What benefits can blockchain promise for some of the world’s largest companies? In this episode of Mastering Innovation on Sirius XM Channel 132, Business Radio Powered by The Wharton School, guest Alain Neyroud, Principal Blockchain Architect at IBM, discussed IBM’s latest blockchain initiatives as well as the current state of blockchain technology. Neyroud also spoke on this topic at the Mack Institute Spring Conference 2018.
Neyroud belongs to a small organization within IBM called IBM Garage, where they blend design thinking, lean startup, and agile methodology to deliver a minimum viable product (typically a blockchain network) for a client in a 2-3 month time frame. His team has worked on a variety of exciting applications spanning different industries. For example, they’ve helped Walmart use blockchain to identify food provenance in a timely fashion so they can quickly recall foods across warehouses, and worked with Unilever to improve real-time measurement of ad campaign performance. Other applications are being explored in energy, finance, and healthcare. Neyroud explained that we are still early in the technology cycle with blockchain, but have moved beyond initial experimentation and are now seeing real operational networks being deployed at scale with major partners. We will continue to see the space develop as the technology matures and more players enter the space.
An excerpt of the interview is transcribed below. Listen to more episodes here.
Transcript
Harbir Singh: For those of us who don’t know much about blockchain, can you give us a sense of how blockchain works and how this innovation is going to change many industries?
Alain Neyroud: One of the simplest ways to explain blockchain is it’s essentially a shared database that can make data available to multiple participants at once. It brings a very unique capability for businesses that want to further automate and strengthen their relationship within their ecosystem. Today, most businesses build their application in a standalone mode for their own purpose and essentially use ad-hoc means to exchange information with their partners within their ecosystem. And blockchain is a new technology that makes it a lot easier to share information among those participants and partners in a trusted and reliable way. There are plenty of potential applications in the financial market or in the entertainment market. There is a huge set of possibilities in the supply chain space as a whole where there’s a lot of dynamics between market participants. Today, most of the coordination between those actors is ad-hoc. Blockchain offers the possibility to streamline that very efficiently.
Singh: In some sense, I find supply chain particularly interesting because as you said it has tremendous possibilities and currently many parts of it are very ad-hoc. If you were approaching someone from Walmart about how they configure their supply chain and sources of goods from all over the world, and I’m sure they’re already using some of these technologies, what would be the pitch?
Neyroud: In that case actually, we have been working with Walmart for quite some time. The initial pitch and the initial story was, “How do we improve supply chain to trace the provenance of goods and provide better food safety responses when any issues occur around the supply of that food?” We started working with Walmart and a few other actors on this limited use case to demonstrate blockchain’s capability to identify food provenance in a timely fashion. And we demonstrated that we could, in fact, identify the provenance of mangoes in a few seconds as opposed to the typical six weeks that it would take at the time for Walmart to be able to trace it back to the provider. So, blockchain was demonstrating the ability to fully trace information and to be able to come back to it very effectively.
“There is a huge set of possibilities in the supply chain space as a whole where there’s a lot of dynamics between market participants.” — Alain Neyroud
Singh: So, let’s stay with that for a while. Amazon bought Whole Foods about a year ago. And Whole Foods, of course, is clear about organic and good provenance of their items. So, this newer efficiency in terms of identifying provenance, is that translating into better prices or is it just confirming the basis of differentiation — that our mangoes come from the best places that we’ve said we are sourcing from?
Neyroud: There are several aspects of it. In the food safety space, the system we built out of this experiment does play in two areas. The first one is provenance. Here the idea is first to be able to quickly recall foods across the distribution warehouses when any accidents occur, and the game is to respond quickly to protect the public and the customer base. It’s a safety issue. The second aspect is, of course, to reduce cost. The third aspect is marketing around the quality of the delivery. You can play on various dimensions there. There is also another interesting aspect that now we can manage certificates. They bring, in fact, various producers to publicize their certification in terms of organic food or other aspects, food and supply chain, via the blockchain platform.
Singh: Fascinating. As you said, there’s opportunity both on the differentiation side and on the cost side. So, let’s look at the cost side. Can you reduce the amount of time a product goes through the supply chain and gets to the shelf? I assume you can, based on what you’re saying. So, there are some increased profits to the retailer from lower cost.
Neyroud: Yes. Certainly downstream there is an aspect of optimizing the supply chain and its effectiveness. But the goal for this specific use case was more about saving money in the amount of food you needed to pull out of the market when food accidents occur.
Singh: Oh, I see. So, it’s more risk management.
Neyroud: Think of the mangoes example. If you found one faulty mango or one infected mango somewhere, typically the response of the distributor would be to remove all the mangoes from all the shelves, in all the stores regardless, right? And this is because it takes several weeks to identify the problems of the faulty mango and fix this situation. With the food safety solution, you can now pinpoint exactly the source of the faulty mango extremely effectively and therefore, target only the products that are identified based on that provenance. And therefore, you dramatically reduce the costs of food safety incidents.
“Blockchain was demonstrating the ability to fully trace information and to be able to come back to it very effectively.” — Alain Neyroud
Singh: I can see a lot of potential applications there. And now, turning our attention to the media buying process and how Unilever has worked with IBM, and quality, and transparency, and security in the use of blockchain. Can we learn more about that? From what I understand it places all the players at the table in a more efficient way and may even reduce the tools of some. Is that right?
Neyroud: Exactly. Interestingly the media buying industry is a very high tech industry, but there are many challenges related to measuring the performance of marketing campaigns and advertising campaigns, as well as deciding the exact payment that must be attached to those campaigns based on their performance. Today, with actors like Unilever, most of this is done manually and is done within the context of the advertiser or the publisher, leading to frequent disputes that take time and money to resolve. So, what we wanted to experiment with Unilever and some of their partners was, could we improve the actual real-time measurements of the campaign performance from a ubiquitous perspective? That is, essentially looking from the perspective of all the actors, as well as reducing the discrepancy in terms of invoicing and limiting the number of disputes. That was the goal of the experiment that we did with Unilever. We’re able to demonstrate that by building a common view of the campaign execution in terms of number of impressions and quality of those impressions, we could one, measure and adapt in real time the execution of the campaign and second, drastically limit the amount of disputes that are involved.
Singh: Oh, fascinating. And that’s partly because some of these views of particular ads could be 10 seconds, but seen as a view, versus an actual view, right? And so, there’s a big debate potentially that can be resolved.
Learn More
Download the Mack Institute’s white paper on blockchain.
About Our Guest
Technology enthusiast Alain Neyroud is a recognized expert in process & decision automation and has spent the past 15 years helping countless organizations reap the benefits of digital process automation. Alain recently joined the IBM Blockchain Labs where he helps trailblazers design game-changing Blockchain networks.
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