White Paper | Towards A Supply Chain Operating System

NoteThis article does not necessarily reflect the opinion of KEC Ventures, or of other members of the KEC Ventures team.

Supplying the world with nearly everything is an enormous and complex job: there are things to discuss. 

– Rose George (2013-08-13). Ninety Percent of Everything: Inside Shipping, the Invisible Industry That Puts Clothes on Your Back, Gas in Your Car, and Food on Your Plate (p. 142). Henry Holt and Co.. Kindle Edition.

In December 2014, I started monitoring a startup that I hoped KEC Ventures would invest in later, when they raise a round of financing. It was building and marketing compliance software for the freight trucking industry. I got to work learning about the trucking market. Ultimately, we failed to close that investment – despite our best efforts and the eagerness of our team to lead the round about a year after I first began to track their progress. I still feel let down by that founder . . . But, that’s a story for another time.

What I had learned about the trucking industry led me to ask myself; “If this is what’s happening in trucking, I wonder what the shipping industry is like?”

Some of what I have learned is chronicled here;

  1. Industry Study: Freight Trucking (#Startups)
  2. Updates – Industry Study: Freight Trucking (#Startups)
  3. Industry Study: Ocean Freight Shipping (#Startups)
  4. Updates – Industry Study: Ocean Freight Shipping (#Startups)

After I published the 4th article on that list, I got an email from a gentleman named Nahum Goldmann. I was intrigued by his email because even before I read his bio, I could tell that he knew A LOT about the topics I had been exploring – all the activities that have to be undertaken to get stuff from a supplier to the ultimate customer – supply chain.

So what exactly is supply chain? I will delve into that in another post more fully, but before then, perhaps this will help. A Supply Chain is;

A network of connected and interdependent organisations mutually and co-operatively working together to control, manage and improve the flow of materials and information from suppliers to end users.

– Martin Christopher, Logistics & Supply Chain Management: Creating Value-Adding Networks, 4th ed, Pearson Education Limited 2011, page 4.

Supply chain comprises;

  • Supply Chain Management (SCM),
  • Supply Chain Finance (SCF),
  • Supply Chain Logistics (SCL), and some people include
  • Supply Chain Execution (SCE).

The world is a supply chain.

I spoke with Nahum via skype on July 14, 2017. During the call we discussed a number of topics, among which was an observation I made in my update on the shipping industry; “One product that it appears the industry would gravitate towards is a system of record that connects all participants in the supply-chain, from end-to-end. This would be a platform into which various shipping industry data could be input, and other data can be obtained as outputs . . . Probably most input data would come from other platforms and data repositories, while output data would be fed to different counterparties based on their access rights and information requirements. It seems to me to be a problem suited for a cryptographically-secure, lightweight, multi-tenant, cloud-based ledger or database of some sort that can also provide anonymity for market participants who wish to maintain some level of secrecy from other counterparties with whom they interact through the platform. One can imagine that governments around the world, for example, would want special access rights in order to keep tabs on the movement of goods and people from one place to another.”

As luck would have it . . . I was describing an idea Nahum and other people with whom he has been collaborating have been working on.

Since then, I have helped him to distill their work into a white paper which you can read below. Also, there’s a link to Nahum’s bio.

A few days ago, on August 23 to be precise, I decided that I ought to start attending the supply chain meetup in New York City. To my utter shock, there was none. So I am fixing that. I have launched The New York Supply Chain Meetup (TNYSCM). Within 3 days, we had grown to 55 nodes.1 My vision is that TNYSCM will become a multidisciplinary community of practice that brings together the wide array of people and disciplines whose full participation it will take to build the global supply chain networks of the 21st century.

By Nahum’s estimates supply chain inefficiencies create a 15% – 20% drag on global GDP. The 2017 projection for global GDP is approximately $80 Trillion. This is a big problem. One of the things I will attempt to do in subsequent research is try to get gather more data on the economic and financial size of the problem.

But . . . Less I get distracted. Here’s the white paper. Also, here’s Nahum Goldmann’s bio. We want your input. My email is at the end of the whitepaper. Hopefully there will be more news to share soon.

For clarification; KEC Ventures is not yet an investor in Nahum’s startup – DLTArray. I am not a personal investor in DLTArray. My involvement is on a purely voluntary basis at this point and is based on my desire to see a large scale supply chain operating system that tightly integrates all the core components that make supply chain networks function come into existence. However, KEC Ventures is an investor in Gem, which is building an enterprise blockchain operating system, with supply chain applications.

Update #1: Sunday, August 27, 2017 at 06:38 EST.

  • Disclose investment relationships involving KEC Ventures, Gem, DLTArray.
  • Clarify my personal involvement

  1. A member of TNYSCM is called a “node.” 

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