This article is the first draft of the author's participation in the preparation of the TBI Trusted Blockchain Promotion Plan "Blockchain Supply Chain Collaborative Application White Paper"

Blockchain, as a technology closer to money, has gradually entered the public eye since 2016 and has been over-promoted. After my beloved Xi Jinping delivered a 1024 blockchain speech, it ignited many students in the blockchain field (including me). ) The fanatical heart. However, the blockchain has begun to be hyped again, technology and applications have also been exaggerated, and all Internet companies have become blockchain companies overnight.

In fact, domestic propaganda is far from the facts, and China's blockchain technology is very popular in Europe and the United States. The beauty of the blockchain we look forward to is a transformation from one system to another, which cannot be achieved overnight. Part of the content of this article is not applied research, but is more inclined to technology application prospects, and part of the content is not achievable by a single technology.

Despite this, we still seem to be able to see that digitization will bring about the beauty of the flow of productivity factors such as land, capital, human resources, knowledge, attention, emotion, etc. across time and space, and look forward to the power of change!

01

Trust, sharing and collaboration

Purchasing raw materials, producing products, managing inventory, transportation, and trade are the most ancient economic activities. With the development of complex technology, especially information technology, economic activities are constantly developing in the direction of digitization to reduce productivity costs and improve production efficiency.

"The Second East India Expedition Returns to Amsterdam", by Hendrik Cornelisz Vroom, 1599. This painting shows the scene of the Overijssel, Vriesland, Mauritius and Hollandia returning to Amsterdam after the second Dutch trade expedition went to East India in 1599. Amsterdam is shown on the right in the painting.

At the same time, in today’s user-centric and rapidly changing era of globalization, companies no longer rely solely on their own capabilities, but begin to collaborate with partners in the supply chain to meet users’ needs for product lifecycle information and comply with specific policies. Regulatory and audit requirements, rapid response to market changes, and improved competitive advantage.

Collaboration usually occurs between supply chain entities with long-term cooperative relationships. Two or more parties share information based on mutual trust, which brings convenience to the business arrangements and operations of all parties, and improves the carrying capacity and operational efficiency of the entire supply chain. Share the benefits while sharing the risks.

The Estelle Maersk, laden with "trust", slowly docked at the port of Rotterdam in the Netherlands. (Https://url.cn/5zTm22q)

Therefore, trust is the basis and prerequisite for supply chain collaboration, and the long chain, cross-regional, and high complexity characteristics of the supply chain determine that achieving high transparency through information resource sharing is essential for reducing transaction friction and achieving efficient collaboration.

At the same time, trust and information resource sharing are important foundations for the realization of collaborative goal formulation and execution, incentive mechanism arrangements, decision-making synchronization, and collaborative performance management.

02

Blockchain, a new model of collaboration in the era of digital economy

More than 20 years ago, the Internet became an unprecedented and highly disruptive technology that changed the way of information dissemination in the past. Information digitization has completely changed the foundation of many large-scale mature enterprises, and the widespread adoption of the commercial Internet has brought about the reorganization of supply chain information and value networks.

As a decentralized distributed ledger technology, blockchain is considered to be a new technological revolution that reshapes the value flow relationship on the Internet, or it will become the underlying basic technology for value connection in the digital economy era.

Network interaction diagram of ports and terminals based on the blockchain-based TradeLens digital shipping platform, 2019.12.08. Yellow represents ports and terminals that are directly integrated with TradeLens, and cyan represents ports and terminals that contribute data to TradeLens. (Https://www.tradelens.com/ecosystem/)

TradeLens is a blockchain-based digital shipping platform jointly developed by Maersk and IBM. The current TradeLens ecosystem is composed of more than 100 different organizations, registering more than 10 million shipping events every week, and Tradelens members can capture up to 600 ports and Terminal data, 55 ports and terminals directly integrated interactive data with Tradelens, more than a dozen customs departments participated to improve the visibility, security and automation of the passage. (Https://url.cn/5Q8GWME)

The blockchain connects the supply chain and collaborates with all parties The geographically dispersed and difficult-to-interoperate management system of the main body of the supply chain raises the threshold and complexity of synergy, which can easily lead to disconnection in the synergy of the supply chain. Blockchain, as a distributed accounting technology, naturally fits the scattered and complex characteristics of supply chain collaboration entities. It can connect the supply chain entities together and provide an efficient basic platform or tool for collaboration.

