Intro/Outro (00:03):
Welcome to Supply Chain Now, the voice of global supply chain. Supply Chain Now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today’s critical issues, the challenges, and opportunities. Stay tuned to hear from those making global business happen right here on Supply Chain Now.
Kevin L. Jackson (00:33):
Hello. This is Kevin L. Jackson presenting Digital Transformers from Washington D.C. Thank you for joining. Today, we’re going to be spending some time with Mr. Praveen Rao from IBM Blockchain Analytics. He’s a Managing Director of Blockchain Analytics and Partnerships.
Kevin L. Jackson (00:55):
But before we start, I want to first thank our sponsor, Digital Names by Total Network Services. If you enjoy today’s conversation, be sure to find us wherever you get your podcasts. Subscribe so you don’t miss a thing.
Kevin L. Jackson 01:14):
So, now, without any further ado, hello, Praveen. Thank you for joining us today.
Praveen Rao (01:21):
Hi, Kevin. It’s my pleasure to be here. Thank you for having me on your show.
Kevin L. Jackson (01:25):
No, I tell you, we’ve been working together for quite a while and it’s great to have you here on the show. I know you well, but, please, can you introduce yourself and your role at IBM to the audience?
Praveen Rao (01:40):
Yeah. Absolutely. So, again, my name is Praveen Rao. I’m a Managing Director, predominantly deal with supply chain solutions for Blockchain. And, also, I’m responsible for convening the ecosystems around our blockchain solutions and putting together all the partnerships around the solutions that we have.
Kevin L. Jackson (02:00):
Wow. That’s sounds like a huge role. How did you get that? I mean, when you’re in elementary school, did you say, “Well, one day I’m going to be running Blockchain for IBM.” What’s a bit of your background?
Praveen Rao (02:16):
I still don’t know what I want to be when I grow up. [Inaudible] ask me. But, you know, my background has always been in the technology space. And I consider myself having grown up in the supply chain space as well. So, I came from an engineering background and then into the business background. So, naturally, I gravitate towards harder problems that involve supply chain manufacturing, essentially the procurement side of it as well. So, I’ve always played throughout my career in this space where the technology and business kind of meet together.
Praveen Rao (03:00):
So, the technology is a great tool to solve business. And it all boils down to how much value we can generate per person by leveraging technology in some of the things that we have done, like from the business perspective. Because blockchain, you know, it’s been there since the inception of humanity, right? But we can do wonderful things by leveraging technology, especially the cloud, analytics, blockchain, and IoT. Things that we could never do before. And what it really means is, we are increasing the amount of productivity and the value we can generate per person who is kind of working in this space.
Praveen Rao (03:45):
So, that’s kind of how my journey started. I was always involved in large business transformation. I’ve done numerous global SAP deployment. I have a good grip on many of the end to end processes and how it has done in a global setting. Some of the nuances around that, that led me to leverage more and more technology in big data and analytics and, now, as the blockchain came into play. So, that’s where I was nominated to kind of help lead and bring some of the newer solutions, specifically for supply chain and procurement. That’s kind of how my journey started. And I’ve been kind of leading the solution core, plus through our supplier from its inception, which you guys are also part of the ecosystem. I’m very happy to have you guys part of that ecosystem as well.
Kevin L. Jackson (04:38):
Yeah. So, it’s connected. I’m really proud to be a part of TYS. But before we go to that, you know, you mentioned blockchain and how it’s important to supply chain. But, you know, most people say blockchain, the only thing they can think of is Bitcoin, right? Bitcoin, Bitcoin. So, why is blockchain so hot outside of Bitcoin?
Praveen Rao (05:06):
Blockchain – it’s a very interesting question – it’s one of the unique technology where the use case became more popular than the technology itself.
Kevin L. Jackson (05:17):
Yeah. Kind of backwards.
Praveen Rao (05:19):
Yeah. Bitcoin is essentially a use case of the blockchain technology. It went way ahead before people could figure it, “Hey, there is more uses to this technology.”
Kevin L. Jackson (05:29):
Yeah. Sort of ran away before everybody can catch it, right?
