 an A session at the end. All right. Thanks, David, for recording this. Thank you, everyone, for joining. Another round of the Washington DC chapter of Hyperledger. My name is Daniel Yim. I'm the organizer for the Washington DC chapter. And we do have a couple of our guest speakers here, Tom Klein and Jeff Stolman. They are the leaders for the Hyperledger supply chain special interest group. So if any of you are interested in joining their group, please reach out to them separately. Maybe some of you are already involved. But we have some interesting topic here as we all kind of dig into the art of possibility and some of the use cases for blockchain. At least for me, one of the use cases that I always thought as sort of a no-brainer, of course, it works with supply chain management. In many ways, it makes sense because it allows the users to keep track of where in the supply chain your merchandise or whatever you're sending is at oftentimes in real time through help of IoT devices. But this is a very interesting topic, very relevant for our current landscape and very realistic and practical. So I'll let our experts get into it. Why don't we start with a short introduction? Tom, do you want to go and kick it off? Sure. I'll hear. I'll even go for a little how come I can't move forward on my charts? There we go. Here you can see our smiling faces here. So Tom Klein, as Daniel said, I'm one of the co-chairs for the Hyperledger supply chain special interest group. I've been involved with it from last year, actually, when I was out in Phoenix the week before everything shut down at the Global Forum for Hyperledger. I've been very interested in logistics and supply chain and got involved and it's been a very good group here and decided to work with it. My background, I worked at IBM an awfully long time, retired there back in 2017. And I said, you know, what's next? And I've always loved systems, true story here. Back in college, I took a class that was advertised as a systems class. It turned out to be an assembler language programming class, which was totally different. And I knew it at the time that it wasn't right, but with 300 students and being, you know, college student, I wasn't ready to challenge the professor. And I kind of view blockchain as kind of, I don't know if it's penultimate, because I'll be something after blockchain, but it's certainly a great representation to allow us to take from individual systems and really talk about ecosystems out there. I'm also interested in sustainability. I took a certification class and we'll talk a little bit about that a little bit earlier this year. And I also am on the IEEE 2145, that doesn't mean anything really around governance around blockchain. And I'll talk a little bit more about that later on. Jeff, you want to go and introduce yourself? Sure. Jeff Stolman. I too have a legacy at IBM. I retired a bit earlier than Tom did and have been an independent consultant ever since. And like Daniel, it occurred to me when I heard about blockchain that that was a natural, supply chain was a natural. And I actually, my real introduction to blockchain was developing solutions for supply chain, actually have some pending patents in that specifically in supply chain, as well as for some enterprise tools for rapid block validation and for migration of block chains from one to another so you don't have blockchain lock-in. And I've been working on various supply chain related scenarios, designing solutions for them. And I think for the most part, it's actually a very doable, doable area unlike some other areas. But of course, it has its challenges and depending on what, which supply chain you want to talk about, it's can be easier or hard. And we'll get into that as we go into some examples. Good deal. Thanks, Jeff. Daniel, you okay if we roll from here? Okay. Good deal. So as everyone said, supply chain definitely seems like a natural here. There's tons of interest. There's lots of work going on. There's lots of startups out there in the supply chain space. And really supply chain touches everything. And you really can even think about supply chain. We think of it usually in terms of physical goods. But in this case, you can even think about a data supply chain. And some of the same concepts are going to come into play here as we're going along. We're going to assume that everyone here knows about blockchain. If you, since we're doing this in Washington, or at least that's the origin of this, there's some really good NIST white papers out there on the basics of blockchain, one around identity, and then one around tokenization that I found very helpful. And there's 80 pages, but they have the executive summary that'll give you a little bit of flavor for maybe some of the underpinnings of this, if that's where you're starting off right now. I'll post those in the chat so people can see them. Okay, great. Thank you. Here, since I'm running off of my laptop, I'm not going to mess with things here, Jeff. So since it's a hyperledger session here, anti-trust policy, these are open meetings. Please don't share any competitive information since we're governed by any trust and competition laws here in the United States. Okay. So we talked about presenters. We're going to try to focus at a higher level here, not so much the technical ins and outs. There's certainly plenty of opportunity to talk about that. We're going to stay at a higher level here about supply chain across the board here. In questions along the way, if there's something we can either, we can try to snap to it if you'd like some clarity on something or we'll have time at the end also to have a longer discussion. And even before we start the recording here, we have a discussion about tokenization that maybe goes offline. Maybe we have time at the end. Okay, we already talked about that. So here's a nice word cloud. And we're going to talk about supply chain in the more general sense because a lot of people think about supply chain just in terms of logistics. But it really is, the logistics is part of it, but really it really starts from where something actually comes and how do you get it and what is, what's that all about to how it gets there, the logistics to how does it turn into something and then how does it get to consumer and or some sort of end user and how does what's the feedback loop associated with that. So we're going to talk about in a broader sense, think about things like ERPs, enterprise research planning, think about TMS's transportation management system, think about WMS's warehouse management system, or warehouse execution systems, think about OMS's order management systems out there. All of these, even procurement systems come into play within supply chains because you want to procure stuff that can get it at the right time, at the right price, etc, etc here. So think about this in a broader sense with supply chain. And that's the way that we're thinking about it. Okay, so in this area, there's certainly lots of challenges that come along with this and transition, transformation, resilience, we're going to talk about those and I'm going to turn it over to Jeff. And, you know, at the world right now, the