Quick response in fashion supply chains with dual information updating. Ford SUPER DUTY 2015 Owner's Manual.



Quick response in fashion supply chains with dual information updating

Quick response in fashion supply chains with dual information updating

This presentation focuses on: How it differs from other solutions. Different Trust Models Different types of networks require different trust models. Below is a chart I put together to highlight the differences in each model. If privacy and confidentiality are the main design feature for shared ledgers, tradeoff need to occur in order to make this work.

All systems have tradeoffs and using a triangle to understand this usually helps. In this triangle, one can only achieve two of three sides at any time. With this triangle you can shift it like a slide ruler, so you can have something between full decentralization and centralization, but of course you will lose consistency or scale as you do.

The nodes need to be known, but not trusted on these ledgers so why bother with decentralization at all? Some of these models are no different than centralized databases with the addition of blockchain "features". Once you sacrifice decentralization and synchronization by not replicating to all nodes you can get enterprise scale and privacy and confidentitality while keeping the data consistent.

Some use a node to node model some use a master node which validates and achieves consensus. Shared ledgers and private blockchains have some or all of the features found in the next slide. These are the common design features associated with blockchain solutions. The next slide comes from the KPMG report on Consensus I co-authored and shows how many use cases there are for financial services. There are just as many consensus mechanisms as well and this can be really confusing particularly when trying to implement different use cases and figure out the design features necessary for what you want to accomplish.

For all of these uses anonymity can't be used and privacy and confidentiality are necessary. This makes most ways of doing consensus not suitable. In my blog post: Zero Knowledge Proofs" , I go into deep detail about these systems and why they are being implemented.

Consortiums make sense because the success of shared ledger and blockchain technologies requires significant levels of market participation, collaboration and investment. The consortium is less about a technology solution or a particular business model.

It's more about how companies who haven't been able to trust each other in the past can come together and collaborate and share information. The participants just need to have similar requirements in terms of: Since these participants are known to each other they can deal with each other directly, without the need for a third party and innovate in a cost effective manner.

This leads to collaboration with other consortium members where it makes sense. These new technology instances are most powerful when you using a consortia model. Below is a diagram showing at the bottom platform consortia. Many of these private models rely heavily on industry input and engagement. In the public model you don'y pay to be a member. In Hyperledger you pay a small fee and companies of all shapes and sizes can join plus you have a fee to join the Linux Foundation.

In the private models it is much more expensive and exclusive. Other major projects include Sawtooth Lake Intel and Iroha. All of these models are trending toward open sourcing their code to allow developers to build on top of their platforms and form communities around the technology. The DACs are truly a new business model as they are building decentralized companies in which the network participants are part owners of the company.

Centralized companies will go away and the projects are creating their own economic ecosystems. Many of these projects are raising money through Initial Coin Offerings ICOs and those who invest get "appcoins" and owners and users of the network. These are essentially decentralized software protocols and are "disrupting the disruptors". At the top right are business consortia these can be public or private depending on use cases and business needs of the companies and business units involved.

Shared ledgers allow companies and business units to work together in a way they couldn't in the past. They provide end to end business processing and record keeping for corporations particularly intra-company. This, in turn, allows companies to derive new efficiencies by sharing information, reducing costs and producing revenue generating opportunities. Many blockchain technology providers are building their own shared ledger platforms which allow companies to use it and work together on use cases and improving inefficiencies.

Next is the critical choices that need to be made. Private shared ledger platforms are by no means standard or uniform. Each platform provides different options for: Even if workarounds are possible, they may prove to be just too complex in practice.

This requires decision-making around: Who will hold those keys? Where will the keys be held? There is no reason why consortium activity on a private shared ledger would be exempt from these laws. Under current Australian laws, consortium activity can constitute cartel conduct if the structure fails to incorporate appropriate compliance and enforcement measures.

It is arguable that current competition laws do not take appropriate account of developments in the digital economy — at least in Australia.

This is a public process that could take six months to complete. By comparison, if the consortium can establish well-designed operating rules and governance for the consortium, then it may be possible to rely on that framework to clearly establish the efficiency benefits — without the need to go through the public authorisation process. Someone consortium promoter decides that there is a reason for the consortium to form.