Blockchain brings a safe and reliable collaborative environment for the main body of the supply chain Different from the traditional collaborative management model based on centralized entities for information resource sharing (such as Dell’s supplier collaborative management platform and large customer internal information sharing platform in the late 1990s), the blockchain-based distributed ledger technology can greatly improve The security and reliability of the collaborative environment can effectively solve network attacks, immorality, fraud and other issues in supply chain collaboration.

At the same time, blockchain-based smart contracts exist in the form of codes, which can realize automatic verification and automatic execution of contract terms, and have an important impact on supply chain coordination in terms of trust, time, cost, efficiency, and risk control.

Blockchain strengthens the trust relationship between the parties in the supply chain collaboration The reliability of shared information and the security of data management greatly affect the efficiency of supply chain collaboration. Blockchain is based on the characteristics of decentralization, open and transparent account book data between nodes, and data traceability and non-tampering. It brings a new trust system based on mathematics, provides basic trust tools for information sharing and collaborative cooperation, and can strengthen the main body of supply chain collaboration. Relationship between trust.

The longest PoW chain data structure diagram of the Bitcoin blockchain, and the longest chain principle ensures the consistency of data among the nodes of the Bitcoin blockchain. Bitcoin: A Peer-to-Peer Electronic Cash System. (https://bitcoin.org/bitcoin.pdf)

Blockchain has changed the single-point radiation conduction mode of the traditional supply chain collaboration main body information, making the collection, verification, and storage of information more credible, and the information transmission and use are flatter, and information sharing is more convenient. Complex supply chain coordination has compliance from trust basis to realization means, which can bring higher information transparency and visibility to supply chain coordination.

03

The main application direction of blockchain in the field of supply chain collaboration

Data sharing and visibility At present, the centralized system of supply chain enterprises (such as ERP system) can only manage supply chain information within the enterprise, and cannot effectively collect and manage every piece of data generated along the supply chain.

The establishment of a unified supply chain collaboration platform based on the characteristics of blockchain decentralization and multi-nodes can record the complete product digital footprint of products in the supply chain process from raw material procurement and production to final sales to users, and all information can be accessed instantly All parties in the supply chain do not need to participate through intermediaries that may affect the quality and transparency of information.

The blockchain-based collaboration platform brings greater visibility and control to products and supply chain processes, avoiding unnecessary coordination and miscommunication. Supply chain collaboration partners can promptly discover problems, bottlenecks, and possible unethical behaviors. Instantly understand each other's performance and make better decisions to improve the efficiency of supply chain coordination.

TradeLens digital shipping platform visual interface (Setting Trade Free with TradeLens: A Demonstration.)

At the same time, the integration of supply chain processes based on a transparent and visual shared ledger will further reduce coordination complexity, optimize decision-making synchronization processes, and truly realize the improvement of supply chain synergy performance.

Eliminate intermediate links and data security As a distributed shared ledger, the blockchain provides a basis for removing complex intermediate links-the integrity, consistency, and availability of data are guaranteed by the entire network instead of relying on a centralized middleman.

Blockchain is very suitable for coordination in complex processes. For example, international trade is considered to be the most complex link in supply chain practice, involving factories, inland transportation, ports, customs inspections, carriers, shippers, recipients, and For a large number of supply chain stakeholders such as insurance companies and banks, most of the processes are based on paper documents, which can easily cause delays and greatly hinder the flow of goods.

Blockchain can help realize the digitization of paper documents, and establish point-to-point shared records between network participants in real time. The stored and shared data is tamper-proof and anti-manipulation, and the security and accuracy of the data pass through each node The server stores the complete transaction history and can be verified to be guaranteed.

Eliminating intermediate links such as the back-to-back transmission of complex paper documents and unnecessary communication can greatly improve the efficiency of the flow of information, funds, and goods in international trade.

Automatic verification execution and efficient collaboration The complexity of the supply chain leads to frequent errors and inconsistencies in various links, such as document problems, transportation problems, price terms, product standards, and it is extremely difficult to track the implementation of common goals and task progress reached by all parties in the supply chain.

The blockchain-based smart contract can realize automatic verification and automatic execution of terms. Its judgment is based on the public records on the blockchain, rather than the data controlled by any party alone, so it has a high degree of credibility and will Greatly improve the efficiency of collaboration.

Supply chain collaboration partners can convert incentive mechanisms, contract performance arrangements, and risk indicator detection into contract codes. When a new record is entered, the smart contract automatically detects whether the relevant terms are met, such as the consistency of the data on the bill of lading, packing list, waybill, and receipt certificate and the compliance with the contract terms, and then trigger the corresponding contract terms.

