SweetTalk Podcast #6: Todd Taylor of Aperio — Product Identity on the Blockchain
Shared product information and identification is the lifeblood of decentralized supply chain operations, and the recently acquired Aperio team is proving this in the field with Sweetbridge
We just published recent news about Sweetbridge acquiring Aperio, LLC — a company with very complementary technology for enabling supply chains to collaborate and operate with higher efficiency on blockchain technology. We also happen to have a lot of thinking in common with the people who founded this project, also emerging from Arizona’s “Crypto Desert”: Todd Taylor and Ken Staker.
Download and listen — we are going to be putting out a lot more of these shows (including Episode 1–5 from our ongoing video series) and they will soon be available on your favorite podcast networks.
About our guest, Todd Taylor
Todd Taylor co-founded Aperio, an innovative blockchain company applying Product Identity Lifecycle Management capabilities for decentralized supply chain projects. The firm was recently acquired by Sweetbridge, and Todd talks about the many unique capabilities of merging one shared ledger among distributed trading partners for product, component and supplier sourcing information with Sweetbridge’s supply chain liquidity, settlement and talent solutions.
Todd also works as an Arizona State University (ASU) Professor for the capstone supply chain strategy class as well as the applied project classes for supply chain management graduate students. Todd is actively researching blockchain as a platform for global supply chains and networks and will immediately partner these interests with the Sweetbridge team.
Full transcript of the above podcast:
Jason: Welcome to SweetTalk, I’m your host Jason English. SweetTalk, where no question is too simple to ask and no rabbit hole is too deep to dive into. Today we’re going to talk to Todd Taylor of Aperio. Aperio is a recent acquisition of Sweetbridge and they offer some really interesting capabilities in the space of master data management (MDM) or product information life cycle management (PILM) for supply chain. What’s interesting about this is that they do it using Blockchain technology and this enables decentralized supply chains to assemble around packed information, and the components that are needed to deliver an end-to-end product creation, sourcing, multiple supplier arrangement. Without further ado, here’s Todd Taylor.
Speaker 1: SweetTalk.
Jason: All right, I have with me here Todd Taylor, technologist and co-founder of Aperio. Welcome to the show Todd, and also, welcome to Sweetbridge.
Todd: Yeah, thanks Jason. It’s exciting for us. We’ve been talking about it for several months now and there was really a nice synergy quite a while and it’s just great to be part of the team and going forward. Both Ken and I are really, really excited so thanks so much.
Jason: Yeah Todd. When we first encountered you, Aperio’s one of the first projects that really brought together Blockchain and Supply chain in a meaningful way. How did you come to such a solution?
Todd: The initial intent of Aperio was to create a Blockchain-based supply chain platform. Looking at core transaction functionality. If you know how supply chains work today and some of the complex and manual document management and exchange that happens between trading partners today. The way the world of commerce works for the most part with at least larger enterprises — it’s this EDI or XML-based document exchange. Even though today it’s done over the web, we went through this transition in the ’90s and early 2000s from private VAN-based document exchange, or even more manual fax or paper-based document exchange. We pretty much have everybody on at least web protocols today, but still it’s very manual.
It’s people logging on with passwords, creating and receiving and manipulating documents. There’s some automation built in with some of the more sophisticated exchanges, but for the most part it’s still a very redundant, very manual system that we thought, hey we can do this a better way and that started off my collaboration with Ken (Aperio co-founder Ken Staker). I think we formalized our little company the first of the year in February and then we’re lucky to work on some projects with some really great companies early on, that enabled us to refine our thinking and our platform a bit. It’s been a really good time.
Jason: That’s interesting, you’ve basically see it evolve from EDI and early data transfer approaches to centralized hubs in the internet, and now we’re looking at a more decentralized approach overall. How do you see this evolving when you bring Blockchain to the table?
Todd: I was exposed to Blockchain back 2012/13 when I was working in China for IBM on a big supply chain project. I also had responsibility for the high tech industry team and some of the guys on the global team and the Watson lab that supported that team, they were the ones that exposed me to Blockchain first and we were looking at it as Blockchain maybe to enable and be the platform upon which we could transact and automate IoT. Internet of Things transaction, so connected appliances and devices trying to create a system that would record those transactions and automate those transactions without manual intervention.
That then led to lots of just research and discovery around what Blockchain is, what it can do, what it can’t do etcetera, etcetera. As I came back from China end of 2015 and stared working at ASU, here in their supply chain department, I continued to focus on Blockchain as a research topic and meet more people and just figure out how things could work and refine our ideas a little bit. For the longest time I thought that at least for most configure to order supply chains, the order ends up being the center of the universe, the center of the business exchange. It’s the order creation and the order tracking and the order fulfilment and then there’s a proof of delivery of the order, and then there’s an invoice against the order.
