CityNameBlockchain applied in the Service Parts Supply Chain

Contents

Our business 03IBM in the past and in the future 03Service Parts Operations in IBM GTS 05Support as a Service 07

Blockchain explained 08A word on TradeLens 10

Cross-bordering parts 12A customs invoice 12Process and application 13

Key take-aways 16

3

IBM has been on the forefront of developing computing technology

• Mainframes (from S/360 in 1964 to the Z14 in 2017)

• IBM PC in 1980

• RISC computing 1992

• Quantum computing

IBM is in business over 100 years and many inventions have been very relevant to the world we live in

IBM has been at the basis of many software standards & platforms

• FORTRAN, 1957

• Relational Databases (1970, DB2)

• Operating systems (IMS, CICS, TSO)

IBM is now working on this with others on Open Source platforms (Linux, Blockchain) as we can’t do it alone!

IBM has been at the basis of innovations that have had a big impact to the world

• Developed the DRAM chip in 1967

• Developed the magnetic stripe card in 1969

• Helped set the first man on the moon

IBM researchers have at times been recognized for their contributions

• Leo Esaki, 1973Electron Tunneling

• Binnig & Rohrer in 1986 for Scanning tunneling microscopy

• Bednorz & Müller in 1987 for high temperature super-

44

Analytics (big data)

From DB2/QMF into machine learning

IBM also wants to be relevant to society in the future and is working on some exciting technologies

Artificial intelligence with WATSON

Augment human judgment

Blockchain technology

This is not Bitcoin!

This technology will revolutionize the supply chain and will develop networks of companies

4

Security – becoming ever more important

IBM principle: the data of our clients is precisely that

IBM will help derive intelligence from your data but will not use it itself

IBM Cloud

Service Parts Organisation – who are we?

4PL – A fourth-party logistic provider, 3PL - a third party logistic provider

General Organization Overview

5

SPO Value Proposition

Facts & Highlights 3 worldwide hubs 200,000 part numbers (50,000 non-IBM) 30 million movements a year WW ± 400 parts suppliers >750 stock locations WW (180 countries) 96% availability in 58 countries 99.9% inventory accuracy SLA support from 2hrs to 2nd business

day Transport / warehousing has been

outsourced Globally managed and integrated

processes and systems where possible, geographical solutions where needed

IBM TSS : Support as a Service

© 2018 IBM Corporation

Blockchain Technology:Registering a transaction on the blockchain uses a chain; tampering with data will break the chain

9

Scalability

Hyperledger Fabric and Cloud based run-time environment allow for the application to see increase usage over time without concerns

Flexibility of smart contract

Everything is the same yet there are always small differences, e.g. from country to country

Visibility

To all actors of all documents as needed(permissioned blockchain)

24/7 access to documents

Auditability and trust

Modification of data not possible without detection

o Clear liability in case of disputes

o Official entities can get access to the data in the blockchain

Advantages of applying blockchain technologypowered by Hyperledger Fabric

Automated data interfaces from / to all parties within the blockchain environment

9

TradeLens Overview Introduction

Data trapped in organizational silosInformation is held in paper and various digital formats across dozens of service providers along the supply chain, requiring complex, cumbersome, and costly peer-to-peer messaging. The result is inconsistent information across organizational boundaries, latency in obtaining shipment visibility, and blind spots that hinder the efficient flow of goods.

Manual, time-consuming, paper-based processesThe collection and processing of up-to-date data, as well as inefficient trade document exchange, requires manual checks and frequent follow-ups and results in errors, delays and high compliance costs. Late filings are common due to missing information.

Clearance takes too long and is often subject to fraudRisk assessments by customs authorities lack sufficient and trusted information resulting in high inspection rates, added prevention measures against fraud and forgery, and delayed customs clearance.

High costs and poor customer serviceThese challenges have significant downstream repercussions. The inability to forecast and plan effectively, address supply chain disruptions in real-time, and share trusted information across the supply chain leads to excessive safety stock inventory, high administrative costs, operational challenges, and ultimately poor customer service.