The combination of blockchain and IoT can further improve the reliability of data sources and the efficiency of data collection. Combining trusted data recorded on the blockchain with AI can intelligently track inventory, predict demand, detect supply chain environments, and predict risks , Solve a large number of supply chain coordination problems, reduce transaction friction, and improve coordination efficiency.

04

Blockchain application thinking challenges in the field of supply chain collaboration

Blockchain has brought huge thinking shocks and challenges in the field of supply chain collaboration. The supply chain collaboration based on blockchain requires all parties to break the shackles of the original system, share information resources, optimize or even reshape the business structure, and build a supply chain value community together, and ultimately achieve better products and services and the changes of all parties. Big benefits have brought impacts and challenges to the original mode of information transmission and value transmission

Information transfer From information islands to sharing and collaboration, from centralized sharing and collaboration to distributed data collection, integration, and sharing, the transformation requires a high degree of trust and common and consistent collaboration goals between supply chain entities.

Distrusted partners are unwilling to collaborate and fear to share information resources, and potential conflicts and injustices may affect the timeliness, accuracy and credibility of data, and have a negative impact on supply chain coordination.

Therefore, successful supply chain coordination requires that all parties to the supply chain have long-term relationships and basic trust, and are willing to share information resources, share benefits, and share risks.

Compared with the collaboration based on a certain center, the distributed data collection, integration, and sharing based on the blockchain-based collaborative approach puts forward higher coordination requirements for the consensus of all parties on the supply chain, the arrangement of incentive mechanisms, and the implementation of common goals and tasks. .

Value transfer The main body of the supply chain needs to deal with the challenge of transforming from an individual value center to a value community. Blockchain technology makes supply chain collaboration no longer dependent on a centralized collaboration platform, which can reduce the degree of monopoly of rights, minimize collaboration risks, and bring higher common benefits. However, the current economic winners may be worried about losing profits or dominant positions. resist.

Multi-party supply chain collaboration can achieve higher returns by creating a value community. It is necessary to think about the architecture and collaboration model of the supply chain from a higher level, involving supply chain process integration, collaborative performance formulation, decision synchronization, incentive mechanism arrangements, etc., which ultimately affect the company Internal business processes and even individual intermediate entities will be replaced, bringing about changes in the entire supply chain and even related industries.

This article is the first draft of the author's participation in the preparation of the TBI Trusted Blockchain Promotion Plan "Blockchain Supply Chain Collaborative Application White Paper"

Blockchain, as a technology closer to money, has gradually entered the public eye since 2016 and has been over-promoted. After my beloved Xi Jinping delivered a 1024 blockchain speech, it ignited many students in the blockchain field (including me). ) The fanatical heart. However, the blockchain has begun to be hyped again, technology and applications have also been exaggerated, and all Internet companies have become blockchain companies overnight.

In fact, domestic propaganda is far from the facts, and China's blockchain technology is very popular in Europe and the United States. The beauty of the blockchain we look forward to is a transformation from one system to another, which cannot be achieved overnight. Part of the content of this article is not applied research, but is more inclined to technology application prospects, and part of the content is not achievable by a single technology.

Despite this, we still seem to be able to see that digitization will bring about the beauty of the flow of productivity factors such as land, capital, human resources, knowledge, attention, emotion, etc. across time and space, and look forward to the power of change!

01

Trust, sharing and collaboration

Purchasing raw materials, producing products, managing inventory, transportation, and trade are the most ancient economic activities. With the development of complex technology, especially information technology, economic activities are constantly developing in the direction of digitization to reduce productivity costs and improve production efficiency.

"The Second East India Expedition Returns to Amsterdam", by Hendrik Cornelisz Vroom, 1599. This painting shows the scene of the Overijssel, Vriesland, Mauritius and Hollandia returning to Amsterdam after the second Dutch trade expedition went to East India in 1599. Amsterdam is shown on the right in the painting.

At the same time, in today’s user-centric and rapidly changing era of globalization, companies no longer rely solely on their own capabilities, but begin to collaborate with partners in the supply chain to meet users’ needs for product lifecycle information and comply with specific policies. Regulatory and audit requirements, rapid response to market changes, and improved competitive advantage.

Collaboration usually occurs between supply chain entities with long-term cooperative relationships. Two or more parties share information based on mutual trust, which brings convenience to the business arrangements and operations of all parties, and improves the carrying capacity and operational efficiency of the entire supply chain. Share the benefits while sharing the risks.

