To stay ahead of competition, companies have always kept secrets and maintained innovation behind closed doors.
However, new developments seem to both drive and facilitate companies to collaborate more.
In this month’s edition of The Fork News we will take a look at how new technologies like blockchain are facilitating an unprecedented collaboration between organizations in ways previously unthinkable.
These are the items we will discuss this month:
- The Traditional Organization Is Dead – We Need To Get Collaborative
- Insight 1: The Future of Organizations is Collaborative
- Bitfury and Mphasis Partner to Accelerate Digital Transformation in Global Trade
- Insight 2: The Future of International trade is Digital
- Major ocean carriers CMA CGM and MSC to join TradeLens blockchain-enabled shipping platform
- Insight 3: Large corporations are starting to believe in “trust be design”
A recent article by Forbes explains how customers in any sector are demanding immediacy, efficiency, and personalization. In combination with other social, economic, political and technological developments this is transforming organizations around the world, Resulting in the birth of a new type of organization which is customer-centric, connected, and collaborative.
The article goes on to explain how optimizing supply chains is one key way that businesses have changed in reaction to growing consumer needs. seeing organizations around the world connect to enable mass personalization of products or 24/7 customer service. Technologies such as blockchain are enabling this inter connectivity without sacrificing on security or efficiency. And this isn’t the only impact of blockchain. By ensuring traceability for products around the world, blockchain is making businesses more transparent and trustworthy for consumers who are beginning to care much more about where their products come from.
A truly connected value chain means businesses can innovate more quickly and provide better–and more ethical–products and services to increasingly demanding customers. Internally, businesses are transforming the way they work from the bottom up. Siloes are being scrapped, and business units that once ruled the roost are being dissolved forever, all in the name of “agility.” Buzzwords aside, this change is happening here and now. Fostering this sense of collaboration goes beyond offices, projects and individual products. Ensuring interactivity and creating partnerships across the whole value chain is key for businesses to react more quickly to the market and to customer needs.
Insight #1 The Future of organizations is collaborative
Traditional strategies of competing, maintaining secrets and controlling advantages won’t work in the coming years. Forced by new customer demands as well as empowered by new technologies, companies will increasingly have to interconnect, dis intermediate and cooperate both internally as well as externally within value chains full of competing players. They have to do so as if they don’t, others will, making them more efficient and more competitive in the long run. It is very likely we will see only more of this development in the coming years, leading towards a completely interconnected and smart economy.
Featured in an earlier edition of Forked News is a report by the WTO on blockchain and international trade in which they found a wide array that identifies a wide array of platforms that— according WTO— “leverage blockchain technology and smart contracts to streamline financial flows between buyers, sellers and financiers, and enhance the security, speed, transparency and reliability of supply chain financing”. These findings are confirmed by recent studies which demonstrate that blockchain can indeed deliver substantial benefits for all parties involved in supply chain financing, by expediting the process and lowering the overall cost of financing programs.
This has now become more evident as Bitfury Group, one of the world’s leading blockchain technology companies, and Mphasis, an Information Technology solutions provider specializing in cloud and cognitive services, recently announced a strategic partnership to bring new levels of automation, transparency and efficiency to the financial services infrastructure that underpins global trade.
According to Bitfury’s statement, the existing systems that handle mission critical activities such as settlement, liquidity management, and foreign exchange (FX) remain highly outdated, inflexible and disjointed. The result is a complex gridlock that limits visibility for all parties and hinders access to liquidity for those who need it most. Those conditions have contributed to a global $1.5 trillion gap between the demand and supply of trade finance. Together, Bitfury and Mphasis will work on new forms of tokenization to enable instant settlement of trade transactions, reduce reliance on complex FX infrastructures, and increase flexibility in liquidity management for financial institutions.
Insight #2 Inter company Collaboration eases access to trade finance
By connecting supply chain actors on a digital platform, overall trust and efficiency can be increased for every participant. By connecting ERP systems and having transparent money flow, companies can cross check incoming and outgoing goods and thereby proof their current inventory and assets making them more credit worthy. Furthermore, the process of trade finance itself, the agreements between the various parties, the reimbursement of the loans and insurance of goods etc, can all be automated using smart contracts which severely lowers the cost of trade finance. This offers another reason, an extra incentive for companies to start collaborating within a supply chain, even though traditionally this has mostly been avoided.
Bitfury isn’t the only large company that sees the benefit of inter supply chain collaboration. Previously mentioned in the Forked News is TradeLens, a blockchain powered shipping platform by Maersk and IBM, which is now finally gaining traction! As mentioned in the previous update, TradeLens was struggling to sign partnerships as the Intellectual property of the platform would remain in the hands of IBM and Maersk. This is obviously worrisome for their largest competitor and normally a big show stopper for such an initiative. However, recently MSC, the second largest after Maersk; and CMA-CGM, the fourth largest in terms of cargo carrying capacity, decided to join the platform anyway!
The reason for this is that the concerns surrounding the IP of the platform are now somehow addressed. According to an IBM spokeswoman:
“IBM and Maersk continue to be the sole owners of the TradeLens platform. The nature of an effective blockchain is to create an environment where multiple parties, often competitors, want to co-exist. Both CMA CGM and MSC are participating on the advisory board as part of the shared commitment to open governance.”
Marie Wieck, the general manager for IBM Blockchain, said IBM has simply stuck to its blockchain architectural principles of open source collaboration, emphasizing that everyone owns their own data and has the authorization to permit who gets to see that and what the privacy implications are. As CMA CGM and MSC will operate a blockchain node on the Hyperledger Fabric based distributed ledger, they can participate in the consensus and validate transactions. Therefore, although not everyone owns the IP of a platform, the decentralized blockchain architecture is enough for these largest competing shipping companies to actually collaborate with each other on one platform!
Insight #3 Large corporations are starting to believe in “trust be design”
Although the intellectual property of the platform stays in the hands of only one of the competing players, they all decided to work together because they believe in the security and trust that is embedded in the system itself, rather than enforced by law. This shows how attributes of blockchain technology are ideally suited to large networks of disparate partners. Blockchain establishes a shared, immutable record of all the transactions that take place within a network and enables permissioned parties access to this trusted data in real time. By giving equal rights and full data ownership to every involved stakeholder, there is no reason for agreements by law, the parties are simply technologically not able to misuse of manipulate any data in their advantage.
Incorporate these insights:
Are you collaborating with your competitors? Or are you stuck in the old paradigm of protectionism and closed innovation? Collaborating with competitors is like a prisoner’s dilemma, if only one company does it, that company will get a disadvantage, but the more that will do it, the more everyone can benefit from it. Today technology facilitates various forms of collaboration on a global scale, and the biggest companies just started collaborating. How can your organization benefit from collaborating with competitors? What are the pro’s and con’s? Why not start today?
If you have any questions about this or would like our network to think with you, feel free to join our LinkedIn group! We are happy to answer your questions.
This was the 8th issue of the Forks Monthly blockchain for supply chains newsletter. We curate and select the 3 most important blockchain for supply chains article’s every month and share an insight for each article. It is our mission to make sure you get all the info you need to stay ahead of this new technology in one single mail per month.
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