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When two chains combine

Supply chain meets blockchain


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When two chains combine | Supply chain meets blockchain

Contents

Introduction 1
Blockchain context 3
Why blockchain makes sense 4
Blockchain industry activity 5
Blockchain considerations and challenges 14
Contacts 16

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When two chains combine | Supply chain meets blockchain

Introduction
In an increasingly digitised world, emerging technologies,
such as blockchain, afford organisations the opportunity
to drive business value throughout their supply networks.
According to Eric Piscini, Principal and Global Blockchain
Leader at Deloitte Consulting LLP in the US,

Supply chains across Building supply chain capabilities with Today’s supply chain challenges and
digital technologies can result in greater how blockchain can help
industries and countries levels of performance. Blockchain is Supply chains encompass the end-to-
will be reimagined, an enabling technology, which is most end flow of information, products and
effective when coupled with other services, and money. The way these
improved and disrupted by next generation technologies such as components are managed affects an
blockchain technologies. Internet of Things (IoT), robotic cognitive organisation's competitive positioning
automation or smart devices. in areas such as product cost, working
We now have safer and capital requirements, speed-to-market,
more efficient ways to In this paper, Deloitte’s and service perception. Organisations
are exploring innovative methods to
connect with business blockchain and supply streamline their supply chains to meet
partners as well as to track chain professionals evolving consumer demands and
optimise efficiencies. Technological
and exchange any type of share insights on how advances are collapsing linear supply
asset. The ability to deploy blockchain-enabled chains into dynamically connected and
always-on digital supply networks (DSN),
blockchain technologies to technology can transforming how businesses exchange
create the next generation mitigate four cross- and share information and assets.
According to a Deloitte 2016 article titled
of digital supply chain industry supply chain ‘Aligning the organisation for its digital
networks and platforms issues — traceability, future,’ 90 percent of organisations feel
they are not adequately prepared for
will be a key element in compliance, flexibility the industry disruptions from these
business success. and stakeholder digital trends. Furthermore, many
believe that 40 percent of Fortune 500
management. The paper companies will not exist in a decade
draws on use cases as a result of these disruptions. These
findings suggest that business leaders
from the pharmaceutical are under growing pressure to innovate
industry (product and reconfigure their supply networks,
maximising value and efficiencies
tracking), automotive while reducing costs in an increasingly
industry (purchasing competitive world.

platform) and food


industry (know your
supplier).

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When two chains combine | Supply chain meets blockchain

Despite DSN enhancements, paper-based mainly on intra-organisational collaboration These issues are felt across industries and
processes are still common, resulting in to gain higher efficiency. need to be addressed before organisations
reduced transparency and collaboration can unlock the hidden value in their
Gindner believes companies should aim to
across networks. Decision making amongst supply chains. David Dalton, Partner and
“achieve higher levels of agility, flexibility and
supply chain actors is further complicated Deloitte EMEA Blockchain Lab sponsor at
transparency, resulting in faster response
by disparate systems which provide limited Deloitte Ireland, believes that “Traceability
times to the ever-changing ecosystem. The
visibility of other functions. Kai Gindner, across supply chains are one of the most
adoption of next generation technologies
Director at Deloitte Switzerland, states that compelling use cases for blockchain
allows for new and more advanced collabo-
for the past two decades, organisations technology.” Blockchain could be the enabler
ration models with the potential to substan-
have been exploring ways to enhance to allow organisations to more effectively
tially improve the supply chain performance
transparency and data sharing across their tackle these problems.
of each node and the entire network.”
networks. These initiatives have focused

Deloitte supply chain professionals have identified four key supply chain pain points that clients are experiencing across the globe:

Traceability Compliance Flexibility Stakeholder


Management
Supply Chain Capability to Standards The ability to adapt Effective
Pain Points monitor events and controls to rapidly to events governance in
and meta data provide evidence or issues, run place to enable
associated with that regulatory various scenarios, communication,
a product conditions without significantly risk reduction
are met increasing and trust among the
operational costs involved parties

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When two chains combine | Supply chain meets blockchain

