The OEL Foundation is a Hong Kong-based non-profit organization that aims to remove the dependency on paper records in the supply chain by using the blockchain in its open source enterprise architecture.
The organization will utilize the properties of the blockchain to help make disputes a thing of the past by confirming records on the blockchain the moment it is verified e.g after a satisfied business receiving their goods on time.
The OEL Foundation’s solutions are also designed in a such a way that benefits the transport industry as a whole instead of only benefiting one or two major companies.
To achieve its vision, the company will work on three core goals:
- Build the OEL Enterprise Architecture
- Launch the OPN token
- Host the OEL Foundation Alliance
These goals will form an ecosystem supporting decentralized applications (dApps) that allows companies to drastically improve their supply chain with the aid of accurate and indisputable shipment data hence cutting down on costs and inefficiencies.
We recently sat down with OEL Foundation board member Max Ward to have a chat with him about the project as well as learning more about his thoughts and insights.
Hello, Max! Thanks for joining us today. Can you tell us more about the OEL Foundation?
Simply put, the OEL Foundation is a way for the logistics community to make the promise of blockchain real for our industry, and start exploring applications. It acts as a platform to consolidate the resources required to develop a true open source enterprise architecture and make it available to the community of Alliance members.
Tell us about how you came up with the idea of The OEL Foundation.
Did you personally face a problem within the industry or do you think there is a gap in the market for The OEL Foundation to fill?
OpenPort – of which I am CEO – began developing blockchain logistics solutions last year on Ethereum, and we were able to successfully roll-out our blockchain-enabled Proof of Delivery product to existing clients earlier this year. Those early pilots have been very successful and there is a lot of enthusiasm among our clients for these products, but the unit economics don’t work out at scale. The Ethereum network is simply too costly, and the transaction speeds too slow, to operate the specific types of applications that the supply chain industry requires.
So we had a working proof of concept and a proven commercial application, but we needed a blockchain architecture specifically adapted for our industry. We knew we weren’t the only ones facing this issue, and that developing an open-source platform that could be become a global standard, rather than a siloed project, would be much more powerful. So the OEL Foundation was born, and already has several members from the supply chain community that share the vision.
What do you think is the biggest problem the OEL Foundation will solve and why is it important to solve?
The supply chain is very fragmented. A single source of trusted data – a decentralized ledger – will be huge for the industry. There are so many benefits, from efficiency gains, lower costs, and faster payments, that can be created if there is a shared, trusted data source.
Let’s talk about the potential of the blockchain in the logistics and supply chain industry. What makes the blockchain better than any other technologies out there in terms of overcoming the problems in these industries?
Are the properties of the blockchain really that efficient in combating these inefficiencies in comparison to other technologies?
It’d be great if you could also expand on some of the weaknesses of the blockchain in this industry as well as the steps taken by the organization to overcome these weaknesses.
I think it’s less about better and worse, and more to do with suitability for the task at hand. Supply chains are about the secure transfer of goods and payments, and blockchain is about the secure transfer of data or digital assets. They are deeply complementary.
Blockchain alone is not enough to revolutionize the whole industry as much as many would like to believe. However, mated to other technologies (IoT, Cloud, SaaS), it has the ability to fully revamp the verification processes that have been, to put it bluntly, quite inefficient for many years now. It provides an automated solution to many problems that have been plaguing the industry. If all participants in the supply chain can agree, in real-time, on an irrefutable truth such as “this shipment was delivered by X person, at this time and place, and in this condition”, that has massive implications for the flow of capital through the supply chain because verification is now instant and undeniable.
You can replicate the speed with other technologies, but not the irrefutability, and that drives cash flow.
The whitepaper mentions that overcoming the paper-based system in use today is the main goal of the OEL Foundation. How confident are you in this and how long do you expect to achieve your targets for the OEL Foundation?
Are there concerns about adoption considering the fact that most businesses are used to the paper-based model and the blockchain is still foreign to many people?
We’ve seen from our work at OpenPort that there is plenty of appetite in the industry to embrace digital solutions. The issue is that current digital solutions cannot entirely replace the paper trail due to the need to be compliant with different data standards and regulations, where paper records remain the only common standard.
Those paper records exist to do one thing: to verify that a transaction happened. Now, for the first time, we have the ability to verify transactions in a paperless and irrefutable way. Once a scalable and robust system is in place, I think adoption will happen on an accelerated curve. Certainly, that will take a few years, however.
The idea of rewarding OPN tokens to participants who share their data is an interesting one. What is the reasoning behind incentivizing data sharing in the OEL Foundation?
What will the data be used for in the ecosystem and how does it benefit the participants of the ecosystem?
