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Truth in Supply Chain; 3 Case Studies on how Blockchain, AI & IoT are Shedding Light

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Avivah Litan VP, Distinguished Analyst


Truth is in a State of Crisis; Truth in Supply Chain is no Exception


3 Blockbuster Trends moving Blockchain Market out of Trough of Disillusionment

• Maturation of Cryptocurrencies & StablecoinsTrend 1

• Truth & Transparency in Supply Chain Trend 2

• Anywhere Any Chain Blockchain Abstraction Middleware Trend 3


Agenda

§ Truth in Supply Chain in Crisis

§ Two Case Studies in Authenticated Provenance and Track & Trace

• Belgian Organic Pork Industry - Provenance & Tracking of Organic Pigs – Farm to Store

• Sponsor: Colyrut, Belgian Retailer; Technology Provider: Settlemint

• U.S. Organic Mattress Industry – Provenance & Tracking of Organic Materials – Farm to Store

• Sponsor: Avocado, U.S. Mattress Brand; Technology Provider: Copperwire Systems

§ One Case Study in Authenticated Provenance

• U.S. Oil and Gas Industry – Provenance of ‘Proofed’ Oil & Gas Pollutants Data

• Sponsor: Environmental Defense Fund; Technology Provider: Context Labs

• What This Means for You in 2021


Falsehoods in Supply Chains lead to Serious Consequences

• Brand reputation loss• Loss of consumer confidence• Lost sales

Brand damage from

counterfeits

• Poor decision making• Lost revenue opportunities• Inefficient processes and higher costs

Bad data across

ecosystem

• Poor patient healthcare• Ineffective clinical trails, medicines• Ineffective climate change control applications

Health risks to Planet and

people

Sample Falsehoods Sample Consequences


1 2 3 4

Consumption

Use Gartner Truth Assessment Model to Prove Provenance

Is This Entity for Real?

Human Verified Digitally CertifiedAlgorithmically Verified

Input

Known Good Known BadLikely Good Likely Bad

Human Verified

Crowdsource ratingsManual audits & certifications

Digitally Certified

Certify entity at origin using appropriate entity-specific techniques

Algorithmically Verified

Domain-specific ML or AI applied to entity

See https://www.gartner.com/document/3986200?ref=solrAll&refval=276089373How to Detect Fakes in a Zero Trust World using Artificial Intelligence and Blockchain

Blockchain Peer-to-Peer

NetworkTokenize ; Track & Trace on BlockchainBlockchain

Peer-to-Peer Network


Blockchain Locks in Shared Immutable Truth across Connected Supply Chains

Data Reconciliation IssuesLack of visibility across supply chain; Different data in different systems for

same events or entities

Lack of Trust Across EcosystemsNo trust in others’ data and processes

No Process Automation Across Entities

Automation limited to single entities or organizations

Distributed LedgerIndependently verifiable

Shared System of RecordAnytime, anywhere

Tokens; Digital Assets Digital or physical representations

Smart Contracts Process automation

Immutable Data cryptographically secured; append only

More Trust

More Efficient

More Revenue & Opportunity

Transformed StateBlockchain FeaturesCurrent State


But… Many Technology & Business Challenges in“Truth in Supply Chain”

Need for new multi-party business

agreementsLack of domain

specific tools for assessing

‘truth’

Custom integrations needed for;

Analytics/AI, IoT & Blockchain

Complex, unproven, multi-party processes

Lack of standards for

data & processes in most domains

Cost of Immature

technology; ROI still

unproven

Sample Vendors for Proving Provenance

• Circulor* • Context Labs• Copperwire• Cybord*• Settlemint• TextileGenesis*no native blockchain capability

8 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.© 2020 Gartner, Inc. and/or its affiliates. All rights reserved.

Case Studies:Truth & Transparency in Supply Chain

• Case Study: • Belgian Pig Farming Industry

• Use Case: • Authenticated Provenance of Pigs and Pork Meat, Track & Trace

• Drivers: • Support Trust in Organic ‘Bio’ Pork Labels• Improve Pork Farming and Distribution to:

• lower costs from more efficient processes and by avoiding future ‘pig health crises’

• increase revenue by encouraging more local farm suppliers, finding new markets and retaining loyal customers


Avoid past ‘Pork Crises’ where

consumers lost trust because of disease spread in some pig

lots

Identify potential improvements for pig farming

process

Ensure Local Organic Pork

Supply Satisfies Growing Local

DemandOffer High

Quality Sustainable products to

Consumers who value ‘BIO’ label

Provide verifiable data about

conditions pigs are raised, processed and transported in

Challenges to Belgian Organic Pig Farming Market


Solution: Establish & Operate Belgian 100% Organic Pork Chain Consortium

Continuously monitor pig health & diet with IoT sensors, location tracking, & manual certification

processes.

