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Transform your supply chain that integrates your global suppliers using Blockchain

Sogeti Labs
May 31, 2019

Digital transformations are disrupting the way we work, we conduct business and arguably all other facets of our lives as well. They seem to be the most significant business trend in current times.

In the enterprise world, most of the digital transformations are currently being applied either inside a single organization or between an enterprise and it’s customers. But there exists another opportunity that may be the biggest and the most important transformation of all, that of bringing an Enterprise and all its partners and consumers on a single network across the value chain. Also referred to as Supply Chain Transformation.

Supply Chain of a modern enterprise spans the entire globe integrating the trade partners, logistics partners, regulators, and other statutory bodies, port authorities, the banking system, the retail partners and very importantly the customers. A key factor for any organizations success is how successfully it can orchestrate this network and keep it working smoothly and scaling to meet the evolving business objectives.

The technology that is forming the backbone of this transformation of the Supply Chain is Blockchain. Blockchain forms a tightly integrated web of all the participants on the supply chain and helps them transact in a trusted, fair and transparent manner in accordance with well defined and agreed upon business rules. Technologies like Smart Contracts on Blockchain where the business rules are defined, provide for the quick and unambiguous resolution of complex situations thus promoting a frictionless platform. Being distributed makes it impartial to the interests of any single party. The participation of the regulators greatly reduces the compliance cost in terms of both time and money. Integration with the banking network means automated payments based on rules agreed in the purchase order. And the integration of the customers means a never before buying the experience of knowing everything about the product before taking a decision.

While bringing about the Supply Chain Transformations using Blockchain, 3 most important issues to be considered are:

1.    Scalability: Blockchains are not known to scale very well. However, applications like Supply Chain need to cater to millions of transactions per year with Blockchain managed data going in TBs per year. If not architected carefully a blockchain based solution can quickly start becoming a bottleneck thus hampering the very functioning of the network, it was summoned to optimize.

2.    Data Security: In a blockchain network there is a set of data that are required for traceability and another set of data that needs to be private. Within the data set required for traceability, there are other bifurcations like data only accessible to the regulator and the party involved and many such other permutations. This calls for a well planned and properly implemented Data Management Layer.

3.    Blockchain Internetworking: By nature, Supply Chain integrates with other networks like the banking network, the identity network, and other such networks. It is important to plan and architect such integrations for bringing in the transformations that will be truly loved by all stakeholders.

Integrating this Blockchain network with IOT sensors embedded in Containers, Transport Vehicles, and other Supply Chain assets enable the Supply Chain to have increased visibility in its various processes and also be automated to a great extent. One such use of IOT in Supply Chain is Asset Tracking wherein asset is tracked throughout its life-cycle. Data like the container temperature during transportation, time spent in transportation, time the product took to be sold off the shelf can then be used to improve the delivery time, quality control, demand forecasting, and many others. Automation of Quality control using IOT would mean that a non-conformance is immediately registered by the Smart contract which could then handle the situation through notifications, penalization, and product quality updations.

Blockchain being the backbone on the Transformed Supply Chain lends itself to another interesting use case, that of ownership management. Once a product is sold at the retailer POS, the mobile number of the buyer along with product unique identifier is sent to the blockchain for ownership transfer. The new owner can further transact and sell the product. This way the new buyer gets assurance that the seller is a legal owner and allows the manufacturer to track the product and it’s current owner for better servicing/warranty management and also data collection.

So how close are we to realize this dream. Let me answer this by saying that we are there. There are challenges like network connectivity, IOT enablement of Assets, Stakeholder on-boarding, and the nascence of banking networks. But all of these problems are solvable, and the solution mostly varies from case to case.

At DEMS-India, we have been involved in bringing these transformations for our customers across varied domains. Let us connect to explore the opportunities.

About the author

SogetiLabs gathers distinguished technology leaders from around the Sogeti world. It is an initiative explaining not how IT works, but what IT means for business.


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