Our initial platform actually was very order-centric and if you know how Blockchain works, an asset that’s posted to the Blockchain, there’s updates to that asset, and those updates become additional transactions that are then validated and blocked, ordered and blocked on to the ledger. We went down that path with our initial proof of concept work with some of these companies and it proved a function, but it was more like just applying Blockchain technology to existing workflows and processes. At the end though, what we came to was really a complete re-architecting of how this should work.
We did that just through asking around, continually asking ourselves, “Can this be done more simply in a better way?” Eventually we came to the point where hey, we should really … What we should really do is virtualize the product. The product is what’s being ordered and requested by the customer. If we can create a virtual representation of that product and post it to the Blockchain as an asset, then the updates to that virtualized product become the transaction record and you end up getting this full lifecycle management capability and identity management capability around a product that gives this really rich and unique end to end lifecycle, tracking and identity capability, which the company is really working on and we like.
Jason: That’s pretty cool. It sounds like you’re able to define a product identification and its components as an end-state or an outcome that’s expected from the supply chain on a Blockchain platform. How is that going to go forward into … How’s that going to scale for a larger companies?
Todd: Yeah, that’s right. There’s still a lot of scalability things we need to work on from a Blockchain standpoint. Getting all of these products virtualized and into a data store that can manage the type of load that some of these fortune 50 or 500 companies are putting against it. The myriad of our component options and the myriad of different item master information that has to be organized and configured such that you can then create these virtualized assets and maintain that asset state over long periods of time, and then also maintain the updates to that as the transaction record. We’re limited with the current state of Blockchain technology and scalability, but that’s also something that we’re starting to work on through some collaborative efforts.
That’s a really cool thing. Even though we’re still at a fairly nascent state with technology, there are some early beginnings and certainly stakes in the ground. Probably most on the token or on the currency side of things, but as we start to move from just currency based ideas and capabilities to the exchange of physical assets and real world transactions and all the legal ramifications and I guess complexity that goes into that, we’ll see some … I’m just continually amazed each day at the speed of innovation and all the different efforts underway. I’m really hopeful that things continue to progress as they are today.
Jason: Right now we’re talking about combining a lot of different capabilities of basically liquidity for supply chains, faster settlement and then tying that to product data or master data management. What do you see are some of the constraints to getting companies on a platform like this?
Todd: I should tell you maybe first of one of the first roadblocks we hit. I lived through the days of this migration from the manual document exchange and the VAN networks and fax-based document exchange to web-based document exchange. That transition has taken, 10, 15, 20 years almost. As we got into this Blockchain development, the same thing was lingering in the back of my mind. “Oh no, we’re going to have to bring people up on another new technology platform. Yes it’s more simple, yes it provides all this functionality and life cycle, tracking and management, but oh no we’re going to go through the same rigmarole again.”
As I began to talk and meet with Scott and the Sweetbridge guys, as you know Scott has a very comprehensive vision, and one of the things I realized and we realized right away was, as you align economic incentives for all of the participants in a business network, now all of a sudden there’s not the … It’s not a stick-based or a punishment-based approach to onboarding like we saw in the ’90s and the early 2000s with Walmart and some of these other companies. “You will comply because this is how we do business, and we’re the big boy in the value chain and if you want to do business with me, this is how you have to do it.”
It’s a move away from that to, wow, now this … As you infuse liquidity or tokens into these business networks and taking our supply chain networks as an example, it’s the second and third tiers of suppliers that end up financing the cost of the operation of the supply chain. They’re providing components and then they’re waiting 60, 90, 180 days to get paid for the components that they’ve delivered. They’re taking out … They’re even using their own savings, their own working capital or they’re taking out loans to finance their operation, and their payment of interest on those loans, right?
If we can allow them to collateralize assets that they currently possess, be it land or even factoring the orders that they’ve received from one of their big OEM customers, or collateralize some of their assets in order to borrow token that they can use to then pay to their different suppliers and things, then all of a sudden you get this infusion of liquidity and you get a reason for them to participate. It creates an alignment of those incentives which is really, really an awesome way to approach it and people will now participate instead of having to beat them over the head with a hammer, they naturally want to participate.
