SAP Leonardo Blockchain Services and Use Cases AC Slide Decks...Master Data Management: Payment...

May 7 – 9, 2019

SAP Leonardo Blockchain Services and Use CasesDr. Sathya Narasimhan, (Sr. Dir, Blockchain) - SAP Labs, LLCNagesh Caparthy, (Blockchain Consultant) - SAP Labs, India

Session ID #ASUG84342

2PUBLIC© 2019 SAP SE or an SAP affiliate company. All rights reserved. |

About the Speakers

Dr. Sathya Narasimhan• Sr. Dir, Blockchain Business Dev., SAP Labs,

LLC

• As senior director of blockchain business development and product management, Narasimhan is responsible for driving customer adoption of enterprise blockchain applications across the entire SAP solution portfolio.

Nagesh Caparthy• Associate Dev Architect, Blockchain

Consultant, SAP Labs, India

• Nagesh is an associate architect supporting various topics such as blockchain, the SAP Cloud portfolio, security, mobility, and the SAP Fiori user experience. His primary focus is to deliver partner products on blockchain and to help create new business across industries.


Agenda

• SAP Leonardo Blockchain Services

• Primary Opportunity Spaces

• SAP Consortium & Customer Co-Innovation

• Most Recent Successful Blockchain Story


SAP Leonardo Blockchain Services


SAP Unique Approach & Capabilities Combining the Digital Core with Business Networks with an Open and Standards-based approach

Business Process

Centric & System of Record

Business Networks

Experience & Pedigree

SAP Cloud Platform

Blockchain


Programmable Economy: Blockchain Powered Network of Networks

Supply Chain Traceability

Dig

ital L

ed

ger

Netw

ork

Asset

Netw

ork

International Trade


SAP Cloud Platform Blockchain

• Hyperledger Fabric on SAP Cloud Platform

• MultiChain on SAP Cloud Platform

• Quorum on SAP Cloud Platform

• Blockchain Application Enablement

• SAP HANA Blockchain service

SAP Leonardo

Technologies

SAP Cloud Platform

Blockchain

More information on https://cloudplatform.sap.com/

https://cloudplatform.sap.com/capabilities.html#2.13


Pharma & Life Science

• Consortium announced at TechEd LV 2018 (Oct 2nd) with 8 founding members

• Consortium expanded and currently includes 12 founding members

SAP Blockchain Industry Consortiums: 49 Member Companies

High Tech Consortium

• Established Consortium on June 6th

2018 with 7 founding members: LINK

• Consortium expanded and currently

includes 20 Members

CPG, Retail & AgriBusiness Consortium

• Consortium announced at TechEd LV 2018 (Oct 2nd) with 9 founding members

• Consortium expanded and currently includes 17 founding members

In addition, we have a total of 100+ customers in our program and 30+ referenceable co-innovations across Pharmaceuticals,

Consumer Products, Automotive, Agriculture, Telecom, Retail, Logistics, High-tech, Aerospace & Defense, Industrial Machinery,

Energy & Utilities, Public Services

https://thebitcoinmag.com/2018/06/07/sap-blockchain-consortium/


Primary Opportunity Spaces


Incentive and value to all members of

the blockchain network is a prerequisite

SAP Enterprise Blockchain Customer Program: Learnings

Business Network Technology

Permissioned Blockchain is the Enterprise

Blockchain preferred deployment

Forces all members to jointly define and

agree on a common set of data elements

Blockchain alone is of no value: need seamless

integration into a business process and

augmentation with other technologies such as IoT

Data shredding is sometimes needed –

exact opposite of Blockchain immutability

Does not solve data quality or entry issues


Rough Solution Sketch

Parts Traceability for Optimized Quality Reporting in AftermarketQuality reporting for legal or on-demand reasons is a lengthy and costly process. Quality Managers spend a lot of time to generate quality reports for specific parts, either by engaging in several lines of communication with various suppliers or by accepting lengthy processes on the supplier side. Suppliers need to report own parts traceability data either manually or by filling information in several OEM-specific systems. Using blockchain, a single source of truth can connect buyers and suppliers - A common data model for parts traceability for immediate update/flagging of problematic parts.

