with Linda Goetze & Michael Darden of the Blockchain Chamber of Commerce
IndustrialSage Transcript
Danny:
All right, so let’s jump into today’s episode. I’ve got some great guests here. I have Linda Goetze, who is the president and CEO of the Blockchain Chamber of Commerce, and we have Michael Darden here, who is a member of the Blockchain Chamber of Commerce. Thank you so much for joining me today on IndustrialSage.
Michael:
Thanks for having us.
Danny:
I’m super excited to get into this topic, ’cause it’s going to be a little bit different than what we’ve maybe talked about in the past, where it’s been traditionally a lot of sales and marketing. And as I’ve alluded, I’ve talked about this on the show a little before, where we’re starting to make a little bit of a transition, a little pivot. We’re going to get into some different topics.
So, I’m very excited to talk to you guys today about Blockchain. That’s super interesting, and it’s a topic that you hear a lot about, and there’s a lot of misnomers, a lot of misinformation. And I’m hoping, and I know you guys are going to do a great job of just kind of sharing with us and our audience a little bit more, for those who maybe are a little less informed about Blockchain, what it is, what are those opportunities, how can you roll that out in a manufacturing environment, and what that looks like. But before we get into all that, Linda, if you could maybe just tell me a little bit about yourself and the Blockchain Chamber of Commerce.
Linda:
Absolutely.
Danny:
That would be awesome.
Linda:
Yeah. Obviously, the introduction to Blockchain is different for everybody, and mine was buying bitcoin.
Danny:
Oh, that’s exciting.
Linda:
Yeah, in 2012, when it wasn’t convenient to do.
Danny:
Okay. So no coin base or anything like that?
Linda:
No, no, no, no, nothing that easy. Not push-button like it is today. Yeah, the process was getting money from the bank, going online and finding out where there were these special ATMs, taking the money from the bank, where they gave you strange looks and put you on a list, (laughs) to the ATM location, where the clerk behind the counter gave you strange looks. Anyway, then you get a little receipt. You go back, you enter it, you get a string of letters and numbers, and you take that home, and you hope when you spin up your own instance of the bitcoin Blockchain, that it says that you have X number of bitcoins in your wallet.
Danny:
Wow.
Linda:
So you take real, “real” money, and put it into a string of letters and numbers, and have trust.
Danny:
And hope that it’s there?
Michael:
That’s trust.
Danny:
Yeah, exactly.
Linda:
That something good is going to happen here. And I just saw something about it that made me, I mean, I talked to my husband three times before he actually said, “Okay, let’s go ahead and do that.” And it has been one of the best diversification choices we have made. And I’m not recommending going and taking all your money out of the bank (laughs) and putting it into bitcoin or anything like that. It was a very measured approach that we took, and they’ve actually shown that between one and, I think it’s three to five percent of your investable assets being in bitcoin can actually lower the volatility of your overall portfolio. So, it’s pretty interesting to look at that and say, “Hmm.” Because everyone hears about bitcoin, “it’s so volatile, it’s off the charts.”
Danny:
Yeah, exactly, right.
Linda:
And seeing bitcoin and Blockchain being in the same bucket just makes me kind of cringe, (laughs) because bitcoin is a part of the cryptocurrency sub-vertical that’s part of the financial services vertical, which is one of 12 verticals that we have at the Chamber that Blockchain is impacting. And manufacturing is one of those huge verticals. Supply chain is massive. What we’re seeing obviously in the financial services vertical, we’re seeing it in the news all the time.
Danny:
Sure, right.
Linda:
So it’s changing the way the world works.
Danny:
That’s a super interesting story. So you got in super early with that, 2012.
Linda:
Yeah.
Danny:
I mean, that’s pretty awesome. So, tell me a little bit, how did you get involved then with the Blockchain Chamber of Commerce? What’s the story there?
