Complex supply chains breed complex problems. The list is seemingly endless when it comes to supply chain friction today. A lack of visibility into the movement of goods, the struggle to pay suppliers across border, and the domino effect of financial struggles that Tier 4 suppliers will have further up the supply chain are just a few of the biggest problems companies endure today.
While innovators are quickly moving into supply chains in an effort to disrupt patterns of friction, addressing these problems all at once is not possible. Even blockchain, the technology often touted as the silver bullet in supply chain management, cannot address these challenges alone.
It takes many technologies, and many participants, to bring true progress to global supply chains, said Eric Piscini, CEO of Citizens Reserve, a startup deploying technologies like blockchain to offer Supply-Chain-as-a-Service via its SUKU platform. That platform, which launched earlier this month, may be based on blockchain infrastructure, but it’s not the only technology Citizens Reserve has deployed to address supply chain management issues.
“It’s the core of the platform,” Piscini said about the company’s use of blockchain, “but we also realize supply chain is not just one technology.”
Cloud infrastructure, Internet of Things (IoT), machine learning (ML) and other innovations are all seeping into the fold of supply chain disruption, he said, and can all play a part in addressing some top hurdles in this space.
As a startup, Piscini explained, Citizens Reserve is not able to create solutions to every single issue. So, to begin, the SUKU platform is first rolling out a marketplace through which buyers and suppliers can procure and trade goods, as well as its track-and-trace solution that provides stakeholders in the supply chain with visibility into where goods are at any point in time.
The tools address several supply chain points of friction, including eInvoice adoption, procurement, electronic payments and transparency of supply chains. However, there are many more issues, which can be generally categorized in three ways, Piscini explained.
The first is technology.
“Companies today may be operating 10 different supply chains for their different needs, and those supply chains are not integrated, mostly due to technology issues,” he said, adding that small- and medium-sized businesses (SMBs) also face technology issues because they lack access to the digital solutions they need to improve supply chain operations.
The second issue concerns availability of functional features for supply chain management solutions, a problem that Piscini said is especially noticeable by end consumers. Wrong vaccines landing at a medical service center or a lack of a particular product at the grocery store signal some type of problem in the supply chain.
Piscini pointed to Apple‘s Wednesday announcement of new iPhone products.
“I’m pretty sure some of the iPhones are not going to be available right away because of supply chain issues,” he said. It may be due to a lack of track-and-trace functionality, or it could be related to a working capital issue — a problem that one Apple manufacturer raised to Piscini, and one that plagues Tier 3 and 4 suppliers, causing them to under-perform. (Apple’s Wednesday announcement did not include any news on product availability or whether supply chain issues might affect it.)
Citizens Reserve is beginning to chip away at these points of friction with the launch of the SUKU platform, including the marketplace and track-and-trace feature. Its solution set will include a SUKU token, which can be used to pay for transaction fees. While businesses can use fiat currency on the platform, they are incentivized to use the token, as it provides them with enhanced functionality on the platform.
Another incentive to use the token, Piscini explained, is that more tokens provide greater voting power for companies on the platform that are debating new features they want to see added. This democratization of building out supply chain solutions shows the importance of not only an array of technologies addressing many supply chains issues, but an array of business participants actively working to solve these problems, too.
In addition to this voting feature of the platform, the solution will aim to act as a portal on which developers can create their own tools for users, too.
“At some point, innovation is going to take place on our platform, and we won’t even know what it is — which is great,” said Piscini.
This strategy of collaboration is a novel approach to supply chain disruption, but one that requires a high level of participation and adoption of technologies with which many businesses may not be comfortable. Use of the SUKU token, for example, and overall trust of blockchain, in general, may be top barriers to the platform gaining traction, a hurdle that Piscini said he acknowledges.
Developing markets are likely to be the first to embrace novel supply chain solutions like blockchain and ML, he said, with consumers in these markets often hit hardest by supply chain disruptions, and with a lack of existing supply chain technology offering an opportunity for businesses to more quickly embrace a new solution.
“The answer is usually that developing countries will go faster [at adoption] than developed countries,” said Piscini. “There is less limitation and fewer incumbents to prevent innovation from happening. It’s easier to implement new solutions today if you start with almost nothing, than if you have to start with a bunch of systems that you have to integrate.”