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Redesigning Trust: Blockchain for Supply Chains

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Re: Redesigning Trust: Blockchain for Supply Chains

#21

Post by frm210 »

ska wrote: post #13
Anon84 wrote: post #5

Earlier quoted context omitted.

You're missing the IoT component. The devices themselves do the data "entry" on the blockchain so the whole system is automated, distributed and tamper proof (assuming you don't hack the devices, of course).

That just punts on the problem. It's basically not solvable - at some point you have to trust humans anyway. 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.

Sure, but you have to trust less humans. You only need to trust the source, without needing to trust the middle-men.

Re: Redesigning Trust: Blockchain for Supply Chains

#22

Post by hef19898 »

Anon84 wrote: post #5
luhn wrote: post #3

Quite a few times I've heard the line that blockchain can revolutionize supply chains, but I still don't understand it. Since you're dealing with physical goods, you're relying on the participants of the system to enter data truthfully and accurately, which defeats the purpose of a "trustless" data store like blockchain.

You're missing the IoT component. The devices themselves do the data "entry" on the blockchain so the whole system is automated, distributed and tamper proof (assuming you don't hack the devices, of course).

The biggest issue I see is to match the virtual information, Blockchain or not, with the physical goods. Once this link is broken Blockchain is definitely dead in that environment.

And once you solved that problem Blockchain doesn't that much value.

Re: Redesigning Trust: Blockchain for Supply Chains

#23

Post by abakker »

The supply chain argument for blockchain basically goes like this: 1. supply chains tend to require lots of coordination, but, also tend to be made of entities that are each individually maximizing for value. 2. In the past, this meant that they needed to coordinate commercially, but only just enough that the supply chain met everyone's bare minimum, contractually-defined needs. 3. typically, this mean that systems were not well-integrated, and the data often didn't make it more than one or two steps in the chain before it fell off.

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.

Re: Redesigning Trust: Blockchain for Supply Chains

#24

Post by scott_s »

albertgoeswoof wrote: post #10
Anon84 wrote: post #5

Earlier quoted context omitted.

You're missing the IoT component. The devices themselves do the data "entry" on the blockchain so the whole system is automated, distributed and tamper proof (assuming you don't hack the devices, of course).

But if you have to trust that the devices aren’t hacked why can’t you just use a database and give each device a private key?

This is the key question to any blockchain-for-X proposal: explain why you can't just use a secured database. My personal suspicion is that all commercial activity already requires enough trust that using a secured database is tenable and vastly easier.

Re: Redesigning Trust: Blockchain for Supply Chains

#25

Post by hef19898 »

That article is not telling anything. No real use case, not concrete problems that can be solved. From that source I would have expected more.

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.

Re: Redesigning Trust: Blockchain for Supply Chains

#26

Post by hef19898 »

abakker wrote: post #23

The supply chain argument for blockchain basically goes like this: 1. supply chains tend to require lots of coordination, but, also tend to be made of entities that are each individually maximizing for value. 2. In the past, this meant that they needed to coordinate commercially, but only just enough that the supply chain met everyone's bare minimum, contractually-defined needs. 3. typically, this mean that systems w…

In every supply chain there is a owner, the channel master. Basically the guy that controls it, directly and the farther out it get indirectly. Until a new party is the channel master for that part of the network. Besides the issues of matching goods to information the transparency that is necessary for a true fully integrated supply chain as envisioned or necessary for blockchain to work won't be accepted by any player. Si ply because everything from markets to customers to potential BoMs and production efficiency can be derived by any party in the chain. And that is not even without looking at processes which is different story all together.

Re: Redesigning Trust: Blockchain for Supply Chains

#27

Post by aey »

abakker wrote: post #23

The supply chain argument for blockchain basically goes like this: 1. supply chains tend to require lots of coordination, but, also tend to be made of entities that are each individually maximizing for value. 2. In the past, this meant that they needed to coordinate commercially, but only just enough that the supply chain met everyone's bare minimum, contractually-defined needs. 3. typically, this mean that systems w…

I don’t see a specific need of a “blockchain” feature for this usecase.

Uber didn’t need decentralization to coordinate drivers and clients. Aws/Postgres can handle the fault tolerance. FedEx already does this.

Re: Redesigning Trust: Blockchain for Supply Chains

#28

Post by Anon84 »

hef19898 wrote: post #25

That article is not telling anything. No real use case, not concrete problems that can be solved. From that source I would have expected more. 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…

The details are in the "related reports" at the bottom. This is the main page for the project.

Edit pdfs:

- http://www3.weforum.org/docs/WEF_Introduction_to_Blockchain_...

- http://www3.weforum.org/docs/WEF_Trustworthy_Verification_of...

Re: Redesigning Trust: Blockchain for Supply Chains

#29

Post by hef19898 »

frm210 wrote: post #21
ska wrote: post #13

Earlier quoted context omitted.

That just punts on the problem. It's basically not solvable - at some point you have to trust humans anyway. 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.

Sure, but you have to trust less humans. You only need to trust the source, without needing to trust the middle-men.

So in case of e.g. a fridge the source would be some copper mine in Africa and the other end be Amazon Logistics that delivers the fridge to your house? When you draw the line somewhere else the issue to be solved it balancing transparency, trust, willingness of the channel master to share information and the tendency for powerful entities to form.

Re: Redesigning Trust: Blockchain for Supply Chains

#30

Post by hef19898 »

Anon84 wrote: post #28
hef19898 wrote: post #25

That article is not telling anything. No real use case, not concrete problems that can be solved. From that source I would have expected more. 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…

The details are in the "related reports" at the bottom. This is the main page for the project. Edit pdfs: - http://www3.weforum.org/docs/WEF_Introduction_to_Blockchain_... - http://www3.weforum.org/docs/WEF_Trustworthy_Verification_of...

Then I stand corrected and I have some literature for the weekend!
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