marketplace is demanding continuing, continuing innovation. It's not like we can stay the same. Resilience, I mean, there always needs to be a plan B in some way, shape or form, and we all have heard over the last couple of years, well, last year or so as we fully get out what's happening with coronavirus, that efficiency isn't the be all to end all. And from a blockchain perspective, people are even realizing blockchain, not even a blockchain supply chain, platform based economies are not all they're cracked up to be. And so blockchain provides an ability to potentially an ability to execute and make take away some of the challenges associated with platform based economies or the resilience issues that are out there right now. Although realistically, I think if we could have, if blockchain was underpinning all of the current supply chain world and these ecosystems about there, we'd, I think we'd still have the same. So we'd have similar supply chain issues because these are pretty dramatic. But I think the edge would be off of them, you know, maybe instead of 500 ships off the Port of Long Beach, or Long Beach, Los Angeles, maybe it's 20 ships or something like that or 10 ships or something along that lines. In legal regulatory, usually laws are put together with the best intention with the devil in the details. And blockchain has the potential and can maybe take, make it easier to implement those devilish details out there. Jeff, I'll let you take it from here. Yeah. Well, one of the key challenges in supply chain is, is digital identity. It's very easy to track a cryptocurrency that already has a digital identity because it only has a digital identity. There's nothing else. But when you're actually dealing with physical goods, you've got to create, you know, a digital twin and somehow keep those things completely locked together so that whatever you're representing in the blockchain actually has something meaningful outside of the blockchain in the real world where these goods are actually moving back and forth. And that's, can be easy and it can be hard, depending on the value of the goods and the threats to the value. If there's a lot of counterfeiting going on, then you might, you know, it's easy to stick a QR code label that gives a unique identity to an item. If it's however a valuable item that's likely to be counterfeited, you've got to put in all kinds of counterfeit protection just in the label itself. You know, just the physical label has to be tamper proof in addition to the fact that the blockchain is tamper proof. So those are some of the types of issues that you get into in digital identity. As well, there's something called, there's an aggregation problem. And I don't know how many people work in supply chain to appreciate it. But if you can imagine, for example, in the pharmaceutical supply chain, you have all these tiny little boxes that get put into a carton and those cartons then get put into a pallet. Well, when a pharmaceutical company ships several pallets of a particular drug, let's say Pfizer shipping, you know, 10 pallets of Viagra to one of the three big distributors, they're not going to open every pallet into every case and scan every single package that's there. They have to, they will be told that in carton number 12, you have, you know, serial numbers 100 through 120. And actually, they're even randomized to make it more difficult for counterfeiting. And you have to, and there's a certain amount of assumption that you're actually getting those and that somebody didn't somehow swap two bottles accidentally in the packing. So that's more of the digital identity complexity. Security is also a problem if you, if people find out what your serial numbers series are, they can create counterfeit products and use actual legitimate serial numbers. And it then becomes an issue to determine which one is real. You know, even the real one may show up second after the counterfeit depending on what's happened. And so you have a physical security issue and it kind of propagates itself into the blockchain itself or some of the things that you would normally associate the digital identity in particular could actually be a fabricated identity. And finally, you have issues like disruption. And one of the things about a good supply chain solution, whether it be blockchain or not, is that you get to, you get a picture. It's ideal to have a picture of kind of the whole supply chain from end to end. So you can see where the problems are. Know in advance that there's going to be a shortage of chip or something and start planning accordingly. That doesn't necessarily require a blockchain, but because blockchain solutions tend to be looked at as end to end and, and they're driving these end to end solutions, it becomes a solution that blockchains can provide. So we'll go to the next slide. Okay, good. So let's talk about business solution patterns a little bit. What, what we've seen out there, I went back and I looked at our last year or so of speakers that we had on our calls for the hyperledger supply chain SIG over the last year just to kind of get a little flavor for that. Also, let me back up a little bit back at the beginning of 2020 into 2019 pre COVID. I did some research everyone has there, you know, hey, what's new in 2020 type of thing. And the number one thing that came out in all of those was visibility supply, people in supply chain wherever they are, they're looking for better visibility in some way shape or form out there. I think that still isn't true. Now I'd be surprised that that changes when the 2020 stuff comes out or 2022. It's hard to say that 2022 predictions come out. In addition to that, I've also seen a lot over the last year or so, a lot of interest around sustainability, not a lot of ideas yet on what exactly to do around that. But the idea the thought is there, they know the pressure is there. And so now we have to figure out what to do about that. On the right hand side, if you have no idea where to start a good place maybe to start as a digital capabilities model, this comes from the Association for Supply Chain Management, ASEM, the old APEX folks. And they have some, I don't want to say, well, let's just call them digital capabilities. They have a previous model that's kind of linear, called the score model. And then this is put on top of that model or complementary to it, if you will, in order to bring things along. So you can see in the right hand side there around synchronized planning, for instance. And then you see smart operations and dynamic fulfillment. And underneath these, there's a bunch of level two is an eventually they get to metrics. And I found it to be a good model to help and play and laying out where blockchain can provide some value because these are really capabilities that most everybody wants within their world. So with that, then let's come over to the left. And the bottom there, proof of origin, authenticity, workflow, ownership, transfer. Think about those as what blockchain can provide, which then enables other sets of capabilities. And we've had lots of folks who want to do track and trace in some way, shape or form. Providence is the other one that comes along the way. And then how do I do some sort of environmental, which kind of comes along with the track and trace and provenance and credentialing, but it has its own little different flavor. Those three items at the top there. Think about them as if you have some sort of sensors in place, it makes it easier. If you don't, then it's probably part and parcel of trying to put together whatever solution that you're going to put in place. I've seen some places use proprietary sensors, other use open sensors. Last week, we had a team that was providing a track and trace solution. And in their ideas, they're using off the shelf types of sensors, which I probably myself I probably like a little bit better than proprietary sensors out there. And then we see things like invoice reconciliation and taking it to the next level from your traditional two part or three part invoice reconciliation. Now actually being able to have the data and be able maybe to not even get to that reconciliation process. The Coca-Cola bottlers group, they use it for inventory control in order to manage stuff between the distributors, your local and your local bottler here. And how do they get the syrup from one place to the other? And then the next two go together payments and trade finance. The whole idea that we're moving this stuff in different ways and usually money is going to be involved in some way, shape or form. So we do want to provide some way to monetize it. And you could even think of trade finance as in terms of a factoring solution. If you want to think about it from that perspective, if you think about it factoring like invoice reconciliation, but similar flavor with trade finance. The sustainability, we're seeing some early work around carbon tracking. In fact, there's a hyper ledger climate action group saying out there that you could participate in also. So with that, let me go to the next one here and let Jeff talk about these. Okay. Well, one of the issues in supply chain is kind of what your scope is. And typically there's a demand for one for either upstream or downstream upstream, meaning where your components coming from. Making sure, for example, that you're buying stuff from people who have fair trade practices, proper labor practices, proper environmental controls. Or you might be some, and that's pretty typical in a lot of consumer goods. Another issue with your downstream control to avoid counterfeit. So you have handbags are one of the largest counterfeit markets in the world today. And if you were able to track your handbags with a little bit better control and you can give them some form of unique identifier, you can then make sure that your retailers are getting legitimate products. And the consumer can ultimately validate that, yes, this is really a coach handbag or really all the other companies that make handbags. Handbags is just one example. Almost there's a lot of high value products that the supply chains are out of control and there's massive counterfeiting. And drugs is another one. And we'll talk about that a little bit later. One of the other issues though that arises is that of privacy. Tom already mentioned how transparency in supply chains is a big deal. And everyone wants transparency, but no one wants to expose a lot of their own data. A distributor might not want to show the manufacturer who his customers are for fear that at some point he'll be disintermediated and won't be in business any longer. So they don't want to put some of that data on the chain and show who they're selling to. Sometimes people don't want to show where they're getting the goods to their retailers. Usually, however, that's because the information, because the goods are counterfeit. But it's a big deal what data is on chain and what data is off chain. Now, one of the features in Hyperledger is something called channels, which allows particular trading partners to be able to see certain data. But the rest of the trading partners are not able to see that. And so that gives you a certain amount of privacy. And it kind of overcomes some of the concerns about having all the data on chain where it becomes a lot easier to transact because everything's just all in one place. Pseudonymity is sometimes necessary and sometimes unnecessary. Pseudonymity is a very big deal in cryptocurrencies. People really like the fact that no one knows how much you've invested in a particular coin or something like that. But in a lot of business transactions, there's no need for Pseudonymity. In the pharmaceutical industry, a manufacturer can only sell to authorized distributors. And distributors can only sell to authorized dispensers. And so everybody has to be known. There is no Pseudonymity. So it isn't necessary in a lot of situations where you explicitly want to know with whom you're doing business. Governance drives the decision. One of the key decisions is whether you use a public blockchain or a private blockchain. Public blockchains, obviously the infrastructure is already in place. But one of the problems with that is you've got a whole lot of activity going. Let's say you went to an Ethereum blockchain and put your supply chain on the Ethereum blockchain and then Ethereum gets very, you know, the gas fees just get exorbitant more than you anticipated and you don't want to be there anymore. Or somebody makes a change to the Ethereum blockchain where the majority of people think it's a great change. But for your particular industry, it's not a very good idea. So you might want a private blockchain. The problem with a private blockchain, of course, is you have to set up your own infrastructure. And it may be limited because the supply chains will tend to grow. Once they're in place and working, you'll want to add more products. It's like right now Walmart has a leafy greens blockchain. But as that becomes more successful, they'll want to start adding more and more products to it, which also involves more and more vendors, the suppliers for them. And it becomes sometimes complicated to add more people in a private blockchain. They may not agree with the rules. Okay, next slide. Regulatory concerns are a big deal. And one of the problems is, of course, the technology is invariably ahead of regulators. But to some extent, regulation is also driving, is also an important driver in the supply chain. The US federal government, the GAO General Accounting Office, did a study and they claim that 40% of Department of Defense supply chain is suffering an adverse impact from faker defective parts. Well, blockchain is a very good solution to be able to resolve that problem. And the government is a sufficiently large buyer that if somebody created a blockchain and the government wanted to use it, they could dictate to their suppliers, you must use it. And that kind of solves some of the issues of participation. The government has also recently implemented something called cybersecurity maturity model certification. And that has to do more with how software is created, and verifying that your vendors processes, not so much products, but the products as well, are such that they keep either counterfeit products or more important adversaries from infecting the supply chain. A lot of goods purchased by the defense and intelligence communities, they're very concerned with where things are made. I have a Lenovo laptop and one of my clients was a defense contractor and I wasn't allowed to bring that into their data center because it was made in China and there was a concern about that. I think they were right. It was annoying to me, but I think they made the right choice. And CMMC is something that's going to, where you basically know the providence of all the components and all the products that you use so that you avoid that type of problem. Central bank distributed currencies, CBDCs are getting a lot of talk right now. El Salvador is now using Bitcoin. That's not their own currency, but a lot of countries are talking about China in particular about issuing their own cryptocurrencies. There's a lot of research. There's not much in the way of policies on that yet. Commercial aircraft integrity, all the FAA requires that all parts that go into airplanes, both new and replacement parts have a verified providence and that's an excellent opportunity for a blockchain solution. And the commercial counterfeit drug problem, which is hundreds of billions of dollars a year in counterfeit drugs throughout the world, the U.S. is trying to counter that with what they call the Drug Supply Chain Security Act, which requires track and trace of all prescription drugs sold in the United States. And we'll get into more detail on that shortly. Okay, so before I start with this, let me just add a little bit more on what Jeff shared there. What areas of supply chain are we seeing a lot? We're seeing a lot around food and ingredients. Jeff talked a little bit about leafy greens earlier on. Here it's really driven by consumer demand and regulatory systems. And there's from the federal government FDA, New Era Food Safety, you've got to look at that. A lot of that is driven by some of the work that was originally done at Walmart with food trust, blockchain, and leafy greens, now taking that and expanding it to a broader sense. There, pharmaceuticals, like Jeff just mentioned, the EU also has a similar act called the Fair Medicines Directive, FMD, to do something very similar there. Luxury, they want to, because of consumer demand, and they want to differentiate, they're getting a robinance. We're talking about the high value parts that you talked about and finance. So that gives you a little flavor for some of the places. Now the next four, I'm just going to go through a few case studies that have presented or out there that have supply chain implications. This first one is from Richemont. And while it's not hyperledger specifically, they actually use Bitcoin. It's an interesting one because it establishes the credentials of the trust that's inherent within blockchain. And in their case, they have these designs that they want to trademark, copyright, authenticate in some way, shape, or form. So, and they do it in a manual fashion, call up a lawyer and lawyer does also to work, etc., etc. And it costs a lot of money and takes a lot of time. The other challenge they had is that it wasn't just folks within the houses, the mazons within Richemont that were only working on their own. So previously you'd have some super designer and maybe a couple others that were all within the same group, and they did their work and you kind of knew where it came from. Well, now if you're having a collaboration, for instance, between one of the mazons and Nike, so the intellectual property that's associated with that, how does that actually get parsed out with this? How do we authenticate that, etc., etc.? So in their case, this was driven out of their legal department, their corporate council. And what that team does, they said, okay, we want to find a more automated way to authenticate these designs that's going to reduce the cost, give us the ability to work with them amongst multiple organizations here, and shorten the time for this. And so basically now, instead of a chop is what is called, I never knew this term, a chop is like the stamp that the designer would put on previously. Now, you take that chop and then you put it into this big old process. Now what they can do is, through a system, they can actually authenticate along the way of their design. So not just the in design, all the steps they've led up to it because the cost is reduced and it can get into the systems, others can see that. So you can see that in the result of this is that, hey, I can say I've saved dollars, 80% of the dollars associated with legal fees, and where you what used to take weeks authenticate is down to minutes. And they don't have any disputes yet, but they believe that they're going to have a stronger case because they're going to have this information out there. So this is interesting, this is Walmart Canada, not Walmart United States. This is one of the hyperledger partners, DLT Labs up in Toronto, work with Walmart Canada. Their problem was that they had 300 carriers that were moving information between, or not information, moving goods between distribution centers and stores. Not everything was a captive Walmart driver. So these 300 carriers are moving stuff between all of these distribution centers and stores, but 70% of those shipments ended up in some sort of dispute. That's a problem if you have 70% of something like that, probably is not a good, is not something you want to continue. The idea then is, well, maybe there's a way to establish a better set of data here so I can reduce those disputes. So in their case, they use hyperledger fabric with some DLT additions here. They have 170 data points on the shipment that they're tracking, and those data points, here's the, I mentioned sensors earlier, they already had the sensors in place to collect those 170 data points. So if you're starting now from scratch and you have no sensor-based data, you can still start off, just don't expect that you're going to ramp up into those 170 data points with the sensors, the appropriate sensors right off the bat here. So these disputes in general were happening because of accessorial charges. I had a wait, I showed up late, those kind of things. Gas costs more, I mean, in the sense of my gas surcharge, I don't agree with that. So all of those kind of ideas are all those kind of problems we're causing these disputes, and it was making the carriers upset here. And so the solution either created, hey, if you're sophisticated, you can interface with the CDI, otherwise we'll give you an API, sorry. Or if you're unsophisticated, simple, you don't have big systems or a lot of help, here's an app that allows you to basically pre-populate the invoice so that I can take these 11 steps where I was negotiating back and forth in order to create an invoice, I can reduce those down to five. And you saw in their case, the disputes were reduced less than 5%. And I think now they're down to somewhere around 3% or so. Okay, so lest you think that blockchain and supply chain is only for big companies out there, this company Chemcor is a $25 million in revenue company based out of Singapore. And their problem was they're shipping mining chemicals from the