Praveen Rao (05:32):
Yeah. Right. I mean, certainly IBM is one of the early adopters or innovators of blockchain too. So, there’s a wonderful history behind that, I won’t go into the details of that. But why blockchain matters? Blockchain matters for mainly four reasons. One is, it basically saves costs. It removes inefficiencies, and it reduces risks, and it increases trust. So, the four main tenants what is really helping blockchain increase the blockchain adoption in the market. The way it does that is, essentially, if you think about it, throughout the history, the commerce try when there is better trust between parties. And better trust comes with better transparency among the different parties. That’s kind of what –
Kevin L. Jackson (06:29):
That’s what’s going on.
Praveen Rao (06:31):
Yeah. That’s kind of what blockchain does. Because what you have is, you have a shared ledger among multiple parties, and that is immutable. So, it’s almost like it’s etched in stone. So, even the person who wrote in it, you can’t edit it. You can always enter it. So, that brings the level of trust saying you always know the history of what happened. Nobody just snuck behind you and changed the story. And there is a provenance of chronology. So, it means, you know the timeline of when it happened, how it happened, by whom, and all that. And above all, it’s also cryptographically sealed. So, that means only the people who are concerned or need to be intended would have access to that data. So, it also brings in addresses, many of the privacy and the data security concerns that exist in business in general. So, in general, procurement supply chain is a multi-party conversation. So, wherever there is a multi-party conversation, there is some amount of trust deficit. And that’s kind of where blockchain really helps because it helps address that trust deficit, thereby fostering better transparency, trust, and better commerce.
Kevin L. Jackson (07:55):
Well, you’re talking about having this information where people can see. And blockchain is also often referred to as a shared ledger technology. And when you talk to people about putting something in a blockchain and say, “Well, I don’t want to share my information with anybody. I don’t want to do that.” Can you tell us a little bit about the difference between? I understand there’s a lot of different kinds of blockchain, like permissioned blockchain, permissionless blockchain. How do you know that nobody else sees this shared information?
Praveen Rao (08:36):
Yeah. That’s a great question. Because anytime they say shared, the first and foremost thing that pops up in your head is security and privacy, right? Like, you don’t want anybody accessing my data. And you brought up permission, that’s a very key concept here. There are two kinds of blockchain networks that you see. One is exclusive or permission. Another is non-permission, that open, that means anybody can access, like the crypto space – we won’t go into that. But supply chain procurement, I mostly deal with the permissioned blockchain network. So, that means it’s like an exclusive group of participants. That’s why we use the word ecosystem. So, that means you are part of a network. So, that means we know who is accessing the information, where, how, all of that. So, let’s say, think of this as you’re part of a Sam’s Club or a Costco, so that means you get certain privileges being part of that exclusive club.
Kevin L. Jackson (09:42):
So, like having a card, right?
Praveen Rao (09:45):
Yeah. Right. Having a Costco card. Kind of somebody will watch you before you go in so you can avail, you know, some of the benefits.
Kevin L. Jackson (09:55):
So, before you can see the information on the blockchain, you have to be like a verified member. You have to have that –
Praveen Rao (10:01):
Verified member is one. Another thing is there’s another concept, channels. That means if you and I are part of the blockchain network, you and I can have a channel. So, that means it’s similar to what we do now, like phone call, it’s a connection between you and me. So, you share information with me knowing you give me access, you know I’m accessing it because you gave me that permission. But you haven’t given permission to my neighbor. Even though he’s part of the network, they can’t quite access it. And the information is sealed in all states of data, whether it’s address, transit, consumption. That means there is a level of protection that happens at every state your data is in. So, it’s not like I can just hack into the backend and then access it all while you’re using it. So, it’s only intended between the parties that have permission and, you know, you have certain rights and it is protected at all states of data lifecycle.
Kevin L. Jackson (11:07):
Right. So, it sounds like whoever puts information on this blockchain has complete control over it at all times.
Praveen Rao (11:16):
Yeah. Absolutely. Right. And complete control in terms of who you want to share this data with as well. Yeah.
Kevin L. Jackson (11:24):
Now, in today’s world, we talk about technology. You can’t get away from cloud computing. Does blockchain have anything to do with cloud?
