Does blockchain mean an end to paperwork chaos?
Biggest pilot project nationwide launched: Around 20 companies test the use of blockchain in the pallet exchange process. Their goal: To gain insights into the pros and cons of the database technology for the logistics sector18. April 2018
Today, GS1 Germany, together with Beiersdorf, dm-drogerie markt, Container Centralen, Lekkerland and PwC, used the 24th Retail Logistics Congress (Handelslogistik Kongress) in Cologne to announce the official launch of a large-scale blockchain pilot project in the logistics sector: For the rest of the year, a group of leading companies will be testing whether, and how, blockchain technology can be used to manage the exchange of Euro pallets in a digital, transparent and efficient manner. "Logistics processes today are still characterised by manual documentation procedures and a lack of transparency, so there's a lot of room for optimisation" says project manager Regina Haas-Hamannt, Head of Innovation at GS1 Germany. "The ideal starting point for the project."
Participating in the initiative on the retail side are dm-drogerie markt, Kaufland, Lekkerland and MARKANT. Beiersdorf, Dole Europe, Dr. Oetker, Gärtnerei Ulenburg, Ringoplast and the Wernsing Food Family are involved on the manufacturing side. Key participants from the logistics sector include Container Centralen, Deutsche Bahn, the European Pallet Association e.V. (EPAL), PAKi Logistics and the Nagel-Group. The European EPC Competence Center (EECC), the Fraunhofer FIT and T-Systems are involved in an advisory capacity. The auditing and business consultancy firm PwC is responsible for documenting the requirements of the pallet exchange process and implementing them on the technological side. Eric Stettiner, Director and expert for enterprise architecture at PwC, sees the benefits of the project in its practical relevance: "Blockchain technology has the potential to change and simplify existing business models and practices. We're supporting this initiative in order to improve our knowledge about the practical conditions and factors that determine the success of blockchain projects." Business software vendor SAP is responsible as technology provider for the architecture of the solution and technical implementation of the future blockchain application.
"The large number of participants shows how great the demand is in the market for more information about blockchain in practice", says Haas-Hamannt. "This is why we're conducting this trial." A sentiment endorsed by the project participants too: "Everyone's talking about 'blockchain'", says Heiko Stuhr, Supply Chain Director for Germany/Switzerland at Beiersdorf. " We want to be involved directly and one of the first manufacturing companies to discover what blockchain actually means in practice. This is why Beiersdorf is pleased to be actively supporting this pioneering GS1 project." Christian Grotowsky, Head of IT at Lekkerland, adds: "We think blockchain technology has great potential, so we're very eager to find out whether it fulfils the expectations within the scope of this pilot project."
Quantum leap to digital pallet credit note
At the heart of the initiative is the pallet credit note . This paper-based document is still part of the daily life of every truck driver and is often the source of inefficiency and a lack of transparency in the logistics sector. Consignees use it when they're unable to exchange pallets immediately. It documents the number, type and quality of the pallets. The holder can later redeem it with the issuer or with an authorised service provider. "The operators often have no idea which supply chain participants are involved in the exchange process. Plus there's no intermediary who monitors the process", explains Haas-Hamannt. "This makes the process extremely opaque. If blockchain makes managing the pallet exchange process more efficient and transparent, it would be a quantum leap for all involved."
The next step: Definition of the system architecture
During a preliminary phase, the logistics experts from the various companies involved defined a standardised process workflow, the necessary roles and basic process requirements for programming the blockchain later on. The next phase for the project team begins in May. The IT specialists from the participating companies will work with experts from SAP to define the governance model and system architecture of the blockchain. Phase three will involve developing a simulation environment based on this for an initial test run with a prototype. The actual blockchain test itself will be conducted in phase four. During this phase, manufacturers, logistics service providers and retailers within a real supply chain will transact pallet exchanges using the blockchain technology. This test, together with the evaluation, will form the basis for the fifth and final stage: deducing recommendations for action for its real-world application. The project participants intend to publish these by the end of the year. Because the goal of the project is not to test blockchain technology just for the benefit of those involved, but to disseminate the findings as widely as possible. Haas-Hamannt is hopeful: "We're very interested in seeing whether the hype surrounding blockchain proves justified in real life."
GS1 Germany assists companies in all sectors of industry to implement modern communication and process standards in practice and in doing so, improve the efficiency of their business processes. Amongst other things, the company is responsible in Germany for the globally unique GS1 item numbering system - the basis of the barcode. In addition, GS1 Germany promotes the use of new technologies for automatically identifying items (EPC/RFID) and standardised electronic communication (EDI). The company also focuses on solutions that increase customer orientation (ECR - Efficient Consumer Response) and on current trends, such as mobile commerce, multi-channelling, sustainability and traceability.
GS1 Germany is a member of the international GS1 network and is the second largest of over 110 GS1 Country Organisations after the USA. GS1 Germany is owned in equal part by the EHI Retail Institute and the Trademark Association.
About the Lekkerland Group
Our customers' success is what drives us.
Established throughout Europe the Lekkerland Group has set itself the goal of becoming the preferred full-service concept provider for all on-the-go consumption channels and all aspects of the convenience store business. As such, Lekkerland is much more than just a wholesaler. We develop and provide not only customised logistics and supply chain solutions, but holistic store concepts, food service modules and retail space optimisations as well. Lekkerland services around 90,000 points of sale in six European countries and its assortment features the latest brands and own-label products. Our customers include service stations, kiosks, convenience stores, bakeries, food retailers and quick service restaurants. Lekkerland employs around 4,800 people across Europe. It turned over 13 billion euros in the 2016 financial year.