Far East to mines and most of theirs were in the Democratic Republic of Congo. So it turns out there aren't any ports that can load so the mining chemicals have to go through a number of countries in order to get to the mines. So they had a problem with getting there on time and in full those orders, they couldn't track things. And they had lots of people who were holding things up along the way. And so they partnered with this company Competech to utilize Hyperledger and build a little blockchain based solution for tracking and tracing these as well as providing some credentialing so that as the materials are going through the different systems, the different checkpoints, they have the visibility associated with where that stuff is, as well as it makes it easier for, I mentioned trade finance earlier, it makes it easier for folks that are financing these chemical shipments that they can believe that this shipment actually is what it says it is, and it's going to get to the place when it's going to, when we say it's going to get there. And one of the things that's interesting down at the bottom is a little different on this one is proof of delivery used to take three, two to three days. So you can kind of imagine if you're at some remote mine and maybe things aren't connected as well, or folks don't want to, you know, they have other things that they need to worry about. Now once it gets there, now we know it's immediate, the proof of delivery is there, and then all the other things that go along in terms of payments now can move forward faster. And then lastly, this is just a combination of a different one case conflict minerals, cobalt specifically with Volvo using hyperledger fabric here, and then caring in the sense of luxury good as was talked about previously in tracking and tracing and the Walmart story associated with, with Food Trust and leafy green vegetables, etc. So I'm able to recall information or have recall information at the tip of my hands as opposed to having to dig it up and getting it days or weeks later here. So before we go, Jeff, I'm seeing 13 things in chat. Daniel, is there anything questions that we should address right now before we go on or should we just turn it up? Let Jeff talk about this. Yeah, go ahead and plow through. There are some questions in the chat log. I think we can address them at the end. Yeah, please go ahead. Okay, good. We'll continue. I will look now I will look now as if Philip was correct where we said central bank distributed currency, it should have been central bank digital currency, that was our word. Too many acronyms. Yeah. So the drugs, the US Drug Supply Chain Security Act requires that all pharmaceutical, all prescription pharmaceutical packages at the kind of user level of the package have a track and trace solution by the year 2023. This law came out in about 2013 and it's had various stages. First, everything had to be serialized and labeled a certain way and 2023 is the deadline to actually have a track and trace solution. It took the industry about five or six years before they came to grips with the fact that blockchain was the way to solve this problem. And there are probably four, well, between four and a dozen different solutions being proposed and they will probably all work. One of the other requirements of the laws, they'd be interoperable. But just to give you an idea of some of the complexities in this particular supply chain, I already mentioned that all the people, all the players in this supply chain have to be certified by their states, not by the federal government by their state. So if you are a Walgreens, you have to be certified in every state in which you have a Walgreens drugstore and each of your facilities has to be certified. The manufacturing sites have to be registered. So you can only sell two parties who are state approved. But one of the issues, and then we have the issue of aggregation is a big problem. This law actually requires track and trace only of the ownership, not the custody. And the distinction there is that a lot of counterfeiting actually happens while goods are in transit. Someone may actually take a case out of a UPS warehouse and I don't mean to be picking on UPS and replacing it with a case of counterfeit goods and then taking the real case and maybe selling that in another country. But they might match the serial numbers if they're able to get a hold of them in some way. But that said, they are tracking, they track the ownership and you can't, when you receive a product, if it does not appear to be legitimately sourced by looking at the blockchain record, you have to report it as suspicious and an investigation that ensues to determine if it's actually legitimate or not. And anything that's suspicious has to be quarantined. It turns out that while hundreds of billions of dollars of counterfeit drugs are sold in the world, very little of that actually occurs in the U.S. And this system won't actually prevent the biggest problem which is people buying from online pharmacies who are part of this. They often claim to be from Canada, but who knows where they are from. They could be usually from somewhere in Eastern Europe that doesn't have laws that allow, that criminalize fraud. But because there's this law requiring it, the industry is, it's the largest industries in the world is going headlong into developing a solution. And so it's one of the areas where there will be not just a pilot but a real solution soon. I don't know that they'll meet the 2023 deadline, but it will be a very good example of a complete downstream from the manufacturer supply chain solution. Now there's no requirement on the manufacturers to track and trace their upstream ingredients, but at the moment that doesn't seem to be a big enough problem to be worthwhile. All right, next. Okay. Digital identity is, as I kind of mentioned earlier, is a big issue with the supply chain because it's a matter of you can assign an identity to, you have to assign a unique identity to every item in the supply chain and that assigned identity has to be verifiable and it has to be at least tamper resistant depending on the industry you have. I was working on a solution for a company in China that sells rice wine that goes for like $100 a bottle and they sell it in, you know, in massive quantities. It's not a product where it's a matter of being properly aged like a French wine and one of the issues that they had is if making these labels required a machine that was worth a million dollars, that was a no-brainer for the adversaries. That wasn't a big enough hurdle to keep people from building or buying a similar machine to be able to create counterfeit labels. So the digital identity problem is can be non-trivial depending on, you know, what the goods are. In other cases, however, the Sierra Nevada brewers who make beer etch a QR code onto their kegs to keep track of their kegs. They're not so worried about counterfeit beer, they're just worried about losing their kegs. They spend a lot of money on the kegs, they ship their beer and kegs and when the kegs don't come back, they got to buy more kegs. And so by putting a QR code on them as a label, they're able