Alliance Edition of vCast/podcast series covers use cases for the newly formed Mid-Market Supply Chain Working Group, with Jim Gitney, CEO, Group50, and Bryan Merckling, CEO, THINaër.Sweetbridge Alliance Network recently announced the formation of a new Blockchain Working Group for Mid-Market Supply Chain with two companies that have long been solving data integration problems for middle-market (think $50M to $2B/annually) supply chains. Now they have a new approach that involves a blockchain platform from Group50 called “Scioebc,” a secure IoT data capture solution from Thinaer and a combined process for ramping up teams on a strategy for ramping teams up for faster time-to-benefit.Watch the vCast on YouTube:https://medium.com/media/62c6987d38dc90e4bb0443907a3ac38a/hrefHear/download the podcast on SoundCloud:https://medium.com/media/f144c9457e31a300d1e3ae7e20dfacd5/hrefFull transcript of the interview here:Jason: Hi, and welcome to SweetTalk. Today’s show we’re joined by two new partners in the Sweetbridge Alliance. It would be Group50 and Thinaër. Very interesting story here combining blockchain with supply chain and internet of things technology. So what I’d like to do is just start it out with a little demo reel, and that’s usually the best way to get to know what we’re talking about here. So let’s play that reel… [videos from Group50 and Thinaër]Group50 Video on YouTube:https://medium.com/media/3becf4f177e7e72c541fac9f74ebd2d2/hrefTHINaër 30-second Video:https://medium.com/media/38e1b0bbb88604e136a96735bb508606/hrefJason: Alright. We’re back. I’m joined today by the CEO of Group50, Jim Gitney.Jim: Good morning.Jason: Yeah. And then Bryan Merckling, who is CEO of Thinaër.Bryan: Good morning.Jason: Yeah. This is a interesting mix of technologies we’re going to talk about today, here on SweetTalk. Group50 has a long history of doing consulting for mid-market companies, leveraging new technologies, bringing them to bear to help mid-size companies, that may not have innovations departments of their own, to really leverage these new capabilities. Chief among them now is definitely blockchain and all it can offer to help speed along optimization of production and supply chain aspects. And then Bryan Merckling, is the CEO of THINaër and this is an internet of things (IoT) company. They use IoT to create real-time actionable data that can inform supply chains and production processes. So I’m really glad to have you both here with me today.Jim: It’s a pleasure.Jason: Yeah. So I guess, Jim and Bryan, if you could each tell me a little bit about your backgrounds and what led you to this space and how you got here.Jim: So I spent my career in corporate America, the first 35 years, and 15 years ago started Group50. Our primary mission and focus is working with middle-market companies, as you stated. But our particular expertise is in optimizing supply chains. And as we realize that technology is expanding far faster than organizations can absorb it, we started looking into what are those disruptive technologies that are going to impact our middle-market clients. And we found four or five interesting things, but blockchain kept coming up as that really disruptive technology that was going to happen. If we truly are experts in the supply chain, we need to be able to advise our clients on what was going to impact them in the future, and I met Bryan mid-last year, middle, latter part of last year and realized that blockchain and IoT were really the ultimate combination of blockchain and application to the supply chain.Bryan: Yeah, and this is my third technology company. I’m a little bit of a serial entrepreneur. I had spent some time after my last company was acquired by IBM, spent some time looking at emerging technology markets and looking at the ones that would be interesting enough when I went back out for my next serial entrepreneurship. And machine to machine and internet of things were just really really interesting to me. There’s a potential $14 trillion impact on the economy so it’s a great space to be a part of.Bryan: And as you dig into IoT, and you dig into the use-cases and how people are trying to use data today, use this new real-time data that we’re getting from things and people and places, the blockchain was just a great next step. So it was a great evolution where you could further protect or have immutable data. Jim had started off down that path. We had a platform that was readily made to support where he was headed so, with some changes to our direction and our road map, we were able to create a blockchain-ready Internet of Things platform. And that’s how we got started with Jim.Jason: Wow, that’s really interesting. And right now there is a lot of energy around both blockchain and IoT spaces. In fact, so much so that they can become a little bit overloaded in meaning. But when you do marry these two things, how does that become more powerful than either one by itself, marrying blockchain with IoT and this idea of information coming from so many different edges?Jim: So, great question. As we know, blockchain is really about transparency and trust and when you sit and think about those primary elements, when things happen inside of a supply chain, especially in aerospace or in food services or in healthcare or in other types of manufacturing environments, things are made and manufactured and they’re very dependent, their quality is very dependent on feedback from … for example, if I’m moving milk from the farm to manufacturing facility, I need to know that the temperature excursions fit inside a very tight control so the milk