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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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How we can 10x our profits from the

$13 Billion Supply Chain Management Industry

May 24, 2018

For many people, it's impossible to imagine starting a day without it…

For others, it's a guilty indulgence that makes getting up early for work all the more worth it.

Either way, the consensus among coffee drinkers is that there are few things better in life than that first cup of coffee to help start your day. And we love it so much, we try to relive that initial euphoria with multiple cups throughout the day

But as you sip on that steamy cup of aromatic goodness, have you ever wondered where your coffee comes from, and what process it took to get it to your cup?

A typical coffee supply chain will look something like this:

A cup of coffee's life starts as a raw bean, grown on coffee plantations or farms. The majority of coffee comes from three main areas around the world, including the northern parts of South America, Central Africa and South-East Asia, with Brazil being the biggest producer globally.

Once the bean has been harvested it will move onto processing where it gets washed, dried and roasted. Next is transportation to retailers and distributors across the globe, before it gets sold to the end-consumer through coffee shops or grocery stores.

Most supply chains will follow this basic routine of production compounded with multiple auxiliary services from third-party providers.

For most consumers, what makes that first cup of coffee even better (or any consumable product for that matter, from drinking a nice glass of wine to driving in that new car), is knowing that the beans were organically grown on a plantation that uses sustainable farming methods by farm workers that are treated fairly without breaching any human rights violations.

Similar ethical standards can be applied all across the supply chain.

Are the packing plants using eco-friendly materials? Are logistics providers using transportation methods with the least amount of CO2 emissions? Etc...

Now the coffee container might tell you where it originated... if it's organic or sourced from reputable farmers… and even if the packageis recyclable.

But here's the problem:

Can you be 100% sure that your coffee is coming from Brazil and not somewhere far less exotic like Oxnard, California? Can you be 100% that it is in fact organic and that sustainable farming methods are used?

Even more concerning is that no one party will have complete oversight in any traditional supply chain. Verifying specific details about sourcing, processing methods or any other piece of information along the network can be a big challenge, if at all possible.

Centralized and fragmented data

Supply chains have become complex networks with various stakeholders having their own prerogative at each part of the chain that they occupy. This leads to data asymmetry without any incentive to provide complete information between parties.

The end-user therefore has no way of authenticating the product, creating the ideal opportunity for fraudulent or unethical behavior to take place along the chain.

Lack of complete information transparency and trust in traditional supply chains come down to two factors.

 Data is fragmented and locked up in data silos. This leads to low interoperability of data, meaning system communication between different stakeholders is fraught with complexity. To establish a high-level of transparency in the supply chain, this is a crucial problem in the technical ecosystem that has to be fixed.

 Supply chain data is centralized which creates the opportunity for data tampering and collusion between parties. Stakeholders might destroy or omit data when a scandal arises such as food poisoning or if it comes to light that employees are being exploited through below minimum wages. The fact that the possibility exists for parties to destroy or tamper with information leads to supply chain ecosystems with questionable integrity and trust.  

Blockchain brings much-needed decentralization

Decentralization through a Blockchain based network can eliminate the limited visibility across supply chains to increase trust and integrity. Its also reduces information asymmetry among the various different parties.

There are three ways in which the technology can provide the desired outcome

1. Immutability

The immutability of a Blockchain network means that data cannot be altered or destroyed. This forces stakeholders within a supply chain to be accountable for their actions which further increases the integrity of the data and trust of the network as a whole.

2. Consensus mechanisms

Consensus on a Blockchain network is achieved when the majority of network participants agree on a certain action to be taken. Thus, the decision is not only transparent for all participants to see but it also prevents the collusion of small groups to manipulate the network for their benefit only.

3. Blockchain flattens the structure

Blockchain technology removes the need for central authorities and unnecessary third-party involvement. Reducing the number of individual stakeholders needed for the effective operation of the supply chain means there is a greater opportunity to achieve information symmetry and data interoperability.

Introducing OriginTrail

The first purpose built protocol for supply chains based on Blockchain

OriginTrail is not just a company, it is an ecosystem. It's based on a token economy with direct relations between users and network nodes free of arbitrary fees.

OriginTrail is a unique solution that allows IT providers in supply chains to set up blockchain supported data sharing in a multi-organizational environment. It helps them build transparency beyond the “one step down, one step up” traceability principle. Furthermore, it improves the integrity of product data and drives efficiencies for stakeholders.