Combine digital pig data with other records,

e.g. vaccinations, lineage, weight. Link data to blockchain

Use SettleMint Blockchain to; track pigs’ digital history, prove provenance, support instant access to pork chain, analyze data

to identify process improvements

Potential Customer facing app; consumers

scan QR code on package to track pork

provenance

Consortium MembersRetailer - Colruyt GroupPig Farmer - BioVarProcessor/Transporter – DelaviTechnology provider- Settlemint

Transform Pig Data; Turn Analytics into Action

Track & Analyze Location• Manage time spent inside

pen and outdoors• Encourage more time

outdoors, as needed

Track & Analyze Food Intake• Sensors on feeding trough

triggers food output when pig snout in trough

• Measure baby pig intake as part of nursing pig mother

• Adjust feeding as needed

Attach IoT Sensor to Pig EarEstablish Unique Identity Record with attributes

Integrate 40 other Pig attributes• Vaccination record• Lineage• Weight before and after slaughter• Method of slaughter• Certificate of Humane Slaughter

Post Slaughter è Unique Pig tracking lost when sensor removedLimited number of pigs delivered to slaughter house per shipment, so can use blended pig cohort data to provide insights to end users


Pig Farm to Store; Key Data for Track & Trace

SettleMint Blockchain

Dapp(back-end)

Full Node

Dapp(back-end)

Full Node

Dapp(back-end)

Full Node

Dapp(back-end)

Full Node

Dapp(back-end)

Full Node

• Unique Pig ID• Date of Birth• Vaccinations• Family lineage• Feed• Bio Certificate

• All previous+• Pickup date• Lot ID• Etc.

• All previous+• slaughter date• temperature• Etc.

• All previous+• cuts• weight per cut• SKU number• Etc.

CCE IT ensures integration with existing systems of Delavi

70-80 pigs/week slaughter slicing

• arrival date• shelf date• sold date

• arrival date• shelf date• sold date

• pick up date• delivery date• temperature

• pick up date• delivery date• temperature

Colruyt IT team ensures integration with existing systems of Colruyt/BioPlanetBiovar IT ensures integration

Farm Packaging Logistics & Distribution


Pig Farm to Store; Integrated IoT, Analytics, Blockchain Architecture

Customer scans QR code on label to view Provenance

Organic Pig Farm in Belgium

IoTPlatform

Temperature and other factors tracked during shipments

Smart Contract

DApp Backend DApp Frontend

ColyrutSupermarket

IoTMetadata Increase

Efficiency and

Revenue

Increase Trust in the Provenance

Increase Trust in Quality

DApp Frontend

Data Driven Analytics for Organic Pork Production

BioVar.be Delavi BioPlanet Colyrut Customer RegulatorBlockchain

1 2

3

Off Blockchain Entity / Process 3 Blockchain Shared Pork Chain System of Record eliminates

reconciliation issues caused by previously silo’ed systems. Transparency reduces waste from mishandled pig and pork meat. Increased consumer trust can translate to more revenue.


Results for Organic Pork Chain ParticipantsIncreased Consumer Trust and Engagement with Brand

Transparent & Immutable Shared System of Record; Optimize Distribution & Pricing

Compliance and Proof of Bio Label

Create future opportunity for process and farming improvements via data mining

Potential for Cost Savings and new local pig farm revenues from trusted data analyses



• Case Study: • Agrestal Organic Living / Avocado Mattress, leading U.S. Organic

Mattress Brand

• Use Case: • Authenticated Provenance of Mattress Materials, Track & Trace

• Drivers: • Support Trust in Organic Mattress Labels• Improve Data used in Regulatory and Certification Processes

• Project is in Phase 1:• Proving provenance of wool from sheep raised in India, • Tracking it through mattress manufacturing


Strengthen Industry & Regulatory Certifications

by providing trusted, verifiable real time data, all not possible with today’s

annual inspections

Brand Differentiationby proving products are truly natural,

organic, & safe, and that business follows sustainable, social & ethical

practices

Brand Trustvia transparency, traceability & proof of claims by opening supply chain to

customers, partners, inspectors & regulators

Prove Provenance via trustworthy capture & presentation

of critical data in secure auditable manner for all constituents

Challenges to Avocado: Major U.S. Organic Mattress Manufacturer


Continuously monitor sheep health & farming conditions with

IoT sensors, location tracking, testing & manual certification

processes.

