MIT’s Supply Chain blog presented a nice research study by Minhaaj Khan and Srideepti Kidambi and supervised by Dr. Tugba Efendigil. Their study is a good example of using less data rather than more to design a simple readily explainable approach that increases profits while reducing errors in ordering. It’s an easy win. Will it work in all scenarios? No, probably not. But it also doesn’t take long to try and implement. Occam’s Razor in action. It’s interesting they did not even need to know about promotions to achieve their gains. In many businesses the promotions can wreck plans. But in this consumer product it turns out they don’t disrupt.
Big data can sometimes confuse us rather than enlighten.
Naturally CIOs are an entrenched bunch. But the lack of use cases that actually work is definitely a barrier to experimentation, along with the inflated cost and risk of finding software engineers with the expertise.
Here’s a great idea: why don’t we simply buy a 3PL? It is a lot easier than developing all that wretched software ourselves! Seriously, why isn’t consolidation of 3PLs and maritime firms a good way to extend services beyond the port and put them under the control of someone we can trust to (more or less) handle the movements the way we want? It is a time-honored way to gain capabilities we do not have without doing the work of creating a new business. Sure there can be some coordination issues, but are they as bad as Maersk has coordinating with IBM on their blockchain system?
Remember that providing coordination and visibility of information is mostly what blockchain accomplishes, and the jury is out on whether it can be made competitive with existing types of databases (which may also need improvement, to be sure). And any of these systems is “permissioned” in blockchain lingo– there is a governor who is empowered to make decisions about who is allowed to use it. None of them is truly decentralized for governance, as the Bitcoin advocates would have you believe; in that world, the miners (of whom there are now about 6 with a 75% share of all blocks mined) can exercise control whenever they want.
It comes down to trust. Who do we trust? Central banks, or a bunch of miners? Or are we happy enough trusting Maersk, or CMA-CGM and Ceva, or some other 3PL with our cargo, and prefer to argue with them over damaged or misplaced cargoes, rather than debate with some Ethereum sites about these issues?
I’m not sure how it will come out, but I don’t think it will be all one way or the other.