OriginTrail is a Slovenian based company with a working platform that launched their Alpha version in 2013 before an initial implementation with the Ethereum test network in early 2017.

The platform's main function is a decentralized protocol that is made for sharing supply chain data on a Blockchain network, bringing increased transparency and trust. They further ensure compatibility with existing ERP systems by supporting global standards for data exchange, such as GS1.

The unique protocol enables IT providers to effortlessly employ Blockchain supported, transparent data sharing in a supply chain by focusing on a number of core aspects:

Data interoperability

All information must be standardized within the system to allow for a uniform data flow. XML is a widely adopted format but the content within these file formats must also be standardized.

OriginTrail therefore use GS1 standards, supporting the information needs of end-users interacting with each other in the supply chain

Data consensus

A three-step consensus check is performed when receiving information from stakeholders to ensure there are no discrepancies between data provided by different stakeholders.

Step 1 – Stakeholder data has to be approved by the following and previous stakeholder in the chain, creating a chain of accountability

Step 2 – Dynamic batches of information are verified including batch identifiers, timestamps and transnational data

Step 3 – Auditing and compliance organizations can validate data by supplying conformations

Decentralized network

The OriginTrail protocol will run on an off-chain decentralized network called the OriginTrail Decentralized Network (or ODN). The solution minimizes the amount of data stored on the Blockchain to reduce costs and inefficiencies.

Origin trail incorporates the Ethereum Blockchain to ensure data integrity (although the fully developed solution will support interfaces to various different Blockchains).

Two system layers are built on top of the Blockchain layer:

The ODN Data layer takes care of all the data management and connectivity functionalities (focusing specifically on data relationships).

The ODN Network layer takes care of the accessibility and data governance of the underlying data layer.

Data Input

A standardized interface format is used to introduce a dataset into OriginTrail. This could be via a web service or an XML file. A network node will then perform a four-step process to merge the data into the supply chain, including:

An initial data format check for syntax and semantic errors.

The data set is then converted into graph form in the database with unique product and batch identifiers.  

The node will then attempt to introduce the new data set into the network  

A successful attempt means the data gets merged into the product supply chain as well as being validated through a consensus check and fingerprinted on the Blockchain.

Data distribution

To read certain information in OriginTrail requires data to be requested from a node with a specific set of input information such as product identifiers and several other parameters, including batch ID, unique product package identifiers, timestamps, etc.

OriginTrail Team

OriginTrail has a strong team of 28 core members and advisers including:

 Tomaž Levak (Co-founder & CEO) – Has been involved in supply chain transparency since 2011. His also part of the Ethereum Enterprise Alliance and an H-Farm alum

 Maja Voje (CMO) – Has 6 years' experience in marketing, including at Google and Rocket Internet. She has an MSc degree in Business Administration and is also an ICO rater at ICObench

 Sava Savić (Data Interoperability Specialist) – Has a Ph.D. candidate researching statistical methods in E-business. He also has 7 years of experience as Microsoft ERP consultant and 1 year as a financial auditor in KPMG

 Nino Pirtovšek (Head of Business Development) – Has helped over 30 businesses execute business transformations and worked for both Deloitte and PwC

 Radomir Sebek (Software Testing Engineer) – Is a former employee of Skype and has 7+ years of experience in telecommunications

 Ken Lyon (Supply Chain Advisor) – Was VP and international information services director at the UPS Logistics Group  

 Srdjan Krčo (IoT Advisor) – Is the CEO of DunavNET and worked for Ericsson as an innovation consultant. He is also a founding member of the IoT Forum and member of the Alliance for IoT Innovation

Community

Facebook (2,500 followers)

Twitter (11,400 followers)

Reddit (4,700 subscribers)

Telegram (2,400 members)

OriginTrail Partnerships

OriginTrail is also a member of the Enterprise Ethereum Alliance...

They won the 2017 Walmart Food Safety Innovation Award...

And they have partnerships with Blockchain for Social Impact Coalitions (ConsenSys) and Blockchain in Transport Alliance (BiTA).

They've also done various successful trials of their network application with existing companies, including:

Zelene Doline (dairy producer)

Natureta (vegetable producer)

Perutnina Ptuj (Poultry producer)

THE THREE KEYS

When it comes to hitting it big with our long-range investment options, we have discussed before that there are three keys to success.

We discovered these keys after analyzing hundreds of companies that have failed and hundreds that have succeeded, and among those we found the three things that determine market and industry leadership.

When we invest, we look for companies that hold at least one of these three keys.