Continuously monitor sheep cleaning and shearing processes using video, photos

Use Copperwire Blockchain to; track serialized sheep digital history, prove organic provenance, support instant

access to data, analyze & identify farming and process improvements

Customer facing app; consumers scan QR

code on package to track provenance of material

*Project now in Phase 1, covering Wool Supplies & Sheep Farming

practices only. Will move into other material sources & business practices

Solution: Establish & Operate 100% Organic Mattress Blockchain Consortium

Main Consortium Members

Brand: Avocado MattressWool Supplier: Agrestal Organic Living IndiaTechnology Provider: Coppewire SystemsOther Material Suppliers: tbd (cotton, latex etc.)Factories: Agrestal, Shikhar Wool ProcessorsRetailers: Avocado Retail Stores


Transform Sheep Data; Phase 1: Establish Provenance

Track Location• Use photos and videos during adhoc

inspections to track sheep movement, farming practices

• Will use automated video analysis in the future

Track Food Farm Quality• Measure grass density via swad sticks• Manually audit food for chemical

additives, wastes (e.g. poultry waste)• Future: use sensors to measure ambient

temp., soil moisture; soil nutrient deficiencies, unwanted chemicals

Serialize lots traceable to Sheep• Establish Lot Records with attributes

Integrate other Sheep Attributes• Vaccination, Illness, Pharmaceutical records• Weight before and after transport and

shearing• Ethical and socially responsible farming and

factor practices, e.g. farmer pay, diversity, animal welfare

Track Cleaning & Shearing• Use of cameras and videos (in future)

of every sheep batch cleaned• Manually audit for humane and fair

practices

From Farm to Bed; Phase 1-Certify Organic Mattress Wool

Birth to Obtaining Wool (shearing)

Clean, Classify wool; Certify process

Track Shipment of Wool from Source

to US port(s)

Convert Wool into Mattress Ready Material

Final Distribution of Mattress to Customer

• Sheep & farmer data• Animal welfare, grazing

process• Grass quality• Land management, • Soil & weather data • Serialization for Fiber

traceability

• Wool classification data• Logistics from farm to

classifying facility• Cleaning, carding and

combing activities• Inspection / certification• Proof of social / ethical

practices

• Shipping data• Track shipments by batch

container; source to port• Track key docs, e.g. Bill of

Lading• Store key images and

videos of the shipment

• Processing data • Quality testing data• Track process & outputs • Track & record

certifications• Track Orders &

Shipping

• Product & store data • Provenance of mattress via

QR scan app for consumers

• Regulatory & certifications reporting

www.copperwire.io

CopperwireBlockchain Platform

Dapp(back-end)

Full Node

Dapp(back-end)

Full Node

Dapp(back-end)

Full Node

Dapp(back-end)

Full Node

Dapp(back-end)

Full Node

SHEEP FARMING CLEAN & CERTIFY SHIPPING FACTORY STORE, CUSTOMER


Sheep Farm to Store; Integrated IoT, Analytics, Blockchain Architecture


Organic Sheep Farm in India

IoTPlatform


Smart Contract


Mattress Store


Efficiency and

Revenue



DApp Frontend

Data Driven Analytics for Organic Mattress Production

Delavi BioPlanet Factory Avocado RegulatorAgrestral Organic Living India Blockchain

1 2

3

Off Blockchain Entity / Process

*Project now in Phase 1, covering Wool Supplies & Sheep Farming practices only. Will move into other material sources & business practices

Blockchain Shared Mattress System of Record eliminates reconciliation issues caused by previously silo’ed systems. Transparency reduces waste from mishandled source animals and materials. Increased consumer trust translates to more revenue.


