The IOTA Foundation, the organization behind the IOTA open source distributed ledger technology built for the Internet of Things, ensures that every transaction item within a global supply chain is tracked and sourced using a distributed ledger. I envision a future where Thanks to the collaboration between the IOTA Foundation and TradeMark East Africa (TMEA), this vision is already becoming a reality in East Africa. Together, these organizations are tackling the challenge of digitizing the export process for Kenyan flower exporters, airlines and freight forwarders.
TMEA found that in just one transaction, African entrepreneurs completed an average of 200 communications, including 96 paper documents. Developed by the IOTA Foundation and his TMEA, the system anchors important trade documents on Tangle, a new type of distributed ledger technology that differs from traditional blockchain models, and shares them with customs authorities of destination countries. This will speed up the export process and increase the international competitiveness of African companies.
What’s behind this initiative from a technology perspective? This was recently shared by José Manuel Cantera, Technical Analyst and Project Lead at the IOTA Foundation. As an overview, the following are used:
- EPCIS 2.0 data serialization format for data interoperability
- An IOTA distributed ledger that registers all events that occur within the supply chain
- ScyllaDB NoSQL for scalable and resilient persistent storage
Let’s dive into the details by taking a closer look at two specific use cases: cross-border trade and end-to-end supply chain traceability. But first, here’s Cantera’s take on the technical challenges associated with digitizing supply chains.
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Digitizing the Supply Chain: Key Technical Challenges
Cantera started by introducing the three most pressing technological challenges associated with digitizing supply chains.
First, there are multiple actors and systems that generate data and integrate it across the supply chain, and it is important to verify their identities. Suppliers, OEMs, food processors, brands, recyclers, consumers, ports, carriers, ground carriers, inspectors/authorities, carriers, customs, dealers, repairers, etc. are involved and verified is needed.
Second, all these actors have multiple relationships, and these relationships transcend national borders, with no central anchor or single source of truth. There are also business-to-government and government-to-government relationships.
Third, there are various functional needs related to maintaining trust between different actors through verifiable data. Traceability is key here. This enables compliance, product reliability, transparency and provenance across many different types of applications. For example, traceability is essential for ethical sourcing, food safety, and effective recalls.
Use Case 1: Cross-Border Trade
As a first example, Cantera looks to cross-border trade operations.
“It’s a multi-layered domain, with different problems that have to be solved in different places,” he warns, before sharing the picture that controls the very complex state of affairs.
The main flow here is:
- Financial procedures: A purely financial transaction between two parties
- Transaction procedure: All documents related to commercial transactions
- Transport procedure: All details regarding the transportation of goods
- Regulator procedure: Various documents that must be exchanged between importers and exporters and between public authorities in corporate-government relations
How is the IOTA Foundation working to optimize this complex, multi-layered domain? Whenever a shipment moves between East Africa and Europe, all trade certificates, all documents can be verified at once by different parties and the authenticity and provenance of documents can be properly tracked. The result is greater agility in the trading process. more efficient and effective. ”
All actors in the flow visualized above are sharing documents via the infrastructure provided by the IOTA distributed ledger using the architecture detailed after the second use case below. increase.
Use case 2: End-to-end supply chain traceability
In addition to addressing document sharing and verification for cross-border transactions, there are other challenges. It is to track the origin of traded items. Cantera emphasizes that when thinking about traceability, we need to think about the United Nations definition of traceability. Sustainability advocacy in the areas of human rights, labor (including health and safety), the environment and anti-corruption. ”
In principle, traceability means being able to trace history. For trade goods, this means knowing what’s going on with that particular trade goods — not just transportation, but also its origin. If one of the parties involved in his supply chain makes claims about sustainability, safety, etc., the validity of those claims must be verifiable.
For example, consider a seemingly simple bag of potato chips. A farmer sells potatoes to a food processor, which processes them into bags of potato chips. When growing potatoes, farmers used fertilizers produced by different manufacturers and containing raw materials from different farmers. Food processors also use oil from yet another source when processing potatoes into potato chips. etc. Potatoes, manure, oil, bags of potato chips, all this history needs to be known for the traceability of bags of potato chips.