Praveen Rao (11:34):
Yeah. I mean, certainly it has everything to do with cloud too. Cloud is kind of making the blockchain accelerate in terms of that option. Because earlier, you used to have servers sitting in a room. And in fact, the interesting thing is, the blockchain, the concept – even though the blockchain technology is new, the concept is not new. It is well over 20 year old concept. Because if you think about it, earlier days, they used to have different storage servers. And any time you had licenses for the software, you would do a level of full tolerance by putting that license on multiple servers so that you can always ping that server, make sure that you have access to that license before you make it. But it was all setting in kind of a storage servers.
Praveen Rao (12:28):
But, now, with the advent of cloud, you can do a lot more than managing licenses. That’s the whole procurement supply chain thing. Almost all blockchain solutions are born and built on cloud. Certainly, it leverages many of the cloud technology when it comes to storage, integration, presentation of the blockchain data. And then, it allows us to scale in terms of having multiple nodes, because, essentially, since it’s on cloud, you can have your own node if you so choose to have a shared ledger in your premise, per se.
Kevin L. Jackson (13:14):
So, I guess cloud computing is sort of foundational to –
Praveen Rao (13:18):
Yeah. Blockchain is built on it, right. I mean, not that it has to be cloud, but cloud certainly helps accelerate because it helps you interoperate with other solutions that are on cloud and also integrate with other data providers and consumers. So, certainly the scalability, the performance, would be much better if you adopt blockchain on a cloud.
Kevin L. Jackson (13:46):
All right. Great. Thanks. So, you know, you had mentioned earlier, also, about Trust Your Supplier. Earlier this year, we actually had Gary Storr, the General Manager of Trust Your Supplier on the show. I understand that IBM is on the TYS governance board. Can you tell us a little more about that?
Praveen Rao (14:06):
Yeah. So, Trust Your Supplier, it’s a journey that we have undergone with a partner, Chainyard, that Gary Storr works for. So, certainly, we have a joint patent for the solution too. So, IBM provides the thought leadership, and the domain knowledge, and the process knowledge when it comes to building the blockchain, and our expertise in bringing blockchain solutions to market. Chainyard brings in the development expertise and the development resources needed to realize this solution, and they also operate the solution. IBM is also a governance board member and also a buyer on the network, so that means we leverage trustier supplier solution in our own procurement to essentially discover onboard, qualify suppliers, so that, you know, we can always continue to improve the supplier pool that we engage with within IBM.
Kevin L. Jackson (15:10):
So, this is more than just information technology though, isn’t it? Doesn’t IBM use blockchain in different industries?
Praveen Rao (15:22):
Yeah. Absolutely. I mean, blockchain is huge. We have a number of blockchain solutions. We have trade lands, we have food trust. Certainly, we talked about Trust Your Supplier, which I focused a lot of my time on. So, blockchain is just getting started. And I think IBM has our services group well over a thousand networks that they’re operating because we also have a blockchain engine called BPS. Basically, that engine can be leveraged to assemble your own network if you are dealing with a specific problem and if you want to leverage blockchain technology to solve any of the trust related challenges, neuron company with your partners and suppliers. By all means, you can leverage that engine and start your own network. A lot of our clients have done that.
Praveen Rao (16:16):
And we also have massive industrial solutions like our cross industry solutions, like Trust Your Supplier, where there is almost a commingling or a merger of the social media kind of play along with the blockchain play, where, essentially, suppliers can maintain their data on a digital passport and share with any number of buyers of their choosing. So, that way, suppliers still control their data, but they can’t choose who they want to do business with. The buyers get to choose, you know, they can constantly discover suppliers. That’s why it’s kind of a nice merger of social media and a blockchain plane.
Kevin L. Jackson (17:00):
Oh, wow. That’s scary. That can be scary, social media for supply chain. One thing that kind of gets confusing, you know, are there many, many different blockchains and are there different technologies? Like, when you get stuck on one blockchain, if you select it, you know, do you build your own blockchain? How does that work? How many — there? Like, how many clouds?
