Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.
Industry IoT Consortium engineers researched supply chain data issues and found three key problems that blockchain can solve unlike any other technology.
For decades, supply chains – principal arteries of the global economy playing a crucial role in enabling international trade flows – have been plagued with data issues. Two prominent Industry IoT Consortium (IIC) researchers revealed these issues affect visibility, traceability, integrity, and transparency.
In an increasingly globalized world, those directly involved in moving products from and to every corner of the world need to urgently address interoperability issues to increase transparency efficiency and reduce costs related to supply chains.
Dr. Raullen Chai and Dr. Xinxin Fan, IoTeX co-founders and head of blockchain, cryptography, and strategy, analyzed the supply chain’s existing issues, which ultimately affect the entire global population. Chai and Fan found technical solutions to these data problems that improve efficiency and user experience while also reducing costs substantially.
The two scientists wrote a seven-page technical brief published by the IIC, an international non-profit organization founded by IBM, AT&T, Cisco, Intel, and General Electric and currently boasts more than 300 prominent members.
In their brief, the two scientists describe how to tackle the decades-old issues by building trusted and transparent asset tracking by addressing the three key data issues.
In their technical study , they explain that today’s supply chains are globally interconnected supply-and-demand networks with profound interdependencies among suppliers, distributors, retailers, and consumers.
Businesses rely on these networks to move their assets from one part of the world to another in a timely manner. However, punctual deliveries represent an enormous challenge both logistically and financially because of the legacy issues.
“These issues have led to poor quality control across the value chain, low administrative efficiency, long and tedious reconciliations among stakeholders, and other issues increasing overall cost and affecting customer satisfaction significantly,” wrote the two highly-regarded academics and scientists.
Unveiling the Problem
“To tackle these industry-wide challenges, we need to focus on three aspects of supply-chain data:” untrusted data, fragmented data, and non-interoperable data.
The first of the issues mentioned above refers to data produced by IoT devices used in supply chains, such as RFID tags and wireless sensors attached to transported physical assets. These devices are subject to various attacks that could arbitrarily alter the supply chain data, jeopardizing its integrity.
The second is fragmented data resulting from multiple stakeholders involved in supply chains. These different parties might not trust each other, creating data silos and preventing optimal decision-making. It can also cause broken trust and compromised value chain integrity among the stakeholders.
Third-party IT systems and ERP solutions that are not designed to interact result in the non-interoperability of data, forcing stakeholders to incur additional costs. These costs result from being forced to build custom networks to bridge the different data systems. The lack of data interoperability increases overhead for all stakeholders, who pass that cost on to buyers. It also decreases supply-chain efficiency.
Unveiling the Solution
In their technical brief, Chai and Fan describe building a trusted and transparent asset-tracking solution by combining three technical components: secure edge devices, consortium blockchain, and standardized supply chain data formats.
“The unique combination of secure edge devices, consortium blockchain, and standardized supply chain format is revolutionary in its ability to create trust among stakeholders in supply chain applications,” Chai and Fan state.
The IoTeX co-founders explain that “the resulting solution facilitates collaboration among supply chain stakeholders, improves supply chain efficiency and user experience, and achieves substantial cost savings.”
Blockchain and Smart Contracts to Build Trust
“Blockchain systems enable (mutually) untrusted parties to conduct business and serve as the single source of truth regarding the collaborative business process, they wrote. “Moreover, blockchain systems can replace trust intermediaries (e.g., notaries, escrows) with so-called smart contracts,” they add.
Smart contracts are forms of code distributed on the blockchain that automatically execute themselves under certain conditions without human intervention. They also simplify trust establishment and improve operational efficiency significantly.
Decentralization, immutability, transparency, security, resiliency, and smart contracts are promising infrastructure for documenting business interactions among stakeholders in complex supply-chain applications.
“The increasing need to eliminate intermediaries and automate supply chain operations are expected to provide tremendous growth opportunities for blockchain empowered asset tracking solutions,” they note.
The solutions provided by Chai and Fan establish a trusted data-sharing fabric for streamlining workflow and increasing supply chain visibility among all the stakeholders. These solutions are also designed to meet the needs of the supply chain market, including, but not limited to, asset provenance, cost reduction, workflow automation, and restoration of consumer confidence.