9 Highlights from Transport Intelligence’s Report “Why is Blockchain a game changer for supply chain management?” by OriginTrail’s Team
OriginTrail is proud to be featured as a case study and interviewee in Transport Intelligence’s (Ti) industry expert report Why is Blockchain a game changer for supply chain management? Ti is a UK-based company, known as one of the world’s leading providers of expert research and analysis dedicated to the global logistics industry. Aimed at supply chain executives with no technological expertise, the report is an easy to understand guidebook, setting out how the blockchain works, how it will be applied to the logistics and supply chain sector, case studies of its application and advice on when or if it should be implemented.
About the Report
Exploring the very latest analysis and drawing on many use cases as well as interviews with a number of professionals in the area, including IBM, OriginTrail, and a leading logistics provider, the report examines the viability of blockchain-based solutions in supply chain management. In addition, the report provides insights into the main limitations of the technology and key obstacles to a wider acceptance of the technology in the logistics industry. By providing practical advice and guidance, the report can help supply chain executives determine whether blockchain technology would make sense for their organisation and under which circumstances it would not be of value.
The report can be purchased at Ti’s website. They also offer a free preview. Please note that the report is written for supply chain and transport industry executives. However, since it is interesting for the general public as well, OriginTrail’s team prepared a list of 9 highlights to share with our community after obtaining TI’s permission.
9 Highlights from Ti’s Report Why is Blockchain a game changer for supply chain management?
1. A whopping 56% of supply chain executives acknowledge that the blockchain is a game changer.
Ti’s global survey found that 56% of supply chain executives believed that the technology was “a game changer.” By now, a majority of supply chain executives are familiar with the blockchain as an industry-transforming technology trend and acknowledge its importance. Companies providing blockchain-powered solutions, such as OriginTrail, should not be evangelising the blockchain per se, but catering solutions, business models proposals and onboarding to its users.
2. Blockchain technology is not only a trust builder but provides cost-reduction opportunities to the supply chain industry.
Ti states that, in the current industry, 10% of all freight invoices contain inaccurate data, including duplication, wrong freight mode charges and incorrect fees. This leads to disputes, as well as many other process inefficiencies, in the logistics industry. By powering leaner, more automated and error-free processes, the blockchain can achieve cost savings.
3. Use cases of the blockchain in supply chains are broader than just tracing provenance.
Transport Intelligence mentioned five potential areas of use for blockchain technologies in supply chains. They are: asset tracking; total visibility across and down into multiple tiers of the supply chain; accountability; process conformance; and, improved collaboration across the supply chain.
At OriginTrail, we definitely agree that these are very important use cases. In other words, these are applications that cater to the supply chain industry, powered by the blockchain. In addition to what is proposed, we would like to highlight that certification, recall and compliance with international standards such as GS1, are important features and applications that companies are welcoming.
4. Whenever you have a trust gap that needs to be overcome, the blockchain makes sense.
What our team appreciates very much about Ti’s report is that they are not portraying the blockchain as a silver bullet that could magically solve all problems in complex international supply chains for all actors. Instead, the report provided clear directions for when blockchain technology make sense. In short, the greatest benefits from implementing the blockchain will be in its application to supply chains with a big number of parties involved in a transaction (in particular, parties who do not know each other and do not trust each other).
5. Importance of zero-knowledge proof
In an interview for this report, an OriginTrail team member said: “Systems, where all parties can keep ownership of their data and know what their data is being used for, will bring real value to the supply chain.” In complex supply chains, companies may be reluctant to exchange data due to a fear of losing their competitive advantages. Zero-knowledge algorithms (which are part of our privacy layer) allow for new ways of trusted and encrypted data sharing, which allows for data validation from third parties without revealing specific information. This cryptographic breakthrough brings new possibilities of extracting value from data previously deemed unshareable.
Learn more about OriginTrail’s zero-knowledge (zk) algorithm:
- Mechta release (V01 ZK)
- Zond release (full implementation)
- More details on GitHub. We also shared this doc.
6. Public blockchains are naturally decentralised; private blockchains may be at risk of conflict of interest.
We applaud Transport Intelligence (Ti) for highlighting a very important differentiation between public (truly decentralized) blockchain solutions for supply chains and private, or permissioned, blockchains.
In private blockchains, the governing authority has a vested interest in a closed ecosystem and could appropriate applications and networks and control them for their own narrow interests. That is, in a blockchain with a single authority, companies will be reluctant to share their data because there is high probability that the managing party that collects data will appropriate more value out of it than the other parties. “While every participant is able to download the entire blockchain and verify all transactions within these private networks, the smaller players do not have any say as commercially they are too dependent on the large players,” explained Peter Kaas of Preceding Ventures.
“This is why the supply chain industry should be seeking a standard platform that is open to everyone and that anyone can join at any time, resembling how the Internet and the World Wide Web became established,” explained one of the interviewees. “The protocols and standards were available for anyone to adopt and use and, as a result, it became this essential resource we all use today.”
7. Supply chain companies can act as initiators in blockchain technology adoption.
Transport Intelligence suggests that transport and supply chain companies could lead the game on the block because they have the most holistic access to data in the supply chains they are participating in.
OriginTrail has a similar use case with BTC logistics.
We definitely agree that logistics companies can create new services and business models when implementing blockchain solutions to their supply chains. They can be great connectors of companies eager to create a pilot implementation based on the blockchain.
8. Current challenges in blockchain adoption in supply chains
In an interview for the report, one of our team members said: “The logistics industry definitely recognises the advantages and the potential value of the blockchain. However, there are still many misconceptions about what the technology can and cannot do. Ti lists the five factors that are likely slowing down blockchain’s adoption in the supply chain industry. At OriginTrail, we definitely agree with their findings and are working with the industry to address them.”
- Latency and Scalability — OriginTrail’s protocol has scalability in its DNA since it only stores fingerprints of data to the blockchain. In this way, it is more powerful and scalable.
- Cost Efficiency — Similarly like above, we only store fingerprints of imported data to the blockchain, which is much more cost efficient. Additionally, our protocol is completely open-source. The code can be obtained for free from GitHub by any organisation.
- Lack of Regulation — OriginTrail talks to policymakers to increase the awareness and adoption of the blockchain.
- Data Quality — We applied widely used GS1 standards and automated data quality verification tools to ensure that inputs are correct.
- Lack of Knowledge — we are building the Trace Alliance, a collaboration hub of companies, developers, organizations, and research institution to successfully onboard entities to the blockchain and support them with useful information.
OriginTrail aims to be an enabler and leverager of the supply chain’s transition to the blockchain.
9. Ti’s outlook on the future of blockchain adoption in supply chains
In the report, Ti’s experts stand for public decentralized solutions as the best choice for the long-term adoption in supply chains: “Any platform, that is not controlled by a single commercial entity and provides blockchain-based transaction records that are immune to tampering may very well lead to the restructuring of the industry.” The authors are optimistic about future adoption trends.
We congratulate Ti’s team for making this insightful report on how the blockchain can benefit the supply chain industry. If you are interested in reading their full report, you can purchase it at their website. They can also send you a test copy to review before you buy it.
OriginTrail’s team definitely recommends that all industry executives — in need of an independent, hands-on (full of case studies), expert view on how blockchain is shaping the industry — read this report. Thanks again to the wonderful team at Ti for allowing us to share some highlights from their report.
Trace on & make the blockchain a game changer one hash at a time,