Sheep Farm to Store; Integrated IoT, Analytics, Blockchain Architecture


Organic Sheep Farm in India

IoTPlatform


Smart Contract


Mattress Store


Efficiency and

Revenue



DApp Frontend

Data Driven Analytics for Organic Mattress Production

Delavi BioPlanet Factory Avocado RegulatorAgrestral Organic Living India Blockchain

1 2

3


*Project now in Phase 1, covering Wool Supplies & Sheep Farming practices only. Will move into other material sources & business practices


Promised Results for Avocado Mattress & Blockchain Consortium when in Full Production

Increased Consumer Trust and Engagement with Brand

Transparent & Immutable Shared System of Record; Optimize Distribution & Pricing

Compliance and Proof of Organic Label

Data Mining Opportunities for Process & Farming Improvements

Proof of Socially Ethical Processes, e.g. farmer payments, diverse labor, humane sheep care, etc.



• Case Study: • Oil & Gas Industry in New Mexico and Pennsylvania

• Use Case: • Authenticated Provenance for ‘Asset Grade’ Oil and Gas Data

• Drivers: • Reduce Tax and Income Revenue Lost to Unnecessary Flaring• Improve Health of the Planet

• Provide reliable data for measuring Net-Zero Carbon goals• Improve Trust in Oil and Gas Greenhouse Emissions data by:

• Transforming and contextualizing raw data using AI and cryptographically securing them on an immutable ledger

Strengthen Industry & Regulatory Certifications

by providing trusted, verifiable real time data, all not possible with today’s

annual inspections

Global Warming> 25% global warming caused by manmade methane emissions;

Persistent emissions, leaky pipes, wasteful venting & flaring major

factors*

Regulations2016 EPA rules target methane

emissions from oil & gas well-head, well pad, transport equipment &

operations.**

Prove Provenance via trustworthy capture & presentation

of critical data in secure auditable manner for all constituents

Challenges to Oil and Gas Industry; New Mexico and Pennsylvania

* https://www.edf.org/climate/methane-other-important-greenhouse-gas **https://www.epa.gov/sites/production/files/2016-09/documents/nsps-overview-fs.pdf

Unreliable Reported Data

No source of truth for pollutantsNo standards for reporting

Biased, latent dataDeviations across common indicators

Global Warming> 25% global warming caused by manmade methane emissions;

Persistent emissions, leaky pipes, wasteful venting & flaring major

factors*

Regulations2016 EPA rules target methane

emissions from oil & gas well-head, well pad, transport equipment &

operations.**

Harmful ImpactsTangible proven harm to health of

people & planetRevenue loss from waste;


Solution: Establish & Operate Oil & Gas Consortium for Environmental Impact (ESG Measurements)

Initial Consortium Members

States: New Mexico, PennsylvaniaAgency: Environmental Defense ForumTechnology Provider: Context Labs

Ingest and Normalize DataContinuously ingest & normalize data on

Greenhouse Gas Emissions, other pollutants from; leaky pipes, blowouts, flares, well

incidents, gas release, water spills

Transform Data Use AI to compare site data

from private well producer with public satellite images &

regulatory sourcesDeconstruct event attributes &

assemble into AI-enabled graphs to support analyses

Validate DataObtain validation from human auditors,

other internal, or public records, combined with AI-based anomaly detection

Proof & RecordDigitally sign cryptographic proof of each asset event & store on blockchain ledger; Link on chain to off chain records for all asset facts

submitted by notaries


Transform Oil & Gas Data; Use Analytics, Timestamping & Cryptographic Proofing for Trustworthy Data

Integrate with IoT Sensors on Rigs• Establish Unique Identity Record, using a newly

created digital twin from regulator assignment

Toxic harm per Asset Operator Data• CO2 emissions• Methane emissions• Flaring• Spills• Blowouts • Fires

Manual Audits • Inspections• Violations • Safety incidents

Water monitoring• Fresh water consumed• Contaminated water disposed

Comparisons to Public Data • Satellite images • Drone video • Other aerial analyses • Regulator reports

Others….