Linda:
Yeah, I connected with the very first event that was held. It was January of 2018, and Abraham Xiong was actually the ideator of the Chamber. He and a core team were holding this meeting, and they had everyone raising their hands. “How long have you owned cryptocurrency or bitcoin?” So when they got to five years, and I was the only one still holding my hand up, (laughs) well, they call me the “grandma.” I’ve tried to change that to “godmother,” not “grandmother.” (laughs
No, it was just a real, strong connection with that core team. I became a founding member of the Chamber, just did volunteer stuff, was on panels, and then was asked to be CIO of the Chamber, and the progression and the creation of the Blockchain ecosystem platform, that has kind of been my baby, and then I was asked to be president and then CEO of the Chamber. So it’s just been a progression of growing into the need and helping establish, we have 23 chapters that are being set up worldwide right now.
Danny:
Oh, wow, yeah.
Linda:
I just got back recently from visiting our chapter in Dubai.
Danny:
That’s awesome.
Linda:
And our chapter in Athens, Greece. So, amazing people around the world that are connecting with the Chamber, and what I love about it most is the core intent and the heart behind it is to help educate. And I’m an educator, that’s my background. So educating and connecting people to this brand new technology, it’s not brand new, it’s about 11 years old–
Danny:
To most of us, it is. (laughs)
Linda:
But to most, it is brand new. So our social mandate is raising awareness, facilitating adoption, and inspiring advocacy. And that’s for commerce, consumers, and people building careers in Blockchain. So I know we have a lot of commerce going on.
Danny:
Oh, yes.
Linda:
And the manufacturing areas, again, are kind of where a lot of it starts. We have to look at the genesis blocks, being in the manufacturing space. So, I’m excited because we have members of the Chamber that are phenomenally impactful when it comes to what’s going to be done in using Blockchain for good and connectivity and transparency. I mean, I’m just happy to get to be a part of the connecting and educating.
Danny:
Well, that sounds super exciting. How many members do you have in the organization worldwide?
Linda:
Well, we have 23 chapters, and we have a model where we connect with traditional chambers. So the Cumming-Forsyth Chamber of Commerce.
Danny:
Okay, yeah.
Linda:
Is one that we have a reciprocal membership with. So we’ve been really involved in what they’ve been doing. They recently just did a hackathon, the talking light.
Michael:
Traffic lights.
Linda:
Talking traffic lights.
Danny:
Oh, that was like a couple weeks ago!
Michael:
Couple weeks ago.
Linda:
Yeah, yeah.
Danny:
At the Digital Ignition, yeah.
Michael:
The Blockchain Chamber was part of that connectivity.
Danny:
Oh, excellent, very cool.
Linda:
So, anyways, stuff like that happening here in Atlanta, but then globally is what we’re a part of.
Danny:
That’s awesome. So obviously, to most of us, I feel like it’s an emerging technology. I think there’s a lot of confusion and a lot of myths flying around around what it is, and I think… It’s funny. Even in our conversation before, we were talking like, yeah, we feel like we have a decent understanding, but there’s still a lot of confusion about what it actually is, let alone how it can actually help you. So, could you maybe explain a little bit to what actually is, in layman’s terms, what is Blockchain? And it’s not bitcoin, right? (laughs)
Linda:
Yeah, that’s the first misconception we try to take off the table. Obviously bitcoin was the first iteration that we publicly knew about Blockchain from, right? So it’s built on top of a Blockchain. So you have the little b, which is the bitcoin, and the big B, which is the Blockchain. But the bitcoin Blockchain, there’s thousands of other Blockchains now. The two big distinctions are the private permissioned and the public Blockchains. So bitcoin is a public Blockchain. What we’re seeing enterprise use most frequently today is that private permissioned Blockchain.
So the concerns about bitcoin mining consuming so much energy, these private permissioned Blockchains don’t have that same energy consumption, because they’re not doing the same type of mining and hashing to create these blocks. So, to give an example from the bitcoin Blockchain, you have a block of data. It could be any kind of transactions. It could be pictures. It could be anything you’re putting on the bitcoin Blockchain. And you take it, and you create a hash of that block. So, it’s basically saying, all of this data equals this string of letters and numbers.
Danny:
Okay, all right.
Linda:
Then you take that, and you add it to the next block of information. So now that record of what happened over here is now connected to what’s happening here, and then I hash that total with a new hash, okay? So it’s, once again, the string of letters and numbers representing this block of information, that includes this block of information, and you just keep doing that.