Pain Points

▪ Time consuming and costly for quality reporting

▪ Process includes several lines of communication and engaging

with various parties to acquire knowledge needed

Scope

▪ No one owns or controls the data

▪ Suppliers are responsible about maintaining own parts

information. The incentive for suppliers to join is that they will

use a single application to instantly notify all OEMs.

▪ OEMs can get immediately notified if they are affected

Benefits

▪ Reduce cost of quality reporting for all parties

▪ OEMs do not need to contact suppliers any longer

▪ Foster creative business relationship

OEM is Not Central

Owner & Can Log

Data on Blockchain

Parts Information

Logged by Suppliers Verified Parts

Distributed & Logged


Master Data Management: Payment Fraud Prevention Example

Challenges / Pain Points

▪ Supplier master data account change approval is a tedious and error-prone

process

▪ Payment fraud, phishing and other form of hacking can cause companies to lose capital

Payment Fraud is a serious global threat to international payment systems. As of

December 2016, more than 24,000 businesses fell victim to a BEC* scam, resulting

in a total loss of over $2 billion.*BEC = Business Email Compromise

Attackers have become increasingly sophisticated. Based on social engineering

methods, faked bank account changes sent to customers.

Rough Solution SketchCauses

• Time pressure is created by giving short term discounts and customers try to schedule payments close to the end of discount periods

• Requests to banks, to verify account holder information, take up to two weeks or more

Benefits

▪ Streamlined, optimized supplier master

data update process, integrated to

S4/HANA finance modules

▪ No central authority required

▪ Multi-party collaboration on a single-

source of truth enables efficiency gains

and transparency for all involved

parties

▪ Attacks are visible and preventable

through single source of truth

properties

▪ Own account information, as well as

supplier relationships, are kept private

Proposed Solution

• Blockchain provides a simple and auditable Single Source of Truth for checking supplieraccount information

• Suppliers store and maintain account details on the blockchain


Asset Lifecycle Management

When quality inspection is taking place, inspectors often want to know where all product components are from, which manufacturing activities

and what type of heating processes are being implemented. Using blockchain, tracking these processes would be made easy along with the

ability to share the records with business partners. For instance, being able to track which supplier produced certain components for specific

manufacturing functions, if the components break down, using blockchain the operator could find the specific company that produced said

component. This allows the ability to check if regular maintenance was performed as well.

Rough Solution Sketch Benefits

▪ Simpler way to keep track of

manufacturing processes for

each specific product

▪ Track if regular maintenance was

performed for components of

manufacturing

▪ Keep track of where components

in manufacturing come from

▪ Accelerate inspection processes

Pain Points

▪ When manufacturing components break, it’s

often difficult to trace back to which company

and when the component was purchased

▪ Understanding if regular maintenance has

been completed or not can be difficult to track

Scope

▪ Tracking all manufacturing processes

▪ Tracking all components received and used

throughout manufacturing

▪ New technology allows for data collection for

maintenance efforts for the product


Enabling Performance-Based Contracts

Blockchain-as-a-service may have the ability to adjust business models as well, to streamline and increase productivity. The operational

performance of both a critical asset or equipment can be tracked on the cost of the equipment and aspects of the performance cycle. After

the company determines a standard benchmark agreement and has been coded into the system, sensors then can communicate to the

blockchain allowing for performance factors to determine compensation.

Rough Solution Sketch Benefits

▪ Data tracking of performance for

all future review of assets or

equipment

Pain Points

▪ Performance-Based contracts aren’t

commonly used because it’s difficult to track

performance and enforce contract

▪ Compensation not based on performance

could cost more than those tied to specific

outcome

Scope

▪ Using blockchain-as-a-service to track

performance and quality

▪ Allows for quick and accurate data tracking for

assets or equipment

Track performanceDistribute

Compensation

Sensors

communicate to

Blockchain


Rough Solution Sketch

Transportation Management: e-Bill of Lading - Ocean, Air, Land (Truck, Rail) The Bill of Lading (B/L) is such a paper based document. It is issued by the ocean carrier. It is used in international trade as title of goods, which are confirmed as received by a carrier and to be released at destination to the holder of the document(s), which is the proof of ownership. This can be changed while the vessel is on the way with the use of blockchain technology. With various partners involved with the blockchain network, the shipper or buyer can instantiate a new trade in blockchain with relevant documents, beginning the process. The current owner of a B/L transfers ownership to another business partner, all seamlessly across blockchain, allowing for swifter management of transportation of goods.