Blockchain context
Blockchain has been described as an While one of the primary uses of blockchain The implementation of blockchain
information game changer due to its is record keeping, organisations should technology can remediate the
unique capabilities and benefits to provide know that blockchain is much more than aforementioned supply chain pain points
greater information transparency. At its simply an enterprise database. While including traceability, compliance, flexibility,
core, blockchain is a distributed digital databases are suitable for recalling ad hoc and stakeholder management.
ledger that lives on the internet and records queries of large volumes of structured
transactions and events. The technology and relational data that require complete
relies on well-established cryptographic privacy within a single organisation’s
principles and operates as a repository for parameter, blockchain is designed to record
information, which is recorded and shared specific transactions and events that are
through a peer-to-peer community. Within shared across a network of parties where
the decentralised network, all participants transparency and collaboration is required.
maintain their own copy of the ledger, In a supply chain, a private or permissioned
referred to as a node, where they validate blockchain may be implemented, dictating
new entries to the chain through the use of users’ ability to read and write to the
a consensus protocol. blockchain.

Traceability Compliance Flexibility Stakeholder


Management
Supply Chain Capability to Standards The ability to adapt Effective
Pain Points monitor events and controls to rapidly to events governance in
and meta data provide evidence or issues, run place to enable
associated with that regulatory various scenarios, communication,
a product conditions without significantly risk reduction
are met increasing and trust among the
operational costs involved parties

Auditability Immutability Smart Contracts Disintermediation


Blockchain Blockchain provides All blockchain Continuous real-time Blockchain enables
Capabilities a full audit trail of transactions are tracking of data peer-to-peer
data, creating an timestamped and is facilitated interactions which
everlasting means tamper-proof, through the use can be trusted
of record keeping providing a single of smart contracts based on the
along a supply chain source of data across the digital signatures
integrity supply chain

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When two chains combine | Supply chain meets blockchain

Why blockchain makes sense


Globally, Deloitte identifies blockchain as authenticity and quality of goods, impacting
a key technology with inherent capabilities sourcing decisions. The distributed nature of Prototype Highlight: TraceChain
to remediate supply chain inefficiencies. the platform allows for greater oversight and TraceChain, a blockchain-based
Deloitte EMEA Blockchain Lab, Deloitte’s control of products while real-time tracking supply chain solution, enables the
blockchain centre of excellence for EMEA, via smart contracts gives supply chain tracking and tracing of finished goods
deployed its first live blockchain solution stakeholders the flexibility to make rapid and materials, providing users with a
with DNV GL, a business assurance decisions and update inventory levels on a high level of trust that the data they
provider that certifies companies’ continuous basis, thereby reducing working view and store on the chain is correct
processes, products, facilities and supply capital inactivity. and has not been altered by an
chains to national and international unauthorised party. It also provides
The Deloitte EMEA Blockchain Lab is richer data and deeper insights—in
standards, proving the capability of this
working with clients in the retail and near real-time—into a production
technology in a production environment.
consumer products industry to develop pilot process that is predominantly paper-
Blockchain can provide a complete chain
blockchain solutions for supply chain pain based and manual today, thereby
of custody for items that are stored on the
points. reducing counterfeits and increasing
blockchain, from their origin to point of sale.
Furthermore, users can trust the data on trust among partners, stakeholders,
The Deloitte US Blockchain Lab has
the chain due to its immutability and the and consumers.
developed a track and trace proof-of-
use of digital signatures, which enable non- concept ‘TraceChain’ to enhance the TraceChain, a blockchain-based
repudiation capabilities. transparency and visibility of the chain of supply chain solution was developed
custody in global supply chains. by the US Blockchain Lab based on
Blockchain’s tracking capabilities (including
timestamping) provide a full audit trail which interactions with our industry leaders
gives businesses increased confidence in the across the Supply Chain Network.

Q:What is it?
It enables the tracking and tracing
of finished goods and materials,
providing users with a high level of
trust that the data they view and
store on the chain is correct and has
not been altered by an unauthorised
party.

Q:How does it work?


Leveraging blockchain, digital
identities have been created for
all physical goods involved in the
supply chain as well as for the various
actors in the chain such as suppliers,
manufacturers, distributors etc.
The immutable nature of blockchain
enables us to record the complete
chain of custody for every item that
is logged to the blockchain from their
origin to the point of sale. This chain
of custody gives increased confidence
and assurance of the authenticity and
quality of goods that leads to better
sourcing decisions.

