Blockchain is one of the most discussed topics at the moment. It is designed to be 100% secure, traceable and can also be used to manage assets easily, writes BAS DE VOS, Director of IFS Labs at IFS.
Blockchain is one of the most discussed and intriguing technologies out there today. I won’t go into the specifics too deeply on how it works since that has been covered by many other sources. Suffice it to say that it is a huge, global distributed ledger or database running on many devices and open to anyone within the Blockchain. In the Blockchain, information, or anything of value can be stored. Its purpose is to ensure a 100% secure, verifiable and traceable database protocol.
So far, most use cases have been focused on the financial sector, including transaction management whereby costs are reduced by keeping property ownership and records or using it to track high-value goods such as diamonds. All these cases are about creating secure, verifiable and traceable storage of information. There is, however, a huge untapped market in the area of asset management. Let me highlight this by describing an example from the aviation industry.
Aviation – a highly regulated market with complex supply chains
Take a look at the highly regulated aviation industry. Modern aircrafts consist of roughly 2–3 million parts. It is crucial to know the provenance of these parts, i.e. original manufacturer and exact product model and version, in order to assure that they have the right specification and that they are not counterfeit. In addition, many of these parts are so-called “tracked items”. Not only their provenance, but the entire maintenance history of these parts needs to be transparent.
Today, the many participants in an asset’s lifecycle—from manufacturer to transporters, maintainers and operators—each have their own disparate systems for managing assets. Consequently, it’s quite difficult to establish and maintain a single version of the truth when looking at that asset’s entire lifecycle. Often, these records can be incomplete or still non-digitised, and communication between the different participants is often conducted on paper or even verbally. Lack of standardisation leads to limited traceability and the cost for compliance, if even possible, can be very high.
What if all of these participants submitted a transcript of the transactions into a purpose-specific, distributed ledger, like Blockchain, to which only authorised participants would have access?
The manufacturer would initially start the Blockchain for the asset and each participant would add the relevant blocks to it. The distributor would let the chain’s participants know that the asset was transported from point A to point B, while the operator would register the number of flight hours that the asset has undergone.
Using Blockchain for this asset management scenario would give you a 100% verifiable, 100% traceable and 100% trustworthy history of the asset’s lifecycle in real-time. Each individual participant in the chain still has the features and benefits of their own business applications to run their business.
Potential benefits for the Blockchain participants:
· Improved data quality through minimised need for manual data entry by the various participants
· A single, traceable record of serial numbers
· Complete and more accurate maintenance history
· Increased trust between service providers, suppliers and operators
· Reduced cost for compliance
· More flight hours for the aircrafts thanks to improved reliability of the parts
Integration is key
How do we achieve these benefits in reality? There are several players that need to work together to make this happen: the technology providers like Microsoft (with Azure Blockchain-as-a-Service) must work together with the regulating authorities, such as the FAA, and the airlines and their partners, as well as with software vendors. We all need to work together and be willing to share information to integrate with the Blockchain.
We’re not there yet, as there are still several challenges to overcome. Things like technical performance need to be thought about as latency of transactions and computing power could stand in the way for achieving consensus within a chain. Data ownership, privacy and security must also be addressed.
There are certainly a few things to consider in order to succeed with Blockchain for asset management, but there is a huge potential and possible competitive edge for those who are willing to get in on the ground floor.
IoT at starting gate
South Africa is already past the Internet of Things (IoT) hype cycle and well into the mainstream, writes MARK WALKER, associate vice president of Sub-Saharan Africa at International Data Corporation (IDC).
Projects and pilots are already becoming a commercial reality, tying neatly into the 2017 IDC prediction that 2018 would be the year when the local market took IoT mainstream. Over the next 12-18 months, it is anticipated that IoT implementations will continue to rise in both scope and popularity. Already 23% are in full deployment with 39% in the pilot phase. The value of IoT has been systematically proven and yet its reputation remains tenuous – more than 5% of companies are reluctant to put their money where the trend is – thanks to the shifting sands of IoT perception and success rate.
There are several reasons behind why IoT implementations are failing. The biggest is that organisations don’t know where to start. They know that IoT is something they can harness today and that it can be used to shift outdated modalities and operations. They are aware of the benefits and the case studies. What they don’t know is how to apply this knowledge to their own journey so their IoT story isn’t one of overbearing complexity and rising costs.
Another stumbling block is perception. Yes, there is the futuristic potential with the talking fridge and intelligent desk, but this is not where the real value lies. Organisations are overlooking the challenges that can be solved by realistic IoT, the banal and the boring solutions that leverage systems to deliver on business priorities. IoT’s potential sits within its ability to get the best out of assets and production efficiencies, solving problems in automation, security, and environment.
