Blockchain revolutionizes the value chain

The still very young technology blockchain is just emerging from the shadow of the digital currency Bitcoin, where it guaranteed a secure money transfer without third-party entities such as banks.

It is no longer only of interest for applications in the financial industry, but increasingly also for use within value chains, especially where data security and data transparency are particularly relevant.

Camelot Innovative Technologies Lab (Camelot ITLab), specialist for the digitalization of value chains, has been working on this technology for more than three years now and offers with Digital Experience² for the first time a service and product portfolio for the identification and implementation of concrete use cases in value chains.

Blockchain technology first came to the attention of a wider public when it was used in connection with cryptocurrencies. At first glance, it seems difficult to build a bridge to the management of value chains, as these are completely different fields of application and processes.

After a more detailed analysis of the supporting pillars of the concept - decentralization, securing the authenticity and immutability of the data, and their guaranteed consistency through trustworthy program sequences (smart contracts) - it quickly becomes clear that numerous application potentials for the blockchain lie dormant, particularly in the value chain.

Elimination of middlemen through blockchain

At the very latest, even the most technology-hungry value chain managers will prick up their ears at the thought of so-called trust machines, which can be realized by combining the four building blocks mentioned above and in many scenarios eliminate costly or data-hungry middlemen.

Within global business networks, numerous problems exist that are now considered to have been solved, but are often only implemented by trustees, clearing houses, notaries or other "trusted third parties".

These service providers make themselves pay dearly for their services, in the form of fees or unpopular data collection. In addition, the processes are becoming increasingly slow and bureaucratic due to the manual intervention that has become necessary.

Often, these are also complicated trade relationships between multiple parties where there is little to no trust.

In such situations, blockchain solutions promise a remedy through the decentralized installation of smart-contract-based distributed applications. They take the place of the aforementioned middlemen.

Companies benefit from an optimization, streamlining and automation-related acceleration of processes. In addition, fraud and incorrect processes can be eliminated.

The formation of such networks is intended to increase trust between business partners. Responsibilities and duties are clear and firmly implemented in the unchanging software network, operation is decentralized, by all participants at the same time.

That may sound like science fiction today. In fact, however, we are talking here about projects that are coming or are currently taking place. It can be assumed that corresponding solutions will already be used productively in the course of the next two to five years.

Blockchain in supply chain management

Blockchain enjoys particular attention in supply chain management. However, as the numerous track & trace initiatives show, the focus is often only on individual blockchain properties such as the unchangeable history of data storage.

While the resulting solutions are often conceptually better than existing implementations without blockchain, they fail to realize the full potential of the technology.

Use cases for blockchain-based "trust engines" and blockchain networks also exist in the supply chain management environment. However, possible imbalances between the partners must be taken into account and it is important to find out in whose favor trust can be established here.

This is because the dominant players in a supply chain could control the use of the blockchain with clearly defined rules for membership, thereby reducing the original blockchain idea of an equal and voluntary network to absurdity.

Many blockchain solutions for the value chain are still in their infancy, despite the currently stabilizing quality of core blockchain technologies. There are still challenges to be solved here, such as scalability with large data volumes.

Nevertheless, there are already a large number of viable use cases today. Why many solution providers still keep them behind closed doors is obvious - the gold in the blockchain-for-business business can no longer be mined in the technology itself, but in the appropriate breakthrough use case, analogous to Bitcoin in the financial industry.

What is Blockchain >>

Use case: Sensor-controlled track & trace ensures complete traceability

The sensor-driven track & trace solution developed by Camelot is used to monitor temperature-sensitive products such as pharmaceuticals to ensure perfect condition throughout the supply chain.

For this purpose, blockchain technology is combined with IoT technology and a digital twin of the sensor used and the product is created in the blockchain. By means of real-time monitoring, the condition of the delivered product is continuously recorded in the blockchain.

Due to the immutability of the information in the blockchain, it is therefore possible to create an unaltered and complete history of the product throughout the entire supply chain.

The decentralized storage of the blockchain prevents counterfeiting. Using the information verified by blockchain technology, recipients of goods - whether manufacturers or end customers - can easily check whether their product still has the original properties, was transported properly and can be used as intended.

This ensures a high level of trust between the parties involved.