Danny:
And they build on top of each other subsequent, right.
Michael:
So what’s really interesting is that this fits just how a manufacturing facility works, right? You’re receiving all this raw material. That raw material has internal work orders to be able to mix them together, produce a defined output product that ends up being what you’re selling to the consumer. But what you want to identify in your own internal supply chain is where waste is. You want to remove that waste by controlling all of those variables that are inside of that manufacturing or distribution facility. But in order to be able to control those variables once it leaves that facility, it needs a way to be able to permission the sharing of that data, and Blockchain is what enables that in these private Blockchains, where you have permission-based access so that trading partners, like suppliers to a manufacturer, can actually see the same order, in real time, being produced at the manufacturer’s location so that they know that there’s not going to be a delay at the shipping location, so that they know there’s not going to be a delay in their production cycle.
And that visibility upchain and downchain is what we’ve always striven to achieve inside of the four walls of the facility. But the visibility, the ability to calculate those sort of data points, we generate a lot of data inside of every manufacturing and production facility, but filtering through that to make informed information. Why did I collect that piece of information? It’s usually for someone else down the chain, and if they don’t call and ask for it, they’re unused. In a Blockchain-based environment, you can implement smart contracts that self-execute. So when a certain event takes place, it triggers the data to push to the next location.
Danny:
So what’s a good example, like maybe a concrete example of a smart contract?
Michael:
So, a smart contract in the logistics world of shipping a transaction from one party to another, a simple transaction, would require the party that owns, sorry, the party that own the goods and the party that they were selling the goods to, engaging with some third-party provider to be able to bring a truck and move that truck from there with the driver to that destination location. The visibility of what the manufacturer has produced inside of their four walls, as soon as they put that onto that truck, it’s basically gone.
Danny:
Gone, yeah.
Michael:
So now, it’s a hope and a prayer that it’s going to show up at your location, and if I don’t hear a complaint back from you, it’s going to just get a paper email, or paper mail copy of a signature sent back to me from the trucking company wanting to get payment, and that’s the first time that I know that it actually got delivered. In a Blockchain environment that has permissions, each of those parties would get access at each transition point. So when the truck picked it up from me, you would get an advance shipment notification that this is the driver and the piece of equipment that’s currently left my location and is on its way to you. And in the future world, the track and trace of that transaction, of GPS location, should and could be communicated to all parties through the supply chain, much like your Uber driver that’s on the way.
Danny:
Exactly. And if I understand correctly, replicating that experience that you have as a consumer when you buy something from Amazon, or you ship something for whatever, FedEx or UPS, and just having that visibility and understanding that, okay, this is where it is, this is happening, and it’s making and then connecting into your systems. Is that a good…?
Michael:
It’s a really interesting example that you give, because somebody like an Amazon or a FedEx or a UPS, they have closed-loop systems, where they have tired to take that control of what’s inside the four walls and say, “Well, if we controlled every one of the assets between here and there, then we can control all the data.” So those sort of systems, United States Postal Service as an additional example of that, they have their own pieces of equipment and their own employees that are moving it
In the place where Blockchain fits most is where there are marketplace participants that are going to engage with each other for a short period of time and then disengage. And when they disengage, they want to leave the historical breadcrumb trail of what their experience was, “I had a good experience with this guy, he did a super job,” so that everybody else down the chain can see that that’s a quality person to be able to work with, and that immutability and the collection of that granular level of data is certainly possible with today’s computer equipment, but the artificial intelligence world helps to unlock that data to be able to make more informed decisions in supply chain.
Danny:
Great. That’s fantastic, especially since the traditional, from a logistics and a supply chain, I mean, that piece, as much as a manufacturer would probably love to have a closed loop system, that’s just impossible. (laughs)
Michael:
I mean, you have too many trading partners.
Danny:
Right, exactly.
Michael:
And too many touchpoints, and too many intermediaries that are stepping in. I mean, a typical shipment gets moved 5.6 times by truck before it shows up at the destination, from raw material to finished goods.
Danny:
Raw goods, all of it, yeah.