Blockchain protocols and applications are useless without reliable source data being fed directly from the supply chain by the actors within. Truck drivers, for instance, are not typically incentivized to share their GPS data, or to proactively record an issue with their shipment.
Micro-incentives are feasible with a token, and can be used to encourage the sharing of the necessary data, and also to reward participants who might be considered to be ‘bottom of the chain’ for the valuable data they provide. Truck drivers, warehouse operators and many more individuals in the supply chain are essential resources of critical data, and now they can share that with us via their smartphones, and be rewarded for it.
The cost to the shipper is a small fraction of the goods value, but it is used to create security and trust.
Editors Pick: OEL Foundation
The OEL Foundation – Revolutionizing Enterprise Logistics & The Supply Chain Industry With The Blockchain
The increasing adoption of the blockchain is huge not only for the blockchain industry but also in verticals where the technology is being used to improve processes and efficiency. One of the biggest verticals set to benefit the most from the blockchain is in logistics and transport management which makes
An impressive aspect of the OEL Foundation is the team’s dedication to maintaining industry standards and best practices in the development of the system.
Why do you think adhering to industry standards (like the Enterprise Ethereum Architecture Framework) is important in a project like the OEL Foundation?
Do businesses need to make changes to their existing processes in order to participate in the OEL Foundation or is that not a problem at all?
It’s important to be visible and transparent, and to adhere to agreed-upon standards as much as possible, especially when developing an open source project. Blockchain is at its heart a community-based technology. As industry leaders, we have to both create and adhere to standards.
Tell us more about the affiliation between OpenPort and the OEL Foundation.
How did the partnership start and what are the long-term goals of both OpenPort and the OEL Foundation?
Are there any new features or things to be added to the ecosystem in the future?
As mentioned, it was the work done by OpenPort that inspired the Foundation. OpenPort has a service agreement with the Foundation, meaning that it acts as an outsourced vendor, providing various services. OpenPort will be implementing the enterprise architecture in its own solutions the moment the mainnet launches.
The possibilities for features within the ecosystem are enormous. OpenPort will focus on transport management, proof of delivery, payments, and other areas of expertise. But the purpose of the OEL Alliance is to have other companies use and develop on the platform, so hopefully, we will see many more interesting applications in the future.
While working on the project, what’s something that you believed to be true for a long time until you found out that you were wrong, or if you don’t like the dichotomy of right versus wrong, what’s something significant that you have really changed your mind about over time?
After many years in the logistics industry, I thought road freight (trucking) would be easy to digitize (certainly easier than multi-modal international shipping). The reality is that even in road transport there are countless hand-offs of information, so it is hard to fully digitize, even though we are now successful in doing so and in the Philippines as a start we are getting all transactions on the decentralized ledger. Basically it was much more difficult than I thought, including adoption of tools – micro-incentives is a powerful concept here driving the adoption.
What is the current progress on The OEL Foundation’s partners?
Are there any interesting partnerships that the team is working on?
We completed the first sale of a blockchain-enabled transport invoice on a blockchain asset marketplace recently, with our partner Acudeen. We’re working with UnionBank and Sweetbridge to bring that capability to a larger audience, and very excited about the possibilities.
What do you think is the biggest challenge or obstacle the OEL Foundation will face? How do you plan to tackle that challenge?
We know that there is enthusiasm for this project, the initial challenge is establishing real use cases – something every blockchain project faces. I think we’re off to a great start on that front. Education is another big factor, and something the OEL Alliance is designed to help tackle. Many companies are interested in learning more about blockchain and what it can do for their business, but it’s a complex topic with a lot of competing ideologies. We want to present practical, feasible applications to our industry to show that there is a path forward to making this technology work for us in the near future.
Moving on to more personal stuff, what does a typical day in your life look like?
I travel too much so it typically starts in a hotel somewhere and involves getting on a plane. I try to pack my schedule with as many meetings as possible and am trying to get better at putting this into 30 minute components. 15 minutes is not realistic especially with traffic in Asian cities but we can always try to be efficient with our time.
Can you express one personal opinion of yours about the blockchain? It doesn’t matter if it’s negative or positive, we just want to hear your thoughts on it.
Decentralization is a concept which when applied to real business derives interesting learnings.
Finally, what other personal goals (besides your career) do you have in life? Is there anything else in life you want to achieve?
I started a company, lots of learnings there as a first-time entrepreneur. Now I just want it to be successful for stakeholders and employees – beyond profits and delivering real sustainable value, that is the only path to happiness and fulfilled purpose I believe.
That concludes our Interview with Max Ward
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