to track where they are and get them back. And if they don't come back, they know who's got it and who's responsible for it. Another issue is the proliferation of blockchains. I mean, if you can imagine all these kind of point solutions that are being created, some companies are going to be faced with you take a department store such as Walmart, well, that maybe they'll have the produce blockchain, they may have the handbag blockchain. You know, there may be dozens and dozens of blockchains that they have to interact with, each of which may have different rules for how the products are treated, how they're identified, what is it just a smartphone scanner that you can scan anything with? Are there unique special scanners? Do some of these systems have encryption? If someone is on the computer to enter in a receipt of a shipment, how different do the screens look for all the different products that get received at the receiving back? You also then have the upstream problem. As I mentioned in the drug example, right now the DSCSA is only a downstream issue. If somewhere along the line, manufacturers are concerned about the provenance and the authenticity of their upstream component products, the chemicals that they use, they're going to have to have upstream blockchains. And eventually that could be problematic, especially when each, if you have a bunch of private blockchains, all with unique rules that are not consistent. Another issue is there's a lot of concern about blockchain lock-in. I mean, the kind of perfect blockchain doesn't really exist yet that has the throughput that's needed meets the requirements of all the different players in a particular industry segment. Tom mentioned the one example where they're actually using Bitcoin as a blockchain and that's a pretty slow blockchain to use if you have a high throughput. It doesn't scale very well. So these are issues that will come about and some people are concerned about getting started because they're worried about lock-in. So I think it hasn't yet surfaced as a big issue, but I think it's an issue that's coming down the pike. There's a lot of requirement for standardization. So as these proliferation of blockchains arise, it's easier to start combining them and people can actually start to whittle down the number of unique individual blockchains that they have to work with. And as with all IT garbage in, garbage out, is the information that's being fed to the blockchain, is there a good way of verifying it's assuring that it's correct information. And ultimately, the biggest issue that I see and Tom I think is in pretty much agreement is governance. Coming up with a rule set that's fair to all the players. When you have dramatic diversity in who these players are in just the example of the drug supply chain, 90% of all the drugs in the U.S. go through three distributors. So these are mammoth companies that have massive control of what goes on in the industry. But some of the dispensers are small, mon-pop pharmacies, one-offs. They're not all Walgreens and CVS. And their requirements are different. And it's very hard to come up with requirements that are not only fair to everybody. If you're charging a fee per transaction, the people who are doing lots of transactions consider that onerous. But if you charge a flat rate, then the people who are just doing one or two transactions will find it onerous. So you have these conflicting goals. And as blockchains improve or blockchain improvement proposals arise, what's good for one group may not be good for another. And who gets to vote and how much of a vote do they have to keep it from happening? I mean, the compromise in the United States is we have two legislative bodies. One is by population and one is by state in order to kind of balance that off. That's just one form of compromise. And we're going to have the same challenges for governance of all these blockchains. Okay, let me just add a couple things here around governance. I'm pretty firm on the grounds that governance of blockchains will involve humans. Hopefully that's not terribly controversial, but some people these things can be set up and run here. But there's always some sort of founding groups that's going to be making some decisions. So there's always going to be humans in the loop associated with this. So you can kind of think about different categories of users, whether they be founders, whether they be observers, whether they be suppliers. So there's different categories of users that come into the governance of the blockchain system. And the other heuristic, I guess for right now is in general, we're not going to start off with kind of like 170 sensors. We're not going to start off with a huge democratized system. Most of the governance of blockchains getting going is around is having some small group that forms it with plans to make it into something broader out there for the objects of governance. What are they going to be the mechanics of governance that Jeff was talking about? And then what are the incentives associated with the governance that you stay with that that the program there? And there's a life cycle associated with that. So let's go on to the next chart here because I'm seeing that we've got six minutes left. Just here's some groups that are doing work within this space out there. Some of you may know, some of you may not know. Let's say specifically with Hyperledger here, we have our calls every Thursday, every other Thursday. Our next one is the next week, the 28th, we're going to have Daniela Barbosa, the new leader for Hyperledger overall, who's going to be on for the first 15 minutes. And then we're going to talk, we're going to have a discussion about what's a good, how do you set up a good trial of using blockchain and supply chain? And then specifically the Hyperledger grid folks, they actually comes on some work with cargo and target. They're actually building a platform, if you will, or a framework that can be used specifically in Hyperledger. And they just add their 0.2 release that is focused really on kind of a masternate of management product information master that kind of information out there as an underpinning with that. So it gives you a little flavor. And Jeff and I are happy to talk about any of these offline going forward. So thank you for joining us today here. We'll do some questions, Daniel. Hopefully some of this stuff inspires you in some way, shape or form. Excellent. Thank you so much for a great presentation. Tom and Jeff was very informative. We do have about five minutes left to our scheduled session. There's some questions in the chat log that I think we can kind of go through real quick. I guess, first of all, are you, Tom, Jeff, you guys okay sharing the copy of presentation? Yes. Yes. Okay. Okay. So we'll PDF it and send it out. Okay. There's a question about, for Walmart, Canada chain, who owned the peers? Say that again. A question is, for Walmart, Canada chain, who owned the peers? Either James raises hand, either he knows the answer or he asks the question. Actually, they have some additional background. So I've been around food blockchain for the last like three, four years now. Walmart