PROTOCOLS

Protocols or "fat protocols" provide a platform for emerging blockchain tech companies to build on their technologies and networks.

Think Amazon or Ethereum. Both are huge platforms.

OriginTrail is an operational interface layer that currently sits on top of the Ethereum Blockchain, however, they have stated that the fully developed solution will support interfaces to various additional Blockchains.

Their protocol will be able to power all types of purpose built SCM Dapps in the future

INTEROPERABLE

As the universe of blockchain continues to expand, hundreds of new platforms and applications will be developed, and those that are able to work across multiple networks and platforms, speaking the “language” of each individual blockchain, will be the ones that will succeed at a pace similar to the growth of the space in general.

A core purpose of OriginTrail is to make the application and readability of information interoperable across the various stakeholders within a supply chain, so interoperability is a core piece of what they are doing to connect different SCM systems and other Blockchain networks.

SCALEABLE

For cryptocurrencies to remain viable as adoption increases, it is essential that the time to process transactions remains low. One of the downsides of a decentralized currency is that orders placed on the Blockchain can actually slow down the network.

OriginTrail describes itself as “the only scalable solution for data management across complex supply chains through purpose-built decentralized graph database.”

They achieve scale through the ODN that allows for data to be stored off-chain, effectively de-clogging the Blockchain to process more transactions without compromising on speed.

The OriginTrail token (TRAC)

The Origin Trail ecosystem uses the TRAC token, which will be used as a means of compensation between supply chain data producers, data consumers and node holders within the OriginTrail ecosystem.

The OriginTrail protocol allows for supply chain applications to be built on top of it and the TRAC token will also be used in these applications.

Users that want to write data in the protocol will be required to run a node. This will ensure integrity, facilitate the possibility for additional scaling, and nodes will act as data holders for other supply chains looking to store data on the network.

OriginTrail is a POS network, requiring users to stake a certain amount of TRAC before they can form a node.

OriginTrail nodes are incentivised to do two types of tasks:

Data processing: supply chain consensus checks, data quality and replication checks

Storing, managing and delivering the data in graph form

The amount of tokens to be awarded for the nodes providing the service is a function of supply and demand between nodes and users. Data creators will not be required to pay any additional arbitrary fees apart from what they agree to pay to the nodes. On the other side, nodes will receive full payment of what they have agreed with and provided to the user.

The TRAC token is implemented as an ERC20 compatible token on Ethereum. This ensures interoperability with wallets and other tokens on Ethereum. The TRAC token smart contract handles all transactions and balances in a secure and trusted manner.

The supply of TRAC is capped at 500 million tokens and the current circulating supply is just over 268 million TRAC.

SUMMARY

TRAC is currently trading at $0.21, with a market cap of $57 million.

The traditional SCM industry size is around $13 billion. If OriginTrail can capture a mere 5% of this market, it will increase its own market cap by more than 10-fold to $650 million.

Also, other players in the SCM space like VeChain which is currently valued at almost $2 billion show the potential for a more than 20x increase from where we are today.

Therefore, it could be possible to see TRAC tokens trade close to $2.50 in the mid term and even up to $7 in the long term.

Supply chain management is an important function in many markets. It is also a big industry in need of a functional solution to combat data asymmetry and network trust.

And OriginTrail has positioned itself perfectly at the receiving end.

OriginTrail is one of the most functional tokens within the Blockchain supply chain space, with a proven track record of successful use cases. In addition, the protocol allows for third-party applications to be built on top of the OriginTrail network which will drive secondary demand.

“OriginTrail has to become a global way of exchanging data with integrity. We have a great community of ambassadors and we are building towards a global adoption. We are creating a quality network of different companies that can act as integrators. It is not us working on all the implementations, but rather involving these companies that understand how the protocol works and be the layer that helps foster the ecosystem's growth. Within the 5 year timespan, our vision is to be the key player for brokering trust between businesses.”

- Tomaž Levak, OriginTrail CEO and Co-founder.

Coin Action

TRAC is an ERC-20 compatible token meaning any Ethereum wallet can be used to store your tokens

TRAC tokens are only tradable on a handful of exchanges, including Kucoin, IDEX, HitBTC and CoinFalcon.

However, the OriginTrail website lists Gatecoin as an additional exchange.

Action

Action: Buy OriginTrail (TRAC)

Buy-up-to Price: $0.40

Buy It On: KuCoin, HitBTC, or IDEX

Store It On: MyEtherWallet on Trezor or Ledger

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