Observations From the Supply Chain Technology Architects: 10 Thoughts on the Decentralized Economy

Article by Tom Serres

1. Asset chains will be a self-governing requisite for the decentralized economy that enables additional cognitive supply chains.

As we continue to evolve towards an on-demand marketplace, the existing framework must be wholly decentralized rather than relying on the half-measures currently found in modern logistics. This will require autonomous, cognitive supply chains that learn and adapt relative to a nearly infinite number of internal and external variables. Today’s leaders must understand that AI, asset chains, IoT, and additive manufacturing are essential components of the asset chains that create future value.

2. Cognitive supply chains will seek economic equilibrium, perfect responsiveness and efficiency, and profit maximization through autonomy and constant iterations.

In traditional supply chain models, firms invest resources to combat the latencies stemming from human interference into logistics networks, trying to create an artificial sense of economic equilibrium despite the intrinsic barriers preventing ultimate efficiency. Cognitive supply chains allow economies to naturally drift towards equilibrium while also freeing corporate resources for investment into innovative thought and design. Supply chain leaders must understand the dramatic difference between intelligently augmenting human performance in supply chains and one that is entirely autonomous to foster such an environment.

3. The marketplace will place increasingly greater importance on transparency and accountability from organizations and leadership.

Customers now demand their preferred brands to be positive corporate citizens of the world. While regulation pushes for greater accountability across supply chains, absolute transparency with information and business practices will be a requirement to achieve a true network state. Competition, in large part, will drive an organization’s push towards complete transparency as anything short of those measures will render them unable to compete in a decentralized economy that rewards participants that embrace shared, open data communication channels.

4. Value generated by third parties and intermediaries will drastically decline as value shifts to the edges of logistics networks.

As critical supply chain innovations continue, intermediaries that once played a pivotal role at various stages between raw materials and finished goods will go extinct. It is incumbent upon supply chain leaders to understand that intellectual property and human talent will drive value, rather than the inefficient, laborious processes of traditional models.

5. Artisans with specialties in design – modern-day DaVinci’s – will be in high demand in the decentralized economy.

Value creation will primarily stem from human talent and innovation, resulting in intellectual property within a decentralized framework. Artisans and innovators will be highly valued components of any organization relying on IP for value. The more human talent a company has the more capable it will be of satisfying escalating consumer demand and expectations.

6. The decentralized economy will require a significant number of lawyer-coders (smart contract developers).

All forms of assets will have individual governance models, ranging from FAA regulations of aircraft manufacturers to regional compliance for drug distribution. A highly specialized individual, a lawyer-coder, will be equally adept at programming as they are managing those individual governance models. Supply chain leaders will need to activate, educate, and recruit this new class of employee because demand for them is bound to outstrip supply.

7. The decentralized economy will reward the abilities to quickly learn and unlearn.

Given the rapid rate of progression in tools and processes within a decentralized economy, people and organizations must be agile.  Continually learning new processes while unlearning others will be critical to those striving for success in a harried IP landscape. We need new, effective methods of learning and unlearning as well as investments to continually drive research and development.

8. Building coalitions will become a highly demanded leadership ability and quality.

While trustlessness remains a vital component to a decentralized economy, leaders must also be able to form alliances. Asset chains will only be effective in a cooperative, shared industrial ecosystem. Participants that demonstrate the ability to play well with others will bolster overall trust and ultimately improve the system.

9. Robots and AI-based machines will be the next massive consumer class thanks to cognitive supply chains and asset chains.

Procurement, payment, and contracting will be managed exclusively by machines as an asset moves across a cognitive supply chain. Asset chains will provide the base business protocols, giving such machines the ability to perform their tasks and functions autonomously. As a result, robots and AI’s will become the largest purchasing agents in the world.

10. Liquidity, discovery, and trust will still define the attributes of a thriving marketplace.

As much as tactics and technologies will transform, commerce will still be rooted in the basic principles of economic theory. Liquidity, discovery, and trust will continue to be essential factors for determining the health and viability of the economy.

To learn more, check out the Animal Ventures Assets Chain report.