John Mitchell is VP Carrier and Retailer Solutions at Brightstar. With over 16 years of experience in the wireless industry, John specializes in creating value for operators and retailers with transformational programmes that drive supply chain efficiencies and customer experience.
You would need to have been consciously avoiding the news for the last three months to have not heard about Bitcoin – the crypto-currency with wildly fluctuating valuations.
What’s less well-known is that the technology underpinning it, Blockchain, has the potential to be as transformative for the wireless industry as Bitcoin is for the new currency market.
The current state of things
The introduction of innovative approaches to extending device lifecycles means wireless device supply chains are becoming increasingly complex. Buy back/trade in and refurbishment programmes, along with the consequent growth of the certified preowned market, have created new participants with more touchpoints. This, together with additional associated financial transactions, new and more complex reverse routing scenarios, and added opportunities for arbitrage, have combined to create new headaches with regards to both financial and product risk.
Traditionally, wireless supply chains focus on ensuring the correct products arrive at the right place, on time, and for the agreed upon price. This is supplemented with traditional, often manual, financial processes involving multiple parties. These procedures can cause painful delays in supply, or result in a mismatch between demand and supply due to the ensuing time lags.
As each participant maintains their own system of record in the chain, this also often involves costly system integrations or clumsy data sharing. Ultimately, the flow of information and money are just as important as the flow of physical goods.
Forward-thinking companies are already addressing many of these issues through the deployment of scalable, cloud-based architecture. This platform enables the deployment of a supply chain “Control Tower”, which gives customers visibility of products throughout their lifecycle, and allows timely interventions to resolve issues.
But the real question is: how do we take these platforms to a level that can really drive speed and transparency in the supply chain, where all participants have real-time access to the same information?
This is where Blockchain comes in.
Breaking down the Blockchain
A Blockchain is an immutable and secure ledger shared between business networks that records each transaction within the network. Each transaction must be agreed upon by all parties, and is executed according to a set of shared and previously agreed upon business rules – or smart contracts. Levels of transactional visibility in the ledger are also pre-agreed, guaranteeing appropriate levels of privacy for specific pricing or other terms.
With all transactions preconfigured to the satisfaction of each party, and key information such as device and component provenance recorded immutably in the device’s records, Blockchain addresses the age-old issue of trust between parties.
If all participants in the wireless supply chain sign up to a distributed ledger, with each getting the necessary visibility to transact their business, and with those transactions governed by pre-negotiated smart contracts, we are presented with some compelling use cases. For example, carriers and distributors will be able to facilitate their device ecosystems by owning and managing their own Blockchain networks.
The value of the Blockchain quickly becomes clear not only through the speed, privacy and security of the transactions, but also from the wealth of data and insights emanating from the fabric of the network.
Beginning the Blockchain revolution
Despite the excitement, Blockchain is currently viewed as an immature technology, and we are still at the stage where businesses, institutions and consortia are analysing the return on investment and building use cases. However, according to an IBM survey, 91 per cent of all banks will have invested in Blockchain solutions by 2018, and some financial markets are already using the technology for clearing and settlements, wholesale payments, equity and debt issuance and reference data.
In the wireless industry it is encouraging to see the formation of the Carrier Blockchain Study Group, (CBSG) championed by Softbank and Sprint, amongst others. While not initially focusing on the device supply chain, it is a sign of how seriously the industry is taking the technology, with compelling use cases on mobile payment systems and the application of prepaid credit. There will continue to be developments in this area, and we can anticipate a broad adoption of the technology over the short to medium term.