The Estelle Maersk, laden with "trust", slowly docked at the port of Rotterdam in the Netherlands. (Https://url.cn/5zTm22q)

Therefore, trust is the basis and prerequisite for supply chain collaboration, and the long chain, cross-regional, and high complexity characteristics of the supply chain determine that achieving high transparency through information resource sharing is essential for reducing transaction friction and achieving efficient collaboration.

At the same time, trust and information resource sharing are important foundations for the realization of collaborative goal formulation and execution, incentive mechanism arrangements, decision-making synchronization, and collaborative performance management.

02

Blockchain, a new model of collaboration in the era of digital economy

More than 20 years ago, the Internet became an unprecedented and highly disruptive technology that changed the way of information dissemination in the past. Information digitization has completely changed the foundation of many large-scale mature enterprises, and the widespread adoption of the commercial Internet has brought about the reorganization of supply chain information and value networks.

As a decentralized distributed ledger technology, blockchain is considered to be a new technological revolution that reshapes the value flow relationship on the Internet, or it will become the underlying basic technology for value connection in the digital economy era.

Network interaction diagram of ports and terminals based on the blockchain-based TradeLens digital shipping platform, 2019.12.08. Yellow represents ports and terminals that are directly integrated with TradeLens, and cyan represents ports and terminals that contribute data to TradeLens. (Https://www.tradelens.com/ecosystem/)

TradeLens is a blockchain-based digital shipping platform jointly developed by Maersk and IBM. The current TradeLens ecosystem is composed of more than 100 different organizations, registering more than 10 million shipping events every week, and Tradelens members can capture up to 600 ports and Terminal data, 55 ports and terminals directly integrated interactive data with Tradelens, more than a dozen customs departments participated to improve the visibility, security and automation of the passage. (Https://url.cn/5Q8GWME)

The blockchain connects the supply chain and collaborates with all parties The geographically dispersed and difficult-to-interoperate management system of the main body of the supply chain raises the threshold and complexity of synergy, which can easily lead to disconnection in the synergy of the supply chain. Blockchain, as a distributed accounting technology, naturally fits the scattered and complex characteristics of supply chain collaboration entities. It can connect the supply chain entities together and provide an efficient basic platform or tool for collaboration.

Blockchain brings a safe and reliable collaborative environment for the main body of the supply chain Different from the traditional collaborative management model based on centralized entities for information resource sharing (such as Dell’s supplier collaborative management platform and large customer internal information sharing platform in the late 1990s), the blockchain-based distributed ledger technology can greatly improve The security and reliability of the collaborative environment can effectively solve network attacks, immorality, fraud and other issues in supply chain collaboration.

At the same time, blockchain-based smart contracts exist in the form of codes, which can realize automatic verification and automatic execution of contract terms, and have an important impact on supply chain coordination in terms of trust, time, cost, efficiency, and risk control.

Blockchain strengthens the trust relationship between the parties in the supply chain collaboration The reliability of shared information and the security of data management greatly affect the efficiency of supply chain collaboration. Blockchain is based on the characteristics of decentralization, open and transparent account book data between nodes, and data traceability and non-tampering. It brings a new trust system based on mathematics, provides basic trust tools for information sharing and collaborative cooperation, and can strengthen the main body of supply chain collaboration. Relationship between trust.

The longest PoW chain data structure diagram of the Bitcoin blockchain, and the longest chain principle ensures the consistency of data among the nodes of the Bitcoin blockchain. Bitcoin: A Peer-to-Peer Electronic Cash System. (https://bitcoin.org/bitcoin.pdf)

Blockchain has changed the single-point radiation conduction mode of the traditional supply chain collaboration main body information, making the collection, verification, and storage of information more credible, and the information transmission and use are flatter, and information sharing is more convenient. Complex supply chain coordination has compliance from trust basis to realization means, which can bring higher information transparency and visibility to supply chain coordination.

03

The main application direction of blockchain in the field of supply chain collaboration

Data sharing and visibility At present, the centralized system of supply chain enterprises (such as ERP system) can only manage supply chain information within the enterprise, and cannot effectively collect and manage every piece of data generated along the supply chain.

The establishment of a unified supply chain collaboration platform based on the characteristics of blockchain decentralization and multi-nodes can record the complete product digital footprint of products in the supply chain process from raw material procurement and production to final sales to users, and all information can be accessed instantly All parties in the supply chain do not need to participate through intermediaries that may affect the quality and transparency of information.

The blockchain-based collaboration platform brings greater visibility and control to products and supply chain processes, avoiding unnecessary coordination and miscommunication. Supply chain collaboration partners can promptly discover problems, bottlenecks, and possible unethical behaviors. Instantly understand each other's performance and make better decisions to improve the efficiency of supply chain coordination.

