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.
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