Leaders from the logistics industry, major ports, blockchain suppliers and importers/exporters have teamed up with the World Economic Forum, the International Organization for Public-Private Cooperation and more than 20 governments to accelerate blockchain deployment in supply chains.
Blockchain and Distributed Ledger Technology (DLT) could bring standardization and transparency to supply chain management, but it has been prone to hype, the WEF notes.
The forum project – called the Redesigning Trust with Blockchain in the Supply Chain – is a new initiative to help supply chain decision-makers cut through all of the blockchain hype and ensure that the technology is deployed in an interoperable, responsible and inclusive way.
Over 100 organizations and experts are on the team, including Maersk, Hitachi, Mercy Corps, Korea Customs Service, Llamasoft and the Ports of Los Angeles, Oakland, Valencia and Rotterdam.
The multi-stakeholder group is charged with co- designing an open-source roadmap or toolkit to guide supply chain decision-makers towards blockchain deployment, the WEF says.
The effort intends to highlight technical and non- technical drivers of success, risks and recommendations as well as design requirements.
“As blockchain technology is so new, supply chain decision-makers need clear guidelines, tools and frameworks to help them maximize the benefits and minimize the risks of this technology,” says Nadia Hewett, WEF project lead for blockchain and DLT.
“This toolkit will be built by the industry and piloted, so we can see what works and what does not. We are going to piece together the puzzle, so others don’t have to start from scratch.” David Libatique, deputy executive director, Port of Los Angeles, explains, “The project has created a broad and diverse community of stakeholders to share experiences and develop a toolkit for innovators and decision- makers to navigate the complex policy, technical and commercial issues that arise from digital transformation of the supply chain.”
Bernhard Kowatsch, head innovation accelerator, World Food Program, says: “A big part of WFP’s core operations revolve around logistics and supply chain, distributing food and other life-saving items to more than 90 million people in 83 countries around the world.”
He adds, “Becoming a part of the Forum’s Redesigning Trust: Blockchain for Supply Chain community has provided us with the opportunity to share real-world connections between the private and public sectors to assist us in the development of our own innovative blockchain for supply chain projects.” Norihiro Suzuki, vice president, and general manager of Hitachi’s Research & Development Group, declares, “We believe that blockchain is a promising technology for several industry verticals, including the financial sector, distribution and logistics, among others.”
Hitachi is actively contributing to the development of platforms through open source software communities, he observes. “We are looking forward to working with the World Economic Forum to bring together these communities to explore the future of supply chains and data flow economy.”
The forum says it will be releasing monthly white papers on the findings from the community. The recommendations will include guidelines on data privacy, security, creation and use of data, public versus private platforms, interoperability, digital identity and signatures (see next article).
Supporting an approach that considers the entire ecosystem promises to ensure an inclusive perspective and result that will benefit all stakeholders, the forum asserts.
Analysis in the first white paper advocated for a mindset shift in business from protective and silo- thinking towards a willingness to try new collaborative models. Competing ports have started to share data to optimize calls of shipping liners in the North Europe area.
The ports also expressed willingness to expand their model to other ports. Similarly, and beyond the shipping industry, the world’s four largest agriculture companies have partnered to digitize international grain trading.
“As digital technologies such as blockchain increasingly encourage higher levels of trust among supply chain partners, they will have effects on processes in the physical world as well,” Hewett points out.
“As a result, fragmentation within and across industries could diminish, the occurrence of errors and exceptions could decline, and operators could require fewer resources to complete the same tasks,” he concludes.
Learn to Secure The Blockchain
There are many security benefits inherent with a blockchain, including cryptography, immutability and decentralization, but that doesn’t make it immune to cybersecurity breaches.
“Leaders today must challenge conventional wisdom and think differently, in order to achieve the highest possible security in the context of blockchain,” asserts Ted Harrington, who is executive partner with Independent Security Evaluators, on the World Economic Forum website.
Security is not just a technical problem, it is a leadership problem, Harrington points out. Most organizations today do not recognize cybersecurity as the core leadership discipline that it is.
“Establish a security leadership position in your organization and ensure that they are empowered to take action where necessary,” he urges.
Keep in mind that exploitation is not just a result of attacker capabilities, but also of developer errors. Recognize that the security essentials matter just as much as – if not more than – the exotic novelties.
Train your developers on security, he stresses. “They don’t need to become the next celebrity at the annual security conclave DEF CON, they just need to understand the core principles of security – particularly cryptography, given its core application to blockchain – and how to implement these principles in the solutions they are building.”
While attackers may try to, and in many cases, succeed in compromising a particular blockchain in operation, attackers far more commonly try to compromise the deployment of the blockchain.
“Build out your threat model to understand who your potential adversaries are; why they are interested in exploiting your system; what types of skill they have; and what types of resources they have,” Harrington recommends.
Ensure your organization has the requisite security talent, he says, even if this means hiring the right specialists, possibly third-partiies, to help.