Once this happens founding members and participation members join with different benefits or tiers of benefits based on the operating rules of the consortium agreement which are decided by a governance board.

These rules include such things as legal and structural decisions of the consortium as well as decisions which are to be implemented on the shared ledger based on a specific technology implemented by the consortium promoter with input from all of its members.

The smart contract system and the rules engine have ensure consistency between real world contracts and smart contracts and as is shown below this is done in both private and public models because "code is king" does not hold up. R3's Corda matches real world contracts with smart contracts and hashes them to a blockchain.

This is a decision based on best practices and governance because smart contracts fail when you need them most: There isn't a way to code this in and know how a dispute will resolve. By doing this you can going off-chain into the real world of courts to settle disputes. Corda comes to consensus on these contracts in two ways: This allows for the counter parties to agree by independently running the same smart code and validation logic and confirm that the contract is the same.

A third party is generally involved in this piece of the consensus mechanism. The CO — Centrally Organized component — can be represented by a number of different company structures in various jurisdictions around the world.

Together, the CO and the DE build a bridge between the centralized legacy paradigm and the decentralized Ethereum paradigm. The SCS decentralizes legacy assets and places them on the blockchain. The SCS also directs the flow of decentralized assets for the purpose of funding, building, maintaining and growing real world projects.

When functioning at its potential, the CODE acts as a decentralization generator that perpetually places centralized assets onto the blockchain, growing the Ethereum ecosystem. This project is a blockchain based tracking application for wellbore samples.

Smith explained that these samples are extremely expensive and can not be replaced. The samples themselves pass through many custodians, mostly all BHP vendors and they are currently manually tracked using spreadsheets and email. This leads to human error which can cause large regulatory fines when things aren't right.

Smith also explained that there is a lack of transparency to business unit stakeholders and a lack of efficiency in finding metadata about these samples. There are 3 nodes in this project: BHP, Weatherford who is providing data analysis and the regulators and the goal is to properly map businesses processes to a granular level than understand how to map that to a blockchain architecture. This flow needs to have a simplified version of process flow of the samples through the vendors and custodians to capture the analysis of the sample itself and link it to the digital object of the sample on a blockchain.

Below is a slide of the business process flow. This allows for real time updates of the samples while getting rid of siloed functions, making tracking of information across functions and processes that are not as efficient as they could be for supply chains of all sorts.

Billions of dollars of value travel on supply chains each day. Other companies, financial institutions and startups are focusing on supply chains. IBM will use Hyperledger to build its solutions on and focus on supply chains. Below is a slide showing other companies focusing on supply chains. The other use case touched on was industry cooperation more than just sourcing and origins of supply chains.

The example Tyler Smith gave was around required public regulatory data that resource companies must give to partner countries that are set up in a contract before extraction can begin. It's not just BHP, but all companies in this industry that need to record and report things like production and location of assets to the partner countries who are required to make it available to the public.

Their are firms that aggregate public data for the governments and the countries into databases and costs multi billions of dollars annually.

The idea is to cut out this middle man by forming a consortium in the natural resource industry to report all public regulatory data that is required. Countries, regulators and natural resource companies can all be nodes in this consortium and publish real time access of this data for all to see and share information amongst peers. The countries themselves can save money by not needed to house this data since the blockchain has built in redundancy.

This also improves transparency dramatically. Since this information all needs to be open and transparent and a publicly recorded, BHP has decided to use a public blockchain.

There are cases however where using private shared ledgers are necessary, particularly because of data leakage and sensitivity around pricing of invoices and businesses processes as the slide below shows.

There are many different financial institutions and companies involved who would require sensitivity and encryption around the transaction and data flows.

Using a public model in this case would not be warranted. There are lots of corporations, banks and startups beginning to focus on supply chains.

IBM has announced this as their focus using Hyperledger.

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The next manufacturing revolution is here



Quick response in fashion supply chains with dual information updating

This presentation focuses on: How it differs from other solutions. Different Trust Models Different types of networks require different trust models. Below is a chart I put together to highlight the differences in each model.