Michael:
That’s an insane amount of touchpoints, but if we really look at it, it’s the same thing. You’ve got raw materials to manufacturer, manufacturer to value add, value add to distributor, distributor to end-user. And you can add a couple of pieces in there that can add additional value, but we still have a need, from a person/company that has goods to their customers, and the service providers along the way that are helping to be able to get it there should be transparent with their interoperability to enable the sort of visibility that the manufacturers have.
Linda:
I just want to break in there, because the permissioned aspect of this allows for visibility to certain parties at certain times, not necessarily visibility to everything at all times.
Danny:
Okay, all right, yeah.
Linda:
So, the initial instigator of the Blockchain can determine how those smart contracts are written and where those permissions are granted. So there is visibility at certain points, but there’s also an ability to maintain. Because it’s private, you can maintain a certain sense of, “Oh, the competition’s not seeing my dirty laundry or my stuff.” (laughs) It’s when you get to the public chains where it really is out there, and then the security that you have is with encrypting data that only you hold the private key to.
Michael:
It’s very similar to how an FTP box works with EDI transactions between current trading partners. When an existing warehouse has an order that’s coming in, they are typically getting an FTP, a file transfer protocol, of a file that’s telling them what the order is that’s coming down to them, and that digital approach has become pretty standard, but it’s also become a little bit bastardized. So, the standards of EDI have some customizable fields at the end, and usually, you end up with a trading partner where you define what those are, and then that’s your rhythm for communicating with them. But in a Blockchain environment, specifically like in supply chain and logistics, those standards haven’t ever existed before.
And a couple of years ago, organizations, one specific organization around supply chain, started to develop the standards for interoperability between these different platforms.
Having the ability to be able to have an immutable distributed ledger platform and having the rules so that they can interoperate together efficiently is two elements of timing that were required for this to be at a tipping point of adoption.
So I think two years ago, we started to hear about Blockchain and Blockchain and transportation, and, “Whoa, what is this, what do we do?” And there isn’t a quick answer to it, because it’s really a cultural change. It’s a change of saying, “Right now, I have full accountability inside of my warehouse and inside of my manufacturing, and when there’s somebody that makes a mistake, I can track it down to the person that picked the order on this day at this time in this aisle.” That’s Blockchain. It’s just creating that record of accountability so that everybody that touches it from the beginning to the end of that cycle has visibility to what took place.
Danny:
So you said something interesting. In order to get that transparency, you mentioned it’s immutable. So if I were to break that down, it’s essentially, in layman’s terms, we have multiple copies of this. So if something gets deleted or edited over here, if I understand correctly, you have all these other copies that will say, “No, no, no, no, actually, that’s wrong,” and boom, now we can…
Michael:
And that’s basically what a hash does, is it identifies so that each time a block is added to the chain of where a transaction takes place, it updates the other nodes of what the transformation is. And if any of those don’t have the right hash that says “update this record,” then it identifies that as being an exception. It says, “Wait a minute, we’ve got a breach in the security of our environment,” and we can correct for it before it becomes a breach.
Danny:
An issue, yeah, that’s awesome.
Linda:
One of the things that probably should be clarified is DLT stands for distributed ledger technology, not decentralized ledger technology.
Danny:
Okay, all right. Very big difference, yeah.
Linda:
So when you go to the public chain, that’s decentralized. When you have the private chain, that is distributed, like he was mentioning, with the multiple nodes, but not necessarily decentralized.
Michael:
It’s controlled.
Linda:
You still have oversight and control of one entity of those group of nodes, but they are distributed.
Danny:
That makes sense. So, I’ve got, in my organization, in my plant, here’s our private Blockchain, and we can control permissions and all that stuff, versus the public, which is where a bitcoin would be, and everybody has access to that.
Linda:
Can have access.
Danny:
Or, can have access to it. Okay, all right.
Michael:
So there’s actually a layer between those two, which is there’s permission-based private chain. And that is where you bring your trading partners in. Even your competitors.
Danny:
Okay, you get access, you get access, you don’t.
