Executive Insights: OriginTrail CEO Tomaž Levak on supply chain visibility and developing new solutions to old problems
We’ve been dealing with the same issues for as long as humans have been trading – communication, accountability, and information. Once shipments were in motion, there wasn’t much anyone could do to monitor its movement and status. If we take a step back and think about the implications of that statement, we realize that at any given time, trillions of dollars’ worth of goods were almost unaccounted for, at least for a short period of time. That’s the sort of realization that keeps supply chain managers awake at night.
Part of the reason for this lack of visibility has been a lack of technology, but there’s a human element as well – even if nodes of the supply chain knew where the shipment was, and its status, they wouldn’t share it.
Now, after thousands of years, there might actually be a fix – blockchain. Here’s why. Blockchain-based solutions align accountability with responsibility and create a neutral layer that incentivizes greater sharing of data. We talked with OriginTrail CEO Tomaž Levak about how that works. “By performing consensus checks in each step of the supply chain we are effectively creating a single version of truth and supply chains with integrity,” Tomaž explained. “Such end-to-end visibility can, in turn, be used to overcome not only data fragmentation but can support various other use cases.”
That’s just the beginning. In the interview below, Tomaž explained how wide reaching the implications of this new technology are, and what we can expect in the years ahead as blockchain goes mainstream.
Shipping and Freight Resource: Can you talk about your recent ICO, and how that’s changing the way startups launch and grow?
Tomaž Levak: With performing a token generating event (TGE) this January, we have issued a token called Trace which is used as a “fuel” in the upcoming OriginTrail Decentralised Network. That means that users of OriginTrail protocol will use Trace for any interaction with the protocol to compensate the nodes in the network for their storage and processing power. Since OriginTrail is an open-source, neutral protocol, Trace is a way to manage relations between users and nodes in the network in a decentralized way.
As a part of the TGE, we have also conducted a crowdsale during which our community was able to obtain Trace for their contributions. Funds collected during the TGE will, in turn, enable OriginTrail team to sustain the development of the protocol over the next three years and ensure its adoption.
An important factor for the successful TGE was the fact that the OriginTrail protocol is already used in several use cases – including supply chain visibility for GMO-free dairy products, premium poultry and fresh vegetables, preventing counterfeiting in wine, as well as ensuring data integrity in online retail, for logistics center, and for laboratory information management systems. Additionally, our solution received several awards prior to the TGE, most importantly the award from the Walmart Food Safety Collaboration Center in Beijing for the project with the Chinese organic food marketplace Yimishiji, connecting their supply chain with the blockchain.
Can you talk about how increased fragmentation of the supply chain poses security risks and what blockchain does to address that?
Fragmentation of data in supply chains (leading to “data silos”) is exactly one of the issues we identified when we were working with several supply chain partners since 2013. There is more data than ever produced and shared, but for actual insights into the global supply chains, data interoperability is still a big issue. Great majority of stakeholders still only have visibility “one-step-back” and “one-step-forward”. Given the complexity of modern global supply chains and the challenges they are facing, this is not enough. It leads to the opacity which can be a fertile ground for bad actors and practices. Blockchain-based solutions like OriginTrail align accountability with responsibility very precisely and create a neutral layer that incentivises greater sharing of data.
Data being shared through OriginTrail is also automatically cross-referenced for consensus checks. By performing consensus checks in each step of the supply chain we are effectively creating a single version of truth and supply chains with integrity. Such end-to-end visibility can, in turn, be used to overcome not only data fragmentation but can support various other use cases.
What steps can shippers take to improve their supply chain visibility, and how are their options expanding?
Modern supply chains – which are actually supply networks – run on data. Shippers are usually already well equipped with the technology and different standards. With decentralized systems, they can start benefiting from that collected data even more. They can support claims towards their clients as well as towards third parties (banks, insurance companies). By integrating with other stakeholders in supply chains they can even work on optimizing their processes for better efficiencies. At all times they can, of course, retain ownership of that data and share it exactly for the use cases that produce value they are comfortable with. Technology-wise, options are expanding as well. OriginTrail does not require product-side adaptations, but can also integrate data in GS1 standards from various data sources, such as RFID chips or smart tags. We recently announced the partnership with EVRYTHNG, IoT Smart Products Platform, which will lead to even more possibilities of integration.
Beyond food and pharma safety, what other shippers stand to benefit from solutions such as yours?
OriginTrail protocol is – in a nutshell – a solution for trusted and efficient data exchange between organizations, with the blockchain providing an additional layer for data integrity and traceability. As such, OriginTrail can be used in any product supply chain. As mentioned above, once the data is on our network, it can be harnessed for different shipping-related purposes. We have created four larger groups of use cases that are going being proposed and they fall within: Supply Chain Integrity (authenticity, brand protection), Supply Chain Management, Compliance/Certification, and Trade Finance.
What steps to blockchain-based service providers need to take to go mainstream, and make their services appealing to smaller companies in the way that SoS has taken hold?
If service providers wish to create mainstream applications, they need to start with small tangible steps creating value but have a vision on how to replicate that value at scale. At the same time, they should not look to entirely replace legacy systems.
At OriginTrail we try to assist them in both steps. Our protocol is freely available on our GitHub repository with extensive documentation to support them with node installation process and integration with the legacy system. Secondly, OriginTrail protocol was created to optimize cost-efficiency when it comes to sharing supply chain data in a decentralized way. Lastly, we have included the globally recognized GS1 interoperability standards at the protocol level as well. This ensures that no changes need to be made to the legacy systems ensuring faster integration.
We look to unite all interested organizations within the Trace Alliance, our collaborative hub of companies using blockchain for solving supply chain challenges.
What steps should smaller shippers and forwarders take to capitalize on developments in blockchain tech?
It is a good time to start trialing this new technology in order to understand its benefits and take advantage of the early movers. It is also important to focus on the use cases where decentralized networks bring benefits and find quality partners to run pilots with.
One collaborative hub that fosters that type of connections is also Trace Alliance that we have set up and is receiving more requests every day. We have just recently also appointed its Chairman Mr. John Keogh who will spearhead numerous activities of this partnership over the next weeks, months and years.
I’m surprised block-chain took this long to be developed, maintaining a single, cohesive story of when and where is a shipment should be the gold standard of shipping worldwide.