Redesigning Trust: Blockchain for Supply Chains
weforum.org
weforum.org
The problem is that everyone in the supply chain knows that better data would improve their operations, but nobody is willing to cede control of a centralized system so that everyone's data can been coordinated and managed. The semi-adversarial relationship that exists due to commercial terms means that no member of a supply chain wants to give up more data than they have to to a central entity.
Alternatively, the problem can also be viewed as a dimensions problem. In reality, there is no natural "owner" of a supply chain. pick any member of the supply chain, and put it at the center, and the data that it needs, and collects will be a different set of characteristics than all the others. there is obviously useful data that spans the whole supply chain, but for each member, the way that data is grouped, pivoted, counted, and accounted for can be different.
Perfect data entry into a system could solve the latter problems, and coupled with differential privacy or other masking functions, you can enter lots of a data into a system and each member of the supply chain should be able to manage their business better, which in turn improves the performance of the whole system.
The blockchain component is really only for the function of solving the system-ownership prisoner's dilemma. Effectively, each member of the supply chain owns the system, but its decentralized nature means that also no single member owns it. A blockchain helps create a system for managing a supply chain when there isn't an owner of the supply chain.
Uber didn’t need decentralization to coordinate drivers and clients. Aws/Postgres can handle the fault tolerance. FedEx already does this.
I would counter also that neither of your examples are actually supply chains. FedEx is part of a supply chain, but only a single member. the chain includes the manufacturer, wholesaler, etc. Uber also doesn't have a supply chain with its drivers. It is not running a supply chain for that purpose, it is a marketplace.
Blockchains are for cases where double spending needs to be prevented. It seems to me that logictics merely needs to broadcast assertions by the participants. Kind of like certificate transparency.
No it's not. It all still depends on people honestly and accurately implementing the IoT component. It's just pushing the problem back a step.
All of these schemes ultimately fail because they face two challenges that inherently involved messy humanity and physical reality: the oracle problem and the enforcement problem.
The only reason this works well for, say, bitcoins, is that they are a digital "asset" created on the chain themselves. Everything else trying to tie a physical asset to a chain has the same problem, you can't do it without relying on trust outside the system.
Agree that “blockchain for supply chain” is inherently flawed. But there are hypothetical (if currently unfeasible) use cases. For example, derive a cryptographic key from a carcass’ DNA. Now you have a good physical-digital nexus. Or, for electronics, measure some random and hard-to-replicate analog jitter.
I dunno, this seems like the one-time pad thingy. If you had a mechanism to transfer a 10GB one-time pad to your friend in a secure manner... why not transfer your 10GB of "protected" data in that secure manner instead? Just because a technical solution "technically works" doesn't mean its useful.
That all said, I still don't know what problem blockchain solves. Other than crypto-currency.
And once you solved that problem Blockchain doesn't that much value.
My thoughts: Supply Chain collaboration is the hardest thing to achieve, not last because internal opposition has to be overcome first. The tricky part? Who benefits from the efficiency gains?
Also, in case a certain company or Supply Chain is able to benefit from a potential Blockchain application (I don't see any yet) it will be so far ahead of anyone else already that Blockchain wouldn't level anything. And those that are not there yet aren't able to benefit from digital solutions. Because their processes and culture aren't their yet. As a result the gap will only become bigger and not smaller.
That being said, as long as Blockchain for SCM is not solving the problem of constantly matching physical and virtual flows without jeopardizing the data and information of every party involved it won't work.
Edit pdfs:
- http://www3.weforum.org/docs/WEF_Introduction_to_Blockchain_...
- http://www3.weforum.org/docs/WEF_Trustworthy_Verification_of...
1. "Blockchain for X" where X is something the client cares about.
2. Blockchain is revolutionary, but blockchain is also complex. See what I did there?
3. I guess not. FOMO! FOMO! FOMO!
4. Gather your stakeholders for a series of working groups where we'll figure out what blockchain can do for you.
5. I refuse to reveal even one problem calling specifically for the magical Blockchain. Nor will I give you one single specific solution made possible by only this new technology in your industry.
These pitches are targeted at people who have long since hung up their spurs for the greener pastures of corner offices.
Funny in a way the first 20 times I saw it, but now this is really getting old.
So zero killer features, then.
The use case is, I can tell when Fedex or the local pizza place is lying to me about my delivery being 30 minutes away, or half a mile down the street, or whether the delivery driver actually attempted to physically deliver my package to my door at 5:47pm or not. (Or Ikea can verify that their subcontracted delivery driver actually got the couch to the buyer on Sunday, or both Uber and I can know exactly where I was dropped off and picked up and when, etc., etc., without either party being able to lie about it.)
A friend of mine agreed that the idea was good, but looked into their implementation and said it was a horrorshow.
Not sure how it worked, though. :(
The article does a good job of explaining why blockchain doesn't add anything meaningful for this use (and other ones).
This is a great article outlining several cases where blockchains are being applied to solve supply chain issues ineffectively.
Yaron's assessment finds that
Key repudiation resistance is the only real compelling case where a blockchain is the right tool for the supply chain. This is not to say that there aren't valuable uses for blockchains within the context of more hyrid solutions.
"The block chain does some amazing things but accomplishing those goals comes at a very real cost. Byzantine attacks are a pain and require lots of resources to deal with. So if we don’t need to survive them then we don’t need the block chain. This article isn’t about saying the block chain is bad. It is about saying that we should use the right tool for the right problem. If your block chain application is based on off chain storage then there is a non-trivial probability that you may not actually need the block chain. It’s worth at least thinking about".
I honestly cannot think of another more overhyped and useless technology right now.
Both parties may act to further their own interests at the expense of the other's interests.