A supply chain is a system whereby parties, people, activities and resources are involved in moving a product or service from a supplier to the customer. The supply chain is getting more complex day by day due to a large number of stakeholders involved from source to the destination. Tracking is even more crucial when environmental conditionals applicable for the product must be taken into consideration.
Food items and biopharmaceuticals such as vaccines require special attention during transit due to laid down specifications of temperature-controlled logistics. Due to improper handling and tracking, half of the products end up being lost and damaged leading to escalating costs and low accessibility.
Mostly the parties involved in cold chain are Original Equipment Manufacturer (OEM), Distributor, Thirdparty logistics (TPL) and Retailer. All the parties have adopted the idea of writing a service level agreement so that service for their customers can be measured and justified. In most cases, it has been seen that due to inadequate real-time information SLA’s are breached. In the legacy system either all the parties use individual applications or else the entire application is owned by a single party and the rest of them update their information in that application.
No single source of truth - Since each stakeholder uses individual systems, there is no single source of truth which leads to issues like late reconciliation, improper tracking of products, etc.
Lack of communication between the parties - Business runs on promises. Technically there is no way that parties can trust each other for the information provided by them. Parties involved in the business workflow are not synced with each other and might have a dierent version of the same information that may harm the business health.
The blame game in case of damaged or lost products - Fixing responsibility for loss or damage of any product among the parties is a big concern.
The contamination of the products is also a possibility - If the products are not tracked properly during handling the product from one party to another, contamination is possible.
Time-consuming to drill down the tracking of the lost or damaged products - Determining the main cause of lost or damaged products is a time-consuming and resource-intensive task.
No-Fault tolerance – Since the information is centralized in case of loss of server or database, entire information is lost.
Benefits of decentralized and distributed system
n a decentralized and distributed system, the same instance of the application is installed on each party and they are connected through networking. If any party adds information it will automatically be replicated by all others depending on the parties involved in that particular transaction. So there is transparency among all.
All the parties are on a common platform and have the same information - Information is synced among all the stakeholders and stakeholders maintain their database as it is a decentralized and distributed system.
Since all the parties have the same set of information so if any of the stakeholders try to change the asset values then it can be easily tracked.
Trust and immutability - Decentralized nature of application gives a unique quality of being trustless – meaning that parties do not need trust to transact safely.
Lost or damaged products can be easily tracked - There is transparency among the participants as each has the same version of information, it is very easy to track the product.
At every point of handover of product from one party to another, information is updated for all the parties so that no one can blame each other and hence insurance claims or penalty on the stakeholder can be initiated as appropriate.
Better control and supervision - The same information is viewed by all the stakeholders so there is better control and supervision of the product from end- to end.
Highly fault tolerant - Information is available with each party so if any party server goes down then it can be easily retrieved from another party.
Less management firefighting - Since everything is crystal clear so management always have a clear view of all the information.
How Blockchain and IoT helps in improving the Cold chain management
IoT and blockchain can be used together to bring revolution in the cold supply chain industry.
IoT devices provide real-time visibility and environmental condition of the in-transit product. There are various GPS enabled temperature and humidity sensors available in the market which provide real-time visibility of the environment through which the products are transiting.
A blockchain is a truth machine. It provides decentralized and distributed features. It helps in securing the information by providing the cryptographic features and making them immutable. Since blockchain is distributed ledger technology, nodes need to be owned by each party involved in the supply chain with the same instances of application.
Blockchain is categorized into public and private. Transactions on a public blockchain are publicly transparent and immutable. There is no data confidentiality and it is accessible publicly to anyone.
On the other hand, a private blockchain is permissioned and the network runs between the defined set of parties. The transaction that occurs between the parties are only known to them. No unknown party can access a private blockchain. Supply chain management is a business workflow between the parties who are involved in that business so private blockchain is preferred.
Whenever a product changes hands, the transaction gets recorded on Blockchain. It creates a permanent history of the product, from manufacture to sale.
The information emitted from the IoT device acts as an input into the Blockchain. Blockchain and IoT work together to bring real-time information to all the stakeholders securely that is immutable and can be trusted.
IoT sensors are capable of detecting humidity, temperature, and status of open/closed doors. These sensors are placed on the carriers which give real-time information. Data from the sensors are persisted into the blockchain.
Diagram shows the transformation from centralized to Blockchain based distributed cold chain system.
Managing provenance of medicine on decentralized shared Ledger, improving efficiencies in the overall tracking
Transparent information among all the stakeholders reduces overhead time and cost of tracking the damaged or lost product and it is very easy to identify the responsible party for the cause.
Reduced Costs - Real-time tracking of the product with the help of blockchain and IoT reduces the overall cost of moving items in a supply chain.
Reduced Duplicity of Efforts - Providing a common platform to report end to end tracking of the product by all the parties involved reduces duplicity of eort.
Faster Payments - Real-time tracking of delivery and acceptance by all the parties involved leads to faster processing of payments. Additionally, processing of claims becomes faster due to real-time tracking of faulty notifications of the state of the product.
Preventing Frauds - History of a product right from its origin to where it is at present gets traced through the blockchain platform which leads to fraud prevention.
Faster Process Execution - Contribution of all the parties to track the product on common blockchain platform leads to faster sharing of information and leads to faster execution of the overall process.
Higher Trust - Immutable nature of blockchain helps to prevent tampering any data and leads to establishing trust.
Paperless - Sharing of documents and getting approvals on the common blockchain platform leads to a paperless environment.
How Coforge helps in Implementing Blockchain based Cold supply chain solution
Coforge proposes the below architecture for a BlockChain based cold supply chain solution. Coforge has developed a cold supply chain solution to track and trace the products (organic , pharma) which require specific temperature and humidity regulations. The solution was built on R3 Corda platform integrated with IoT sensors.
Singapore — Cargo Community Network (CCN) partnered with Microsoft to introduce the world’s first blockchain-based air cargo billing, costing and reconciliation system. Launched at the 13th International Air Transport Association World Cargo Symposium in Singapore, the system is set to transform air cargo billing processes, minimize billing discrepancies, accelerate billing reconciliation, and provide near real-time revenue recognition to enhance efficiency for airlines, cargo agents and freight forwarders involved in the entire supply chain.
Source https://www.canadianshipper.com/transportation-an d-logistics/microsoft-launch-worlds-first-blockchain-ai r-cargo-billing-system/1003379452/
Commodity forwarder Murphy Global Logistics has implemented block chain technology to improve visibility of cargo as it moves through the supply chain.
Source: https://www.aircargonews.net/technology/ forwardermurphy- global-logistics-adopts-block-chaintechnology/
The U.S. Defense Logistics Agency (DLA), in charge of the supply chain for all branches of the American military, recently held an event focusing on how blockchain can be used to improve collaborative efforts within the DLA.
Source: https://openledger.info/insights/blockchain-logisticsuse-cases/
Using Blockchain for Port Clearance
Entities involved: Ideanomics, APMEN
Project status: The service is ready to be launched at both Shanghai and Guangdong ports, and the companies hope to expand the service to 16 other ports currently operated by APMEN.
Sources: Ideanomics and APMEN joint press release
Source: https://openledger.info/insights/blockchain-logisticsuse-cases/
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