A knock on the door
Rushes to go open
Sighs in relief after waiting over 40 minutes for its arrival
“Finally!!! Pizza’s here”
Smiles. Reaches for his pocket
Tips the delivery guy
Closes the door
Walks back to the living room
Opens the pizza box
Screams
“WHAT??????”
What could have been the problem? Surely, he didn’t see an empty box did he? Or maybe the pizza was already half-eaten? Well, I can’t say either but maybe this article can give us a hint on what caused the scream.
Over the years, there has been a growing number of global challenges in supply chain management. Supply chain management simply refers to managing the flow of products and services from the suppliers to the consumers. It involves all the steps that convert raw materials into finished goods and distribute them to final consumers. One of the main essences of supply chain management is to ensure the safe and quick delivery of products to consumers but such is usually different.
Supply chain management is one of the most crucial aspects of business that affects a company's overall performance, hence, a business needs to have a functioning supply chain system.
ISSUES FACING CONVENTIONAL SUPPLY CHAIN MANAGEMENT SYSTEMS
Highlighted below are some of the known issues facing traditional supply chain management:
Lack of transparency of supply chain actors: From the highest rank to the lowest rank in the hierarchical order of a company’s structure, there can be a lack of transparency as to the state of products which may later on lead to problems that the consumer has to face alone.
Lack of proper systems to aid product traceability: Traceability is the process by which companies track the movement of products along the supply chain. As products move from suppliers to consumers, there is always the possibility that the logistics truck didn’t take its expected route and developed some issues along the way, affecting the product and the consumer might not be informed. This lack of proper traceability of products along the supply chain is caused by inefficient record-keeping and proper systems to simplify the process.
Lack of proper risk assessment: Many supply chain systems lack trained personnel or systems to carry out risk assessment on products to ascertain potential risks associated with products or the possible adverse impacts that a change in the geographical location might cause on products. For instance, environmental factors should always be considered in supply chain processes.
Security threats: Usually, depending on the location and the distance, there is the risk of insecurity in the shipping of goods.
Time-consuming manual processes: Up until this time of technological advancements and evolution, some companies are still stuck with manual ways of carrying out industrial operations which slows down the entire supply chain process.
Issue of tampering: Over the past years, there have been multiple complaints about products being tampered with on arrival to the consumers. This issue has, for a long time now, continued.
Consumers’ data lack privacy: Some traditional supply chain systems require the full personal information of consumers to get the delivery right. This poses a risk to the consumers' security as it can lead to their data being misused for illegal activities.
Inventory management issue: Many companies deal with the issue of incorrect inventories, for example, an item being out of stock. In a case like this, the company may get thousands of orders for a product they only have in hundreds. This ultimately leads to the company canceling orders of their customers and issuing refunds. Recall the Solana Saga's inaccurate inventory that led to the company processing more phone orders than they had in stock. This led to multiple customers’ orders being canceled to match the number of orders to the number of phones in stock.
Packaging errors: Let’s not forget the human factor. Humans are not machines and are bound to grow fatigued at one point. There is always the possibility of mistakes when packaging products for shipping or delivery.
Wrong delivery information: Some orders don’t get to the expected customer due to errors made when filling in the delivery information.
WHAT IS A ZERO-KNOWLEDGE PROOF?
Zero-knowledge implies proving the truth about a piece of information without disclosing the content of that information. Zero-knowledge tech is a cryptographic method by which one party (the prover) proves the truthfulness of a transaction or message to another party (the verifier) without revealing the content of the message.
A Zero-Knowledge Proof (ZKP) is the cryptographic key that the prover sends to convince the verifier of a claim but doesn’t reveal the content of that claim.
HOW CAN ZERO-KNOWLEDGE PROOFS BE EMPLOYED IN SUPPLY CHAIN MANAGEMENT
Zero-knowledge proofs have massive potential in various industries like supply chain management. Here are some ways in which ZKPs can be applied and be beneficial to the supply chain sector:
Protecting patent or intellectual property: Blockchain holds a permanent and immutable record of activities that happen on-chain and zero-knowledge proofs can be used to verify facts without divulging information. They can be applied in the supply chain to help protect companies’ intellectual properties or patent rights and also help prevent being charged with theft. How so?
If a company utilizes blockchain tech to conduct its manufacturing business and somehow faces a legal battle of alleged patent or intellectual property theft (simply put, the company is being accused of stealing another company’s ideas for a product or process), the company can employ the use of ZKPs to proof the authenticity and originality of their product without the need to reveal its process or product’s private data to the other company or to an outside party (say the lawyer or court).
Protection of users' data & identity: Zero-knowledge technology or protocols can be utilized by companies that use third parties for shipping or deliveries to protect sensitive personal information of their customers. ZKPs are useful in proving the correctness of a customer's public information but not revealing much private information about the customer to the shipping/delivery company. Also, with ZKPs, customers can prove ownership of their orders but not reveal much information to the “delivery guy” or the shipping company.
Ascertaining the quality and provenance of products: Products with specific dates, origins, and events can be entered into a shared ledger by supply chain actors. With the emergence of IoT, some of these products' data like temperature, stress resistance, pressure, elastic limits, etc are made available to be transferred across various devices and can therefore be linked.
However, supply chain actors don’t need to enter or reveal the entire content of the data, they can share proofs (e.g., location proofs, proof that the boiling temperature of a product doesn’t exceed the normal) of the validity of the data relating to the products. A smart contract is utilized to ensure that every supply chain participant shares valid proofs. Predetermined conditions are programmed into the smart contract so that it automatically knows and verifies the products if those conditions are met. Once verified, the quality and provenance of the products are ascertained.
Real-time traceability: Participants in the supply chain can utilize ZKP to prove the location or condition of a product without having to provide the product's precise location or other specific details. This improves security and privacy when tracking products from manufacture to delivery.
To verify compliance with regulations: ZKPs can be used to show compliance with certain guidelines and regulations without revealing private or sensitive information. This is especially helpful in sectors of the economy where compliance with rules is essential.
In cases of collaborations between multiple companies, a more suitable solution - sMPC can be utilized in union with ZKPs. Secure Multi-Party Computation allows for multiple parties to work together on a computation to achieve a desired result without any company needing to reveal trade secrets and whatnot. Learn more about ZKPs and sMPC in this article.
ZKPs have found wide usage in many industries and their relevance cannot be overemphasized. In the many months and years to come, we can expect to see more interest in this technology and people exploring its potential, even outside the blockchain.
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