doesn’t spoil. If I’m going to use a wash to clean lettuce, for example, and we’ve all heard about the recent scares in lettuce and also sliced fruits, I need to know that those wash baths and those decontamination chambers have performed what they were supposed to do. And I need to know that the quality reports are associated with them. And so, by adding IoT, I get the trust and the transparency well-figured out and well-documented so I have true provenance of the product.Bryan: Yeah, and I would add one other piece to that. We’ve been focused on the approach we took to IoT was Bluetooth, low energy. The reason we took that approach, we think there’s a huge opportunity in the small-medium business market for this type of play, and blockchain adds even more credibility to what we’re doing. So with the blockchain, now we can set up permission-based access to the data along the chain. And it just makes it really easy to implement, real easy to deploy, real easy to control, which all lends itself to a great fit for that small-medium business market.Jason: This is very interesting when you can combine these two technologies. How do you bring this into the range of mid-market companies that may not be the multi-billion dollar players? How can they take advantage of this space and get started today using these kind of solutions?Jim: So that’s a real interesting question. We’ve actually developed a seven-step process where we can work with … the objective is to have a plug and play product that can easily be put into a middle-market company who wants to use blockchain to aggregate data about things that are going on in its supply chain. And with the IoT platform, we can pull data from machines, we can pull data from coolers, refrigerators, location data, asset tracking, those kinds of things. We also, with APIs, have the ability to pull data from ERP systems, MRP systems, etc.Jim: But not everyone’s going to implement the full blockchain, collecting every piece of data. So what we’ve designed is a plug and play product where you start with the proof of value. Actually, you start with integrating a blockchain strategy, or creating a blockchain strategy and integrating it into your business strategy, and then you build a business case around it, and then you build a technology road map, and then you do a proof of value.Jim: The idea there is that for a middle-market company, you don’t want to spend hundreds of thousands of dollars to get to the proof of value. You want to be able to have a pilot project, prove its value, then make a decision on whether to implement it across your whole business, and then make the decision using the plug and play feature of characteristics of Scioebc, then make a decision on whether you want to integrate it with customers and suppliers. So we have the ability to start out small, practice, get really good at it, and then go ahead and realize the full potential of Scioebc and THINaer.Sample implementation process/timeline from Group50 workshop.Bryan: And from a platform standpoint, we architected for the small-medium business from the beginning, so we know the platform will be used in the same way every time. We know the people, places, and things data layer will get used in the same way every time, we know the API will get used the same way every time. What we’ve carefully done and carefully architected is we’ve gone up the stack just high enough that we’ve got quick starters for the customers so that they can get started fast, but after they’ve gone through Jim’s process and they know where they ultimately want to go, they can build the rest of the application feature functionality on top of the platform so we would contend, when you start your 70% complete as long as you’re adopting the blockchain ready platform that we’ve created.Jason: Yeah, that makes a lot of sense especially from the point of view of putting results first and having it tied to very specific deliverable goals, but still having it architected in a way where it is a little bit more dynamic and open-ended on the back end. Because most large companies, they look at everything from an enterprise-centric monolithic system outward, right? They think of it as a accounting process and hierarchically-driven system that has to be adapted to as opposed to thinking of it saying, “Okay, if we’re going to start changing our model of dealing with information assets and data about what’s moving through the supply chain, we’re going to have to switch our methodology.” So I think Jim you were talking about this Scioebc. Is this your platform for kind of enabling the information layer itself? How does that act. Does that act as a middle layer or is it a blockchain platform for hosting this information?Jim: It’s a blockchain platform, it’s a permission-based blockchain platform and it is designed to aggregate data from a series of disparate systems. One of the big challenges in the middle-market companies is that they have a tendency to be a hodgepodge of a bunch of different systems. I’ve got CRM over here, I’ve got EDI, I’ve got MRP, I’ve got ERP, I’ve got automation systems.Jim: We have a client that has three different automation systems inside their company. What the blockchain allows, the way we’ve designed Scioebc, is it allows you to aggregate data about product flowing through the supply chain from all of these various systems. You don’t have to go out and replace your enterprise system in order to implement Scioebc. You can literally pull data from all of the different systems, accounting, and quality systems, etc., process controls for machines, and pull