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.”

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