blockchain for supply chain management · blockchain for supply chain management arjeh van oijen,...
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![Page 1: Blockchain for Supply Chain Management · Blockchain for Supply Chain Management Arjeh van Oijen, co-founder and CEO of Unchain.io . ... “Blockchain is an operating system for business](https://reader034.vdocuments.mx/reader034/viewer/2022042621/5f765cb8688620064e07a836/html5/thumbnails/1.jpg)
Blockchain for Supply Chain Management
Arjeh van Oijen, co-founder and CEO of Unchain.io
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The origin of blockchain
1
• Trustless network • Mining • 21 million coins • Litecoin, Ripple, Ether • Bubble?
Currency
“Satoshi Nakamoto”
2008
• Blockchain • “Distributed shared ledger” • Cryptograhy (SHA-256, PKI) • Consensus model • Smart contract
Technology
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Traditional point-to-point collaboration & data exchange across
business networks
2
Logistics provider
Storage provider
Customs Bank
Supplier
Buyer
Single point of security vulnerability
Ledger
Ledger
Ledger
Ledger
Ledger
Ledger
Single point of security vulnerability
Point-to-point integration
Complex – Inefficient – Expensive – Error sensitive – Vulnerable - Slow
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Blockchain based collaboration & information exchange in
business networks
3
Logistics provider
Storage provider
Customs Bank
Supplier
Buyer
Ledger
Ledger
Ledger
Ledger
Ledger
Ledger
Simple – Secure – Consistent – Fast – Efficient – Resilient
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4 key elements of blockchain technology
4
Shared distributed ledger Cryptography
Consensus Smart contracts
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Not just one blockchain technology
5
Differences between technologies
• Open source or proprietary
• Types of nodes
• Consensus model
• Storage technology
• Smart contract language
• Access control and confidentiality
• Extensibility
• Interfaces (APIs)
• Performance
‘Mother’ of all blockchain technologies
Most applied blockchain technologies
Other blockchain technologies
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Value of blockchain for business networks
6
Reduced complexity and costs Identity & trust Reduction of errors
Resilience & continuity Speed Auditability
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Areas for which blockchain is suited and for which it isn’t
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Suited Not suited
• Exchange of data between organisations (and individuals)
• Provide single point of truth
• Trust is essential (identity, authenticity, integrity, non-repudiation, confidentiality)
• Provide auditability and transparency
• Orchestration and control of processes across multiple organisations is essential
• Exchange of data within one organisation
• Situations where trust/security is not relevant
• Situations where high throughput and low latency is essential
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Application areas of blockchain (not limitative)
8
Financial Services
• Payments • Securities registration & processing • Lending
Property
• Real estate • Intellectual property • Cars
Governmental services
• Voting • Registrations (passports, driving license) • Permits
Identification & Security
• Party/device authentication • Self sovereign identity • Digital signatures
Trade & Supply Chain
• Document exchange • Provenance • Trade agreements
Internet of Things (IoT)
• Autonomous devices, such as Cars Drones Sensors
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Application areas of blockchain for supply chains (not limitative)
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• Supplier and product catalogue data management & distribution
• Logistics management, monitoring and control
• Custody and declarations
• Quality assurance
• Provenance and compliancy
• Freight insurance
• Payments and trade finance
• Supply chain financing
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Blueprint for applying blockchain in supply chains
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Source &
Procure Order
Delivery &
Shipment
Invoicing &
Financing
Payment Reconcile
Blockchain Network
Data exchange, contracts, process orchestration, traceability, matching, identity & security
Buyer Supplier Logistics service providers Inspection
agencies Authorities
Banks /
Financing
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Example medicine distribution
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Advantage blockchain vs. ‘traditional’ technology
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• Out-of-the-box and standardised technology
• Secure and validated by development community
• Everyone can continue working with own system(s) (ERP, logistics, QA, etc.)
• Vendor independent (open source) acceptance by stakeholders in business network
• Deployable across multiple different data center providers (distribution of trust)
“Blockchain is an operating system for business networks”
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IoT, Blockchain and AI … A Perfect Storm
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IoT Blockchain Artificial Intelligence
• Automated collection of data
• Smart/autonomous devices
• Secure and trustful exchange of data
• Shared data repository for all
• Orchestration of supply chain
• Interpretation of data
• Automated decision
• Determining next actions
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Origination of blockchain networks
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Existing network organisations New consortia One initiating organisation
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Reducing document processing costs in maritime logistics
15
“Blockchain could save $300 per container in terms of labour
and processing associated documents.”
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Streamlining data exchange for ocean shipping
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Benefits
• Reduces data entry by up to 80%
• Simplifies data amendments
• Streamlines the data exchange
• Single point of truth
• Reduces incompliancy risks (and penalties)
AB InBev, Accenture, APL and Kuehne + Nagel
successfully test blockchain for Ocean Shipping
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Better control on risks in marine insurance
17
Maersk, MS Amlin, XL Catlin to incorporate
blockchain into marine insurance
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More efficient and faster trade finance
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Group of banks found We.Trade to create the first
blockchain-based trade finance platform
• Deutsche Bank • KBC • Rabobank • HSBC • Natixis • Nordea • Unicredit • Santander • Society General
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BITA – Blockchain in Transport Alliance
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BLOCKCHAIN IN TRANSPORT
ALLIANCE
A STANDARDS ORGANIZATION
700+ members and counting • Fleets, 3PLs, and Shippers
• Technology Companies, OEMS, Suppliers, and Service Vendors
• Startups and Investors
• Consultants, Advisors, Universities, and Trade Associations
Topics covered (not limitative) • Freight tendering and contracting
• Freight payment
• Asset ownership and transfer
• Gray trailer pools
• Freight custody
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Faster Bill of Lading document exchange with reduced costs
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Improve transparency and reduce waste in food chain
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• Transparency to consumer
• Fair trade & sustainability
• Reduce waste
• Optimisation of production & supply chains
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End-to-end traceability and fair trade
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Provenance and sustainability in food supply chains
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Stopping the spread of conflict diamonds
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Busting counterfeit and reduce waste in medicine supply chain
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Boosting agriculture growth in Africa
26
by Cellulant
Agrikore is a block-chain based platform that
ensures that everyone in agriculture can do
business with each other in a trusted environment
- Identity management
- Secure data exchange
- Supply chain management
- Payments
- Financing
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Attention points for setup and implementation of blockchain networks
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Organisation • Consortium organisation and governance
• Scheme specification, processes, roles, responsibilities
• Legal structure and financing
Technology • Blockchain and other technology related choices
• Blockchain network setup (consensus model, node deployment, scalability)
• Standardisation, APIs and interoperability
Roll-out • Onboarding of participants (incl. identity & key management)
• Integration with business applications and devices of network participants
• Blockchain network interoperability and integration
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Integration ‘existing world’ with blockchain networks
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Application /
Device
Application /
Device Application /
Device
• Complex point-to-point integrations
• Hard to manage and operate
• Dependent of scarce blockchain experts
• No secure storage of keys
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Unchain.io blockchain integration gateway
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Application /
Device
Application /
Device Application /
Device
• Any application/device to any blockchain network
• Easy, fast and secure integration
• No dependency of blockchain experts
• Low cost
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Summary
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• Blockchain is here to stay
• Paradigm shift in thinking how to collaborate in business networks
• Blockchain technology simplifies creation of networks to enable business collaboration
• Organisation and governance aspects become more essential than technology
• Many different initiatives to set up blockchain networks
• Interoperability and consolidation needed to avoid too much fragmentation
• Ease of on-boarding and integration will be critical for success of blockchain networks