In addition to this, there is a lack of clarity around return on investment, uncertainty around the benefits, a lack of executive leadership, and concerns around security and the complexities of regulation. Because IoT is an emerging technology there remains a limited awareness of the true extent of its value proposition and yet 66% of organisations are confident that this value exists.
This percentage poses both a problem and opportunity. On one hand, it showcases the local shift in thinking towards IoT as a technology worth investing into. On the other hand, many companies are seeing the competition invest and leaping blindly in the wrong direction. Stop. IoT is not the same for every business.
It is essential that every company makes its own case for IoT based on its needs and outcomes. Does agriculture have the same challenges as mining? Does one mining company have the same challenges as another? The answer is no. Organisations that want their IoT investment to succeed must reject the idea that they can pick up where another has left off. IoT must be relevant to the business outcome that it needs to achieve. While some use cases may apply to most industries based on specific circumstances, there are different realities and priorities that will demand a different approach and starting point.
Ask – what is the business problem right now and how can technology be leveraged to resolve it?
In the agriculture space, there is a need to improve crop yields and livestock management, improve farm productivity and implement environmental monitoring. In the construction and mining industry, safety and emergency response are a priority alongside workforce and production management. Education shifts the lens towards improving delivery and quality of education, access to advanced learning methods and reducing the costs of learning. Smart cities want to improve traffic and efficiently deliver public services and healthcare is focusing on wellness, reducing hospital admissions and the security of assets and inventory management.
The technology and solutions selected must speak to these specific challenges.
If there are no insights used to create an IoT solution, it’s the equivalent of having the fastest Ferrari on Rivonia Road in peak traffic. It makes a fantastic noise, but it isn’t going to move any faster than the broken-down sedan in the next lane. Everyone will be impressed with the Ferrari, but the amount of power and the size of the investment mean nothing. It’s in the wrong place.
What differentiates the IoT successes is how a company leverages data to deliver meaningful value-added predictions and actions for personalised efficiencies, convenience, and improved industry processes. To move forward the organisation needs to focus on the business outcomes and not just the technology. They need to localise and adapt by applying context to the problem that’s being solved and explore innovation through partnerships and experimentation.
ERP underpins food tracking
The food traceability market is expected to reach almost $20 billion by 2022 as increased consumer awareness, strict governance requirements, and advances in technology are resulting in growing standardisation of the segment, says STUART SCANLON, managing director of epic ERP
Just like any data-driven environment, one of the biggest enablers of this is integrated enterprise resource planning (ERP) solutions.
As the name suggests, traceability is the ability to track something through all stages of production, processing, and distribution. When it comes to the food industry, traceability must also enable stakeholders to identify the source of all food inputs that can include anything from raw materials, additives, ingredients, and packaging.
Considering the wealth of data that all these facets generate, it is hardly surprising that systems and processes need to be put in place to manage, analyse, and provide actionable insights. With traceability enabling corrective measures to be taken (think product recalls), having an efficient system is often the difference between life or death when it comes to public health risks.
Sceptics argue that traceability simply requires an extensive data warehouse to be done correctly, the reality is quite different. Yes, there are standard data records to be managed, but the real value lies in how all these components are tied together.
ERP provides the digital glue to enable this. With each stakeholder audience requiring different aspects of traceability (and compliance), it is essential for the producer, distributor, and every other organisation in the supply chain, to manage this effectively in a standardised manner.
With so many different companies involved in the food cycle, many using their own, proprietary systems, just consider the complexity of trying to manage traceability. Organisations must not only contend with local challenges, but global ones as well as the import and export of food are big business drivers.
So, even though traceability is vital to keep track of everything in this complex cycle, it is also imperative to monitor the ingredients and factories where items are produced. Having expansive solutions that must track the entire process from ‘cradle to grave’ is an imperative. Not only is this vital from a safety perspective, but from cost and reputational management aspects as well. Just think of the recent listeriosis issue in South Africa and the impact it has had on all parties in that supply chain.
Thanks to the increasing digital transformation efforts by companies in the food industry, traceability becomes a more effective process. It is no longer a case of using on-premise solutions that can be compromised but having hosted ones that provide more effective fail-safes.
In a market segment that requires strict compliance and regulatory requirements to be met, cloud-based solutions can provide everyone in the supply chain with a more secure (and tamper-resistant) solution than many of the legacy approaches of old.
This is not to say ERP requires the one or the other. Instead, there needs to be a transition provided between the two scenarios that empowers those in the food supply chain to maximise the insights (and benefits) derived from traceability.
Now, more than ever, traceability is a business priority. Having the correct foundation through effective ERP is essential if a business can manage its growth and meet legislative requirements into the future.