it all up into the blockchain. We’re more of an aggregator of data. If you sit and think about blockchain, blockchain’s real value is in creating an immutable source of information from disparate databases. If you look inside a middle market company, there’s hundreds and maybe even thousands of them. Keeping those all in sync is incredibly difficult. Scioebc and a blockchain product allows you to do that.Jason: It’s never been more important to get control over so many different sources of data and move it into something where we could have a more shared system of record and start getting to this next generation. It’s been held back, I believe, because we have tended to aggregate all of this data into different silos. Even if it wasn’t a system that sits in your four walls, it could be a service that tried to act as a hub or something like that. It’s not where the future is going. I’m really interested in how you apply IoT data to understand the state of assets in a system like this when you approach a project. Maybe, Bryan, you have some thoughts on that side?Bryan: Yeah, for sure. The IoT data, I’ll add one more piece to where Jim was headed, we’ve architected this all the way down to the devices. History tends to repeat itself. The same thing we all did with applications and disparate applications, IoT was headed down the same path. We architected this from the beginning to be able to see any Bluetooth low energy device. We could even see other technologies. We don’t care if it’s our device, if it’s your device, if it’s somebody else’s device. We can see it, we can aggregate it, we can contextualize it and make the data useful. Now that we’ve done that, as we bring it into the platform and we aggregate and try to create this single repository for what your business is and what it’s doing in real time, now the blockchain allows us to automate a lot of this stuff, allows us to protect the data with immutability, allows us to open up the data in personalized role-based permissions. It’s just a great next step in how IoT is already offering up the data.Jim: One of the things that’s important to remember here, Jason, is that we’re using a model called proof of state, S-T-A-T-E. Inside the supply chain, every time a part moves from a truck to a manufacturer from a distribution center to a factory, it gets integrated into a subassembly or whatever. Its state changes because the part number might change as well or ownership might change. There’s a certain set of things that have to happen in order for a part to move from one state to the next one. Using smart contracts, we are actually using that as the methodology for allowing the block or that part to change its state in the system. IoT data coming into the smart contract is one of the important elements in saying, “Yes, I receieved this truck of milk. It was cooled properly during its whole trip. It met every requirement in order for me to accept this part or to accept this truck of milk.”Jim: The smart contract then allows the new block to be written. It allows its state to be changed. You won’t hear about proof of state in a lot of the general conversations about blockchain. You hear proof of work, proof of state, proof of reputation, etc. In the supply chain world, it’s very critical that when a part moves from one state to another that the smart contracts be written around that. That’s how we are integrating all of these pieces of information to allow the block to continue.Jason: That’s what supply chain is pretty much all about, state, what is the state of the assets moving through the system. I think in the blockchain world, they think of state as basically a financial transaction, some small part of an exchange of value, which it really isn’t for supply chain terms. It’s everything having to do with the state of the asset where it is, who owns it, what condition is it in, what materials is it made from, what does it go into. You’re definitely taking that into account when you want to pass something from one state to another in supply chain. That is an insightful approach, I would say, to taking this into account. What do you think would be some of the most prevalent use cases for this kind of technology and this combination of technology?Jim: We’re focusing on the use cases where it’s very critical that you truly understand the chain of custody and the provenance of a product, food, food services, pharmaceuticals, aerospace, automotive, and healthcare. In every one of those situations, a mistake can have fatal or very detrimental results. One of the reasons why we created proof of state and why we are so focused on the supply chain is that’s what Group 50’s expertise is. We do supply chain work, so we truly understand how it works, we understand how it works in those industries, and we have the ability to combine that knowledge along with these technologies to really create a product that can very quickly yield results to middle market companies.Bryan: As we’ve gotten into this and we’ve started to speak with manufacturing customers, we’ve got a lot of really good feedback on just how manual it was to not only track the proximity of raw materials but the environmentals around the raw materials, which are important and have never been as successful as they will be with IoT and blockchain combined.Jim: We actually have ongoing conversations right now, and Bryan, you probably don’t even know about this, with a chocolate manufacturer who wants to track cocoa coming from farms to their manufacturing facility from farms in Africa, and South America, etc., a food manufacturer here in the