The Key

Was it the philosopher Jean Paul Sartre who said “So often times it happens we live our lives in chains, and we never even know we have the key”?

Or maybe that was Glenn Frey.

Regardless, that line comes to mind as we read the extensive coverage of blockchain technology. Talk about hype cycles: If you read industry news and and watch the television commercials, blockchain technology will prevent fraud and exploitive labor practices, it will replace conventional currencies and payment processes, and it will even ensure that our morning coffee is shade grown and fair trade.

Morgan has largely refrained from adding its voice to the buzzy blockchain din. In our experience, when everyone agrees that the next big thing is going to free us from all the chains that shackle our supply chain efficiency, things may just be getting a little overblown. We remember when radio frequency identification (RFID) tags were going to let us track everything, everywhere, all the time—and completely passively. That was in the ’90s, and for the most part we’re still waiting.

Yet, inside of every hype there’s at least some real application and improvement. While Walmart’s 2003 requirement that all of its top 100 suppliers use RFID tags caused more than its share of headaches and misapplications, those early efforts helped make the way for some genuinely useful initiatives.

In 2012, Airbus RFID executive Carlos Nizam told ZDnet, “What [Walmart][ did was very ambitious, and things in RFID wouldn’t be where they are today without Walmart…. They really spurred and stimulated it.”

For Airbus, that means high-value aircraft wing assemblies and subassemblies can now be tracked with tags regardless of where in the world they are being made. “I can see assembly time on every wing being manufactured. If one is taking too long, why? Am I seeing a trend, or is it a statistical anomaly.”

We believe blockchain may follow a similar learning curve, which is why we were pleased with FedEx CEO Fred Smith and CIO Rob Carter’s comments earlier this month at a New York technology conference.

While they did indulge in a few superlatives, the FedEx execs said their initial experiments will focus on a small number of large, high-value shipments. That sounds like an “Airbus” use case to us—and one likely to yield near term value. From there, we can all explore how blockchains can help deliver fresh mangoes. “The consequences of investing in this aren’t very high,” Carter said. “The consequences of not investing are extremely high.”

Meanwhile, that observation about living our lives in chains and never knowing we have the key? While blockchain and other “it” technologies capture our imagination, there are many other keys just lying around waiting to unlock efficiencies. In our own practice, we make aggressive use of the world’s already omnipresent mobile devices with—horrors!—barcodes. It’s worth noting that the first commercial use of barcodes was in 1966. Turns out they’re still handy, if not sexy.

Our approach to digitizing manual processes is to use the cheapest, most readily available and fastest-to-deploy solutions available. If that means a new technology like cloud infrastructure or blockchain, so be it. If not, there are always  barcodes.

At the same time, we always keep the long run in mind—making sure that today’s solutions scale and adapt gracefully to that beautiful future we read so much about. It turns out that in the long run, it’s a long run. That’s a great supply chain philosophy. Or, a great song. Your choice. 

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