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When two chains combine | Supply chain meets blockchain

Blockchain industry activity


Specific use cases have been identified where a contracted manufacturer or traceability of prescription drugs throughout
by Deloitte blockchain professionals distributor either siphons legitimate drugs the entire chain by 2024. Stakeholders are
to exemplify industry-wide challenges and resells them or enters counterfeit under mandate to identify and report any
for supply chain management. These drugs into the supply chain as ‘authentic’ illegitimate drugs in the network within
cases examine product tracking in the units. Although electronic drug pedigree 24 hours. Consequently, pharmaceutical
pharmaceuticals sector, purchasing in the solutions are being implemented to resolve companies are under increased regulatory
automotive industry, and know your supplier traceability issues, these systems still rely pressure to develop innovative and effective
issues in the food industry. on siloed data sources and exchanges ways to track, report, and share information
of information via two-way interactions, with the US Food and Drug Administration
Pharmaceutical industry
suggesting that the marketplace lacks a (FDA) across all stages of the supply chain.
According to the World Health Organization,
technology solution for the problem. Although technologies have been available
it is estimated that up to $200 billion worth
for years, traceability still has nowhere near
of counterfeit pharmaceutical products are In 2013, US Congress enacted the Drug
the level of granularity needed to satisfy
sold globally every year and 50% of these Quality and Security Act (DQSA) to
the new regulations. To improve efficiency,
drugs are purchased online. Counterfeiting improve patient safety. This Act requires
a game-changer is required and blockchain
usually occurs at the manufacturing source pharmaceutical companies to ensure the
could be just that.

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When two chains combine | Supply chain meets blockchain

Supply chain use case #1: ecosystem can (1) access the provenance, tracking drugs on the blockchain throughout
Product tracking refers to the tracing of (2) authenticate items, and (3) prove their lifecycle—from manufacturing to
unit level items (i.e. drugs and medicine) compliance. This is enabled by the real- patients—could facilitate counterfeit
across the end-to-end supply chain time capability and distributed features drug identification or assist drug recall
using blockchain. All stakeholders in the associated with the platform. For example, management.

Pharmaceutical supply chain

Today

Raw Production Distributor Pharmacy/ Patient


Material Hospital
Suppliers

Tomorrow
Pharma
Company

Logistics
Regulator
Providers

Patient Blockchain Pharmacy/


Hospital

Production Raw Material distributed real-time


Suppliers update of information

Distributor

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When two chains combine | Supply chain meets blockchain