has done a lot more. They've actually done, done on over in the Middle East. Whenever you're looking at this, there's, it's so interesting. I think the one thing that you've really talked about that's really the key and what I've seen and through all my data management experience is the data management. How are you structuring the data? How are you controlling the cadences? How are you getting everybody to use a certain way? If you want a historical background of what really got this started, if you go by the, shoot his name just, they'll sec the guy heading it. Look at what happened at Jensen farms here in Colorado. It's a study that we've actually based Colorado, the Colorado Department of Ag has done a lot about when Jensen farms happened about 10, 12 years ago, and it took 10 to 12 days to get root cause analysis, i.e. need for blockchain. It led to a lot more deaths. And that really was the impetus for Walmart to start to invest into blockchain. Yeah. Yeah. All right. Any other comments from your end? Okay. This is a specific question. I don't know the answer to, but I believe that who's learning the peers. I think that means who's running the nodes. I'll interpret that as, and I don't believe that they have all the nodes out there at individual carriers. Yeah, this is a centralized node. My apologies, Tom for interrupting. This is a Jeff Tenendome. I was the one who was kind of asking around. The reason I ask is I'm just kind of curious when it comes to, you know, these different implementations around supply chain. One of the challenges that I think we see is regarding ownership or, I mean, it's not necessarily potentially challenging if all the groups agree, but when you have these smaller suppliers and understanding potentially how much ownership they have when it comes to infrastructure, when it comes to the nodes versus, in this case, a Walmart specific type of blockchain, where maybe they own a lot more. Just understanding how that architecture works, where they get trust when it comes to, say, different suppliers and sharing information. And depending on who owns the nodes, you're going to have that visibility into some of that information, depending on how that infrastructure is set up and how it's configured with hyperledger fabric. Absolutely. You can bring up a very good point, and there was a great example of that. IBM and Merisk, which is the largest shipper in the world by ship, created a blockchain, and they had great difficulty getting anybody to join any other major shipping lines to join, because in the original governance structure, it appeared that they had control of all the data, and people didn't want to be, you know, just little servants to them. And so there was a lot of readjustment in order to start bringing on other trading partners. I mean, a supply chain is only as good as how much of the network it represents, and they were getting no traction. And so it took them a couple of years to get their act together to where they were able to start bringing on other parties, and they had to start making the data, you know, more data ownership more widely dispersed. Yes, thanks, sir. That's kind of where I'm going, just kind of curious. But nowhere is there. I don't want to... But in certain cases, in certain cases, you know, if you're powerful enough, like Walmart could just dictate to its suppliers as they did with, you know, just putting codes on all the products, that was something they dictated their supplier. They said, as of such and such a date, if you want to sell products to Walmart, and this was before blockchain was an issue, you know, you have to put a code on your product to label it so we can scan it at the register. And so people did it. And like for the U.S. government, you know, going forward, since they're one of the biggest buyers in the world, they can start imposing their own... They could impose their own blockchain for stuff that the government buys, and people will have to either do it or not, you know, but if they don't do it, they won't be able to sell to the government. So it depends how much power you have. Let me add a couple of quick, quick thoughts to that. And I put my email, my gmail, email in the chat there. Anybody's welcome to contact me, and then I can get Jeff. Daniel, you have our email too, because we're not going to get to everything. But real fast, I am not a purist. I'm more pragmatist on these kind of things. And from a governance perspective, and then actually into implementation, there's going to be times where you're going to do a... The use case is going to say you're going to need to have distributed nodes across different places. And other times you're going to have it somewhat centralized with plans and kind of see, well, what goes on. What I've generally seen as more from a UI or UX perspective is kind of what was done with the Walmart Canada story, where you're going to give somebody an API if they don't have their own IT shop, right? Or a small IT shop, they're not very sophisticated. Other times you can give an API to you, and that's how they want to integrate. And some of this want to do EDI augmentation in some way, shape, or form. So you kind of give those on-ramps to folks to the blockchain and then figure out how you can bring them in closer over time with additional capability. Great. All right. Let's, for the interest of time, let's move on to the next question. A question from Nikash is about what kind of data points was collected right from shipment origin? So I think the question is about what kind of data is collected throughout supply chain? Jeff, if I'll take a crack at that, maybe in the... Well, I mean, what data you collect is very specialized, depending on what the product is that you're tracking. I mean, in the case of pharmaceuticals that I just described, there's a separate database that says when you're labeling a drug package, part of the code that goes into that label, there's a serial number at the end, but there's a product code that's dictated, the format of which is dictated by the FDA. And that identifies the product type and it also identifies the factory that it came from, et cetera. And those things are then maintained in separate databases so that you can look up and see that anything that has in the product type code, it shows that a particular number is a case number. That case has 12 packages that each have 50 pills in them. And so that data could be maintained off the chain, but it needs to be ultimate because it's anything that has that code, it's going to use that, it's going to have that same description so you don't need all that description in there, you just need the code. In other situations, you may have things that have different grades. You may have bolts, and is this a grade two bolt, a grade five bolt, a grade 12 bolt? And so you, not only is it a five sixteenths, 18 thread, eight inch carriage bolt, but it's a grade two or it's a zinc coated versus a galvanized. And so the kind of descriptive requirements are going to vary depending on what the product is that you're handling and what's critical to be able to identify it. Does that help? Very thank you. Thank you, Jeff. I think that answers