All these details (when the potatoes were harvested, what fertilizer was used, where the fertilizer came from, etc.) are all considered significant events. And each of these key tracking events has key data elements that describe who, what, when, where, why and how.
How IOTA Addressed Key Technical Challenges
The IOTA Foundation has applied several core technologies to address the most important technical challenges across these use cases.
- Data interoperability
- scalable data store
- Scalable, Permissionless, Feelless Distributed Ledger Technology
These and similar use cases require many different actors to exchange data, so a standard syntax with reference vocabularies is needed for semantic interoperability. Additionally, everything should be extensible to meet the specialized needs of different industries (for example, the automotive industry is more nuanced than the seafood industry). Key technologies used here include W3C with JSON-LD, GS1 with EPCIS 2.0, and UN/CEFACT which provides the edi3 reference data model. IOTA also used sectoral standards for data interoperability. For example, DCSA (Sea Transport), MOBI (Connected Vehicles and his IoT Commerce) and Global Dialogue on Seafood Traceability.
It is worth noting that IOTA was heavily involved in the development of EPCIS 2.0. EPCIS 2.0 is a vocabulary and data model (and a JSON-based serialization format and accompanying REST API). This allows stakeholders to share transactional information about the movement and status of objects (physical or digital) identified by keys. Using this model, an event would be described as:
This translates to JSON-LD in a format similar to:
Scalable data store with ScyllaDB NoSQL
Establishing a scalable data store for all critical data related to each supply chain event was another challenge. Cantera explains: ScyllaDB has many advantages here. You can scale your data very easily. Data can be retained for long periods of time at a finer granularity level. Not only that, but you can combine the best of the NoSQL and SQL worlds by being able to have robust data and a robust schema to hold your trusted data. ”
Cantera then elaborated on ScyllaDB’s role in this architecture and gave an example of an automotive supply chain. Consider his OEM, which makes 10 million cars a year. Assuming:
- Each car has 3,000 trackable parts.
- Each part has a life of 10 years.
- Each part can generate 10 business events.
This equates to storing approximately 300 billion active business events in ScyllaDB. Another example: Consider a shipping company that moves 50 million containers annually. Given that there are 10 events per container and a 5 year lifespan, Cantera estimates that there are about 2,500,000 active events here just from the EPCIS 2.0 event repository. But there are additional layers that require this level of data scalability.
He concludes his discussion on this challenge by looking at the many applications of ScyllaDB throughout the initiative.
- Event repository (EPCIS 2.0, DCSA, etc.)
- Item level tracking
- Any DLT layer 2 data storage
Scalable, Permissionless, Feelless Distributed Ledger Technology
Scalable, permissionless and feelless distributed ledger technology also played a key role in the solution designed by the IOTA Foundation. To this end, he leverages his IOTA distributed ledger in combination with protected storage like IPFS to provide features around verifiability, auditability, and immutability of data and documents in these peer-to-peer interactions. provided.
For example, suppose you hire a particular carrier to move your goods. When an activity starts, the transporter can generate events that traded items have started moving down her chain of supply, and these events are committed to her IOTA distributed ledger. More specifically, the originator of an event can generate a transaction on the distributed ledger, which can later be used by any participant in the supply chain to verify the authenticity of the event. And once the event is committed, the caller cannot change it. If the event is altered, the validation step will fail, which can be understandably concerning for her partners in the supply chain.
Here’s how to put it all together.
Tip: See the video below starting at 17:15 for a block-by-block tour of Cantera for this reference architecture.
The digitization of supply chains is fraught with technical challenges, so it is not surprising that a combination of unconventional technologies is required to meet the highly specialized needs of the IOTA Foundation. Cantera sums it up nicely:
“This requires interoperability, which means complying with EPCIS 2.0, an open standard for decentralized identities derived from W3C verifiable credentials. Semantic interoperability and some We need a reference architecture that ensures that reusable building blocks are used, which requires decentralization, and decentralization of data requires distributed ledger technology, especially complemented by IPFS. In need of a public, permissionless and feeless distribution layer like IOTA, which increasingly relies on decentralized applications, and in need of data scalability and availability, ScyllaDB is the perfect partner here. Last but not least, we need trusted data sharing through technologies such as distributed identities, distributed ledger technology, and peer-to-peer.”