Even in today’s technologically advanced world, businesses can dramatically improve supply chains and similar cross-company processes. Take the container industry for example. It might seem impossible in the year 2022, but paperwork can account for half the cost of transport.
Many have tried to eradicate the old ways of doing things in this area of supply chain management, but most of the current solutions only deliver a one-sided advantage, buying efficiency on one side with increased effort on the other. Cooperative approaches like EDI have problems establishing a reliable standard and often fall short on the automation side, still requiring manual checks and missing a process view as is required for complex business cases and audits.
Flowciety has announced its launch today with a mission to bring the industry into the digital age, using blockchain technology to solve some of the most significant problems in supply chain management.
So has this industry, in particular, taken so long to move away from paper processes?
“The mantra ‘never change a running system’ is strong with a lot of companies, so sometimes they can’t imagine another way of doing things, because it feels so natural to them,” Sophia Schade, CEO and cofounder at Flowciety told me. “Then we have laws which ensure that cross-company processes and transactions need to be documented in a certain way.”
Those seem fairly typical reasons, but there is another issue at hand.
“The third reason is a bit more complex, but is significant,” Schade said. “The IT systems in place can’t communicate safely in a controlled manner. Of course, you have APIs and can exchange data, but who is in control? Who owns the data? Which system has the overview of the process and why? In business processes and transactions, companies don’t always have the answers to those questions, or worse still, a third-party has the power to control and dictate the answers.”
Flowciety’s main advantage is bringing communication and automation to all partners of the equation, while “feeling” like a classical enterprise system, doing away with cryptocurrencies or expensive and non-scalable consensus mechanisms.
“Flowciety offers some standard processes,” Schade said. “if you decide to use one of these, all we have to do is install Flowciety on a machine, configure it to connect to the local IT, and you are good to go. However, most companies have some individual requirements, which means we cannot use our standard process, so we have to customize them or develop completely new processes. This ranges from changing the order or access permissions for tasks up to implementing new scripts and connectors to automate tasks.”
A blockchain-based ecosystem, Flowciety creates a system-agnostic blockchain network to connect the entire flow of information throughout the supply chain – from suppliers to manufacturers to distributors and retailers – and provides real-time tracking. The company also solves potential invoice fraud, compliance risks, policy adherence, anti-corruption issues, and can help with issues like maverick spend.
When partners use Flowciety together, there is no possibility to manipulate the process and leave either partner open to potential fraud or other issues. Consensus is found democratically, and every step is comprehensible and audit-proof.
This project brings traceability, transparency, and accountability to the movement of goods and commodities. The technology can be applied to cross-company processes, especially those in procurement, logistics, and supply chain, to make business processes more efficient and cut costs from supply chain infrastructure. It can also track the movement of goods in an auditable manner back to their origin.
“Flowciety focuses on the 80% or so of regular cases which you can automate simply, leaving people to focus on the hard cases that need complex thinking to solve,” Schade said. “Wherever the user has to interact with the software, the UI is based on what they already know. For example, the page to check a purchase order in Flowciety looks a lot like a PDF export of an order from most ERP systems.”
Flowciety addresses common blockchain problems by using enterprise-focused blockchain frameworks. Those create a permissioned environment without the need for cryptocurrencies, proof-of-work, and other known mechanisms built for public environments. The team integrates a blockchain into a wider solution and combines it with well-known technologies to only use it for cases where it actually makes sense, cherry-picking the best of multiple technologies.
