Supply Chain Today

With globalization and interconnectedness around the globe, supply chains have become incredibly complex. There is often a tangle of participants that stretches far beyond a simple peer to peer relationship. Not only are there co-dependencies across the entire chain, but there is also a plethora of intermediaries involved in the physical movement of goods: Forwarders, insurers, governmental bodies like customs and many more.

This complexity makes international transactions a challenging task for involved parties, however, efficient supply chain management is one of the key pillars to business success. By increasing efficiency of business processes and effectively managing the supply chain, companies can create and secure impactful competitive advantages. Unfortunately, many processes are still analog, and interdependent streams between physical delivery, supporting documentation and payments are disconnected.

This is exactly where technology can support and create chances for optimization and automation. Imagine a world where supply chains can be automated end-to-end, including the handovers between multiple parties and the respective back office processes. One event triggers the next and they are all interconnected. Not only would this increase speed, it would also help to reduce associated costs and ultimately allow for a better customer experience, in both consumer and industrial markets. Emerging technologies like IoT, Artificial intelligence, Machine Learning and Big Data support the realization of this vision. And Distributed Ledger technologies play a vital role for enabling it.

Morpheus.Network’s Role / Positioning

This is where Morpheus.Network positions itself. It creates a middleware layer that connects previously disconnected workflows and systems. Imagine it as the binding glue between different components that create a well-oiled and functioning machine. With its event based modular architecture, it can automate processes by creating an end-to-end digital footprint.

Supply chains comprise of a magnitude of systems and platforms that need to communicate with each other. This encompasses different ERP and warehousing systems, forwarding interfaces, EDI, as well as documentation and payment layers, just to name a few. All this information is stored in data silos of the respective actors which require alignment. However, most often the exchange of information involves more than two parties (1 to n relationships) who do not necessarily trust each other.

By providing a middleware solution, Morpheus.Network can combine multiple separated systems by utilizing data inputs and trigger outputs based on pre-defined events. Data is handed over in a trustless architecture based on distributed ledger technologies. With its blockchain-agnostic architecture, it can ensure that confidential information remains in permissioned networks, while other datasets can be openly shared between multiple parties. With a fully digitized data-driven workflow, the required basis for leveraging other technologies like AI, ML or data analytics is established.

It is important to note that Morpheus.Network does not seek to replace existing systems and services, but rather augment them. It provides the infrastructure that allows multiple systems and parties to communicate in a digital manner. With a holistic data trail, previously separated layers of physical distribution, documentation and services, as well as the payment streams are connected. This creates the base for offering new data-driven services and automated workflows to all involved parties.

A real-life example: A manufacturer receives a purchase order in his ERP system. He attaches a digital ID of his product that can be queried over a scannable QR code and submits the data out of his ERP system. The forwarder scans the code upon pick-up and during transport, thus feeding the manufacturer’s database with all relevant information about the shipment, automatically connected to the product and purchase order. Relevant export documents for customs are automatically submitted by scans at the respective hand-over points. The buyer confirms receipt of the product by scanning it upon arrival. This scan triggers the payment to the manufacturer. Simultaneously, information is shared with insurance providers to document hand-overs and delivery time, allowing for automated reimbursements in case of damage, delays or loss. Morpheus.Network provides the middleware layer that connects and shares the relevant datasets, enabling a fully automated process based on modular event triggers.

To show how this works in practice, Morpheus.Network teamed up with Litecoin to demonstrate an automated workflow that brings shipping information, documentation and payment together.

Litecoin

Litecoin offers many advantages as a payment layer. As a peer-to-peer currency that is built on an open source network (released under the MIT/X11 license), it enables instant, near-zero cost payments to anyone in the world. The Litecoin Foundation acts as a non-profit organization that ensures stable operations of the network.

Morpheus.Network CEO Dan Weinberger and David Schwartz put together a demonstration which uses Litecoin as the payment layer for an international shipment. David Schwartz is the Litecoin Foundation Project Director and aspires to promote awareness and adoption of Litecoin in real-world scenarios.

The collaboration showcases how Litecoin can be leveraged to enable real-time, intercontinental payments. The Litecoin blockchain is capable of handling higher transaction volume than its counterpart Bitcoin. As a result, merchants get faster confirmation times, while still having the ability to wait for more confirmations when selling bigger ticket items. When using Litecoin, one can make instant money transfers at a fraction of the cost of a traditional banking system.

The Use Case

The use case is based on a live export from Canada to the US. The automated workflow handles all the specifics and peculiarities of an international shipment which includes Custom Border-Protection, taxes, duties and prices. In addition, the relevant datasets for tracking, insurance and payments are integrated and leveraged to automate an end-to-end supply chain.

As a starting point, the individual workflow is set up in the Morpheus.Network user interface. It specifies all conditions and steps that are relevant to the supply chain. Picture it as the digital twin of the actual process which defines all events. This includes payment terms, process steps of physical transfer and the corresponding documents and services.

Setting it up is as easy as naming and dating the workflow and assigning the initial shipping information. With an easy to use drag & drop interface, modules can be added to reflect event triggers along the entire process, based on customizable predefined rulesets. In this scenario, a QR code is used to identify the shipment and trigger actions upon scanning. This can be achieved by simply adding the Morpheus.Network QR Code module, allowing the user to generate a code and link it to associated input datasets. In the next step, the scan of the QR code by the forwarder automatically generates relevant documentation for the product trail. As the product is pushed forward, the platform sends notifications to all downstream links in the supply chain and forwards the QR code to relevant parties, triggering subsequent events.

Another key module is the export documentation, involving the setup of export documents. This includes pertinent information such as the shipper address, weight, unit, country of manufacture, invoice, and customs brokers. Upon scans at predefined hand-over points, these documents are then shared automatically with all involved parties. Once the documents are generated, they are shared and stored using IPFS.

The payment layer is set up by defining the source and destination currencies. Here, the initial payment is carried out using Litecoin and transferring it to the destination address in Bitcoin. This is a great showcase of the blockchain agnostic capabilities of Morpheus.Network which allows to seamlessly integrate multiple blockchain backends in one process. The platform itself handles any fees associated with the transaction and does conversions on the fly. The initial 50% upfront payment is automatically delivered once the first QR code is scanned when the product leaves the warehouse. It is sent in Litecoin and received in the equivalent BTC value.

As the payment itself can be a trigger for events like document creation, it also gives a good example of Litecoin’s strengths. With the money being transferred almost instantly, it allows subsequent steps to be automatically executed without having to wait hours or days for settlement. Thanks to the integrated on-the-fly conversion, this happens at a fraction of costs and time normally associated with international payments.

At the end of the workflow, another QR Code scan confirms the reception of the goods at the buyer’s address. Upon scanning the second QR code at delivery, the final 50% payment is automatically triggered. This step indicates that the shipment has been completed and all associated documents and payments have been exchanged automatically along the way. The result is increased efficiency and cost-effective information exchanges for all parties involved in the transaction. Each party has a fully digitized audit trail and can extract details from the process as required.

Morpheus.Network is running a number of pilots with customers around the globe, giving us the opportunity to demonstrate our platform’s versatility and flexibility through cooperations with a range of global logistics companies. We work closely with these businesses to create custom solutions tailored to their supply chain needs. You can read about some of our pilots here: