CSCMP's Supply Chain Quarterly
September 23, 2018
Forward Thinking

Small trials can lead to big results with blockchain and AI, panel says

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GE and IBM advise launching internal pilots of emerging technologies, Project44 speakers say.

Many transportation and logistics providers are wary of sinking money into emerging technologies like blockchain and artificial intelligence (AI), but with careful planning they can still launch trials of these new tools without excessive risk, according to a panel that spoke at a technology conference in Chicago.

In order to measure how much value emerging technologies can generate in real-world applications, companies can dip a toe in the waters by testing them on internal operations before ever offering them to customers, panelists said at technology vendor Project44's Transform conference in Chicago.

At General Electric Co.'s GE Transportation division, supply chain leaders tested AI algorithms on a system that analyzes video feeds from their own locomotives to detect potential maintenance issues with railroad tracks, said Jennifer Schopfer, vice president of transport logistics for GE Transportation Digital Solutions.

In another limited real-world application, GE is using AI to help smooth out some of the human foibles that can trip up literal-minded computer programs. For example, she said, statisticians say that the city "St. Louis" can be spelled in more than 30 different ways, counting all the permutations of each word. A computer can deploy AI to conclude that all these rogue spellings actually refer to the same city, and avoid problems with mistaken shipping addresses.

Likewise, IBM Corp. suggests that its clients "start small" and apply a leading edge technology like blockchain in limited trials before rolling it out to widespread use, said Jeff Beals, IBM's strategic solutions development executive for blockchain.

IBM recently launched a high-profile blockchain initiative called TradeLens as a joint venture with the container line giant Maersk Line. But before that project went live in January, the company had run a series of much smaller internal trials, using blockchain to trace humble transactions such as a case in which a shipment of flowers moving from Kenya to Rotterdam triggered more than 200 point-to-point transactions and handoffs before reaching its destination, he said.

As companies gain enough experience and trust in new technologies to apply them to a wider variety of commercial applications, they may begin to struggle with additional hurdles, such as the traditional reluctance that many firms have about sharing private data. "The supply chain itself is inherently interconnected, so it's kind of ironic that we don't all collaborate by sharing data, and do better than we now do at moving cargo," Schopfer said.

However, the technology itself could help provide a solution to that challenge by allowing participants to set their own rules for the amount of data they are willing to disclose, Beals said. At its base level, blockchain is simply a set of technologies and tools that enable many-to-many conversations, he said. And because communication is a team sport, blockchain supports that transaction by keeping the data secure and immutable, Beals told the crowd.

"Blockchain is not for point-to-point communication, but for sharing across an ecosystem, so you may be sharing data with someone who could have been a competitor in the past," Beals said. "But with much less friction at sharing that information, you can create new value" that rewards participants with new business opportunities in exchange for the perceived risk of exposing their proprietary data.

Ben Ames is Editor at Large and a Senior Editor at Supply Chain Quarterly’s sister publication, DC Velocity.

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