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Powering Better Supply ChainsBlockchain inspired distributed business networks

Insolar Research

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The key drivers for supply chain blockchain adoption are:

89%Cost saving

81%Enhancing traceability

79%Enhancing

transparency

Source: Capgemeni Research Institute

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Blockchain will revolutionize supply chainsB

uild

ing

Blo

cks

Potential Benefits Include

IoT Integration

ERP Integration

New Services

Smart Contracts

Distributed Ledgers

Cloud Processing

■ Improved visibility - faster, more details

■ More reliable data - trusted, verified

■ Reduced errors

■ Lower costs to manage data

■ Automate more steps

■ Minimize costs to deal with disputes

■ Better supplier management

■ Allow more ecosystem parties to add more value

■ Provide compliance data more easily

Industry-leading companies, like Walmart and Maersk, are already investing to explore how blockchain and enterprise software system can be combined to create new processes

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Blockchain addresses the supply chain industry’s need for:■ Collaboration: Multiple parties needed to collaborate on a

common problem

■ Shared versions: Parties’ need of document filings, commercially sensitive information or status of shipping information

■ Automation: Smart contracts have the ability to encode business rules and authority approvals which can be endorsed and distributed securely

■ Domain control: Regulatory approvals required and moderation of performance needs can be tweaked and adjusted with different parameters as needs change, trust is not uniform

■ Provenance trail: Audit trail to reduce prevalence of disputes, and the severity/duration of dispute process when they occur

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Today’s supply chains are changing as a result of digitization, technological advancement and shifting consumer demands

Digital innovation and IOT are changing supply chain dynamics■ Truck appointment system■ Digitization■ Remote container management system■ Secure IOT for smart port operations

Transportation infrastructure is digitizing and automating■ Multi jurisdictional tolls■ Trucks with contracts■ Autonomous vehicles

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Supply chain systems face many challenges

Data visibility & consolidation ■ Disparate record-keeping

and reporting systems lead to scattered, incomplete and unreliable documentation

■ Fragmentation creates difficulty with compliance and dispute resolution

■ Little visibility into the status of goods as they move through the supply chain■ Communication between organizations is complicated and expensive with high administrative costs■ Frequent delays ■ Resource intensive■ Stifles supply chain optimization

Process optimization

Demand management

Tracking, transparency & trust

■ High administrative costs

■ Poor visibility to address bottlenecks

■ Lack of concrete accountability

■ Multiple actors involved in information transfer

■ Poor data leading to poor planning and execution capabilities

■ Low ability to anticipate and react to demand and supply volatility

■ Difficulty in provenance tracking

■ Frequent contract disputes

■ High/ costly incidents of fraud

Costly disputes arise as a result of information gaps and lack of trust in supply chain data

What were rates at time of shipment?

Are shipment issues shipment needing remediation before billing?

What was service level and what extra charges were allowed?

Were service levels met?

How do weights tie off to the original contract?

Is the billing correct? How was the billing calculated?

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Agriculture ■ Food safety and origin■ Agricultural supply chain

Transport & Logistics

■ Paperless logistics■ 4PL management■ Asset maintenance

Natural Resources ■ Mining supply chain■ Mineral provenance■ Commodity trading

Electric Utilities ■ Management of physical assets■ Energy trading

Manufacturing ■ Manufacturing supply chain■ Digital enabled parts

Technology & Telecoms

■ Telecom asset management

Automotive ■ Tracking of car parts Retail ■ Product verification■ Retail supply chain■ Product warranties

Financial Services

■ Trade and supply chain finance Healthcare ■ Pharmaceutical supply chain

Insurance ■ Insurance payouts automation Public Sector ■ Asset tracking

Blockchain is impacting the supply chain across many industries

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Data visibility and consolidationInformation securely available to all stakeholders (manufacturer, receiver, shipper and regulators, etc.)

Tracking, transparency and trustAbility to examine sources, investigate industry certifications, track restricted or dangerous components, discover deviation from parameters etc.

Increased securityMore secure than previously paper based, fragmented records - blockchain allows parties to see and exchange digital documents

Enhanced operational efficiencyThrough smart contract automation of processes done manually today: configured to perform specific tasks, monitor parameters and trigger diverse actions/notifications

Asset registration/identityImproving security and efficiency of IoT capabilities, and attaching valuable information to assets used across the supply chain (maintenance, ownership history)

ReputationVerified reputational data on participants

A supply chain blockchain platform lower barriers to trade for every stakeholder in the supply chain ecosystem

Att

rib

ute

s

Benefits

■ Reduce delays from paperwork

■ Reduce waste

■ Identify and address issues faster (proactive from passive)

■ Lower cost

■ Reduce or eliminate fraud and errors

■ Improve inventory management

■ Minimize courier costs

■ Enable collaboration

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Today, transferring information between siloed parties relies on many different modes of communication