GLOBAL TRADE IS HIGHLY INEFFICIENT AND BURDENED BY PAPER-BASED PROCESSES Inland Transportation

Shippers / Beneficial Cargo Owner

Supply Chain Visibility Systems

Trade Associations

Supply Chain / Transportation Management Systems

Authorities

Financial / Insurance Services

Port Community Systems; Terminal Operating Systems

Ports and Terminals

Freight Forwarders /

3PLs

Customs Systems

Ocean Carriers

Customs Brokers

27-May-19 10

27-May-19 11

https://www.youtube.com/watch?v=tdhpYQCWnCw

TradeLens Overview Introduction

Connects the ecosystemBrings together all parties in the supply chain - including traders, freight forwarders, inland transportation, ports and terminals, ocean carriers, customs and other government authorities, and others - onto a Blockchain-based platform with a secure permission and identity framework

Drives true information sharingProvides for the seamless, secure sharing of real-time, actionable supply chain information across all parties to a trade - encompassing shipping milestones, cargo details, trade documents, the structured data embedded in trade documents, customs filings, sensor readings, and more

Fosters collaboration and trustEnables the digitization and automation of the cross-organization business processes integral to global trade, including import and export clearance, with Blockchain ensuring secure, auditable, and non-repudiable transactions

Spurs innovationLays the foundation for ongoing improvement and innovation through an open, non-proprietary API, the use of standards and promotion of interoperability, and the launch of an Applications Marketplace that parties can use to build and deploy TradeLens-powered applications for themselves, their partners, and their customers

THE TRADELENS PLATFORMDigitizing the global supply chain

Inland Transportation

Shippers / Beneficial Cargo Owner

Supply Chain Visibility Systems

Trade Associations

Supply Chain / Transportation Management Systems

Authorities

Financial / Insurance Services

Port Community Systems; Terminal Operating Systems

Ports and Terminals

Freight Forwarders /

3PLs

Customs Systems

Ocean Carriers

Customs Brokers

27-May-19 12

THE PLATFORM IS BUILT ON AN OPEN TECHNOLOGY STACK AND IS UNDERPINNED

BY BLOCKCHAIN TECHNOLOGY

Customs Invoice example

Cross border shipments require a number of steps

start

Pull & Pack

Status: Case packed

BLOCKCHAIN

Packed Case data

Provide COS owned data

Customs Invoice Data

Ship Case

Airway bill

CustomsClearance

Import approval

Receive Case

TMS

Pay Duty /Intrastat / Extrastat

Push to bin /ship to final

dest.END

IBM

/ 3P

LIn

vent

ory

Ow

ner

MRN

ExportApproval

Ledger 1

Ledger 2

IBM / DHL

Inventoryowner A

HLF

Warehouse System

OwnerSystem

ExportBroker

Local Customs

InvoicePrint module

PC

PC ID

ID

EA

EA

Import Broker

Local Customs

AB

AB

Transport Management

IA

IA

Warehouse System

Shared ledger allows for increased trust in data

Pilot implementation approach, MVPThis environment makes import clearance data available to carriers and brokers in an automated way, fitting their business

BLOCKCHAIN

IDDE

Gateway

Customs Invoice Data

PackedCase Data

ShipmentCase Data

Transportation Management

Enrichment interfaces

Service Parts ERP

Product Classification

DHL Express(carrier)

Individualimport broker

Automatedinterface (push)

Semi-automatedinterface (pull)

Key take-aways

• Blockchain technology for Supply Chain Management is mature and new applications of the technology are being developed and will become available in the next five years, potentially causing the business to transform significantly

• Working together with multiple parties is what drives the need for blockchain technology and also what complicates the ability to create successful applications –competitors will need to work together

• QUESTIONS?

Thank you!

Jaap HazewinkelManager of Strategy and TransformationTSS Service Parts Operations

—Hazewinkel@nl.ibm.com+31 6 1250 6288ibm.com