Re-imagining Trust in Outsourced Manufacturing

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A running joke going around today in professional networks is that the CFOs are the happiest lot with onset of COVID-19, what with their travel costs being cut down dramatically.

Employees, partners, customers, suppliers, and even governments have encouraged leveraging online collaboration solutions to execute business. More than 150 universities in the US have shifted their classes to online mode. There are news of collaboration tools being overburdened because they were never designed for this level adoption. Surely Cisco, Microsoft, Zoom and their competitors are working overtime to raise capacity of these systems as quickly as possible to meet these rapidly growing demands.

Obviously, businesses such as airlines, hotels and malls have taken a hit. Eventually, office space business too may come under pressure.

We hope COVID-19 will retreat in due course of time, as it is doing in China. Will “in-person, on-campus” degree still hold 5X more value compared to an online degree? Will customers still insist on in-person meetings? Are at-site inspections still required, at least with the same frequency as earlier?

A new normal is established and all “phycisal” engagement expectations will be questioned.

A new normal is now established where all “physical” engagement expectations will be questioned.

At Schrocken, we help our customers manage outsourced manufacturing with superior transparency, control and compliance adherence. Traditionally, outsourcing is built on dual foundations of people/organisation relationships, and trust through physical validation. We believe both will now move online.

Outsourcing is built on dual foundations of people/organisation relationships, coupled with trust established through physical validation.

Relationships have been moving gradually online over the years with the adoption of online collaboration systems. This will now accelerate in the new normal. Officers at suppliers as well as customers will be more open to stay connected over digital medium, and the need for the handshake or wine & dine will definitely decline. Meetings at conferences would probably be enough to establish that in-person connect, to be followed by several face-to-face but digital interactions.

But how to establish trust in the digital world when most of the community is used to in-person engagements? Everything physical will need a digital counterpart. There are several example scenarios in which this can be described.

  1. A supplier may share photographs or video of a component under production, which serves as a replacement of physical inspection of the site.
  2. Logbooks may be shared online to provide details of operating conditions under which a product is manufactured. Electronic Batch Manufacturing Records (eBMR) is a good example from the Life Sciences industry of how these processes are being converted to digital.
  3. Digitally signed certificates of analysis may be shared with partners instead of physical copies, the traditional practice.
  4. Digital interactions (instant messaging, voice calls over phone) can be permanently stored in digital media for future access.

And how to ensure all these artefacts are authentic and trusted? Blockchain technologies emerged to address just this problem. While its first application is Bitcoin, a digital currency, business applications of the technology are many, including in the manufacturing industry.

At Schrocken, we use Enterprise Blockchain technology to solve this problem of trust in the business environment where a combination of intensive regulation and outsourcing exists. With the perfect storm that COVID-19 has created, we invite you to talk to us and re-imagine trust and relationship with your suppliers and customers.

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