Intel, Flex, UPS Test Blockchain Proof Of Concept

Ganesh Wadawadigi

Efficient cross-company collaboration is key for companies to profitably service customer demand in a timely manner while minimizing costs. Blockchain is a promising technology to create the trust and transparency needed to achieve these objectives. Companies are working through industry blockchain consortiums and blockchain co-innovation programs to explore various blockchain for supply chain use cases.

Streamlining intercompany collaboration with blockchain

Cross-country shipment of goods is an inherent part of the global supply chain process. Numerous participants, including freight forwarders, logistics providers, port authorities, customs agents, brokers, and banks, are involved as goods move from the seller to the buyer. Many documents are exchanged at each step of the process, typically via fax, email, and even hand-delivery.

Such a slow, error-prone process, with limited to no visibility, leads to delayed shipments, fraud, and high costs. Reconciling discrepancies takes an enormous amount of time, effort, money, and resources for all companies involved.

Blockchain with integration to enterprise systems and processes promises to drastically improve the international trade process by providing visibility and transparency to all participants in the network and creating digital trust.

Digitalization with smart contracts

Through co-innovation, a proof of concept for international trade was developed using blockchain. The figure below shows the end-to-end process facilitated by smart contracts using cloud platform blockchain services for Hyperledger Fabric, a permissioned blockchain. Predefined templates model which parties are involved at each phase of the trade, which trade documents need to be provided by whom, which of these are mandatory, and who has visibility to them. A mobile app for QR code-based verification with digital signature can be used cargo release and pickup.

international trade blockchain

Unlocking business value with secure information exchange

Intel, Flex, UPS, and members of blockchain consortium and co-innovation programs recently concluded an exercise in which they collectively executed more than a dozen trades on this PoC system in parallel to their current systems.

“There’s no dearth of data today, but it can still be challenging to reach the desired level of intelligence we need to drive actions,” said Anita Bubna, senior director, treasury, Flex. “Moreover, it takes us significant time and effort to aggregate the required data across many stakeholders, internally and externally. This proof of concept establishes how blockchain can address our needs by providing actionable information.”

Here are some of the key benefits of blockchain that were observed through this joint exercise:

  • A real-time view of the current state of the trade with visibility to the required trade documents at each phase will address the inconsistencies and mismatches in information between business partners that exist today.
  • Automating the end-to-end process with smart contracts will eliminate the considerable time and resources spent checking and correcting information, which results in delayed shipments and payments.
  • Tamper-proof and verifiable data shared by all parties on the blockchain will drastically reduce audits and disputes and the associated costs from goods stuck in warehouses and ports.

Furthermore, blockchain can provide instant and up-to-date information to customs during both export and import, streamlining the flow of goods across country boundaries.

“As a leading global logistics services provider, we play a key role in international trade, and this PoC provided us additional confirmation that blockchain has the potential to enable efficiencies in international trade,” said Mahesh Sahasranaman, principal architect, UPS.

Intel, Flex, and UPS continue to explore topics like extending smart contracts with automated data validation rules and defining contextual alerts to facilitate user notification and action on the blockchain network. “We are excited to be part of the blockchain co-innovation program as we see a lot of promise in utilizing the technology to streamline our international trade process,” said Linda Cheung, director, Global Trade Solutions, Intel. “This proof of concept gave us an opportunity to explore the feasibility of using blockchain for efficient intercompany collaboration and information exchange with our trading partners.”

SAP is continuing to augment business applications like S/4HANA, SAP Transportation Management, SAP Globe Trade Services, SAP Logistics Business Network, and SAP Global Track and Trace with blockchain to facilitate the entire end-to-end international trade process. If you’re attending SAPPHIRE NOW & ASUG Annual Conference, register for Ganesh’s session, “Creating Digital Trust with Blockchain in Multiparty Collaboration.” Learn more about the application of blockchain technology in this SAP Leonardo virtual event.

Ganesh Wadawadigi

About Ganesh Wadawadigi

Ganesh Wadawadigi is a Chief Solution Owner at SAP, responsible for solution and go-to-market strategy for blockchain for supply chain. He has more than two decades of experience working with customers globally in the areas of Supply Chain Management and Manufacturing in various leadership roles, including consulting, solution management, product marketing, and solution strategy. Ganesh holds a Ph.D. in Aerospace Engineering from Iowa State University and earned his undergraduate degree from the Indian Institute of Technology (IIT).