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Cointelegraph spoke to Mika Lammi, Head of IoT Business Development at Kinno, about the ‘Blockchain in Logistics’ project carried out in partnership with IBM in Finland.
BlockShow Europe 2017 organized by Cointelegraph Events in Munich in the first week of April has showcased a number of established Blockchain solutions for various industries, not limited to finance and banking.
The logistics industry was represented by Mika Lammi. Head of IoT Business Development at Kouvola Innovation Ltd, or Kinno. A development agency owned by the City of Kouvola in Southeastern Finland is working on a SmartLog Project building a Blockchain-based logistics application to revolutionize the supply chain.
The problem identified by SmartLog has been overlooked for quite a long time. Information support systems in the logistics industry is fragmented and very diverse with hundreds, if not thousands of software applications, services and solutions, which do not always communicate meaningfully with each other, as system integrations are almost always built as one-on-one relationships between operational ERPs and their databases.
Blockchain technology, with its ability to deliver trustless connections and ensure data integrity, was found as an efficient solution for enhancing multi-party transaction scenarios in the supply chain business. SmartLog has introduced a scenario where various logistics companies are able to share and tap into a single Blockchain to get an access to a relevant information concerning the movement of the intermodal containers throughout the European Union transport corridors.
The project funded by 2.4 mln euros from EU’s INTERREG Central Baltic is planned for three years. During that time the SmartLog team will develop an application to issue information about containers’ location, surroundings and such to different ERP systems.
The project kicked in September 2016 with defining an academic research framework for further analysis of operational data which is to be collected from piloting companies. The data is needed to develop a Blockchain fabric and smart contract layers to facilitate moving data between participating companies. Besides that, SmartLog has been working on recruiting logistics industry companies across the Baltic countries to act as pilot participants.
In an interview with Cointelegraph, Lammi shares where the project is at the moment:
“We have entered the active development phase finally. I can't describe how good it felt when after two years of trying to convince people that this concept might actually be valid, now we are finally doing it, it is amazing. We started officially 1st of September 2016, development phase started two months ago, we are coding like mad, setting up our first demonstration areas, framing research questions and data mapping points and that sort of thing to get the most out of the first demo we will do in the northern Estonia. I am expecting our first results from the version 0.2 sometime before June this year, so we are moving quite quickly now.”
Lammi continued saying that so far everything has been running quite smoothly and according to the initial plan. The biggest challenges, however, which the SmartLog team has faced are those of ensuring the relevance of flowing information for each and every participant, and scalability issue.
“When we come to the use scenario of the total visibility, obviously we want to do that in a manner that is very secure and controlled, making sure that recipients only get that bit of info that is relevant to them. That means we are going to have to control basically every single sliver of messaging and make sure that they all go to the right place because having a flood of information about what everyone else is up to would be overwhelming for the recipients. That’s going to be a conceptual challenge for us, as we are going to have to develop some pretty mean access management systems so we can keep everything in control and still make it scalable, so it applies to ten companies or ten thousand companies at the same time. That’s going to be a very interesting challenge.”
Kouvola Innovation Ltd is partnering with Region Örebro County in Sweden, Transport and Telecommunication Institute in Latvia, Valga County Development Agency, Sensei LCC, and Tallinn University of Technology in Estonia. Quite recently SmartLog has started collaborating with IBM.
“We initially started talking with the IBM a bit over two years ago, and it has been a collaboration with them, we are not partners in a sense that we would exchange money or services - no. What we are doing is contributing to their efforts of creating an ecosystem of blockchains, on top of which they are going to offer services and products. So basically our interests are completely parallel at the moment. At least it is a very interesting situation because it enables us to help each other very freely, out of mutual interests, we have developed a really good relationship with them.”
At its recent InterConnect conference, IBM has announced the launch of Blockchain as a Service based on open source Linux Foundation’s Hyperledger Fabric platform. IBM has been looking to bring additional value to companies looking to adopt Blockchain technology.
Collaborating with initiatives like SmartLog will certainly allow IBM to simplify their own platform and improve security features. Besides, it is always better to work closely with industry players, rather than trying to work alone.
It is of course very early to say how the idea will work in reality but Cointelegraph couldn’t help but asking Mika Lammi how he sees the future of Blockchain technology in logistics in a few years from now.
“I really hate to predict. If I predict I like to base it on data, something solid and since nothing like this has ever been attempted before it’s really impossible to say anything with any conviction. But if we go into the realm of the science fiction, I can make some projections. Maybe in about three to five years Blockchain will start to play a major role in asset management both intellectual, like data asset management, and physical asset management in the logistics industry or supply chains to be more accurate. So in three years, it’s going to hit its first major breakthrough and maybe in five years it is going to be spreading like a wildfire through the industry.”
Mika Lammi concluded saying that he is sure to attend BlockShow Europe 2018, where we will certainly catch up with him again for the updates on the project.
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