Join the Alliance!
By Sean M. Holt, MBA and Sam Coyne
The blockchain ecosystem is fragmented. The supply chain is fragmented. Every day we are inundated by the introduction of new start-ups offering to solve all the world’s problems. Instead of multitudes of entities duplicating efforts in silos, an alliance is needed to collectively solve shared objectives. In order to fully harness the massive and disruptive benefits of blockchain on the supply chain, a focused community must reach in a single direction. Momentum, applications and results are easier won through collaboration, especially in distributed ledger technology and the complex logistics powering global commerce. This is the intent and purpose behind the creation of the OEL Alliance and OEL Enterprise Architecture.
Recently, the OEL Alliance demonstrated an effective proof-of-concept when the first ever blockchain-powered invoice in the Philippines was sold on Acudeen’s AssetChain by Alliance member OpenPort. The invoice was quickly verified — without the need to interact with the seller’s payer — and bought at a competitive rate, thus demonstrating the ability to provide immediate and cheap financing for transporters in the blockchain ecosystem. OpenPort’s blockchain logistics platform was used to track the transportation of consumer goods by a third-party logistics (3PL) company with real-time monitoring and a digital chain-of-custody record. A blockchain-enabled electronic Proof-of-Delivery (ePOD) was generated once the journey was verified as completed and the smart contract triggered the invoice creation.
Why is this important? Because it validated the cooperation of multiple separate entities (AssetChain, OpenPort, XVC Logistics) working together for a common goal…rapid facilitation of goods transfer and payments, complemented by a reduction in cost with greatly enhanced traceability.
Looking over the horizon, we can begin to consider further gains through the future integration of more ecosystem partners. With the use of IoT-related sensor data (i.e. temperature monitoring, pallet tracking, returnable packaging) from technology providers & developers, along with the cooperation between freight forwarders, 3PLs, transporters, brand owners, manufacturers, retailers, insurance companies and financial services within the supply chain industry, even greater levels of value can be extrapolated.
What the industry will begin to see is enhanced liquidity & cash flow as relevant institutions begin to offer more favorable rates. Why? Because the irrefutable and immutable digital audit trails that are created quickly eat away at counter-party risk. Additionally, the diminished reliance of intermediaries — by using blockchain to transmit orders, letters of credit, bills of lading, and delivery receipts without bonded couriers — further drives market efficiency, transparency, and even more cost savings. Smart contracts that trigger near-immediate payments and micro-rewards (for information sharing) help level the playing field and correctly incentivize participants. This, in turn, fosters more fluid demand and supply-side relationships, again, reducing reliance on brokers and clearing houses.
The telephone was a marvelous invention, but initially useless as a singular unit. However, its true power was derived from the ‘network effect’ once additional units were added to the system. Businesses and entities of all forms began to benefit greatly from the mass adoption of the telephone, and it is now considered ubiquitous. The blockchain ecosystem will also greatly benefit from similar network effects, particularly when various competencies and organizations begin working harmoniously. It is with this notion that the OEL Alliance exists.
We welcome everyone with a wish or need to build better supply chains to join the OEL Alliance and work with us to create technologies and standards from the opportunity presented by blockchain, and that our community members such as OpenPort, Maia Global, BSA Logistics, XVC Logistics, and Bastian Consulting are beginning to discover.
For further information on the OEL Enterprise Architecture, OEL Alliance, and TGE, please join our Telegram community or write to us at hello@oel.foundation