TradeLens digital shipping platform visual interface (Setting Trade Free with TradeLens: A Demonstration.)

At the same time, the integration of supply chain processes based on a transparent and visual shared ledger will further reduce coordination complexity, optimize decision-making synchronization processes, and truly realize the improvement of supply chain synergy performance.

Eliminate intermediate links and data security As a distributed shared ledger, the blockchain provides a basis for removing complex intermediate links-the integrity, consistency, and availability of data are guaranteed by the entire network instead of relying on a centralized middleman.

Blockchain is very suitable for coordination in complex processes. For example, international trade is considered to be the most complex link in supply chain practice, involving factories, inland transportation, ports, customs inspections, carriers, shippers, recipients, and For a large number of supply chain stakeholders such as insurance companies and banks, most of the processes are based on paper documents, which can easily cause delays and greatly hinder the flow of goods.

Blockchain can help realize the digitization of paper documents, and establish point-to-point shared records between network participants in real time. The stored and shared data is tamper-proof and anti-manipulation, and the security and accuracy of the data pass through each node The server stores the complete transaction history and can be verified to be guaranteed.

Eliminating intermediate links such as the back-to-back transmission of complex paper documents and unnecessary communication can greatly improve the efficiency of the flow of information, funds, and goods in international trade.

Automatic verification execution and efficient collaboration The complexity of the supply chain leads to frequent errors and inconsistencies in various links, such as document problems, transportation problems, price terms, product standards, and it is extremely difficult to track the implementation of common goals and task progress reached by all parties in the supply chain.

The blockchain-based smart contract can realize automatic verification and automatic execution of terms. Its judgment is based on the public records on the blockchain, rather than the data controlled by any party alone, so it has a high degree of credibility and will Greatly improve the efficiency of collaboration.

Supply chain collaboration partners can convert incentive mechanisms, contract performance arrangements, and risk indicator detection into contract codes. When a new record is entered, the smart contract automatically detects whether the relevant terms are met, such as the consistency of the data on the bill of lading, packing list, waybill, and receipt certificate and the compliance with the contract terms, and then trigger the corresponding contract terms.

The combination of blockchain and IoT can further improve the reliability of data sources and the efficiency of data collection. Combining trusted data recorded on the blockchain with AI can intelligently track inventory, predict demand, detect supply chain environments, and predict risks , Solve a large number of supply chain coordination problems, reduce transaction friction, and improve coordination efficiency.

04

Blockchain application thinking challenges in the field of supply chain collaboration

Blockchain has brought huge thinking shocks and challenges in the field of supply chain collaboration. The supply chain collaboration based on blockchain requires all parties to break the shackles of the original system, share information resources, optimize or even reshape the business structure, and build a supply chain value community together, and ultimately achieve better products and services and the changes of all parties. Big benefits have brought impacts and challenges to the original mode of information transmission and value transmission

Information transfer From information islands to sharing and collaboration, from centralized sharing and collaboration to distributed data collection, integration, and sharing, the transformation requires a high degree of trust and common and consistent collaboration goals between supply chain entities.

Distrusted partners are unwilling to collaborate and fear to share information resources, and potential conflicts and injustices may affect the timeliness, accuracy and credibility of data, and have a negative impact on supply chain coordination.

Therefore, successful supply chain coordination requires that all parties to the supply chain have long-term relationships and basic trust, and are willing to share information resources, share benefits, and share risks.

Compared with the collaboration based on a certain center, the distributed data collection, integration, and sharing based on the blockchain-based collaborative approach puts forward higher coordination requirements for the consensus of all parties on the supply chain, the arrangement of incentive mechanisms, and the implementation of common goals and tasks. .

Value transfer The main body of the supply chain needs to deal with the challenge of transforming from an individual value center to a value community. Blockchain technology makes supply chain collaboration no longer dependent on a centralized collaboration platform, which can reduce the degree of monopoly of rights, minimize collaboration risks, and bring higher common benefits. However, the current economic winners may be worried about losing profits or dominant positions. resist.

Multi-party supply chain collaboration can achieve higher returns by creating a value community. It is necessary to think about the architecture and collaboration model of the supply chain from a higher level, involving supply chain process integration, collaborative performance formulation, decision synchronization, incentive mechanism arrangements, etc., which ultimately affect the company Internal business processes and even individual intermediate entities will be replaced, bringing about changes in the entire supply chain and even related industries.