip­ping point for sup­ply chain man­age­ment implementations. 

What is cer­tain is that these com­bined forces are all here and estab­lished as next-gen­er­a­tion tech­nol­o­gy forces. They’re all part of the wider tech­nol­o­gy industry’s road map for the imme­di­ate future. And SAP is work­ing to move adop­tion along through its con­sor­tium of cus­tomers and part­ners putting blockchain into prac­tice with­in their sup­ply chains.

So, imag­ine this: The next prod­uct you buy from a retail store could have come from a fac­to­ry sup­plied by a BaaS-dri­ven sup­ply chain man­age­ment sys­tem that allows the man­u­fac­tur­er to trace its deliv­ery from the assem­bly line all the way to the point you pur­chased it. How’s that for advanced?

If you’re look­ing to learn how your peers are doing more with enter­prise asset man­age­ment and sup­ply chain man­age­ment, you should join us at the SAP-Cen­tric EAM & Sup­ply Chain con­fer­ence, March 16 – 18 in San Anto­nio, Texas. You can also reg­is­ter to lis­ten to our on-demand web­cast, ​“The State of the Sup­ply Chain for SAP Cus­tomers.”