Blockchain automation for tomorrow’s digital supply chains

10 reasons why a Sky Contract Platform is a better foundation for building and running multi-enterprise solutions than distributed ledger technologies, blockchains, and middleware

Executive Summary

Supply chains leverage globalization and use more suppliers and manufacturers to decrease costs. This business fragmentation is amplified at the IT level by point-to-point messaging between trading partners. Messaging, a $6B segment in the middleware market, powers almost all supply chain networks today and fragments even more processes. It inhibits supply chain digital optimization and transformation — a $1T market opportunity by 2025. 

Cryptocurrencies can decentralize business, but the real urgency lies in digital unification and the automation of supply chains. DLTs distribute ledgers, but without enabling recipients to verify transactions they are not much different from control towers or SaaS platforms.

The real business potential of blockchain resides in smart contracts that can unify, distribute, and reconcile multi-enterprise processes. Smart contracts were born with cryptocurrencies to decentralize digital cash. They evolved in DLTs to handle trading and record management use cases in finance, but they don’t yet satisfy supply chain requirements.

Blockchain has traction in supply chains as they continue to expand and get more complex. Trending use cases are asset track and trace, provenance, faster payments and settlements, IoT-enabled ecosystem digital twins, and Artificial Intelligence enablement. But that’s just the tip of the iceberg, as community processes must be re-engineered and EDI systems need to be upgraded to enable multi-modal and physical internet platforms.

To better automate today’s—and tomorrow’s—digital supply chains, Sky Republic formalized the principles of a Sky Contract Platform (SCP) and built Atlas—the first implementation of an SCP—from the ground up.

An SCP is defined by the following list of ten capabilities and is designed to digitize, unify, automate, reuse, and reconcile industry processes:

1. A good fit with currently centralized networks allows one operating entity (or “notary”) per smart contract, so today’s network operators and “channel masters” can become transparent ecosystem integrators and co-innovation catalysts.

2. Legal protection in case of dispute or litigation via digital signatures with certificates.

3. Smart contracts with enhanced choreographies, providing distributed automation for complex business rules, data, assets, and records using distributed relational databases.

4. Autonomous reconciliation of smart contracts via a distributed consensus algorithm, so participants can independently and programmatically verify the state of smart contracts and the content of related blockchains produced by single operating entities.

5. EDI support, allowing to upgrade EDI servers by delivering messages in any format.

6. Dynamic contracting, so smart contracts can embed and transparently enforce their instantiation and onboarding terms, with or without human intervention.

7. A composite application framework for accelerating the development of multi- enterprise applications that transact through smart contracts and integrate
back-end applications.

8. An event-driven design that delivers a secure, distributed infrastructure to simplify application development, ensure application scalability, and lower total cost of ownership (TCO).

9. Confidentiality features built into smart contracts via SubContracts.

10. Node resilience and scalability via a decentralized hub architecture to ensure business continuity and optimize running costs.

An SCP can accelerate and simplify business by reducing disruptions, friction, fraud, paper, manual tasks, and interactions. It distributes benefits among business partners so they can join forces more easily, co-innovate more effectively, and build more efficient, resilient, and agile digital supply chains.

In the 1990s, enterprises started to eliminate point-to-point application integrations to enable ERPs and optimize their business processes. This digital transformation produced substantial returns over two decades.

Today, a Sky Contract Platform can eliminate point-to-point integrations between enterprises and enable co-innovation to optimize community processes. For enterprises, this is the beginning of a new era of business process optimization from the outside.

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