The future of blockchain in the supply chain industry

6

October

2019

5/5 (1)
Source: (Miller, 2019)
Source: (Miller, 2019)

The future of blockchain in the supply chain industry

Blockchain is the promised land for lean transactions, they do not require a middleman anymore since trust is established by cryptography. Although it all sounds very realistic, how fast can we actually make use of it on a greater scale? More specifically, how can a modern supply chain make use it the new technology?

I will start with a short explanation of the blockchain technology. It is a decentralized database, which stores a registry of assets and transactions across a peer-to-peer network. These transactions are secured through cryptography, over time a transaction gets history, or time stamped, and is locked in blocks of data. These blocks are thereafter linked together. However, not all blockchains are the same. One should consider permissionless (open, public) and permissioned (closed, private). (Alicke et al., 2017) In this article we only consider closed/private blockchains.

Supply chain has potential benefit from blockchain as it is mostly complex and not transparent. The reliability and integrity that is needed in supply chains is part of the blockchain technology. E.g. to see the chain of ownership of goods (to trace all products to its source), and thereby have the option to eliminate illegal items, items produced with child labour and the like. Moreover, records cannot be deleted from the chain, there is no way wrongdoers can screw the system. (Marr, 2018)

In the supply chain one can think of the following applications. First, slow and manual processes can be substituted. Secondly, traceability can be enhanced. And supply chain related transaction costs can be reduced, e.g. by using blockchain for making payments. But in order to get there a lot needs to change. For example, data accuracy and availability, generating company wide standards that even go beyond your own company (in your supply chain), who will pay and who can do it (highly educated talent is needed). (Alicke et al., 2017) & (Marr, 2018)

In my opinion, blockchain has great potential but should be considered an option, not a must. The complexity and costs that come along with the new technology might not always pay off. Simpler and faster solutions might also very well do the job. Moreover, many companies do not seem to be ready for it yet. Data, knowledge, employees’ mindset and more cooperative IT and business leadership is needed to make blockchain adoption successful in your supply chain. Which is confirmed by my own experience, from working in corporate and scale up companies that want to adopt new technologies as much as possible.

References:

Alicke, K., Davies, A., Leopoldseder, M., & Niemeyer, A. (2017). Blockchain technology for supply chains–A must or a maybe?. Retrieved 6 October 2019, from https://www.mckinsey.com/business-functions/operations/our-insights/blockchain-technology-for-supply-chainsa-must-or-a-maybe

Marr, B. (2018). How Blockchain Will Transform The Supply Chain And Logistics Industry. Retrieved 6 October 2019, from https://www.forbes.com/sites/bernardmarr/2018/03/23/how-blockchain-will-transform-the-supply-chain-and-logistics-industry/#131b03ad5fec

Miller, J. (2019). Microsoft and Intel Believe that Blockchain Technology is Not Upto Scratch. Retrieved 6 October 2019, from https://www.cryptonewsz.com/microsoft-and-intel-believe-that-blockchain-technology-is-not-upto-scratch/19489/

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Digital Transformation Project – Julia’s Pasta Transformation -Group 6

23

October

2016

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We started our digital transformation project by understanding the frustration of customers of Julia’s: long waiting times. During our research we developed a suggested solution for this problem.

Firstly, we examined the internal and external environment of Julia’s. Here we found that the competitive advantage of Julia’s lies in the handmade, authentic and healthy food they provide, but the average waiting times are quite high when comparing them to other options to have dinner at railway stations.

One of the important goals of Julia’s is that the preparation of a pasta should not take more than four minutes. Taking into account this important goal we defined four key success factors (KSF). We defined the key success factors as punctuality (KSF 1), consequent quality of products (KSF 2), customer satisfaction (KSF 3) and distinguish from competition (KSF 4).

First of all, the investment in the application will turn profitable if an increase in customers is achieved. The pasta bars of Julia’s have to change the organization within each bar so that there is a fast and convenient way to pick up the online ordered food by the users of the application.

Long waiting lines will disappear as customers are now able to pre-order their meal so that they do not have to wait in line. By reducing the waiting time, the punctuality will be higher. Julia’s will provide handmade, fresh and authentic fast food, which will grow their competitive advantage and distinguish from competitors by being fast and offer a decent, warm and healthy meal. Finally, the reduced waiting time and the guaranteed quality of products will lead to a high customer satisfaction what leads to more sales of products and makes the investment profitable.

A limitation of the application could lie in the problem that customers are not on time for picking up their meal, caused by a delay of the train. To prevent this problem, we would suggest to implement the Julia’s online ordering application into the NS application, as the NS application provides information regarding all of the train delays. This information could help to see the delays coming and would prevent the food from being too long in the heating system. Another limitation of the application could be that there is not enough capacity at the Julia’s pasta bars. We suggest to reorganize the pasta bars to become more efficient and larger to ensure all of the demand of customers. 

In the end we could say that the online ordering application would turn out to be a profitable investment and we therefore suggest to implement the application as soon as possible. We also would like to mention the possibility to implement the application within all the formulas of NS retail when the application works smoothly and when the customer satisfaction will increase.    

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Consumer Data: Currency of the Future. 5/5 (1)

10

October

2016

Google Home – the always-listening connected speaker. Welcome to the next generation of consumer data collection. At Alphabet’s hardware launch event last week, the company unveiled it’s answer to Amazon’s Echo: a wireless speaker with a set of microphones built into it, allowing the neat little device to continuously listen to you. A physical “mute” button on top let’s you tell it to stop listening, and actually, that’s the most interesting thing about it – Google Home listens to you by default.