Greenhouse Gas Emissions; States’ Project Starts with Scope 1

Source: Greenhouse Gas Protocolhttps://compareyourfootprint.com/difference-scope-1-2-3-emissions/

New Mexico & PA Project


Oil & Gas Data Timestamping; Integrated IoT, Analytics, and Blockchain Ledger Architecture

IoTPlatform


Smart Contract



Efficiency and

Revenue

Increase Trust in Measurements

Increase Trust in Provenance

DApp Frontend

AI for Methane Emissions & Revenue Loss Projection

Delavi Context Labs Blockchain Ledger

1 2

3


*Project now operated by Context Labs. In the future, other entities could run nodes in a distributed ledger architecture, especially relevant for Track & Trace.

Oil & Gas Field Events

Public Aerial Data

End Users: ESG Investors

RegulatorsLocal Govt.Consumers


Results for States, Regulators, Asset Operators, ESG Investors, and Public

Trustworthy Methane and Volatile Organic Compound Emissions Data & Estimates

Contextualized, timestamped cryptographically proofed data for ESG Investors, Regulators, Consumers, etc

Modeling tool to review impact of new environmental regulations

Public access web site for each state to demonstrate greater public good

Visualize Revenue Losses; e.g. $43M in 2020 lost tax and royalty revenue on $271.5 million of wasted natural gas in New Mexico*

*See https://www.edf.org/nm-oil-gas/revenue/


Jan 28, 2021GM To Make Only Electric Vehicles By 2035, Be Carbon Neutral By 2040https://www.forbes.com/sites/samabuelsamid/2021/01/28/general-motors-commits-to-being-carbon-neutral-by-2040/?sh=424982366355

More Corporations will Meet Investor ESG* Demands

February 21, 2020Microsoft Stands Head and Shoulders Above the Rest in ESGhttps://www.etftrends.com/disruptive-technology-channel/microsoft-stands-head-and-shoulders-above-the-rest-in-esg/

June 15, 2020 Applied Materials appoints Director of ESG, Corporate Sustainability and ReportingSee https://www.appliedmaterials.com/en-il/company/news/press-releases/2020/06/applied-materials-appoints-director-of-esg-corporate-sustainability-and-reporting

Too Big to Let the Planet Fail “... We are asking companies to

disclose a plan for how their business model will be compatible with a net zero economy – that is,

one where global warming is limited to well below 2ºC,

consistent with a global aspiration of net zero greenhouse gas

emissions by 2050. ”Larry Fink, Blackrock CEO 2021 letter to CEOsBlackRock is the world’s largest asset

manager, with $8.67 trillion in assets under management as of January 2021

* Environmental Social Governance criteria

Lessons Learned• There are no out of the box implementations for these technically complex

projects; custom efforts are required for desired outcomes • AI provides insights from data and events that can used to manage future workflows, and

continually adjusts as new inputs are ingested

• IoT connects physical world events to the virtual world

• Blockchain provides a shared immutable system of record and supports the ‘smart programmable’ glue that connects multiple entities in a supply chain

▪ Together these technologies ▪ bring transparency into previously siloed systems and partners

▪ facilitate smarter, more efficient, more trusted connected processes not possible otherwise

▪ ROI must be identified at the outset but▪ it can take years to achieve and is more likely to initially come from more efficient processes

than from additional or new revenue sources.


Action PlanKNOW the art of the possible

– Understand how Blockchain, AI, and IoT can be used to support Provenance and Track & Trace use cases

– Understand project constraints, e.g. new complex business processes, lack of mature domain-specific tooling, need for custom integrations, skill scarcity, few experienced vendors, etc.

LEVERAGE blockchain infrastructure already in place– Add Authenticated Provenance and Track & Trace blockchain use cases, if relevant to your business and

if you can demonstrate ROI through improved efficiencies and new revenue streams

– Public blockchains like Ethereum can also be utilized in many instances.

ADDRESS customer demands for greater trust – These technologies give customers confidence in your brand and the provenance of your products

FAST FOLLOW what’s worked in these supply chain case studies

But DO NOT OVERSHOOT – Start small with well-scoped use cases that need these technologies


Recommended Reading

§ How to Detect Fakes in a Zero-Trust World Using Artificial Intelligence and Blockchain

§ Key Takeaways From Gartner Survey of U.S. and China Enterprises to Guide Your Post-COVID-19 Blockchain Future

§ Hype Cycle for Emerging Technologies, 2020

§ Hype Cycle for Blockchain Technologies, 2020

§ Assessing the Optimal Blockchain Technology for Your Use Case

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