That’s where we saw the real nice synergy as hey here’s an initial platform we can use and infuse with liquidity to establish the value, not only of a Sweetbridge model, but also of the simplified supply chain model that Aperio was creating and from there the sky’s the limit. There’s all kinds of things that we want to do going forward as we begin to prove out our initial technologies and we’ve got a few customers that are already … we’ve already run simulated proof-of-concepts for those customers, and we’re doing some others as we move to pilot stage and then hopefully production stage and some non-invasive environments. Then hopefully we continue to learn and we continue to prove it out. There’s lots more functionality coming.
Jason: Cool. Todd, can you explain a little more what you mean by virtualized products or virtualized assets in a system like this? Obviously they’re not virtual services or virtual machines. These are definitions of actual products. Does it give trading partners a one-to-one relationship in terms of what they’re trading and what they’re specifying?
Todd: That’s a big one. The item master management is a huge thing with our platform. The idea that we landed on was there’s no more of this publishing of catalogues and maintaining catalogues and item master information, pricing and availability all over the place. If the network’s on a blockchain environment, then it’s simply a matter of going to get the information from the components that have been specked from those suppliers on as needed basis, and pulling that information in to the transaction and then letting it run. Pulling it in to the virtual asset information and then letting that network go through its updates and process. Letting smart contract code manage and automate the workflow much, much more than we have today.
Since we have a single source of the truth in the ledger, you can let that transactions run and if the transactions are … If you have that then you have confidence that it can run and that you’ve got a course for remediation if something goes awry. Really great, but once everybody’s connected into a network and there’s tokens, infusing liquidity into the network, then you can just start to think about the way that network operates and really gain a competitive advantage over other networks. You think about the optimization that can occur between tiers of suppliers, as everybody’s operating on the same platform.
Today when we do network optimization and design or inventory optimization, figuring out how much of what part of a component to hold and in what inventory levels and where, being able to do that now becomes a reality as these suppliers are operating on the same platform. Rather than just doing that little network optimization for yourself or that inventory optimization for yourself, being able to bring those capabilities together to do across the platform, across the network. That really is going to create some awesome efficiencies, and we’re looking at just the planning and the forecasting and the collaboration improvement.
The integration improvement really is going to make a big difference.
Jason: Great. You have this product information lifecycle management solution, or master data management that Aperio’s bringing, and then you’re tying that to the Sweetbridge platform as a substrate. You get some of those capabilities as far as the crypto-currency, enabling liquidity on assets and faster settlement between partners and some of those capabilities. Obviously there’s a lot of other pieces that have to be built to enable an end to end supply chain. How do you see that being done in terms of if we’re going to be a fabric, what other types of solutions would plug into this? Obviously we’re not going to be able to build it all ourselves or buy it.
Todd: Yeah, and that’s the beauty of the Sweetbridge model — that alliance or ecosystem framework. Even though they’ve acquired Aperio as an initial piece of functionality, the model is very much an ecosystem alliance enabling model, right? Whether or not Aperio builds or Sweetbridge builds out the analytics functionality or the planning functionality or the forecast functionality, or some of these other pieces of functionality, it probably won’t be Sweetbridge. It will probably be a partner that is already making some progress in those areas that we bring in to the alliance framework and we just help them to build it out using the Sweetbridge tokens as liquidity for the network, but then helping them build out and refine the technology and the platform.
I think that framework or that business model is one that scales, one that is not limited just to me and Ken and a couple other guys, working on a skunkworks project based upon our experience. Let’s bring in these alliance partners and ecosystem partners to the table and let them compete against each other and see what Sweetbridge can do to empower them and to really help them along the way. That’s the idea, and a great model.
Jason: Great Todd. I noticed when I was back at i2. I started there about 20 years ago. A lot of the people who were designing genetic algorithms and building these designing supply chains networks, they also had footing in the academic world where they would teach supply chain or factory physics. Some of those sciences. How do you see that working for you? I know you have a role as a professor and a part of ASU as well as in the local scene of Phoenix and Arizona itself.
Todd: ASU, Arizona in particular has become just a really friendly Blockchain state. Recognizing smart contracts as legitimate contracts, and doing some things around electronic signatures and other things and just from a regulatory standpoint in the state, creates an open door policy for Blockchain innovation in the area, and I think we certainly embrace that at ASU and we’ve got a cross-functional research group that’s gathered together from the law school and the business school and the engineering school, the department of mathematics. A bunch of collaborations from around the university working together on a variety of different projects.