Our personal devices are becoming more personal than we ever could have imagined, and Google Home is a clear testament to that. The company has positioned itself right at the heart of consumer data, with access to unlimited, highly personal information. It’s always listening, always learning. TechCrunch’s Natasha Lomas put it perfectly, “in other words, your daily business is Google’s business.”

Personal spaces like your home and office are being turned into gold mines of consumer data, all fueling Google’s AI technology. That’s the nature of machine learning, it needs information to become useful. In order to give you suggestions on where you might like to eat or what the traffic’s like on your commute to work, it needs to continuously harvest your personal information, preferences etc. and learn, infinitely. It sounds a little paranoid, but that’s the raw truth. When I first heard about Google Home (and the rest of Google’s hardware line), I was pretty excited, to be honest. Besides its good-looks, it seemed Google was in a better position than anyone to pull off an AI-powered home device, which added huge appeal. Having had a bit of a think, however, I’m somewhat nervous about giving them total unobstructed access to the most personal aspects of my life…

AI is becoming an integral part of our lives, the more we find utility in it, and businesses like Google are tapping directly into that in order to profit in a multitude of ways. Google Home offers direct access to our most personal spaces, and it’s difficult to deny that it feels a little invasive – but then that depends on your perspective, I guess. In any case, it seems we may have come to a crossroads; we need to ask ourselves if we’re ready to give up that access and, perhaps more to the point, are we to gain or to lose from doing so?

It seems pretty clear to me: consumer data is the currency of the future, and Google is going to be absolutely swimming in it.

Sources:

  • https://techcrunch.com/2016/10/04/say-hello-to-google-home/
  • https://madeby.google.com/home/
  • https://techcrunch.com/2016/10/05/not-ok-google/
  • http://www.nytimes.com/2016/05/18/technology/google-to-introduce-its-voice-activated-home-device.html?_r=1
  • https://thescene.com/watch/wired/google-is-changing-its-gadget-game?source=player_scene_logo

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Freemium, explained. 5/5 (12)

21

September

2016

Having discussed a few different pricing models in class, I questioned why one in particular hadn’t been brought up yet: freemium. Did you know that as much as 95% of the apps in Apple’s AppStore employ freemium models? For those Android fans, the number on Google Play is even greater, at an incredible 98%! Yet, what exactly is it? I would like to attempt to answer this question (bear with me), and provide some insight into the types of businesses that we are now dealing with on a day-to-day basis.

The word “freemium” was coined by combining the words “free” and “premium”. Accordingly, two types of features are identified under the model, namely those which are free and those which are considered premium features. In a freemium business model, consumers are given free unlimited access to a business’ core product, and revenue is earned from a small portion of the user base who sign up for premium features. Of course, as with any proposed business model, there are both benefits and limitations.

Strengths:
– Growth potential
In a word, freemium is scalable. When we perceive something as “free”, a lot of barriers are already removed, making users much easier to win over (perhaps that next targeted Facebook ad will be just enough). This becomes especially true for internet-based businesses where, due to internet economies, the marginal cost of each new customer is very low.

– Marketing
Not to be forgotten are the potential marketing benefits of a free offering. Relating strongly to the previous point, the ease with which users can sign up and start using a product/service extends to the ease with which new users can be invited to join in on the fun. If the initial user didn’t convert, there’s a good chance that one of those they invited might.

– Network effects
Building again on the massive user base that can be achieved by a freemium business model are network effects. Specifically, these are achieved when a product/service is perceived as increasingly valuable as more and more people use it. When properly leveraged, network effects could define the sustainable future success of a business, which is especially true under a freemium business model. In addition, by offering a free (basic) product, it’s easier to own the network effects and prevent someone else from using them against you.

Weaknesses:
– Need for a large user base
In an article from Business Insider, this weakness was summarized as a “numbers game”, and I couldn’t put it better myself. “If only 1% of your users are going to pay you, then you need to have lots and lots of free users (millions, typically) to make that 1% enough money.”

– Need for many return users
Freemium models need to offer a product/service that increases in value over time in the eyes of the consumer. Relevant, here, are experienced goods: products whose value is only determined by a consumer after a period of use. Investor Sean Parker said of Spotify that, once you create all your playlists and organize your music, “we’ve got you by the balls,” which is a perfect illustrative example. Of course, ensuring that your offering falls into this category might be a difficult task, so the need for it should be considered a setback of the freemium model.

– Slow profit
As perceived value to the consumer is supposed to increase over time, it can be quite a while before a freemium business reaches break even, much less makes a profit. Of course, with the scalability of the model, once profitability is achieved it can be achieved in massive proportions – but it will probably only come with patience.

So that just about sums it up. I hope that now you might have a slightly better idea of how freemium business models work and that it may serve as a fruitful dinner party conversation in the future! If you can think of any variations, interesting applications, or anything (really, anything) else, just use the comments section below.

Sources:

www.freemium.org/what-is-freemium-2
www.techcrunch.com/2011/09/04/complete-guide-freemium/
www.businessinsider.com/what-is-the-freemium-business-model-2011-4
www.businessinsider.com/sean-parker-spotify-2010-10
www.businessinsider.com/what-is-the-freemium-business-model-2011-4#evernote-is-a-big-freemium-success-1

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