How it would work Blockchain platforms could be used to models to meet on-demand preferences,
Tom Hynes, Director at Deloitte Ireland, store information and enforce regulatory and the development of different types
indicates that blockchain is a potential rules across the entire supply chain. Smart of vehicle and in-house vehicle services.
solution that “can help track how drugs contracts used for data storage could follow With the emergence of more tech-
move from the manufacturer to end a simplified structure, such as: oriented products and services, analysis
consumer, providing stakeholders and management of supply chains has
• Add Item—e.g., ID, location, timestamp,
with visibility and improving demand become more difficult. Original Equipment
current stakeholder
management, revenue forecasting and Manufacturers (OEMs) now operate in more
overall performance management.” • Update Item—e.g., ID, new location, new countries than ever before and visibility
timestamp, new stakeholder has worsened across disparate systems. To
Blockchain’s smart contract functionality,
proactively address consumer complaints
along with the use of IoT devices, could • Look Up Item—e.g., ID, retrieve locations, associated with these issues, Asim Kailash
deliver an effective, continuous drug and retrieve stakeholders Agrawal, Manager at Deloitte Malaysia KL,
tracking capability for pharmaceutical
reports that clients in emerging markets, like
stakeholders where the full provenance of IoT devices could help capture the detailed
Southeast Asia, intend to leverage market
a unit, its conditions, authority rights, and information and its flow and provide easy
intelligence in order to “detect product
checkpoint approvals could be accessed access to any stakeholder with credentials to
quality issues at an earlier stage, recall
at any point in time, thereby enhancing retrieve the information. From a regulatory
products quickly, and track the issue back to
the complete audit trail of each item in perspective, depending on legislative
the source.”
the chain. Any deviation, such as the drug requirements, blockchain solutions could
temperature, could be captured through act as a reliable source for entities such as Nicholas Smith, Director at Deloitte UK,
an IoT device, whose data would be input the FDA who could retrieve a full history has noticed that several OEMs are already
and tracked via smart contracts on the of product flows via the blockchain. exploring the potential of blockchain
blockchain. The smart contract rules would Using the same platform, pharmaceutical technology. As it pertains to the supply
then execute notifications and actions to companies could prove their compliance chain of automobiles, he states that the
be taken by the affected stakeholders in with standards. In addition, the ecosystem blockchain provides “great potential in the
charge of that phase of the supply chain. could develop its own in-chain smart tracking, tracing and provenance of parts
Smart contracts could be coded to perform contracts to trigger and notify stakeholders in the upstream supply chain and in truly
specific tasks and trigger diverse responses whenever pre-defined conditions or out of understanding each individual ‘as-built’
depending on the conditions being the ordinary events occurred. vehicle.” Furthermore, inherent capabilities
monitored. This would provide organisations of blockchain, such as immutability and
Product tracking is one of multiple use cases
with the ability to automatically respond to transparency of vehicle records, have
that clearly show how blockchain can be
events. For example, if certain pre-defined the potential to create an aftermarket
leveraged to resolve issues of traceability,
conditions are not met, drugs could be opportunity and a shared purchasing
compliance and flexibility where multiple
recalled before they are released to the platform.
stakeholders depend on one another
market. Using detection capabilities for
for information sharing. Pharmaceutical Supply chain use case #2:
negative conditions and recalling a drug on
companies are already investigating this Purchasing platform:
time could not only reduce stakeholders’
game-changing technology, which promises Purchasing Platform refers to the transfer of
compliance risk but could also prevent the
not only regulatory compliance benefits but value and interaction amongst all tier level
sale of dangerous products and potentially
also end-to-end traceability. suppliers and OEMs along the automotive
protect patients from adverse events.
value chain, facilitating the buying, selling,
Enhancing the contracts with a digital Automotive industry
and reselling of all types of raw material
signature could also provide stakeholders The automotive industry is in the midst of
and car parts. Stakeholders using the
with accurate and accountable tracking a historic change with the rise of disruptive
platform can (1) access information on raw
throughout a drug’s lifecycle, leading to technologies beginning to have a profound
materials, (2) buy and sell raw materials at
disintermediation of the chain by eliminating impact on infrastructure, supply chain and
their disposal, and (3) be held accountable
the need for certification processes by a business models. The influx of these new
for activities and checks. This is enabled
sole authoritative source. technologies is driving industry players
by the real-time capability, smart contracts
to streamline their processes, leading to
functionality, and distributed features
shorter product lifecycles, new business
associated with the platform.

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When two chains combine | Supply chain meets blockchain

Many OEMs today have limited visibility Michael Woodword, Partner at Deloitte UK, leveraging smart contracts. These self-
beyond tier 2 suppliers, and lack meaningful believes that analytics may be improved executing blocks of code could be used to:
insight, particularly regarding raw material and trading relationships may become more
• Store information about supply and
levels. Without the necessary supply chain transparent, enabling “an amplification
demand (how much is being bought and
knowledge or supply chain oversight areas of trust that is an imperative for supplier
sold, how much suppliers have in stock, etc.)
such as working capital, cash flow levels, relationship management.”
and data analysis are impacted, prohibiting • Govern sourcing decisions
How it would work
businesses’ ability to quickly adapt, plan,
A marketplace for selling, reselling, and • Generate requests for materials from
and buy or sell. By incorporating blockchain
buying raw materials could be built buyers, where suppliers could bid on a
enabled solutions into infrastructure,
shared open market platform

Automotive supply chain

Today

Tier N Tier 2 Tier 1 OEM* Dealership


Supplier Supplier Supplier *Original Equipment Manufacturer

Tomorrow

OEM

Non-traditional
Logistics
Tech Suppliers

Digital
Consumer
Blockchain Dealership

distributed real-time
update of information

Tier N Tier 1
Supplier Supplier

Tier 2 Supplier
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When two chains combine | Supply chain meets blockchain

Focusing solely on the open market 3. OEMs could then choose either to charged to the supplier prior to delivery.
platform, the exchange could flow as follows: automatically select a supplier (for Today, stakeholders often have little or no
example, the first supplier to meet the oversight of which player is responsible for
1. An OEM could create a request to
OEM’s requirements) or to select a bottlenecks in the supply chain.
purchase raw materials specifying criteria
supplier manually
such as price, delivery date, etc.
Further clauses could be added to the
2. Suppliers using the platform would be
smart contract to trigger specific events.
notified of the request and could submit
For example, a delay in delivery could result
bids including details of any conditions
in a penalty, which could be automatically
they might wish to impose