There’s a new stadium that’s going in. The Sun Devil Stadium has now been named the “smart stadium” in the nation and we’re doing a project around this smart stadium initiative. Similar to the IoT project I did a few years ago with IBM. It’s really just seeing if we can use Blockchain as a platform to help manage the fan experience, and help automate … create a fan identity and prove the experience of fan-based students that are participating. Creating a student record and identity that’s Blockchain-based. A whole bunch of other really cool projects. There’s a lab in the computer science development that’s the center for scalable computing, and there’s actually a Blockchain lab as part of that center along with some other IoT and other types of projects and lab environments.
There’s some really neat security and scalability research that’s happening with that within that lab and then just a whole bunch of really good discussions with the law schools and others about how Blockchain starts to enable the legal environments and bringing down some of the barriers between digital and our real-world transactions and interactions. Some real good things happening in Arizona. I think Arizona wants to welcome more and more of this and there are some things being done to provide start-up incentives and other types of incubation. Arizona State has this huge untapped talent pool of computer science students. These are full stack, well-trained developers and bringing those guys along into Blockchain realm is not hard.
There’s tons of them working on Blockchain projects already and doing a lot of self-study around Blockchain and we’re working on a certificate programs and training that could maybe formalize some of their Blockchain education and training, but in the meantime there’s a lot of just interesting self-study and proactive project work and this lab work going on. It’s fun to have the mix of this academic environment and the business environment. We can pull back and look at things, and do some research and development that maybe would otherwise have the freedom to do in more of a pressure business situation.
Jason: Let’s talk a little bit more about that if you don’t mind. How do we address that skill gap that we’re seeing in the market for Blockchain solutions right now? There’s obviously not a lack of desire or motivation, but it’s not just about following those … some kind of business school. It’s basically how do we encourage an environment of learning or sharing so that this technology can reach its full potential.
Todd: It’s interesting. We’re going through the same … In addition to this technology paradigm shifts that Blockchain technologies are introducing, education’s going through a very significant paradigm shift as well, and it’ll be really interesting to see how that plays out. In these vocations of software development or supply chain, we learn by doing to a very large extent. There’s just as human creatures we learn and innovate by doing and by testing and by probing and by working and by doing, and so how we enable the training for these developers on project work by doing, by working, by discovering. It’s different than the traditional lecture test model of typical universities.
We’re trying to infuse this project-based work and education along with some basic training and knowledge sharing. At the same time, more of this experiential learning opportunity. I think ASU is taking a real leadership approach to changing a very, very large public university, trying to make that change to this more experiential, mentor, apprenticeship style learning model and I’m excited to see how that evolves at the same time.
Jason: This is great. We’re pretty excited to explore how we could basically make the supply chain more of a democratized approach to value. In that there’s still competition for business, but basically how can supply chains be more integrated so they can compete with each other at an economy level?
Todd: Yeah.
Jason: Let me see if I can think of a way to apply this. How can we enable industries or even certain regions, economic regions to compete on a level of some of these hyper-connected vertical supply chains we see today in the world?
Todd: Thanks Jason, we’re really excited, and I know from an altruistic standpoint, Sweetbridge has an eye on how can we empower the fringes of society and that’s another thing that motivates and drives us around this. As you look at these business networks today, it is dominated by these really large Fortune-50 companies and they have an advantage that’s really hard to compete against because of the monetary system that’s in place. The vision of Sweetbridge has to infuse business networks with liquidity, now starts to level the playing field and it allows for economic participation by some of these folks at the fringe, and creates more of a fair trade mechanism and encourages more of their participation.
In some of the initial proof of concept work and project work that you’ll see from Sweetbridge and from Aperio, you’ll see some of these … The involvement with some of the players of the fringe or frontier of our economies. I’m really excited from just an altruistic standpoint for that to come to fruition, and we’ll see what we can show here in the coming months on that success.
Jason: This has been really great Todd, to hear about some of the capabilities, that you and Ken, and Aperio are bringing to the table here. Really looking forward to find out about some of the early projects that are going on. Whether that’s in high tech or minerals or food supply.
Todd: Yeah, we’re going to do that in some of these pilots, so keep your eyes on what’s to come. It’s gonna be great.
Jason: Great. Thanks for coming on the show Todd.
Todd: Thanks Jason, will see you.
Jason: Bye-bye.
Sweet1: Sweet Talk.
Jason: That concludes episode six. This has been Sweet Talk, a production of Sweetbridge Foundation, A non-profit global blockchain alliance for a liquid supply chain. If you have any comments or suggestions about content we might carry on the show, please send them to info@sweetbridge.com and I certainly invite you to check out our blog at blog.sweetbridge.com. Thank you for listening.