United States. Those are just a couple of examples where people have a very keen interest and see how blockchain can significantly reduce the amount of work they do, and significantly decrease the risk of doing it wrong, but also significantly increase the transparency of the supply chain.Jason: Yeah, and I think what we’re looking for here is we need a layer for experts to come and apply their skills to this problem. That hasn’t gone away, right?Jim: Yes.Jason: You need to learn by doing, and then you have to have people who can come and interoperate with this new supply chain format and have tools and solutions ready to make that happen. That’s certainly what we’re trying to do with the Sweetbridge Alliance is bring together different projects. If I’m trying to understand the state of all my assets, I’m rewarding value based on successful outcomes basically, and I’m able to incent the right behaviors of all of these different parties in the supply chain. There’s always a flexible set of all of these different vendors or suppliers that can lead into the system. How do you keep an ecosystem like that secure when you do need to have so many players put data into the system, whether that’s in person or through various devices and things?Jim: Perhaps you want to talk about the integrity of the IoT data, which is a big deal.Bryan: Yeah. We’ve had to solve for everything from healthcare where HIPAA and personally identified data has to be carefully protected because IoT has expanded beyond proximity of where are my raw materials or where is my wheelchair. It’s become where are they, what are the environmentals around them, if it’s a person, whether it’s on the floor of a manufacturing company or in a hospital. Even vitals from people are being tracked now with wearable devices for health and protection purposes of them. We’ve had to solve for everything from that to government manufacturers of helicopters that happen to manufacture the president’s helicopter. Being able to protect the data at rest and in motion, we had to solve for. We’ve created special gateways in our solution that feed our platform, that understand how to do all of that, that understand how to de-identify data until it gets back behind the firewall. Even at that case, once you’ve put the information back together, it still has to be highly protected and highly regulated. From there, we move to role-based permissions, and then we layer on. I think we’ve got three layers of security on top of the role-based security just to protect the information that comes off of the devices.Jim: Using the blockchain allows you to get around some of the concerns that are in the marketplace with IoT about spoofing IoT data or spoofing various Bluetooth devices, etc. Because of the immutability of the blockchain and the security that Bryan has put in place, we believe we’ve solved one of those big concerns in the application of IoT data into the blockchain. In terms of all of the other sources of data, that’s where the smart contract and the change of state comes in because if the data can’t be validated, then the block can’t be written.Jason: Yeah.Jim: Then the block can’t be written. You immediately have an issue where you have to go validate a particular piece of data. For example, let’s go back to my example of a truck of milk. If I have to keep it at 34 degrees during its whole trip from the farm to the manufacturing source, ice cream, for example, and I’m requiring that the health records for all the cows that contributed to that milk be part of the block, that is stayed at 34 degrees the whole it was there, and it gets there, and I find out that for 20 minutes during its trip it was at 38 degrees. I don’t meet the requirements of the smart contract. Now I have to do something. I either have to make an immediate decision that yes, this is okay, and we move forward, or no, I’m not going to accept that shipment.Jim: Perhaps I don’t have the data associated with the health records of the cows. Maybe I’m selling organic milk, and I need to make sure that the cows that contributed to this milk only were fed organically. Those are the kinds of things we have the ability to do with the way this is structured. Does that help?Jason: That is very exciting. Food safety is always the one that’s closest to most of us because we can easily imagine what happens if something hasn’t been certified to the specification that we bought. I think there’s going to be way more use cases like that happening over time where it’s customer behaviors and demands are going to drive this level of compliance and this level of transparency and to what’s happened with my product on its way to getting here. Was it ethically sourced? Was it organic? Does it meet the transportation requirements, and timing, and everything, temperature? Nowhere is that more personal than food, obviously. There’s a lot of use cases in that space for sure.Jim: We can talk about aerospace as well, Jason. If you sit and think about a flight safety part that’s required to have its chain of custody, and its provenance during its whole life cycle, if I have the ability to demonstrate that, that part in after market or in the airline industry is worth significantly more than the exact same part that doesn’t have all of that data easily available, where the life cycle of the product isn’t properly managed. You can get into recent cases where maintenance on aircraft, jet engines, et cetera where they weren’t tracking the actual maintenance logs or the inspection logs properly, could potentially lead to a failure of an airplane, which could be