What is Olistics (Formerly Olam Foundation)?
A guide for the perplexed
The most frequently asked questions I receive regarding Olistics and its Internet of Logistics project pertains to how we envision the future of supply chains. The depth and quality of my answer often depends on who is asking the question and what their background is. This isn’t intentional; I’ve just been in situations where I over simplify my answer to someone who later turns out to be an industry veteran, while other times I find myself over-explaining to someone who lost me sometime during the first sentence when I use an unfamiliar industry term.
The project has been gathering more and more excitement with every day, and I wanted to put together a short post in the shape of general FAQ’s and in layman's terms as a general overview of our foundation and the project. So without further ado, here are the foundation’s official answers:
What is the goal of Olistics?
Olistics’ goal is to once-and-for-all resolve the abhorrent, wasteful inefficiency in today’s global supply chain by introducing a universal technical standard for logistic tracking, documentation and communication among all participating parties.
What is Olistics’ vision?
Olistics’ vision is to establish an open-source standard platform for all logistics parties along the supply chain to communicate and share data with each other effectively, as well as provide and consume services they offer. Similar to the affect the TCP/IP standard had as a major enabler for growth of the world wide web, Olistics’ standard protocol will be the pathway to the next logistic generation.
Why have you founded Olistics?
Fed-up by the stagnate and dismal condition of present-day logistics, a group of supply chain industry veterans decided to band together and roll up their sleeves to confront the wastefulness and inefficiencies of the current supply chain. Now that blockchain technology matured and earned its acceptance, it’s the perfect time to break the status quo and lead this massive $10 trillion market to the 3rd millennium.
What are the current problems of the supply chain industry?
The current problems cannot be overstated: Unregulated pharmaceutical transport, colossal food wasting, lost shipments, counterfeit products and tampered goods, stolen containers, unbelievable pollution, not to mention the massive bureaucratic nightmare of dealing separately with every single entity along the way, from port authorities to trucking companies to even the insurance companies.
If you are not acquainted with supply chains and how they usually work, think of it this way:
As of today, there is no giant vehicle in the world that can drive AND fly AND sail AND utilize a railroad. This means that every time a manufacturer wants to send goods somewhere else in the world, they traditionally must choose between one of two popular options:
- Hire the services of a freight-forwarder (think: Expeditors or Geodis), which will then contract a whole slew of entities to deal with them separately on your behalf. These entities may include but are not limited to: Trucking companies, cargo handling companies, port authorities and customs, shipping company, insurance companies, and other service providers (e.g companies who operate climate control sensors for your containers), each on separate contracts.
- Not use a freight-forwarder, and handle these contracts by yourself.
In both cases, the resulting hassle stems from the fact that you need to deal with so many different companies who have their own ways of doing business. And since the manufacturer can’t be there to witness the goods being passed from one link in the chain to the next, he needs to really trust everyone involved.
Now you are probably thinking “But everything is documented, right? Surely a company big enough to deploy cargo ships across the oceans has a state-of-the-art management and inventory system, no?”
Short answer: No. Many of these companies have “conservative” (read: outdated) IT systems with no real motivation to improve on them. To understand why, read the longer answer below:
Long answer: Not at all. Think about it for a moment: You have the most advanced, state of the art shipping company with the greatest inventory IT system on planet earth. Whoop-die-doo. But your portion of the chain is about to end, and in a minute you need to transfer your containers to a trucking company, who doesn’t have the same management system as you. There’s no industry standard and never was, so you have to pass the goods in the most comprehensive way you can possibly think of: A pen and paper.
Yes, it’s actually that silly: Millions and millions of dollars worth of goods get passed every day, documented by nothing but actual paper (you know like, from trees?).
On average, a single container moving through the supply chain racks up 300 papers and 30 different hands.
Imagine 2 huge, heavy, massive chain links, connected by a zip-tie. That’s your supply chain in a nutshell! You can boast all day about how strong YOUR link is, but it means nothing when measuring the integrity of the overall chain.
This giant mess that has been around since the days of sailboat trade routes which results in an almost criminal amount of food waste and pollution every day. It’s been calculated that of all food produced for human consumption, 1/3 (!) gets thrown away, wasted at some stage of the supply chain.
This doesn’t even begin to measure theft of goods and loss of cargo, all which the end consumer pays for.
Why should blockchain be used in the Supply Chain industry?
While Olistics’ services and tools will be multifaceted, at the basic level there are four significant advantages to data sharing across the supply chain on a blockchain:
- Tracking of containers, products and other distribution assets would become way faster and much more accurate.
- Since a decentralized system denotes less manual involvement, the move to blockchain would immediately result in a massive drop in human errors on orders, receipt of goods, deliveries, invoices and other trade related documents.
- The ability and freedom to share information regarding real-time process improvements and maintenance.
- A permanent audit record of every container/product movement or financial transaction from its source to final destination, eliminating most chances for fraud.
Is this similar to what Amazon is trying to do?
In a way. As the trade mammoth that it is, Amazon’s supply chain suffered from the same chaos the world is. The problem was so damaging to their bottom line in fact, that they’ve opted to completely close their multiparty supply chain in favor of an independent, internal one; they purchased and deployed their own planes, ships and trucks, tracking systems and all, just to keep everything on the same system, without relying on any external stakeholders. The crazy thing is that this incredible overhaul, including their air land and sea shopping spree, saved them a ton of money in a relatively short time.
Amazon is massive enough to afford to do this, but their operations account for less than 3% of the global logistics industry. No other player is nearly large enough to take on such a move, which is exactly why Olistics’ solution is so important: So the rest of the world can enjoy streamlined supply chain similar to Amazons.
How many companies have already agreed to work with Olistics?
At this early stage, we are proudly working with some of the largest industry titans, global freight forwarders Kuehne + Nagel, and warehousing and ground-handling company Swissport. The Belgian GS1 (established the barcode standard) and renown CRM software & cloud computing solutions firm Salesforce are taking part in Olistics’ development as well.
Olistics is now ironing out POC’s with other top-tier supply chain names including DHL, Lufthansa, MSC, Expeditors, Panalpina and Geodis just to name a few. It’s important to mention that these names are so strong and their scope so wide, that they have the pull required to dictate the next global standard for documentation on the blockchain.
Who is your main Competitor?
While they are a bit different in terms of approaches to the problem, the VeChain, ShipChain, Origintrail and Morpheus Network projects offer great solutions for specific known problems in the supply chain. Olistics’ approach is much more comprehensive; we are tackling the very core structural problems of the supply chain. Once the platform is implemented, solutions such as Morpheus Network can absolutely thrive.
What is the benefit of being a Not for Profit?
It is what sets Olistics aside. Since its inception, the project was formed as a joint effort to resolve significant problems affecting everybody. As a not-for-profit, we are able to introduce a totally trustless, decentralized, open source standard without being beholden to any of the major players in this game.
So to wrap things up nicely: Olistics’ goal is to establish an industry standard, a common language, open to all, with the intent of enabling all parties present and future to collaborate effectively. As more partners become familiar with our mission every day, we all get closer to making the Internet of Logistics project a reality… and not a moment too soon.
If you wish to learn more about the Olistics, its vision, and it’s token generation event, join us on Telegram or reddit! The project’s whitepaper and proof of concept (in real-time) can be accessed via the website http://olistics.org.