Praveen Rao (17:30):
Yeah, that’s a great question. Blockchain is still in its infancy. I see blockchain going the same route as cloud technology, because, earlier, there was just one Rackspace kind of a cloud. And then, large cloud players came in. Certainly IBM have a cloud, there are other peers or competitors who also operate clouds. So, similarly, blockchain is also going to evolve, in my opinion, because IBM has a blockchain platform called IBP, IBM Blockchain Platform, which is built on an open source technology called Hyperledger. So, Hyperledger provides the blockchain. And IBM is one of the founding and governing partner of the Hyperledger foundation, which is an offshoot of Linux Foundation, by the way. And then, there is also ETDM, that is multi-chain, there is corridor, there is a bunch of other blockchain technologies that are out there. And, certainly, they’re all at different levels of maturity.
Praveen Rao (18:41):
Some of our major competitors are also planning to bring their own blockchain technology in the future. But as we go into the future, you know, I see more of a hybrid model, just like how we have hybrid cloud now. Hybrid cloud is kind of a norm right now where a company operates multiple clouds, whether it’s IBM Cloud along with Azure and AWS. But they all work together to solve a harder business problem. I see blockchain going the same way, where there is essentially an interoperability between different networks. Because, ultimately, what we are trying to solve is the trust and transparency and we need to make sure that these proper handshakes happen between different networks, and the data can flow for various reasons, so maybe has different use cases.
Kevin L. Jackson (19:34):
Right. On this show, did you just coin a new term, hybrid blockchain? Is that what we’re going to be talking about all next year?
Praveen Rao (19:43):
I mean, it seems natural evolution as we go in and as more awareness builds up around blockchain. But I think that’s an inevitably beat. Because the world it is too big for one company and one —
Kevin L. Jackson (20:01):
And this is coming from IBM, the world is too big for one company. Wow. IBM is changed.
Praveen Rao (20:09):
That’s my personal view. But, anyway, I think there are many interesting problems that, I think, blockchain can solve. And I know that the world also has an abundance of talent and talented people, they’ll always figure something out. But, I think, looking at the analogs like the past evolution. So, I do see that blockchain is a network of network already, but a hybrid version of that, too, in the future.
Kevin L. Jackson (20:45):
So, sort of getting back to our knitting, I guess, supply chain, blockchain seems to really be focused on addressing a lot of the risk around supply chain, and procurement, logistics, distribution. Can you talk a little bit about the different risks and how blockchain helps with managing those risks?
Praveen Rao (21:07):
Yeah. I mean, the risk is an inevitable part of billing, you know, when you’re engaged in a multi-party conversation, right? All it takes is a few bad apples to spoil the entire carton per se. So, if you talk to any chief procurement officers, risk and compliance are what keeps them awake. Because everybody wants, you know, cheaper, faster, better — Companies, most CEOs goes to their CPOs, you know, whenever they need cost savings. But at the same time, the last thing they want is do a business that would essentially put them out of business. Because that’s kind of the risks that we are dealing with considering almost 60 to 70 percent of your revenue comes through the product and services that you purchase, transform, and then market. So, it’s even more prevalent when it comes to procurement, because, you know, you’re dealing with different players, and different industries, different geographies. Many of them, you are doing business for the first time.
Praveen Rao (22:17):
So, that’s why, if you look at the supplier life cycle management, you start with discovery, and then you go into qualification, and then onboarding. There are a number of different risks you deal with, both from the operations and also from the onboarding, like the inception of suppliers into it. So, the way some of the leading companies, including IBM, is solving is through, essentially, a network. I mean, this is a concept that existed from the beginning. So, if I know you, and if you recommend somebody, and two other people said, “Hey, this person is good.” Then, my risk level goes up because there’s ten people watching for this person that I’m trying to do business with, because there’s a track record of excellence. So, you can reasonably predict the future is going to be consistent with that track record.
Kevin L. Jackson (23:15):
People do business with people they know, right?
Praveen Rao (23:17):
Yeah. So, that is one aspect blockchain brings into the network. Because you’re part of an exclusive community, so people know each other. They give feedback about these. There’s a 360 degree view of the supplier. So, the new business, new engagement. And then, there is also a huge number of partners that we engage with, the data providers, right? If you are dealing with, let’s say, a financial liability. There are people like rapid rating who will give you FHR score, Financial Health Rating. You’re compared to the peers in the industry. So, that would give you an indication of, you know, how likely that I can continue to do business with our sustainability. We have people like Ecowater, who gives you the sustainability rating.