Factory Warehouse Logistics Provider Carrier Port of Departure Port of Arrival

Bank Insurance Company Bank Customs Rail Operator Bank

■ Inconsistent information across organizations■ Complex, cumbersome, and costly P2P messaging■ Manual, time-consuming, paper-based process■ Lack of information for risk assessment and dispute resolution■ Prone to error■ Susceptible to fraud

Barge Operator Local Truck Buyer

Contracting is arduous and paper based. Each renewal leads to negotiation with little data available to leverage for better outcomes

Expensive to prove compliance and resolve disputes

Reactive to supply chain difficulties after they have occurred, often more difficult and severe as a result

Poor/no visibility beyond one step forward/back

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Blockchain serves as a supply chain information pipeline, providing stakeholders with end to end visibility and automation capabilities

Factory Warehouse Logistics Provider Carrier Port of Departure Customs Local Truck Buyer ■ Fast, secure access to end-to-end supply chain information with a single version of the truth

■ Verifiable authenticity and immutability of digital documents

■ Improved availability■ Trusted cross-organizational workflows■ Reduced costs

Provide end-to-end supply chain visibility that enables all actors involved in a global shipping transaction to securely and seamlessly exchange shipment events in real time.

Port of Arrival Rail Operator Bank

Bank Insurance Company Bank Barge Operator

Business Network Platform

Identity Services Document Flow Services Subcontracting Services Other Services

Automated contracting and payments

IoT integration for proactive decision making and problem identification

Regulator access to real time information and immutable provenance to ease compliance validation and customs processing

Improved dispute resolution and specific party accountability due to complete digitized audit trail

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Pharmaceutical supply chain

Stakeholders can track units from manufacturer to consumer; improving demand management, revenue forecasting and overall performance management

Farm

Customer

■ Transparency for stakeholders: provenance, conditions, authority rights, checkpoint approvals and compliance

■ Counterfeit drug identification, drug recall management, reducing compliance risk and protecting patients

■ Smart contracts and IoT capture deviations from parameters (drug temperature, etc.), and respond by executing actions such as recalling before release to market

■ Digital signatures eliminate the need for certification by a sole authoritative source

■ Used to store information and enforce regulatory rules across the entire supply chain

■ Regulators have access to a full real time history of product flows

Current state:

Raw material suppliers

Production Distributor Pharmacy/ hospital

Patient

Distributor

Patient

Raw material suppliers

Production

Pharmacy/ hospital

Pharma company

Logistics provider

Regulator

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Automotive and manufacturing supply chain

Disruptive technologies and globalization are having a growing impact on the automotive supply chain

Current state:

Supplier N Supplier 2 Supplier 1 Manufacturer Dealership

■ Manufacturing is global, with poor visibility into bottlenecks, raw material levels, working capital, cash flow levels across supply chain, limiting the ability to quickly plan, adapt, or buy and sell

■ Huge value in ability to detect quality issues, recall, and track issue back to source quickly

■ Complete supply chain visibility, an aftermarket and shared purchasing platform to transact value and information across the value chain, buying, selling, and reselling raw material and car parts

■ Stakeholder access to provenance, marketplace, and accountability

■ Smart contracts store demand and supply information, govern sourcing decisions, and generate requests from buyers

■ Full transparency of inventory levels in real time, leading to better control of inventory, cash flows, and sourcing decisions, plus ability to prove compliance and accountability for delays/defects

Supplier 2

Consumer

Manufacturer Supplier 1

Supplier NRegulator Logistics provider

Dealership

Smart contract flows:1. Manufacturer creates request to purchase raw materials 2. Suppliers notified and submit bids including conditions3. Manufacturers either automatically select a supplier (e.g. first to fill requirements) or to select manually 4. Further clauses added to smart contract (e.g. delay penalties)

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Agricultural supply chain

Blockchain brings the highly regulated agricultural supply chain traceability and transparency across the product life cycle

In a blockchain pilot done by Walmart, the ability to track a mango went from almost 7 days to 2.2 seconds

Current state:

Border crossing

Distribution center

Farm Transportation

ProcessingCustomer Store

Packing house

■ Fraud: Substitution, tampering, misrepresentation

■ Illegal production: Estimated 10-22% of total global fisheries production is unreported/unregulated

■ Foodborne illness: 1 in 6 Americans fall sick from contaminated food and/or beverage per year

■ Recall/ loss: Avg. company cost of recall - $10 million, excluding brand damage & lost sales

Store CustomerDistribution centre

Farm Packing house

Transportation Processing

Every pig smart-tagged

with bar codes in pens

RFID & cameras in slaughterhouse

capture production process

Trucks with temperature &

humidity sensors, and GPS systems

ensure safe conditions

Procurement managers at

distribution centers can remotely trace

all product information

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Jon HimoffBusiness Development DirectorEmail: jon.himoff@insolar.ioMobile: +44 7734 051075

Let’s discuss how we can generate value for your businessDrop us a note to business@insolar.io or visit insolar.io