disastrous. We have the ability now to really pull all of that data together and through analytics on the bank end being to understand the relationship between failures and inspections, and how it was machined, and how it was heat treated. We now have the ability as this grows to do some incredible analytics on the back end to help further improve the quality of the product.Jason: Yeah, that’s fascinating. There’s definitely going to be an increasing movement where if there’s not information to support an asset, then it doesn’t have nearly the value. That’s definitely hitting on a case where the full history of its repair life cycle is critical to having any value to the part at all because how do you know if what you’re putting in is going to last? There is no better way to get that done.Jason: We’ve talked about a couple of cool ideas with food, and then with maintenance in aerospace. I guess one question I would have is if you’re talking to a company, and they’re coming in fresh, and they don’t have … You’re talking to the IT department or maybe the CTO or CIO of one of these smaller mid-sized companies, and they don’t know where to really start with implementing a block chain solution. What would be some good areas that could help make your business ready to make some of these changes happen?Jim: If you’re talking about Scioebc, and the total implementation, we actually have launched four workshops. One is a blockchain immersion workshop where we come in and spend a day with the senior leadership team and just bring everybody up to the same level of understanding of blockchain. We customize it to their industry. We’ll actually point out what are some of the industry applications that are being blockchained as being used. They understand what the competitive arena looks like, what the market looks like, what the application looks like.Jim: At the end, they actually plan their next step, which is likely a strategy workshop that says, “How do I want to apply this inside my business?” Then they move on to, let’s build the business case around that strategy because at the end of the day, although this is a plug and play device, it’s going to require resources and money to do an implementation, even a proof of value. We actually have a very well-scripted set of workshops that either the group 50 team or the thin air team can deliver that allows them to understand how they apply blockchain and IOT to their business.Bryan: It’s exactly how we started with IOT a couple years ago. We actually started with enablement sessions. We would help them understand, go through a few questions about their business, a few questions about their business strategy. We would help them understand where and how they could apply IOT, so that they would have a successful product. It’s a great recipe, worked really well as IOT exploded on the scene a few years ago. It’s the absolute right approach for the blockchain as well.Jason: I agree. There’s definitely a need for training and understanding in this space, so anything you can do to help ease that along is very valuable. I guess we’ve covered a lot of topics here. Where would you suggest that our listeners go to hear more about your solutions, or learn more?Jim: For Scioebc they can go to group50.com/blockchain. From there, all of our information including our workshops, and the video, and the applications, they can get to that. Group50.com/blockchain.Blockchain in Supply Chain|Blockchain Technology Consultants-Group50Bryan: Same thing on Thinaër. Thinaër, but it’s spelled with an A-E-R — www.thinAER.io/blockchain. We’ve got some information on there as well about the IOT enabled blockchain. Obviously, some of that points right back to Group 50 and Scioebc.Blockchain Applications - Blockchain Examples | THINaërJason: Excellent. Do you have anything else interesting for our listeners to ponder?Jim: Yeah, I think one of the things that’s important about Scioebc and its plug and play nature, and the idea of proof of state is that it mimics what’s required by organizations in order to enable transactions. If we know that a product has been delivered by a trucker to a manufacturing facility, and it’s met all of the requirements that would meet the needs of the accounting department in order to do an invoice to transactional requirements, that is all there. We believe that Scioebc is actually a transactional enabler for those future protocols such as the ones that Sweetbridge is developing as well.Jason: Excellent. I can see how you could basically tie the successive transaction whether that’s providing liquidity on the basis of an order or a future order, faster payment terms, or some other scenarios that we’re looking at where we could have a company jointly investing in future working capital and other types of capabilities. You could see how that would be tied to the information and the state change you’re enabling.Jim: Yeah, that’s what our focus is.Jason: Beautiful.Bryan: I think you said it quite well. I think enabling that ecosystem, that transaction model, to me that’s the most important part of what the blockchain could do at some point.Jason: All right. Thanks, Jim. Thanks, Bryan, for joining me.Jim: You’re welcome.Bryan: Thank you for having us.Jim: It’s our pleasure.Jason: All right. That concludes our show for today.Watch the vCast interview on the Sweetbridge YouTube channel: https://youtu.be/Jr4Oa2ZU6_kSweetTalk: Group50 & Thinaër — Blockchain & IoT for Supply Chain was originally published in Sweetbridge on Medium, where people are continuing the conversation by highlighting and responding to this story.