If privacy and confidentiality are the main design feature for shared ledgers, tradeoff need to occur in order to make this work. All systems have tradeoffs and using a triangle to understand this usually helps. In this triangle, one can only achieve two of three sides at any time. With this triangle you can shift it like a slide ruler, so you can have something between full decentralization and centralization, but of course you will lose consistency or scale as you do. The nodes need to be known, but not trusted on these ledgers so why bother with decentralization at all?

Some of these models are no different than centralized databases with the addition of blockchain "features". Once you sacrifice decentralization and synchronization by not replicating to all nodes you can get enterprise scale and privacy and confidentitality while keeping the data consistent.

Some use a node to node model some use a master node which validates and achieves consensus. Shared ledgers and private blockchains have some or all of the features found in the next slide. These are the common design features associated with blockchain solutions.

The next slide comes from the KPMG report on Consensus I co-authored and shows how many use cases there are for financial services. There are just as many consensus mechanisms as well and this can be really confusing particularly when trying to implement different use cases and figure out the design features necessary for what you want to accomplish.

For all of these uses anonymity can't be used and privacy and confidentiality are necessary. This makes most ways of doing consensus not suitable. In my blog post: Zero Knowledge Proofs" , I go into deep detail about these systems and why they are being implemented.

Consortiums make sense because the success of shared ledger and blockchain technologies requires significant levels of market participation, collaboration and investment. The consortium is less about a technology solution or a particular business model.

It's more about how companies who haven't been able to trust each other in the past can come together and collaborate and share information. The participants just need to have similar requirements in terms of: Since these participants are known to each other they can deal with each other directly, without the need for a third party and innovate in a cost effective manner.

This leads to collaboration with other consortium members where it makes sense. These new technology instances are most powerful when you using a consortia model. Below is a diagram showing at the bottom platform consortia. Many of these private models rely heavily on industry input and engagement. In the public model you don'y pay to be a member. In Hyperledger you pay a small fee and companies of all shapes and sizes can join plus you have a fee to join the Linux Foundation.

In the private models it is much more expensive and exclusive. Other major projects include Sawtooth Lake Intel and Iroha. All of these models are trending toward open sourcing their code to allow developers to build on top of their platforms and form communities around the technology. The DACs are truly a new business model as they are building decentralized companies in which the network participants are part owners of the company.

Centralized companies will go away and the projects are creating their own economic ecosystems. Many of these projects are raising money through Initial Coin Offerings ICOs and those who invest get "appcoins" and owners and users of the network. These are essentially decentralized software protocols and are "disrupting the disruptors".

At the top right are business consortia these can be public or private depending on use cases and business needs of the companies and business units involved. Shared ledgers allow companies and business units to work together in a way they couldn't in the past.

They provide end to end business processing and record keeping for corporations particularly intra-company. This, in turn, allows companies to derive new efficiencies by sharing information, reducing costs and producing revenue generating opportunities.

Many blockchain technology providers are building their own shared ledger platforms which allow companies to use it and work together on use cases and improving inefficiencies. Next is the critical choices that need to be made. Private shared ledger platforms are by no means standard or uniform. Each platform provides different options for: Even if workarounds are possible, they may prove to be just too complex in practice. This requires decision-making around: Who will hold those keys?

Where will the keys be held? There is no reason why consortium activity on a private shared ledger would be exempt from these laws. Under current Australian laws, consortium activity can constitute cartel conduct if the structure fails to incorporate appropriate compliance and enforcement measures. It is arguable that current competition laws do not take appropriate account of developments in the digital economy — at least in Australia.

This is a public process that could take six months to complete. By comparison, if the consortium can establish well-designed operating rules and governance for the consortium, then it may be possible to rely on that framework to clearly establish the efficiency benefits — without the need to go through the public authorisation process.

Someone consortium promoter decides that there is a reason for the consortium to form. Once this happens founding members and participation members join with different benefits or tiers of benefits based on the operating rules of the consortium agreement which are decided by a governance board.