the question. Someone asked about whether this recording will be available on YouTube. Yes, it will be. You can simply search for the word of this presentation or we can also send out a link after the presentation once the recording has been completed. There's a question about consensus algorithm. What type of consensus algorithm is used for supply chain management? There's no rule to that. It's kind of whatever the particular blockchain implementation determines to use. Obviously throughput is going to be a relatively important characteristic in selecting your blockchain and some blockchains come with a particular consensus algorithm. I mean if you're, and some you have the ability to create your own consensus algorithm, but there's no, there's nothing about a supply chain solution that dictates a particular consensus algorithm be used. So you could use proof of work if you could tolerate that speed problem. You could do proof of stake, distributive proof of stake. There's a wide array. You know, you could use a directed acyclic graph. There's all different ways of doing it. And I even submit that the governance aspect of it, of who gets to be in, what does it get to do, and what are we doing is a form of consensus. If you want to call it meta consensus, right? It has to be put, it's probably the first question or set of work that needs to be done. And then as Jeff mentioned, the consensus algorithm will kind of go from there as well as what blockchain you choose to use. Great. I think that pretty much covers all the questions that we have. Is there any other questions that any attendees here want to ask the present presenters? Yeah. Jason John here. I curious about the off chain records. What are some of the document archiving implementations that you've seen out there, right? Because we're talking about provenance and chain custody and all of that. So there's a lot of documents and records and you know, diagrams and when you talk about FAA parts and records and all that. What are some of the record keeping implementation infrastructures you've seen out there that's being deployed for them? Let me take a first crack and then give Jeff a thought. In general, you're talking about how do I get stuff from wherever it is, all the great existing systems and interact this in some way, shape or form with as my read on what you're saying with some sort of credibility or veracity there. And interestingly enough, the ISO definition for an oracle and I think of oracle as the mechanism that blockchains use to get off chain data on chain. The ISO definition just says basically it's a pipe. Now I have a problem with that because I believe that oracles should also put some veracity into it. But it'll be that as it may and I think most people would expect that. Now in terms of what's out there, I got to do some more. There's another hyperledger project called Cactus in terms of interoperability. So what am I to do is here, I think I actually have a call. I have an hour blocked on my calendar whether I'll get there or not. You all know how that works. But to look more at hyperledger cactus is interoperability mechanism. And the other one that I've been seeing a lot is baseline protocol, which is more of it comes more out of the Ethereum world. But what looks interesting with that is that you can set up some of the standardization between your two or two or broader set of groups here in order to take, for instance, SAP data into whatever blockchain system you have out there. So like a baseline protocol, that's the other one that would come along. Jeff, I'll let you add your thoughts to that. Yeah, well, that's kind of the oracle and the data that Tom is referring to is kind of information that is useful for everybody. But there's also some kind of more transaction specific data. And there's an interesting example in the pharmaceutical industry. As I mentioned, there are three distributors who control 90% of the traffic. And they currently actually make money by charging the manufacturers to provide them data on what happens to their products downstream. So they don't want to have a completely transparent system where the manufacturers can see downstream, even though the manufacturers, when they have a recall, they need to reach those people downstream. And so the data that the data that the distributors have, in a solution they're proposing, is they would maintain that data themselves. And if the manufacturers want to see downstream, they have to go through the wholesaler, the distributors. And it's just because they have so much power, they're implementing that. And so that data is off chain. That's not on the chain. You've got to actually call them up and ask them. Right. And that off chain data is on IPFS or what kind of infrastructure? No, it's just in their ERP system. But they don't bring it to the blockchain. I mean, ultimately, most of these supply chain systems will interface with an ERP system. And in fact, the solution in the pharmaceutical industry proposed by the wholesalers, they've teamed up with SAP, which happens to be the ERP that most of them use, most of the big players use. So what would be on the blockchain? Would it be like a link to a location where a file is stored? Is that sort of how you can think about it? What's on the blockchain is the fact that transactions took place without identifying the party to whom the product went. It's to me an incredibly inefficient solution, but I understand that people don't want to give up a revenue stream. It's an unfortunate compromise. But that's only one of the systems being proposed. But I'm pretty sure that the distributors are pretty dead set about maintaining that power. I don't know if I answered the questions. I'm going to look on your face. Yeah, thanks for the answer, by the way. Okay. Okay. I think that covers all of our questions here from the chat log. We are about 13 minutes over time. I appreciate everyone's time here. It was a very informative and interesting presentation. So thank you so much, Tom and Jeff. I'm sure everyone feels the same just based on the conversation that I see from the chat log. If anyone wants to reach out to our speakers here, I think that they have left their contact information. Please feel free to reach out. Stay in touch. I'm sure you can also find them on LinkedIn. Otherwise, we'll go ahead and wrap this up. We'll also be sending out a link to the YouTube video once the session is over. Everyone have a great day and we will see you again in our next event. It has not been scheduled yet. There should be another one coming up shortly. We're thinking of one towards the end of mid to end of November. So please stand by for announcement. Any last minute thing, Tom, Jeff? I'll just say thank you. Glad everyone joined here. And if you're thinking of doing blockchain type of stuff, I'll quote somebody I talked with last week who has done blockchain and is now getting into lots of challenges. But they're saying we still got business benefit associated with doing the work that we're doing with these initial implementations. So don't wait for everything to all be solved here. There's value right now. Great. Thank you all. Bye, everybody.