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IOTA Distributed Ledger: Beyond Blockchain for Supply Chains

The IOTA Foundation, the organization behind the IOTA open source distributed ledger technology built for the Internet of Things, envisions a future where every single trade item in the global supply chain is tracked and its provenance sourced using distributed ledgers. This vision is already becoming a reality in East Africa, thanks to the collaboration of the IOTA Foundation and TradeMark East Africa (TMEA). These organizations have teamed up to address the challenge of digitizing the export process for Kenya’s flower exporters, airlines and freight forwarders.

TMEA found that for just a single transaction, an African entrepreneur was completing an average of 200 communications, including 96 paper documents. The system developed by the IOTA Foundation and TMEA anchors the key trade documents on the Tangle, a new type of distributed ledger technology different from the traditional blockchain model, and shares them with customs in destination countries. This expedites the export process and makes African companies more competitive globally.

What’s behind this initiative from a technology perspective? That’s what José Manuel Cantera, technical analyst and project Lead at IOTA Foundation, recently shared. From a bird’s-eye view, it involves using:

  • EPCIS 2.0 data serialization formats for data interoperability
  • IOTA distributed ledgers to register every event happening within supply chains
  • ScyllaDB NoSQL for scalable, resilient persistent storage

Let’s dive into the details with a close look at two specific use cases: cross-border trade and end-to-end supply chain traceability. But first, Cantera’s perspective on the technical challenges associated with supply chain digitization.

Cantera crafted this talk for ScyllaDB Summit, a virtual conference for exploring what’s needed to power instantaneous experiences with massive distributed datasets. Register now (free + virtual) to join us live for ScyllaDB Summit 2023 featuring experts from Discord, Hulu, Strava, Epic Games, ScyllaDB and more, plus industry leaders on the latest in WebAssembly, Rust, NoSQL, SQL and event streaming trends. 

Supply Chain Digitization: Top Technical Challenges

Cantera began ins by introducing three of the most pressing technical challenges associated with supply chain digitization.

First, there are multiple actors and systems generating data and integrating data across the supply chain — and verifying the identity of each is critical. Suppliers, OEMs, food processors, brands, recycling agents, consumers, ports, carriers, ground transporters, inspectors/authorities, freight forwarders, customs, dealers, repairers, etc. are all involved, and all must be verified.

Second, there are multiple relationships across all these actors, and these relationships cross borders with no central anchor and no single source of truth. In addition to business-to-business and business-to-consumer, there are also business-to-government and government-to-government relationships.

Third, there are different functional needs related to maintaining trust between the different actors through verifiable data. Traceability is key here. It’s an enabler for compliance, product authenticity, transparency and provenance with a view to different kinds of applications. For example, traceability is essential for ethical sourcing, food safety and effective recalls.

Use Case 1: Cross-Border Trade

For his first example, Cantera turns to cross-border trade operations.

“This is a multilayered domain, and there are many different problems that have to be solved in different places,” he warns before sharing a diagram that reins in the enormous complexity of the situation:

The key flows here are:

  • Financial procedures: The pure financial transaction between the two parties
  • Trade procedures: Any kind of document related to a commercial transaction
  • Transportation procedures: All the details about transporting the goods
  • Regulator procedures: The many different documents that must be exchanged between importers and exporters, as well with the public authorities in the business-to-government relationships

So how is the IOTA Foundation working to optimize this complex and multilayered domain? Cantera explains, “We are allowing different actors, different government agencies and the private actors (traders) to share documents and to verify documents in one shot. Whenever a consignment moves between East Africa and Europe, all the trade certificates, all the documents can be verified in one shot by the different actors, and the authenticity and the provenance of the documents can be traced properly. And as a result, the agility of the trade processes is improved. It’s more efficient and more…

Read More: IOTA Distributed Ledger: Beyond Blockchain for Supply Chains

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