Praveen Rao (24:04):
So, essentially, what we do in a blockchain, it’s all provided directly into the blockchain. So, what IBM and many of our peers do is, essentially, we look at the supplier data in the context of the data from the trust anchors per se. So, all of these data providers, so that way you have one consolidated view of various risks. And then, you can, essentially, action on it, whether you want to onboard them or whatnot. And we also have other providers to deal with resiliency and operational risk. For example, you know, a COVID-like situation happened or like the Fukushima that happened in Japan. So, the first thing that comes to any CPO’s mind is, “What does it mean?” I know the cases in India were rising like last two weeks ago. What does it mean to my supply chain? How much of an impact? When China was locked down, there was no toilet papers in the thing — Similarly for businesses here, much bigger issues to deal with. What kind of impact you would have on your promises to your clients?
Praveen Rao (25:14):
We have partners like Resilinc, who can put your entire supply chain on a world map, and then kind of show you the suppliers who would be impacted in that particular scenario. Also, help you figure out an alternate route, because the last thing you want to do is single source everything to one place, and then, essentially, have a bottleneck in our supply chain. So, those are the views that you would get along with, you know, the trust from the trusted partners.
Kevin L. Jackson (25:48):
You say, you know, if you’re talking about supply chain, there’s a problem, right? So, be quiet. So, I know we’re running out of time here, but one thing I did want to sort of understand more is, you know, last year, a lot of people were talking about smart contracting and how smart contracting was going to revolutionize and change supply chain. But, now, we’re talking about blockchain, aren’t they sort of similar?
Praveen Rao (26:18):
Yeah. I mean, I glad you brought it up because that’s another salient features of blockchain. It comes out of the box, free of cost to you. So, what it really means is, think about the different things, like who thinks that you can do it? Because right now, the that’s one beauty of blockchain, it can completely disrupt your current business model. Right now, a supplier does the work and gets paid. Because availability to promise date, and that’s the date they should do. It also kind of brings in a level of complacency, both in the supplier and the buyer as well. So, what blockchain can do is incentivize by having innovative contracts. So, what if you can bring product to market faster than your competition by working with your supplier? So, it means the more to you, you get much better market penetration or gains. So, you can structure that, all those scenarios, into your supply contracts. Either you can reward them for delivering early or penalize them for bringing you down or delaying you. So, those things is something you can build it right into the contract and track them throughout the supplier life cycle contracts.
Kevin L. Jackson (27:39):
It sounds like you’re gamifying the supply chain. Is that really what you’re doing?
Praveen Rao (27:45):
Yeah. I mean, the kind of things that you could do now, it’s mind boggling and things that you could never do before. The best part is, it’s all transparent. You know, I mean, we’re also reducing the conflict and need for excess audit. I read the article where it said, in U.S. alone, we spend about $600 billion in all the internal audits and auditing the systems that we do. So, in blockchain, everything is audited every single second. So, you don’t really need to spend. You can use that time, that money for something more higher value added for your company.
Kevin L. Jackson (28:26):
So, you mean I don’t have to pay for auditors anymore? Hooray.
Praveen Rao (28:30):
At least not the internal auditors.
Kevin L. Jackson (28:35):
All right. Wow. Wow. You’ve taught me so much in the few minutes we’ve had. So, we’re coming to the end of our time. But how could my audience actually reach out to you if they want more, if they want more?
Praveen Rao (28:48):
Absolutely. So, I’m available on LinkedIn, Twitter, you know, certainly please do connect with me. You know, also you can send me an email at raopr, my last name, R-A-O-P-R, @us.ibm.com. So, if you have any questions, I’m more than happy to engage with you.
Kevin L. Jackson (29:08):
Wow. Well, thank you very much for spending the time with us. And on that note, be sure to check out a wide variety of industry thought leadership at supplychainnow.com. You can find us and subscribe wherever you get your podcasts. So, on behalf of the entire team here at Supply Chain Now, this is Kevin L. Jackson, wishing all of our listeners a bright and transformational future. We’ll see you next time on Digital Transformers. Thanks everyone.
Praveen Rao (29:42):
Thank you, Kevin, for having me on.
Intro/Outro (29:45):
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