Supply chain workshop @ odyssey

I had the honor of leading a workshop on supply-chain during the tech deep dive preparatory event to the 2019 Odyssey hackathon. The event was both rewarding and full of new learnings.

Inspiring speeches

I was especially inspired by the talk of Willie Smits of the Massarang foundation. He demonstrated (by actually doing it) that it is possible to regrow forests and rebuild ecosystems in a sustainable and profitable manner.

The Ocean protocol was finally presented in a way that made sense to me and turned me into a supporter. A lot of work still needs to be done in order to enable its full potential.

Workshop findings

The format was a one hour workshop about Supply chain and Blockchain and AI.

The original plan was to document the ideas generated in the workshop as issues in a github repository. That turned out to be a bad idea as there is simply not enough time to articulate ideas clearly enough in a one hour workshop.

Instead I’m writing this blog post.

Great subject matter experts

We had some Challenge owners for the supply chain relevant challenges in the room. They probably ended up being a bit frustrated as the discussion was not specific enough.

But it allowed us to pin point some issues in the supply chain:

• Fraud is rampant and it is difficult to punish in the current system as it is difficult to prove who’s at fault. The paper documents can be withheld and copied and forged. According to IBM 40% of fraud in the logistics process is document fraud.
• Identifying cargo and making sure that it is the same product at both ends of a journey is a big challenge. Sealed containers with a blockchain lock would be a start, so are DNA tests for organic products.
• People in developing countries can learn and are eager to participate. The resistance to change comes from the incumbents. Indeed an exploitative system has been setup in many places which would be challenged by disturbing the status quo.
• It is important that data flow in both directions producer <-> consumer. Indeed we (the rich world) often assume that we’re the ones who need more information when it is actually useful both ways.
• The data asymmetry is hurting the weaker participants and we can help by creating knowledge and data commons. As has been proven in the past, giving information to people allows them to do better work and make more profits. Blockchain could help by providing a subvention scheme or some other mechanism to allow the richer part of the supply chain to finance the efforts of the poorer part.

The main benefits of blockchain

One thing we were able to establish is that a blockchain does not prevent fraud or create better quality data. But it does offer some benefits:

• Once the data has been written it can not be changed anymore. No cheating in hindsight. The timestamp of the blockchain is correct.
• If you do try to cheat, the probability of being found out is a lot higher when you can not change your statement.
• As the data is publicly available it allows a lot more scrutiny. Having more products arrive at destination than left the warehouse would automatically trigger an alarm. The only explanation is that they have been illegally added to the supply chain. Which would invalidate the whole chain’s reputation making it economically non viable.

Not specific enough

The only actual projects which were named Cryptomice.eu and seal.network solve the identification of products. No other project was named which solves supply chain issues with blockchain.

The talk was a lot about generic topics like game theory and reputation and I got the impression that a big part of the audience was under the impression that if you build a solution the customers will come. I do not agree with this statement as change is always difficult and takes more effort than the status quo.

The difficulty of creating incentive systems

We tried to talk about incentivizing the supply chain participants but it appears that this was not the right crowd for this endeavour. It appears that developers need to work on their skills for creating incentive systems.

It is not enough to think about the great savings once the application works. One also needs to create value for the network and make it worthwhile for early adopters to make the additional effort to be the first to join.

As many blockchain projects are about building a network and gain value with each new participant. It is crucial that we put more thought into how to tokenize the network. Just a hint: a payment token is a bad idea.

Overall it was a success

Indeed I had a great time leading the discussion and even if I failed to reach my goals of concrete ideas for the hackathon, there were good ideas and opinions in the crowd.

Bottom line: I’d do it differently next time, but I’m happy to try again.