Why data integrity is paramount to supply chain security

By: Geeq

In a globalized world where we rely on imports to meet many of our basic needs, reliable supply chain data is pivotal to the efficiency of the global economy. Data must be not only secure, but also time-consistent. Geeq recently partnered with Morpheus.Network, a middleware platform that helps logistics providers harness the benefits of blockchain. Here, we lay out in detail the sector’s specific challenges, and how Geeq fits in.

For many consumers, just-in-time delivery has become an integral part of their everyday lives. With a few clicks, we can order extra groceries online and they arrive on our doorstep within days or even hours. But when we walk into a store and take a product off the shelf, we rarely think about the vast and delicate web of logistical connections that brought it there.

Supply chains: essential to the modern economy

Our economies and consumption habits now rely heavily on the global supply chain. Take the banana, for instance, a delicate tropical fruit that was still considered a rare delicacy at the turn of the 20th century. Despite needing to be hand-picked and then shipped in refrigerated containers for thousands of miles, it is now the most widely consumed fruit in both the US and Europe.

This is a trend that is mirrored in manufacturing. As liberal market economies like the US and UK have specialized in service industries and shed manufacturing jobs since the 1970s, the scale of the imports required to meet domestic consumption habits has grown. This is reflected by the US balance of payments deficit for goods, which stood at $1,090.7 billion in the period between 2020 and 2021.

But this is not about any one country in isolation. In a globalized world, we are all more dependent than ever before on the international supply chain to meet our existential needs. A simple, everyday item like a T-shirt, for example, might go from cotton farm, to mill, to factory, to warehouse provider before finally reaching the retailer – with each step in the supply chain in a different country, or even a different continent. This complexity became particularly apparent during the COVID-19 pandemic and subsequent supply squeeze, in which goods including computer chips, pharmaceuticals, lumber and many other products and materials fell into short supply.

This is not about any one country in isolation. In a globalized world, we are all more dependent than ever before on the international supply chain to meet our existential needs.

This complexity became particularly apparent during the COVID-19 pandemic and subsequent supply squeeze, in which goods including computer chips, pharmaceuticals, lumber and many other products and materials fell into short supply.

Digitization: despite progress, problems persist

In recent decades, businesses have made progress towards making supply chains more automated and efficient. Within organizations, significant investments have been made into enterprise resource planning (ERP) software to make processes and workflows relating to procurement, project management and supply chain operations more efficient. Furthermore, international quality management standards such as ISO 9001 have made it easier for countries to trade with each other according to common guidelines and standardized requirements.

But while businesses have made considerable headway addressing internal barriers to supply chain efficiency, the connections between stakeholders along the chain — such as businesses, vendors, shipping companies and regulatory authorities — remain relatively fragmented. Stakeholders often rely on differing, incompatible data systems, which complicates the handover of goods from one party to another at warehouses, ports and airports.

In addition, manual, paper-based documentation remains common. Shipping is the backbone of global trade, with an estimated 90% of goods traveling by water. But the industry still relies on the centuries-old concept of the bill of lading — a document detailing the cargo, origin and destination of goods, 40% of which are still transferred via paper records. Other commonly required documents for each shipping transaction include:

  • a bill of exchange that details the amount the buyer needs to pay for the goods
  • a promissory note signed by one of the parties to the transaction committing to pay the stated sum of money
  • a ship’s delivery order issued by the carrier of the cargo that instructs the port operator to hand over the cargo on arrival
  • a warehouse receipt detailing the quality and quantity of goods
  • a mate’s receipt signed by the ship’s officer indicating that the goods have been received and are ready for loading
  • marine and cargo insurance policies

While efforts have been made by legislators in the EU, UK and elsewhere to digitize trade documentation to increase efficiency, digitization also entails cybersecurity risks. The broad patchwork of software and data systems currently in use provides a wide range of potential attack surfaces for cybercriminals and other rogue actors, with any network only as strong as its weakest link.

The broad patchwork of software and data systems currently in use provides a wide range of potential attack surfaces for cybercriminals and other rogue actors, with any network only as strong as its weakest link.

Data integrity is paramount to consumer confidence

With so many points in the chain where data is transferred, anomalies become increasingly likely. Take a case where a medical device is being imported, for instance. To meet regulatory requirements, the manufacturer needs to be able to monitor and document the entire chain of custody from source to destination, with all handoffs clearly documented — from the manufacturing plant, warehouses, docks, and delivery depots, to the final recipient.

In numerous respects, blockchain technology is well suited to these types of supply chain cases. By creating a reliable and neutral store of information that all stakeholders can access and trust, everyone can trace the provenance and custody chain of goods. In addition, blockchain networks produce data redundancy by default, with each full node typically keeping a copy of the entire transaction history of the chain. This makes blockchain networks resilient against most conventional forms of cyberattack.

Geeq Data gives supply chain stakeholders additional assurance for off-chain data by providing a simple, non-intrusive way of continuously recording attestations for information that enters a datasystem. In the event of a cybersecurity breach, either internally or at another vendor in the supply chain, all records can be cross-checked against records in a node that is provably unchanged, in order to flag inconsistencies and help restore the original data (with the confidence these data were validated neutrally in the first place).

Using Geeq Data, every transaction receives a durable cryptographic proof of inclusion in a block, which can be connected at any point in the future to a provably correct chain state. No other blockchain offers this level of confidence.

The relationships between supply chain partners are often multifaceted. Two companies may simultaneously cooperate in one sector of the market while competing in another. As a result, businesses may wish to carefully control what information is accessible to other supply chain stakeholders to prevent commercially sensitive data from being revealed. Geeq Data can be deployed on a private blockchain instance and includes a fine-grained permissioning system to stipulate which data is available to whom.

For accurate recordkeeping and auditability, the time consistency of supply chain records is also of crucial importance. In the event that the wrong device is delivered, all stakeholders need to be able to clearly trace who had the goods at which time. Some blockchains have block confirmation times ranging from a few minutes to multiple hours, which could lead to confusion in the chain of custody, particularly when there are multiple handovers within a short space of time.

Geeq Data provides a reliable, time-consistent data layer that ensures stakeholders can always be sure that the original records concerning the order of events and the sequence of handovers can be identified. This increases the transparency of the supply chain and makes the lines of accountability clearer, making it easier to identify and rectify discrepancies.

Coping with complexity

Human society is fundamentally characterized by interdependence – from our earliest beginnings, ingenuity and cooperation have been the keys to survival. Nowhere is this interdependence more apparent than in the global supply chain, a complex web of interactions that provides us with everything from clothes and computers, to food.

The data systems that underpin the global supply chain were already in need of reform on efficiency grounds. But recent global events and the resulting supply squeeze have made that need even more pressing. Through our partnership with Morpheus.Network, we aim to play a small, yet vital role in making supply chain logistics more transparent and dependable.

You can discover more about Geeq Data and its benefits for supply chain operations on our wehttps://geeq.io/supply-chain-management/bsite.