How do you make supply chains more visible without compromising security? A Dutch start-up may have the answer

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Sean Fleming, Senior Writer, Formative Content

  • A Dutch start-up has developed a blockchain and cryptography system for supply chain management.
  • Circularise enables businesses to have transparency in their chain, while maintaining privacy.
  • Blockchains record information in linked groupings that have reliable auditability.
  • They can be used to give all partners in a supply chain access to essential information.
  • While cryptography technology allows sensitive information to remain confidential.
  • Circularise is a member of The Circulars Accelerator Cohort 2021.

Better supply chain visibility can boost sustainable production methods and provide greater confidence to businesses on where their materials are coming from. It can also offer insights into who is working for all the businesses connected to a particular supply chain.

It is, however, a major headache for organizations. The data journalism site Statista cites a 2018 survey which “found that the biggest challenge (21.8%) for global supply chain executives was visibility.”

A Netherlands-based start-up called Circularise has been working on a technology platform that helps deliver the kind of supply chain transparency many businesses would like, while overcoming one of the biggest concerns businesses have – the security of their sensitive data.

a graph showing the supply chain challenges.
Supply chain challenges. Image: Statista

Total transparency

Circularise, a member of the World Economic Forum’s UpLink platform, uses what it describes as “a combination of blockchain, peer-to-peer technology and cryptography like Zero-Knowledge Proofs (ZKPs) in a decentralized information storage and communication platform”. It allows information exchange between participants in value chains while retaining the ability to fine-tune the amount of information disclosed.

What is the World Economic Forum doing about blockchain?

Blockchain is an early-stage technology that enables the decentralized and secure storage and transfer of information. It has the potential to be a powerful tool for tracking goods, data, documentation and transactions. In this way, it can cut out intermediaries, reduce corruption, increase trust and empower users.

The potential uses of blockchain technology are essentially limitless, as every transaction is recorded and distributed on a ledger that is almost impossible to hack. Though the most well-known use case is cryptocurrencies, blockchain is being positioned to become a global decentralized source of trust that could be used to collect taxes, reduce financial fraud, improve healthcare privacy and even ensure voting security.

Blockchain has the potential to upend entire systems – but it also faces challenges. Read more about the work we have launched on blockchain and distributed ledger technologies – to ensure the technology is deployed responsibly and for the benefit of all. We’re working on accelerating the most impactful blockchain use cases, ranging from making supply chains more inclusive to making governments more transparent, as well as supporting central banks in exploring digital currencies.

Blockchain works like a database that groups related pieces of data together into units called blocks and connects them together sequentially – in chains. Each block of data contains information regarding when they were created or amended, becoming a permanent record of the history and provenance of each block in the chain. Anyone party to a blockchain database can see who has made changes and when things have been added or removed.

In that way, blockchains can be used to provide an ultra-robust record of the provenance of anything that can be recorded in a database, making it possible to know the name of the farm that grew the food you eat, for instance. Or in the case of industrial processes, whether the recycled aluminium in an order actually came from a source of recycled aluminium.

a purchase order showing how detailed information is pulled from the blockchain, without revealing commercially sensitive data.
Detailed information is pulled from the blockchain, without revealing commercially sensitive data. Image:

Cryptography for sensitive information

Few businesses would be willing to let the rest of the world access their commercially sensitive data – it’s one of the reasons cybersecurity is so important.

From trade secrets to lists of materials and details of business deals, there are many examples of data within a supply chain that businesses don’t want to share openly. Naturally, this makes the open and accessible nature of blockchains less appealing.

What is the World Economic Forum doing on cybersecurity

The World Economic Forum’s Centre for Cybersecurity is leading the global response to address systemic cybersecurity challenges and improve digital trust. We are an independent and impartial global platform committed to fostering international dialogues and collaboration on cybersecurity in the public and private sectors. We bridge the gap between cybersecurity experts and decision makers at the highest levels to reinforce the importance of cybersecurity as a key strategic priority. World Economic Forum | Centre for Cybersecurity

Our community has three key priorities:

Strengthening Global Cooperation – to increase global cooperation between public and private stakeholders to foster a collective response to cybercrime and address key security challenges posed by barriers to cooperation.

Understanding Future Networks and Technology – to identify cybersecurity challenges and opportunities posed by new technologies, and accelerate forward-looking solutions.

Building Cyber Resilience – to develop and amplify scalable solutions to accelerate the adoption of best practices and increase cyber resilience.

Initiatives include building a partnership to address the global cyber enforcement gap through improving the efficiency and effectiveness of public-private collaboration in cybercrime investigations; equipping business decision makers and cybersecurity leaders with the tools necessary to govern cyber risks, protect business assets and investments from the impact of cyber-attacks; and enhancing cyber resilience across key industry sectors such as electricity, aviation and oil & gas. We also promote mission aligned initiatives championed by our partner organizations.

The Forum is also a signatory of the Paris Call for Trust and Security in Cyberspace which aims to ensure digital peace and security which encourages signatories to protect individuals and infrastructure, to protect intellectual property, to cooperate in defense, and refrain from doing harm.

For more information, please contact us.

The ZKPs that Circularise uses keeps information hidden indefinitely, while still allowing users of the blockchain to interrogate it. Rather than list all the materials in a component, the ZKP acts as a question-and-answer portal. Circularise says on its website: “Smart Questioning … allows stakeholders to ask critical questions (eg, ‘Does this plastic part contain hazardous materials?’) to a secret dataset (eg, the bill of materials)”.

This approach makes it possible for businesses across a supply chain to share information about their products on an open blockchain-based system without exposing their sensitive data.

Circularise is one of 17 companies selected from more than 200 applicants for The Circulars Accelerator Cohort 2021, which is run in collaboration with UpLink, the World Economic Forum’s innovation crowdsourcing platform.

The six-month programme – which is led by Accenture, in partnership with Anglo American, Ecolab and Schneider Electric – helps circular innovators scale their solutions by providing them with tailored support and mentorship, and connecting them with industry leaders.

It operates through UpLink, which launched at the World Economic Forum Annual Meeting in 2020. The platform crowdsources expertise and resources to help scale up innovative ideas that can advance the UN’s SDGs.

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