Smart contracts in action


Using smart contracts to create a shared marketplace 3A

Automatic buy

1 2 4

For certain
conditions,
Buyer places Bids placed automatically Request closed
request by sellers choose seller

Smart contract Broadcasted Smart contract


created across
3B closed
network

Manual buy

Buyer chooses
the seller

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When two chains combine | Supply chain meets blockchain

The creation of a shared marketplace, using With customers becoming more knowledgeable
blockchain technology, can provide users
with full transparency of their inventory and demanding transparency, it is imperative for
levels along with real-time data updates on organisations to make data—such as of price, source,
supply and demand. Stakeholders benefit
from better control of their inventory, cash authenticity, or even social obligations—accessible.
flows, and sourcing decisions, and can Blockchain-based solutions can provide assurance to
leverage the system to prove compliance or
delays were associated with certain actors not only millennials, but also digital generations, as
in the chain if legal actions are required. access is granted to trusted, secure, and unaltered
According to Lance Younger, Partner at
Deloitte UK, an additional benefit of using information.
blockchain to manage automotive raw
materials is the potential to de-risk the
supply chain “to reduce the cost per part, Food Safety Modernisation Act (FSMA), In order to respond to the influx of
across OEM operations.” introduced in 2011, was an effort to shift regulatory food standards, changing
food companies’ focus from responding to consumer demands, and increasing
As with most industries, automotive food contamination to preventing it. Players competition, food players will need to
clients could significantly reduce costs and must be able to quickly analyse data and explore, test, and leverage innovative
enhance visibility by introducing blockchain continuously track all information to ensure technologies capable of adapting and
technology into the overall supply chain they are making optimal and safe food managing their supply chain activities
network. In addition to real-time analytics decisions. In light of growing regulatory on a real-time basis while delivering full
and improved recall functionalities, the demands, James Cascone, Advisory Partner transparency over their operations and
inherent capabilities of blockchain merit in Deloitte U.S., explains that blockchain maximum efficiency gains.
investigation to determine how they might “provides the traceability required to provide
best benefit businesses. higher levels of assurance regarding the
Food industry chain of custody of food products.”
Like the pharmaceutical industry, the In addition, consumers are using smart
food sector faces increased regulatory devices more often for researching,
pressure from government bodies such purchasing, and reviewing food products
as the US Food and Drug Administration from manufacturers to wholesalers to
(FDA) and Federal Trade Commission restaurants. Instant access to nearly
(FTC) with standards being introduced limitless information has impacted
to enforce food safety protocols and consumers’ expectations, demand for types
waste disposal procedures and provide of food products, and buying decisions.
visibility over food management activities Darshini Dalal, Manager of the Blockchain
across the product life cycle. The FDA’s Lab in Deloitte US, elaborates,

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When two chains combine | Supply chain meets blockchain

Based on client and market experience, According to Paul Sin, Partner at Deloitte China,
Deloitte recognises that restaurants,
retailers, wholesalers, and even suppliers
may not always be able to effectively
In China, sales volume of counterfeit products can be
trace their food products and identify and easily five to ten times to that of authentic ones, with
manage the individuals they have direct
and indirect relationships with across each
alarmingly low quality and safety issues. Blockchain
product’s lifecycle. The main use case at enables the transparency of the supply chain and
play, therefore, is Know Your Supplier (KYS).
provides traceability to the origins. This is not only
Supply chain use case #3:
Know your supplier
a solid business case for sellers but also has a huge
Know Your Supplier (KYS) refers to the positive social impact on food safety.
ability to identify, verify, and endorse
any stakeholder an entity wishes to
conduct or continue to do business with. How it would work 1. Supply chain details (i.e., product
All stakeholders using the platform can Food stakeholders could establish an components and associated lifecycle)
benefit from (1) onboarding simplification, industry-wide platform to onboard and
(2) a shared information repository (i.e. 2. Quality certifications approved by
manage supplier relationships and review
relationship history, provenance of goods regulated bodies (i.e., approved body, date,
the quality of food products along the entire
purchased, associated supplier quality expiry data, date of last testing)
chain. Each user in the ecosystem would use
certificates), and (3) reporting capabilities. a digital identity to access and participate 3. Endorsements given by food stakeholder
This is enabled by the real-time capability, on the platform. Smart contracts could be (i.e., wholesaler, restaurants or end
smart contracts functionality, and created to store and manage meta-data and consumer based their own experience,
distributed features associated with the events associated with supplier onboarding reviews of the food quality)
platform. and relationship maintenance, such as:

