This article was written for beginners who are interested in understanding how the blockchain can impact the way we consume and, more specifically, learning about the relationship between the blockchain and the supply chain.
Saving money is going to be a priority when the Covid-19 crisis is over. The stimulus plan of September 2020 is focused on the environment and is particularly concerned about saving money. Companies will have to find solutions to spend less, and this will be influenced by the changes in our work, life and consumption habits caused by the health crisis. The evolution of our consumer habits has a direct impact on the supply chain of the products we buy. This is why we place it at the very core of what we are building.
What is the blockchain?
The blockchain is an information storage and sharing technology that uses interconnected information blocks. This technology prevents any forgery of the data and stores the modification history, so it is secure and transparent. Everyone participates in the daily operations of the Blockchain in a decentralized way (no leader). Every user has the same level of access to information. Currently blockchain has many limitations. It is slow, unsustainable and not scalable. The NeuroChain technology is a new augmented blockchain based on intelligent decision making mechanisms. It is composed of Bots and a set of rules represented by flexible and scalable protocols (Proof of Involvement and Integrity & Proof of Workflow). It runs on a network or media with an adaptive communication layer.
Let’s start with a situation: when a need meets technology
Gaining visibility on the supply chain is an increasingly important requirement for industrial companies. This requirement is driven by different dynamics. On the one hand, companies’ supply lines have become more global and complex since 1945, with international trade growing at an average annual growth rate of over 4.5% between 1950 and 2000 (Source: WTO, ex-GATT), which made it difficult to optimize supply chains. On the other hand, the urgent need for ecological transitions and a number of quality-related crises (Spanghero, Volkswagen, Areva) have increased the expectations of consumers for transparent information provided by companies. To meet this need, companies can use tools to gain visibility on the supply chain. However, the old models aren’t flexible and don’t collect enough data, making it impossible to manage the supply chain efficiently. An MRP, for example, helps a manufacturer communicate its needs for parts to its suppliers. The DDMRP subsequently improved the MRP process by taking customer orders into account when assessing needs. Today, the blockchain strengthens this relationship even further by making it possible to share information in both directions: the manufacturer communicates his requirements to his suppliers, and the suppliers can then share information with the manufacturer. The blockchain works in conjunction with Artificial Intelligence (AI) to extract intrinsic intelligence from the collected data.
Blockchain’s main contribution: greater confidence and transparency
NeuroChain platform provides a revolutionary form of distributed consensus. It enables the ranking of each stakeholder and transaction. NeuroChain Bots not only make decisions but also adapt to the context thanks to machine learning. We believe that more transparency is crucial and achievable today with the use of Blockchain technology.
Which supply chain transparency issues do you want to address?
Where do raw materials come from? What is the supplier profile and their commitments? Can we have a general overview of the CO2 cost of the products? We selected 4 key issues which can be resolved by the blockchain by providing more transparency to the supply chain.
End-to-end traceability of the supply chain
Better visibility on: raw materials, suppliers, the societal impact of production, batches, etc., it’s important to have a clear understanding of the impact on the environment.
Managing environmental costs
Better visibility on: gas consumption for transportation, energy used for product transformation, packaging, etc.
Product Tracking
Better visibility on: the location of a product in the delivery process until it reaches the client
Managing real costs
Better visibility on: total costs for transportation, energy used for product transformation, labor costs.
We focus on a number of transversal issues on top of these key issues. Of course, the blockchain gives us greater visibility on the supply chain, but transparency can take many forms.
The information collected through the blockchain can provide three types of transparency according to the type of information collected and the way it is shared :
- Internal transparency relates to the company’s own operational data shared internally. The source of this data is secured through a certification system on the blockchain. The company is therefore transparent about its business and that of its branches.
- Transversal transparency concerns data from our entire value chain, processed and shared internally. For example, this allows us to improve supplier compliance. Such data visibility allows you to provide reliable and regular information on your needs to your suppliers. As a result, the chain can be more responsive and provide visibility on supplier location.
- External transparency concerns the data shared with consumers. Providing transparency to consumers guarantees our right to informed consumption. Blockchain systems guarantee traceability to help communicate reliable, accurate, and most importantly, real-time indicators. These indicators are given before the “harm” has been done. This will make it harder for us to ignore our own consumption patterns.
The transparency provided by the blockchain is then streamlined to identify those who can access the information and how to share it. To achieve this level of transparency, a large amount of data must be collected along the supply chain and passed on to customers.
How does the collection and exploitation of data work in the blockchain?
Thanks to IoT, the information collection process in factories is now simpler. It has become more efficient and widespread in the industrial sector. Nothing is more efficient than an IoT to share a high volume of updated data. Every position in the factory can be observed with an IoT and a blockchain (which meets the challenge of tracking products). The tracking capabilities of the blockchain allows us to monitor products in the factory and once it has left the warehouse. All this is achieved by the IoT, blockchain and Big data ecosystems working together.
Big Data lacked an ally to fully leverage industry data. The industry’s interconnected ecosystem was still resisting the centralization process triggered by Big Data. Big Data and the blockchain’s ability to complement each other will soon overcome these resistances. In fact, data collection is a prerequisite for the valorization of data through a blockchain. This combination of methodology and technology will truly add value to the industry by enabling data collection and analysis along the entire supply chain. Everything is going to change with this data! From a business perspective and the issues at stake, and also from the consumer’s perspective. Blockchain technology will therefore add value to the supply chain by turning it into a key function of the company, streamlining its operations (transversal and internal transparency) and meeting customer needs (external transparency). The blockchain will allow the supply chain to respond to future economic and environmental challenges by providing data to precisely monitor economic and environmental performance. Customer needs being met by technology gives greater value to the supply chain. The biggest challenge for many companies is to upgrade to the latest technology. However, as explained in the article on data collection, there are prerequisites. In fact, most companies cannot collect all this data today, or perhaps they don’t want to share it.
Blockchains are extremely important for the smooth running of companies, both to optimize existing processes, but also to help companies shift towards ecological practices, the circular economy or more transparency towards consumers. Blockchains can deliver certified data within a business ecosystem, but also to the outside world. Certified data kept internally (private blockchain) will improve the supply chain, while outsourced data (public blockchain) will provide more transparent information to consumers. Some people want to force a choice between private blockchain and public blockchain. We use both types of blockchain in our projects to enjoy the benefits of both. As an example, we can use our Neurochain blockchain for external data, a blockchain specially developed to meet the needs of companies.
This synergy allows us to process any type of data and meet all the needs of our customers’ projects with Neurochain.