Pain Points

▪ Bill of Landing is a paper-based document that controls

ownership, which is a time consuming process

▪ Prone to error due to paper-based nature of document

Scope

▪ The ocean liner (carrier) using SAP TM issues the B/L and posts

its details into the blockchain (representing an unique token /

asset). The corresponding PDF document is uploaded and can be

digitally signed with a mobile app.

▪ The current owner of a B/L (e.g. the shipper) transfers ownership

of the B/L to another business partner (e.g. Banks or Buyer).

▪ The Buyer uploads relevant documents for import customs

clearance and enrolls the local trucking company, which confirmed

the delivery order to pickup the container from the port

Benefits

▪ Swifter processing for B/L process

▪ More traceability throughout transportation

▪ Allow for digital signatures and secure QR code based

authentication

Ownership of Items Transferred

Through e-Bill of Landing

E-Bill of Landing Located on

Blockchain for Swift Transfer in

Ownership with Digital

Signatures & QR codes

Payment for

Transportation Dispersed


Digital Pallets Receipt

Blockchain-based solution for Efficient Pallet Exchange

Wooden Euro pallets (EPAL) enable the smooth and efficient transportation of

goods within Europe and globally. With more than 450 million units in circulation,

it is a cheap, standardized and exchangeable asset, that has been widely

adopted by manufacturers, logistics companies, distributors and retailers.

A blockchain based solution developed by GS1 on the SAP Cloud Platform

enables industry participants to record and exchange pallet receipt notes in a

peer to peer environment without the need for a centralized intermediary.

Challenges / Pain Points

▪ Paper-based pallet receipts make exchange between participants difficult

▪ Pallet logistics add inefficiencies to the supply chain process

▪ Lack of transparency over pallet availability at destination

Benefits

▪ Immutable, single source of truth

provided to all supply chain network

participants

▪ Standardized data elements and

processes

▪ Minimal complexity, maximal security

▪ Supply chain efficiency

Rough Solution SketchCustomer Requirements

▪ Easy onboarding on the network for new

members

▪ Records of material provenance stored

on a blockchain based system

▪ Confidentiality of trade relationships

Proposed Solution

▪ Blockchain based “barter” solution for

pallet receipt exchange

▪ Scalable solution that can be utilized by

“on-the-ground” employees


SAP Consortium & Customer Co-Innovation


Asset Intensive Industries

Transportation & Logistics

Discrete Mfg. Industries

Life Sciences & Pharmaceuticals

Retail, Consumer Products,

Agribusiness

High Tech & Telco

SAP Industry Blockchain Consortiums


Engagement Model: SAP Innovation Services


Most Recent Successful Blockchain Story


Ocean to Table Blockchain – Bumble Bee Seafoods

Business challenge

• Increase Corporate Social Responsibility, Local Livelihood, & Sustainable Catch Awareness

• Maintain Transparency & Data Integrity as Tuna moves from Source to Consumer

Solution• Blockchain Technology maintains Data Integrity & Transparency through Supply Chain

• Sharing Information across Suppliers, Strategic Partners, Non-Governmental Agencies

[NGO’s] to insure best Outcomes

Outcome

• Integrated Supply Chain results in Efficiency, Transparency, & Data Integrity

• Education/Promotion of Sustainable Fishing

• Increased Transparency to Consumer, resulting in Market Premium where Fair Trade

Products are sold

• Increased Local Livelihood, such as additional Income from the Fair Trade Premium paid to Fishermen for their Catch

Featured Technologies• Blockchain technologies

• SAP Cloud Platform

• SAP HANA Database

• SAP Analytics Cloud

• SAP Cloud Applications

Project Timeline: • September 2018: Proof of Concept

• December 2018: Pilot Deployment

• February 2019: Live Deployment


Live Demo:

Scan QR Code to learn

about out the origin of the

Tuna you are buying!

Ocean to Table Blockchain – Demo


Identification & Verification of Sellable Returns

Legal requirement Business ChallengePurpose

SAP Advanced Track &

Trace for Pharmaceuticals

Manufacturers Wholesaler

Scanning System

Drug Supply Chain Security Act

demands companies to both

identify and verify sellable returns

2-3% of total sales are sellable

returns (58.7 million units a year) Help secure the health of patients

by fighting fraudulent activities


Supply Chain Provenance: application example


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