Supplier
Food supply chain ID
Company name
Public key
Rating

1 2 3

Supply Chain Details Quality Certification Endorsements


Data Actions: Data: Actions: Data: Actions:
Relationships Add/update Quality Add/update Stakeholder ID Issue
Products: relationship provider ID certificate Status Revoke
Where/When/ Add/update Date Date
How product State Reason

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When two chains combine | Supply chain meets blockchain

By using this onboarding platform, incentivised to maintain quality certificates restaurant or even the end consumer could
restaurants and wholesalers, for example, in order to potentially increase and establish provide a review or rating through the
would have end-to-end visibility over relationships with other upstream activity use of an application, effectively creating
the supplier relationship with real-time players. For example, if ingredients do not a transparent review platform for the
access to monitor and manage all supplier meet quality standards, the regulated entity ecosystem. This would be the first platform
relationships. Currently, this is not possible could revoke the quality certificate and to enable all supply chain stakeholders
in the marketplace. Platform users notify everyone in the network who has a to interact with one another directly
would have a complete audit trail of food relationship directly or indirectly with that and share reviews to better improve the
ingredients they buy from the associated supplier. Receiving real-time updates on food experience for all. As restaurants
supplier and could prove the product is of food quality ingredients enables upstream become more technologically savvy, the
specified quality by checking the quality players to make better sourcing and incorporation of such applications into
certificates of each ingredient uploaded purchasing decisions and reduces the risk their service offerings would impact their
by the regulated bodies. Given that all of reputational damage as there is more consumer base. Food critics’ reviews and
information (i.e., supplier profile, certified visibility of downstream activities. ratings could be incorporated into the
qualifications, food materials) added to the solution to provide the end consumer with a
Endorsements could be provided by
chain is timestamped, users could retrieve 360 degree view of the food they are eating.
anyone who has direct contact with the
a full history of the stakeholder relationship
food ingredient. For example, a wholesaler,
and associated activities. Suppliers are

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When two chains combine | Supply chain meets blockchain

Food supply chain

Today

Input Farmers Aggregators Processors Wholesalers/ Retail


Providers Restaurants Consumers

Tomorrow

Input
Providers

Non-traditional
Logistics
Tech Suppliers

Aggregators Blockchain Retail


Consumers

Processors Regulator distributed real-time


update of information

Wholesalers/
Restaurants

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When two chains combine | Supply chain meets blockchain

Blockchain considerations and challenges


It is critical that organisations conduct a Data ownership Implementing an emerging technology
comprehensive review and assessment • Concern: A third party might own the invariably causes businesses to hesitate.
to ensure they can introduce controls to supply chain data. However, thorough evaluation of the
mitigate and manage the issues associated aforementioned considerations will
• Mitigation: Suppliers would need to
with blockchain implementation. Careful likely alleviate the risks associated with
be incentivised to share data and use
evaluation of risks using Deloitte’s a blockchain implementation. Above all
the blockchain in conjunction with their
Blockchain Readiness Framework can set other considerations, creating a blockchain
internal local data system.
the foundations of a prosperous blockchain strategy today will support entities in
journey. An organisation’s appetite for the Transaction volume managing and developing solutions, which
risks associated with blockchain may be • Concern: Competitors might be able to can then be shared across the business,
measured across three primary domains: determine how much merchandise is remediating existing challenges and creating
Standard Risk, Value Transfer Risk, and moving. operational efficiency gains.
Smart Contract Risk. Additionally, matters
• Mitigation: The contents of a tracking How to take action
such as levels of market adoption and
record on the blockchain can be Launching a blockchain journey may be
regulatory involvement raise concerns
encrypted. simplified by planning the approach in the
across most nascent technologies.
incremental steps shown below:
Increased transparency, an inherent
capability and the most notable advantage
of blockchain, may cause some businesses How to take action
to think twice before progressing towards
implementation due to concerns about
competitive advantage and security. Internal Socialisation
1
Step
However, the most common concerns, Begin the discussion now in order to gauge business and IT interest in
detailed below, may be mitigated by the potential applicability of blockchain within your business
effective planning.

