- IOTA’s Distributed Ledger technology and its decentralized marketplace can bring significant cost savings to the power cable industry, according to NKT Holding.
- The IOTA Foundation and NKT are collaborating to explore the potential of the DLT for supply chain management
Just last week Crypto News Flash reported that the IOTA Foundation has entered into a cooperation with NKT Holding, a global conglomerate specializing in power cables and photonics products. Now the company has published further details on the scope and goals of the cooperation on its blog. The central task will be to investigate how assets can be autonomous economic actors that can pay for their own services as they move through the supply chain.
In particular, this is examined using the cable drums and NKT’s digital platform, TrackMyDrum.com. The digital platform is used to track a cable drum on its way between cable producers, logistics companies, dealers and construction sites. The solution comes either with a small intelligent device, a NB-IoT tracker that can report location, temperature, shock, etc., or as pure software that manages events based on drum status reports and uses a QR code for identification.
IOTA’s decentralized marketplace as a solution for the power cable industry
The use of TrackMyDrum is already generating enormous savings. Together with the IOTA Foundation new potentials are to be discovered:
TrackMyDrum benefits are already significant when compared with digital platform running costs. However, adding distributed ledger technology to the toolbox opens up a new way of thinking about supply chain management.
Together with the IOTA Foundation […] we are exploring if the concepts currently tested in smart mobility can also be applied to smart supply chain use cases.
As a first step, NKT plans to equip each cable reel with its own e-wallet. This will turn each reel into an independent economic actor by allowing it to pay for each service or receive payment for each service provided. NKT hopes that this will result in further cost savings of 10% in the area of logistics.
The prerequisite for this, however, is a decentralized approach, which requires that every company can access all data in a decentralized marketplace. All suppliers must share their data via drums and create a decentralized system:
The basic underlying idea is to transform supply-chain management into an autonomous self-regulated market of various micro-services, instead of centrally planned activities.
NKT is aware that the approach will meet with enormous resistance from industry and can only be achieved in individual steps, as data about the movement of the drums also contains sensitive business information. However, as the company states, it is not only the power cable industry that faces this challenge:
Most industries are facing the same questions and we see resistance to move towards such industry platforms as the underlying technology is to establish a central database – and who can be trusted to manage it?
This is where IOTA’s Distributed Ledger technology and its IOTA Marketplace come into play, which enables all market data to be managed decentrally (but in a central database, the ledger). In this system, all devices and machines are digitally connected to each other without any human to human or human to computer interaction, for example to order the delivery of a new drum.
Furthermore, in the decentralized marketplace, all decisions and actions are based on the best price option. This creates an Autonomous Economic Agent (AEA) that can search for options, negotiate and make payments.
Smart supply chains will not solely be based on better data and analytics allowing a central point to coordinate and delegate efficiently. But, like the “invisible hand” imaginged by Adam Smith to ensure efficient markets, we can rethink supply chains as multiple markets of supply and demand of services – and we start to have a decentralized marketplace.