Blockchain has been heavily piloted across the breadth of supply chains over the last couple of years, but one aspect that is still desired is the possibility of interoperability between different blockchain networks. In an ideal world where blockchain has significant mainstream adoption, interoperability would be crucial because it would bring unrelated blockchain networks together, thus making a variety of services and data accessible across several stakeholders.
At the Blockchain Expo 2019, a panel discussed the importance of interoperability in the blockchain landscape and the issues that need to be overcome to create interlinked blockchain networks. Dean Croke, chief insights officer at the Blockchain in Transport Alliance (BiTA), spoke about BiTA’s founding two years ago to foster blockchain adoption within supply chain operations and to create open data standards on which solutions could be built. “BiTA was formed with a view to not repeat the same mistakes the industry made with B2B communication methods,” he said.
Though there have been standards developed for B2B communication, they have never had mainstream success. Companies ignored the standards and opted for customized data protocols that could not sync with the way data was collected by competitors in the market, leading to a disconnect between stakeholders, and making it impossible for meaningful data sharing to materialize.
Companies working in blockchain today are primarily motivated by the advantages it could potentially bring for the first movers. In many ways, early adoption and experimentation were caused by the fear of missing out (FOMO), which played a vital role in bringing stakeholders to the table to discuss standards and how they could benefit from a streamlined ecosystem.
Harry Mylonadis, head of technology & innovation at ENGIE International Facilities Management, argued that companies want to buy into the premise of blockchain as it helps them get visibility into provenance and the history of a product’s movement across the supply chain. It also helps with trust issues as the data that comes into the system has reliability, which is critical if stakeholders in a value chain are to work together.
“The development of open standards across industries is one of the main goals, and consortiums like BiTA are at the heart of the efforts,” said Matthieu Lux, senior blockchain consultant at Deloitte Ventures’ UK Blockchain Studio. Data governance and standardization is the first step towards creating interoperability between companies across different niches, especially long-time market incumbents that are new to the technology space.
Trusting a single blockchain network might be relatively easy for companies, considering the prospect that broader interlinked blockchain networks bring to the table. Lux explained that interoperable blockchains have stakeholders from radically different niches who are providing data and also seeking data – making it a lot more complex to authenticate and certify. Companies fear a breach of trust within the system which could potentially jeopardize their market standing.
Croke spoke on how paperwork and the lack of interoperability within existing systems create delays for people and freight moving across borders. He cited the delays that are caused at the ports when paperwork is misplaced or lost. And even without delays caused by unfortunate circumstances, freight still sits at the port for many days, as authorities wait for shipping information and government document approval.
Though blockchain does advantages, there are situations within supply chains where it still cannot help. For instance, blockchain has found several use cases within the global food supply chain, but it is still unclear on how technology can help attest to the type of feed a farmer gives to his farm or livestock. Tracking, at the moment, can only go so far in keeping a tab on food produce movement within the supply chain, but is by no means pervasive.
That apart, the very real problem that impedes blockchain adoption is convincing companies to work together to create a common and open data standard for blockchain solutions. “This is a challenge, because it is about getting people to think of fixing something that they believe is not broken,” said Croke.
Data standard isolation is a problem. Though the railroad, air and maritime industries have developed standards in the past, none of them are interoperable. Croke explained that BiTA was trying to consolidate every standard within the logistics realm, which will drive efficiency and seamless freight movement. He pointed out that this is not an easy venture, nor something that can be achieved in a short time span.
“If you think of the evolution of cloud storage, it took about 10 years for companies to move from using ERP to pushing data to the cloud. I think it is going to take time for companies to migrate to blockchain networks, just like with every other major tech development,” he said. “We believe the maturation of this technology will happen by 2025. We see hurdles like lack of involvement, but we know we have a better way and it is about convincing them to come on board.”