Source visibility Education

2
• Concern: Competitors might be able to Having secured internal buy-in for the potential use of blockchain,
view supply chain sourcing details. invest in establishing a working knowledge of the technology (what it is,
associated benefits, different types, etc.)
• Mitigation: The identities of parties
involved in a transaction or movement
of goods are hidden. Only their public Ideation

3
keys are visible to the rest of the network. Step Team with experts to determine the art of the possible for blockchain as
New public keys can be used for each it relates to your business, including the creation of a blockchain strategy
transaction for added security. and prioritisation of use cases

Supply chain security


Use Case Design
• Concern: Using distributed ledger

4
Step Select the targeted use case and define the supporting architecture
technology might put supply chains at risk
of a cyber-attack. and Minimum Viable Ecosystem (note that it is often advantageous to
start small as it allows for a quick win and demonstration of blockchain’s
• Mitigation: Blockchain’s underlying potential)
capabilities provide data confidentiality,
integrity and availability, but as with any
Implementation
other technology, organisations need
5
Step Rapidly progress the prioritised use case through iterative cycles,
to have in place robust cyber defence
establishing a go-to-market approach, business case and method to
strategies.
create a commercial-scale product

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When two chains combine | Supply chain meets blockchain

Blockchain’s capabilities in supply chain and to shape how blockchain technology will
management is an increasingly popular function in their industry. With challenges
topic, with proofs-of-concept being and risks clearly defined and evaluated, the
developed across all industries. Early final consideration is whether your business
entrants have the opportunity to team with is ready to explore the new frontier of
regulatory parties and founding providers blockchain technology.

Contacts
Authors Contributors

Lory Kehoe Eric Piscini


Director Principal, Global Blockchain
Deloitte Ireland Leader
lkehoe@deloitte.ie Deloitte Consulting LLP
episcini@deloitte.com
Kai Gindner
Director Guilherme Campos
Deloitte Switzerland Senior Consultant
kgindner@deloitte.ch Deloitte Ireland
guicampos@deloitte.ie
Darshini Dalal
Manager Shruti Jain
Deloitte Consulting LLP Consultant
ddalal@deloitte.com Deloitte Switzerland
shrutijajain@deloitte.ch
Danielle Andrzejewski
Senior Consultant
Deloitte Consulting LLP
dandrzejewski@deloitte.com

Niamh O’Connell
Consultant
Deloitte Ireland
nioconnell@deloitte.ie

Special Acknowledgments

We wish to extend our thanks to Deloitte global blockchain and industry


professionals from six different member firms namely Canada, China, Ireland,
Malaysia, Switzerland, U.K and the U.S. Specific thanks goes to Richard Bradley,
James Cascone, David Dalton, Jonathon Fox, Tom Hynes, Asim Kailash Agrawal,
Sarah Noble, Paul Sin, Nicholas Smith, Sunita Suryanarayan, Michael Woodword
and Lance Younger for their support of this publication.

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When two chains combine | Supply chain meets blockchain

Global Blockchain Labs


Deloitte Americas Blockchain Lab Deloitte APAC Blockchain Lab Deloitte EMEA Blockchain Lab
30 Rockefeller Plaza 35/F One Pacific Place, Whitaker Court,
New York, NY 10112-0015 88 Queensway, Sir John Rogerson’s Quay,
usblockchainlab@deloitte.com Hong Kong Dublin 2,
apblockchain@deloitte.com Ireland
EMEABlockchainLab@deloitte.ie

References
i Gerald C. Kane, Doug Palmer, Anh Nguyen v U.S. Food and Drug Administration,
Phillips, David Kiron, & Natasha Buckley, “Drug Supply Chain Security Act
“Aligning the organization for its digital (DSCSA),” retrieved October 2017,
future,” Deloitte Consulting LLP, July, 2016, https://www.fda.gov/Drugs/DrugSafety/
https://dupress.deloitte.com/dup-us-en/ DrugIntegrityandSupplyChainSecurity/
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