These rules include such things as legal and structural decisions of the consortium as well as decisions which are to be implemented on the shared ledger based on a specific technology implemented by the consortium promoter with input from all of its members. The smart contract system and the rules engine have ensure consistency between real world contracts and smart contracts and as is shown below this is done in both private and public models because "code is king" does not hold up.

R3's Corda matches real world contracts with smart contracts and hashes them to a blockchain. This is a decision based on best practices and governance because smart contracts fail when you need them most: There isn't a way to code this in and know how a dispute will resolve. By doing this you can going off-chain into the real world of courts to settle disputes.

Corda comes to consensus on these contracts in two ways: This allows for the counter parties to agree by independently running the same smart code and validation logic and confirm that the contract is the same. A third party is generally involved in this piece of the consensus mechanism. The CO — Centrally Organized component — can be represented by a number of different company structures in various jurisdictions around the world.

Together, the CO and the DE build a bridge between the centralized legacy paradigm and the decentralized Ethereum paradigm. The SCS decentralizes legacy assets and places them on the blockchain. The SCS also directs the flow of decentralized assets for the purpose of funding, building, maintaining and growing real world projects. When functioning at its potential, the CODE acts as a decentralization generator that perpetually places centralized assets onto the blockchain, growing the Ethereum ecosystem.

This project is a blockchain based tracking application for wellbore samples. Smith explained that these samples are extremely expensive and can not be replaced. The samples themselves pass through many custodians, mostly all BHP vendors and they are currently manually tracked using spreadsheets and email. This leads to human error which can cause large regulatory fines when things aren't right. Smith also explained that there is a lack of transparency to business unit stakeholders and a lack of efficiency in finding metadata about these samples.

There are 3 nodes in this project: BHP, Weatherford who is providing data analysis and the regulators and the goal is to properly map businesses processes to a granular level than understand how to map that to a blockchain architecture. This flow needs to have a simplified version of process flow of the samples through the vendors and custodians to capture the analysis of the sample itself and link it to the digital object of the sample on a blockchain. Below is a slide of the business process flow.

This allows for real time updates of the samples while getting rid of siloed functions, making tracking of information across functions and processes that are not as efficient as they could be for supply chains of all sorts. Billions of dollars of value travel on supply chains each day. Other companies, financial institutions and startups are focusing on supply chains.

IBM will use Hyperledger to build its solutions on and focus on supply chains. Below is a slide showing other companies focusing on supply chains. The other use case touched on was industry cooperation more than just sourcing and origins of supply chains. The example Tyler Smith gave was around required public regulatory data that resource companies must give to partner countries that are set up in a contract before extraction can begin.

It's not just BHP, but all companies in this industry that need to record and report things like production and location of assets to the partner countries who are required to make it available to the public. Their are firms that aggregate public data for the governments and the countries into databases and costs multi billions of dollars annually.

The idea is to cut out this middle man by forming a consortium in the natural resource industry to report all public regulatory data that is required. Countries, regulators and natural resource companies can all be nodes in this consortium and publish real time access of this data for all to see and share information amongst peers. The countries themselves can save money by not needed to house this data since the blockchain has built in redundancy.

This also improves transparency dramatically. Since this information all needs to be open and transparent and a publicly recorded, BHP has decided to use a public blockchain.

There are cases however where using private shared ledgers are necessary, particularly because of data leakage and sensitivity around pricing of invoices and businesses processes as the slide below shows. There are many different financial institutions and companies involved who would require sensitivity and encryption around the transaction and data flows.

Using a public model in this case would not be warranted. There are lots of corporations, banks and startups beginning to focus on supply chains. IBM has announced this as their focus using Hyperledger.

Quick response in fashion supply chains with dual information updating

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5 Comments

  1. Many of these projects are raising money through Initial Coin Offerings ICOs and those who invest get "appcoins" and owners and users of the network.

  2. The SCS also directs the flow of decentralized assets for the purpose of funding, building, maintaining and growing real world projects. The blog rapidly became my main vehicle for writing up what I have learned.

  3. There are cases however where using private shared ledgers are necessary, particularly because of data leakage and sensitivity around pricing of invoices and businesses processes as the slide below shows.

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