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We first heard about the potential of blockchain in supply chains a few years ago and were almost immediately pushed into a cycle of hype and hope they could do what they could do for us, followed by a “trough of disillusionment” and nothing Things can go as fast as we would have liked. But that doesn’t mean startups, corporations, and consortia aren’t quietly working to advance the technology and push to apply it in ways we might not have anticipated.
Modernize old key technologies
A nonprofit, Baseline Protocol, has been working on what they call “baseline” enterprise systems. By creating a layer on the Ethereum blockchain, enterprise ERPs like SAP can communicate in a unified way, enabling communication across companies and businesses. Coca-Cola is currently piloting This is at their bottling company in North America and are looking to increase transparency throughout the bottling supply chain.
Baseline Protocol is also working to modernize EDI, a technology that has existed since the 1940s for connecting disparate systems for placing orders, invoicing, inventory tracking, and more. Baseline is supported by Microsoft, Consensys, Ernst & Young, and Accenture.
Bringing government into the future
A start-up company based in Slovenia, FreightX, recently announced an agreement with the Egyptian government to help modernize the country’s maritime customs procedures. The chaos at the Suez Canal in 2021 has left most people unaware that the Egyptian government has been undertaking one of the most significant modernizations of port procedures in the world since 2019. With COVID-19 sending ripples across the industry, all the steps to modernize and improve have helped Egypt offset many of the problems others have been experiencing.
The CargoX platform facilitates customs procedures by providing Egypt with Advance Cargo Manifestation technology, with the goal of reducing time in customs, money spent on physical documents, and unlocking automation and general efficiencies through the Ethereum blockchain. Reported efficiencies include a reduction in cargo release time from 29 days to 9 days, a reduction in compliance costs from $600 to $165, and a general reduction in detention and storage costs. CargoX is also known for providing shippers with digital blockchain-based bill of lading documentation, saving time and costs.
Material Sustainability and Traceability
United Nations Economic Commission for Europe (UNECE) and Food and Agriculture Organization of the United Nations (FAO) Jointly launched cotton traceability project on top of the Ethereum blockchain. To raise awareness and benefit smallholder farmers in Latin America, the project aims to show how smallholder farmers can join forces and use technology to improve not only how they operate and participate in global markets, but also their lives and their livelihoods in the process.
Cotton is notoriously difficult to trace back to its origin, which presents an opportunity for apparel manufacturers to not only verify the sustainability of their supply chains, but also serve as inspections and audits to demonstrate fair trade claims to consumers and governments.
Where are we going from here?
Blockchain in supply chains was a hot topic in 2017 and 2018, but quickly moved to a topic that was gaining attention at industry trade shows. By surviving this hype cycle of rapid boom and bust, whetstone startups continue to build in the public and private spheres as blockchain infrastructure continues to grow to support their goals. Paul Brody, EY Global Blockchain Leader, agreessaid that while blockchain itself may not repair supply chains, it does provide a clear and open communication system that has been sorely lacking in the past.
Also, enterprise-level systems are often not very friendly or accessible to small and medium businesses. The setup of ERP, TMS and WMS is notoriously challenging and not only expensive to acquire but also to maintain in the long term. Often, new enterprise software implementations will cost millions of dollars and require hiring consultants as well as in-house staff.
Open access and open source systems like Ethereum enable inclusivity in building supply chain applications that can be used by businesses of all sizes at a cost proportional to their business; unlike today’s ERP There are high barriers to entry.
Fast forward to 2022, and startups have come out of disillusionment and onto what Gartner calls the “slope of enlightenment,” and now have a growing number of verifiable use cases around the world. Blockchains, especially public chains like the Ethereum network, are now showing their true potential to be the “HTTP” of supply chains.
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