Tackling Supply Chain Traceability with Blockchain

My Write-Up on a Panel Discussion: What I Said and Didn’t Get to Say

Late last week I was part of a panel discussion organized by our friends at the International Association for Trusted Blockchain Applications (INATBA), with the title Tackling Supply Chain Traceability with Blockchain, and have decided to write up my thoughts on the subject — things I said and didn’t get to say during the online session — in this blog post.

The Aftermath of the Fall of TradeLens

The discussion started with a presentation on the TradeLens project — what it was about, who were involved, and why it failed, eventually. That got me thinking about all the big-name blockchain initiatives that closed up shop last year alongside TradeLens, including the Blockchain Insurance Industry Initiative (B3i), we.trade, and the Australian Securities Exchange (ASX) CHESS replacement project.

Let’s be honest, these project failures did somewhat shake up the blockchain world, and raised some concerns around the adoption of blockchain technology in the enterprise space. However — how I see it, and I’m definitely not the only one — it’s not the technology’s fault, and these downfalls by no means signify the death of enterprise blockchain, in the area of supply chain management or elsewhere, although they definitely do leave some important lessons learned behind.

In my view, these first-generation industry-wide blockchain projects were typically too costly and too ambitious. The relationships among the network participants were very complex, with mindsets and visions being hard to align.

In an industry-wide network, all member organizations need to understand and accept the fact that distributed ledger technology (DLT) is not an internal tool — it implies collaboration with partners as well as competitors, therefore, the governance of the network needs to be established early on in the process.

Also, as these initiatives serve a business purpose, all participants need to see what value they get out of it, and like what they see. In addition, I believe that given the size and complexity of these undertakings, proper project and people management are also critical success factors.

‘Small’ Things That Just Work, Don’t Make the Headlines

The good news is that smaller and simpler endeavors — leveraging blockchain and associated technologies — that support easy integration with existing enterprise systems have been succeeding in the real world.

A telecommunications company I spoke with a few years ago — as a technology industry analyst — built a blockchain-backed supply chain management solution for customer premises equipment. First, they completed a proof of concept, then they rolled it out into production in one country, and then they moved on to another country, and later on, further assets.

By using an agile and incremental approach, they were allowed to make mistakes early in the process, and address and resolve them quickly. They said that blockchain technology’s true magic was its single source of truth capability that could be implemented across organizations — something that had not been possible before — which translated into significant, immediate efficiency gains in terms of both time and cost that were achieved across the entire supply chain. They claimed they saw a 200% return in 3 months.

At BTP, we also completed a successful supply chain project in the energy and utilities space. The project’s goal was to demonstrate how capturing and recording provenance information can help guarantee the safety of critical infrastructure. A burst gas pipe or failure of a welded joint can cause serious damage to communities and energy supplies, as well as expose energy firms to possible liability. We used our provenance product, Chronicle, to immutably record and query provenance data on specific infrastructure assets such as gas pipes, which included the origin of these assets as well as activities carried out by the different stakeholders such as staff as well as suppliers and subcontractors in connection with these gas pipes.

Although I know that we will continue to read about failures, I believe that there are plenty of success stories out there as well. Many of these stories may not make the headlines, as they are just things that work and provide value.

Interoperability and Open Standards Are Key

The need for interoperability in the distributed ledger technology space appeared early on. It’s not just about making the multiple blockchains and distributed ledgers that are out there interoperate, but the ability to integrate them with existing systems is as important as that. We can’t really expect organizations to throw out all their existing business applications and systems and replace them with something brand-new and shiny overnight.

In all this, open standards play a key role. Open standards enable interoperability and ease of communication among devices and systems. They allow for a more efficient use of existing resources, as you don’t have to reinvent the wheel. In addition, they let developers quickly adapt to changing circumstances and conditions, leading ultimately to faster development, better applications, and greater trust overall.

For example…BTP has built its blockchain-backed provenance product, Chronicle, on open standards — including the W3C Prov Ontology (PROV-O), and the Open Policy Agent (OPA), which is a relatively new standard method for applying policies universally. [Chronicle is not just built on open standards, but it is also open source all the way down. But, that’s a bigger conversation. See Chronicle on Github. Also, see blog post Chronicle: You Say Provenance, We Say Open Source.]

CEOs Are More Aware, but May Not Fully Understand

The last question of the session was about the current level of awareness and understanding of CEOs on the potential of blockchain/DLT to impact their businesses.

If I compare the conversations I was having as an analyst in 2018–19, and the ones that I’m having now — as a CSO at BTP — with CEOs and other non-tech professionals at different organizations, I can say that there’s definitely much more awareness, however, understanding still varies.

Educating the market is something that we still need to do on a daily basis. I guess the good news is that most CEOs do not conflate blockchain technology with cryptocurrencies anymore, and the discussions we are having now are around actual business applications and benefits, as well as actual integrations and implementations (and not about bitcoin ;-)).

Generally speaking, CEOs do not need to understand the nitty-gritty of technology, as what they care about is business value and achieving company goals, and that’s what you need to focus on when you’re speaking with them. Nonetheless, conversations may be very different when you’re talking to CIOs, CTOs, or other tech professionals.

P.S.

This was written by ME and not ChatGPT. :-)