Michael:
And now you can say, “Everybody that’s in the blanket making business has access to all of the raw materials from everywhere so that we can all make better buying decisions and all make better transportation decisions.” It’s better for all of us to work together in this, but I don’t want to share who my customers are with you, and you don’t want to share your customers with me. So we will control based off of the agreement of these “coopetition” partners what the rules are of how we’re going to share this data effectively, the intent being that all boats rise with the layer of the lake. So if you get the layer of the lake to be able to come up with the information flow and the transparency, everybody does better.
Danny:
That’s awesome. Okay, so, I have another question, then. So, I mean, this all sounds amazing, right? The rainbows and kisses. (laughs) It’s super easy, right?
Michael:
Where’s your unicorns? (laughs)
Danny:
Right? It’s amazing. It’s going to solve all the problems in the world. Not really. But those organizations that are kind of interested, who are actually rolling out with this now, and what does that look like from an organization that’s saying, “We want to kind of start dipping our toe in and moving in this direction”?
Linda:
You mean like Walmart and Coca-Cola and those guys?
Danny:
Yeah, yeah.
Linda:
They are. We have, I guess the green chain is the most thrown out there implementation to help make sure that any greengrocers’ goods that could be contaminated with any kind of outbreak can be targeted by location and taken off the shelves.
Michael:
Farm to table.
Danny:
Boy, that’s a great use case, ’cause right now, isn’t there something?
Michael:
There’s a lettuce recall going on right now.
Danny:
A lettuce recall, yeah.
Michael:
And it’s limited because of the fact that there’s more controls in place. This has gone on in the manufacturing world forever, of there being lot numbers and manufacturers dates to be able to serialize equipment and model numbers so that there are some data points.
Linda:
But tracing in six seconds rather than six days.
Michael:
Or six weeks. I mean, to try to touch all the data points along all my partners and get them to share that data around one transaction is a long time of phone calls and recordkeeping, and it’s just data. And if it’s organized and labeled and tagged correctly, then accessing that should be a real benefit for all those parties that contribute to that data source.
Danny:
Absolutely.
Linda:
Now, Coke is probably one of the biggest supply chains that has most recently come out, saying that they’re doing a Blockchain implementation with their supply chain. It’s not just the little guy, the cypherpunk, that’s doing Blockchain now. It really is the big enterprise players and all the big four with Deloitte and IBM. They’re all doing consulting into organizations around the world at different levels of success, and I hope that we’ve gotten past the POC stage, which is that proof of concept, like, “Okay, this actually does work for this business use case,” to actual rolling out and implementing Blockchain in the areas of business that it makes sense.
‘Cause there’s still places where you should just use an internal ledger; you don’t need Blockchain. But when that immutability is important, when that private permission to access is important, when you’re working with people that you don’t want to have to trust, and you just want to know that when my pallet hits their dock, payment hits my account, Blockchain can do that.
Danny:
It’s a great use case! (laughs) I would like to know that. It’s interesting. Obviously, the industrial studies for the last better part of two and a half years, it’s been a lot around sales and marketing, and the digital transformation conversation is huge inside the manufacturing/industrial space, and it’s the same thing in sales and marketing, the same thing. But the common thread in this specific use case you were talking about relative to sales and marketing is really that visibility all the way across, even if you look from a sales to fulfillment standpoint, is really seeing that thread and the touchpoints and having visibility at all areas to be able to go back and say, “This drove X amount of sales,” or that, or this, and just having the data and the connections and that visibility is huge.
Michael:
Those are key performance indicators that are driven by data points where you can average and identify outliers, and you can’t average and identify outliers if you don’t collect the data.
Danny:
Exactly.
Michael:
So the first step is to be able to build the infrastructure that enables the data collection to take place. A lot of the early Blockchain solutions, frankly, have been orchestrated, where there’s, “I want to show a working Blockchain to my management team, so I’m going to put these partners on the Blockchain and connect my very narrow path so that these parties can do this.” The natural progression of something even like bitcoin where it matures over time, it starts to be able to gain generalization, and generalization comes in and creates a truer marketplace of consumption of the new data, and that new data is what’s missing at the moment, because there’s a trust element that’s involved in being able to have those first participants sharing in an anonymized or non-threatening way, but there’s a trust factor, that they’ve got to jump on board and say, “I see the incremental benefit of being able to have competitors…”
Linda:
The “coopetition.”
