A supply chain can be a complex and dynamic network of organizations, people, technology, activities, information and resources. It’s the people and processes involved in sourcing raw materials through to delivering finished products.
As an industry, the Global Supply Chain is worth over US$40 Trillion per year, and there are seemingly infinite international laws and regulations governing each step. It's incredibly inefficient.
“Experience indicates that even the simplest of mistakes or an oversight in a bill of lading can lead to complex and often costly problems.”
–Gard, Maritime Insurance
This global market is based on paper Bills of Lading, detailing merchandise shipment and ownership, and Letters Of Credit, that banks use to guarantee a buyer's payment will be received. Every step of the process typically makes use of an auditor too, adding delays, complexity, and expense.
California-based Skuchain thinks blockchain technology can fix a large amount of what ails supply chains today, with trustable visibility into the flow of goods and money. The company has spent the best part of a year working on a plan to overhaul every part of the supply chain process.
The company is attempting to unlock hundreds of Billions of dollars locked up in Letters of Credit and “other arcane and extortionate methods of prefunding global trade.” Travis Giggy, VP of Customer Development at Skuchain recently told IBTimes: "We think the blockchain is going to enable new kinds of commerce that are rarely seen in today's world outside of fully integrated companies like Apple. In five years we will see an emergence of what we call 'collaborative commerce'."
Skuchain has several investors already, including Amino Capitol, the blockchain-hungry Fenbushi Capital, and Barry Silbert's Digital Currency Group. They're also far from the only ones who want a piece of the world's largest market.
Several startups are already in pursuit of similar goals, including Provenance, a well-funded startup with a detailed plan to show the entire supply chain for every product at your grocery store on your smartphone, just by scanning the barcode.
Wave is also in the running, having completed the Barclay's accelerator late last year. The company is focused on overhauling the Bills of Lading system, using the blockchain. Wave is probably Skuchain's most direct competitor, but the startup's focus appears to be more concentrated.
Open Trade Docs looks like the latest entry, offering an open source approach to the supply chain finance process. Their goal is to provide supply chain participants with better access to financial services, using private blockchains.
Amongst all the competition, Skuchain's developers appear to be the first to propose adding smart contacts to supply chain management. “When the agreement is met, the money moves automatically,” states their website.
With all of the competition vying for market share, and so much of it well-funded already, it seems likely that supply chains will get their desperately-needed blockchain overhaul soon.