When It Comes To Blockchain and Procurement “Where’s The Beef?”

When I say the words “blockchain and procurement,” what immediately comes to mind?

According to the early results of a LinkedIn Procurement Insights poll that asked the question “Do you currently use Blockchain in your procurement practice?” a large majority (93%) do not even associate the two. In other words, and as one respondent put it, “Many technologies that have the potential to improve supply chain transparency and the like are outside of blockchain.”

Even with those who understand blockchain within the procurement realm—and at this point, we are not sure that many do—their responses range from hopeful to pessimistic.?

While one individual said they loved the question, he also noted that he was “really hoping to see a good example coming out of this poll.” He concluded with, “Surely there must be one somewhere!?!?!”

Blockchain . . . Anybody, Anybody?

As someone who has been in procurement for decades, I have seen a panoply of remarkable technologies in my time.

I have seen the PC world move from $13K proprietary 256K RAM systems to today’s commoditized tech that is probably more powerful than the systems used to launch the first man in space.

I have witnessed the industry’s transition from the cumbersome PIP commands of the early CP/M operating systems to DOS and the present-day self-updating windows environment. In short, with each phase of the progression, you could easily see the reason and the benefits behind every transformation.

However, when it comes to blockchain, most everyone is in a perpetual holding pattern of “I get it but,” which is confirmed by the poll results.

Let’s face it when 85% of those responding say they do not use blockchain in their current procurement practice, with another 8% saying they don’t know if they do, what does that mean?

In other words, hasn’t blockchain been around long enough to move beyond the conceptual to practical use stage?

Where’s the Beef With Procurement and Blockchain?

In searching for a greater understanding of blockchain, another respondent wrote the following:

“Take, for example, the perishable good being transported. Someone or something needs to scan the item at someplace to write to the blockchain to certify its origin. How do people know the beef is from Japan? There’s a certain level of trust that needs to happen before it gets written to the blockchain.”

Fortunately, another person who responded to the poll had an answer when they said: “for the beef example you raised, check out BeefLedger.”

It is also worth noting that the same individual who provided the beef also asked, “are most procurement professionals going to know the tech they are using is underpinned by blockchain?”

Familiar Limitations

A professor who responded to the survey reported that their institution “ran a study” on this topic, indicating that “a tiny portion of respondents had some actual use case.”

However, the real issue with the professor wasn’t the lack of usage history but the availability of “processible” data. According to his findings, even if an organization has data, it is in a “chaotic” format that is “spread across various systems, tools and, of course, Excel spreadsheets.”

If memory (and past research) serves me, the data problem that limits the potential of blockchain is the same problem that limits mainstream procurement technology effectiveness.

Based on the above, perhaps the focus should be on getting quality data before discussing the merits of blockchain and any other technology.