Michael:
“The competitors and competition, so they can do better if they work together.” And I think we’re starting to see that because of these narrow things that have taken place, but the Gartner hype cycle of this puts this at, it’s hyped, it started to go down a little bit, but now you have true cases that people can look at and say, “Okay, so we’ve never had the bitcoin environment hacked, with the inability to be able to correct for the problem.” So, there’s a proof there, and now, what else can we apply that sort of methodology to that adds the value? And I just see supply chain as one of those that is an absolute natural.
We have tried for my entire career in supply chain to be able to create that transparency and record-keeping so that not only can I inspire employees based off of number of lines picked or accurate items received or number of shipments processed per day. Those are all data points that we already realize are valuable, but we have a limited ability to reward our partners that are outside of our four walls for their performance, because we have limited data. But if we open up the floodgates of that data like we have inside of our own four walls, it’s really an exciting time to be involved in the sensor deployment of information.
Danny:
That’s awesome. That sounds super exciting. I think we’ve uncovered, we’ve unpacked a lot, and sure, we can probably go way deeper on this. (laughs) I know we just scratched the very top of the surface, and I really thank you and appreciate you for coming on just to share some of that, demystifying it a little bit, kind of sharing some more truths around what it is and, most importantly, what it’s not. So, if anyone would love to get involved or learn more about your organization, what’s the best way of doing that?
Linda:
Yeah, absolutely. Blockchainchamber.org is our website, and we also have an initiative of the Chamber that is the Blockchainecosystem.io website. So, that’s a place that we intentionally built to help the community gather and connect and be organized into those 12 verticals where they can see who’s doing what where and connect, this “coopetition” we’re talking about, and actually be able to build better together, and be available for people coming and looking for Blockchain solutions. So, head to the Blockchainecosystem.io website, and obviously, we’d love to connect with you. If you’re here in Atlanta, we have an event this Thursday, and we have them on a monthly basis around the different verticals, and just love to have the community connect together and learn together.
Danny:
Excellent. Well, Michael, Linda.
Michael:
Thanks very much for your time.
Danny:
Thank you so much for coming on.
We really appreciate it. It was awesome.
Linda:
A pleasure, thanks.
Michael:
Thanks.
Danny:
Thank you. Oh, we’ll shake hands. Cool, so, all right. Really great episode of IndustrialSage. I hope you learned a lot. I certainly learned a lot. I think there’s a great word that I’m going to pull out of that. It’s “coopetition,” did I get that right? “Coopetition,” I think that’s great. You know, I think it’s interesting. The same thing we’ve talked about sales and marketing and that transformation that’s happening, obviously the same thing is happening inside your manufacturing plant, inside your supply chain. And I think it’s interesting to me, one of the things, some of the same exact challenges in terms of really that transparency and sort of opening up, doing things differently.
I mean, it’s kind of a scary thing to be able to say, “Hey, I’m going to share my data with you,” and I think that “coopetition,” did I get that right? Yeah, okay, good. I think it’s awesome. I also think that the ability for using Blockchain to be able to create more visibility, it’s absolutely, 100% where we’re going, we’re seeing that. That’s the whole point. That’s why you have access to data. And like Michael was talking about, start with collecting that data, and then we can start understanding it, breaking it down, looking at it, implementing solutions like Blockchain to be able to unlock that visibility, that transparency, and to really get, there’s a lot of data. We can make better decisions for your company, really, at the end of the day.
So anyways, thank you so much for watching this episode of IndustrialSage. Look forward to a lot of great new content coming down the pipe over the next several months. 2020’s going to be pretty amazing. I hope it’s going to be amazing for you as well. If you have any questions you’d like for us to answer on the show, you can reach out to us at industrialsage.com/questions, and that’s all I’ve got for you today. Thank you so much for watching or listening, if you’re on any of the podcast stations. You can catch us next week with another episode of IndustrialSage. I’m Danny. Thanks for listening/watching.
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Original Source: https://www.industrialsage.com/blockchain-is-transforming-the-manufacturing-and-supply-chain-industry/