Blockchain applied to global supply chain

Supply chains are logical candidates for applying blockchain. I was reading a great application from Covantis who specialise in automating and making workflow way more efficient. Supply chains are complex processes which can be.

• Repetitive
• Manual
• Costly
• Time consuming

The Business Problem

Over the last decade, global trade leaders have attempted to drive standardization and simplification across the agricultural commodity trading industry with the use of e-BLs and electronic documents, with limited success. Today, industry processes remain complex and inefficient due to:

• Manual processes: Post-trade processes for bulk shipments remain labor-intensive and manual with paperwork couriered around, and often repeatedly re-entered—increasing both operating costs and risks of human error.
• Reliance on email: More than 275 million emails are exchanged annually to process the estimated 11,000 worldwide shipments of grain transported across the oceans. (Source: The IPPC ePhyto Solution, The Food and Agricultural Organization of the United Nations)
• Inefficient data exchange: Paper-based certificates and bills of lading are not easily exchanged among multiple parties. It is costly to replace paper-based certificates if they are misplaced.

Specifically in the context of COVID-19, agricultural commodity supply chains have been disrupted by interruptions to paper document deliveries, and the increasing necessity to work from home. The global pandemic has accelerated the importance of the industry’s digital transformation, necessitating an easier way to electronically exchange documents and data.

The Covantis Solution

The Covantis blockchain platform allows industry participants to collaborate and seamlessly exchange documents and information. The technology works toward achieving the following efficiency gains as estimated by Covantis:

• 60% of execution tasks automated
• 70% increase in transaction speed
• 90% reduction in rekeyed entries
• 80% decrease in error rates and inconsistencies

Lety’s take a deeper dive into how this works.

Industry Pain Points

• Inefficient manual processes and repetitive paper-based documents necessitate heavy data reconciliation, intensive audits, long processing times, and high operating costs
• A lack of common standards and disjointed coordination between multiple stakeholders results in slow clearance of goods
• Lack of transparency and limited visibility over tracking of goods and settlement of trades reinforces counterparty risks

Key Platform Benefits

• A common trusted platform facilitating the following transformations:
  • Digitized documents and automated business processes
  • Improved security and reliability of documents and data
  • Reduced need for manual data re-entry and review
  • Secure and seamless information exchange among platform participants
  • Real time visibility of information among platform participants
  • Secure and auditable transactions 
• Greater visibility across supply-chain movements underpinning transactions, leading to reduced costs and operational risks associated with shipping, storage and wait times
• Standardized data to drive further efficiencies, reducing manual errors, and risks of fraud or data manipulation
• Increased supply chain efficiency, transparency, and traceability, enabling the industry to better serve its customers and consumers.

Key Platform Features

• Company registry: Customer registry and onboarding
• External vessel registry: Connection to external vessel databases
• Notification and task management: Transaction notifications and task progress tracking
• User and role management: Customer identity and role permissioning managed by Covantis based on contextual supply chain/voyage roles
• Messaging tool: Contextual chat feature connecting customers with other participating legal entities in real-time.
• Document management: Document download, upload, and transmission to participating legal entities.
• Voyage management: A voyage dashboard summarizes all pending actions and presents a visualization of contract execution progress. Users can input voyage details and manage nominations including creation, forwarding, withdrawal, substitutions, and amendments. 

User Permissions and Data Confidentiality

While providing increased visibility on the trade execution process, the platform is built on industry best practices. Each user is only extended permissions related to their role. The platform leverages standard and reliable encryption algorithms to ensure the confidentiality of transactional data as well as the non-repudiation of messages and nominations. Each customer uses a pair of cryptographic keys that unequivocally identifies them and every action that is performed in the system.

Encouraging Industry Adoption

Covantis aimed to build a transformative solution for the entire trading and shipping industry with agriculture commodities as a starting point. To do so, they onboarded hundreds of users from over 45 legal entities.

To read more about the Covantis platform you can visit this article from Consensys: