😴 Dull Process + Blockchain = Innovation

GM, GM!

You know how we break down the Web3 use cases every week in 4.3 minutes:

• 😰 The challenge

• 💡 The solution

• 👀 Take away for other industries

Do you get goosebumps when I whisper "long-term supplier declarations" in your ear?

What about "master data information for materials"?

Elevated pulse?

"Status of origin of a product"

Still nothing?

Well, then I guess today's newsletter isn't for you.

For all you customs mucky-mucks, I've got something special for you.

😰 The challenge

To receive customs benefits under free trade agreements, it is necessary for companies to prove origin characteristics of goods.

For this purpose, there are usually long-term supplier declarations (LTSD). These certify relevant master data information for materials between buyers/sellers for up to 24 months. It is like a passport for a material.

You might think that such important documents have long since been digitized, but no: 83% of LTSDs are still issued in paper form throughout Europe.

This manual and analog process carries high risks:

• No change tracking: Changes to the origin of goods can currently only be communicated by mail or email. A direct change of the issued LTSD is no longer possible. The supplier often cannot ensure the origin of the goods over a longer period of time.

• Audit: The company that has issued an LTSD in error is always liable, but this is enormously difficult to prove in the event of a legal dispute.

• Fraud risk: Currently, anyone can pretend to be an entrepreneur.

💡 The solution

To prove LTSDs, authorities must prove the original document, making blockchain technology an ideal solution as it enables a trust-building single source of truth.

This is what Siemens was thinking when tackling this problem.

They created the platform taXchain.

Siemens thinks of it as an „App-Store“ for various use cases in tax and customs.

The first use case for their new platform where the generation and exchange of LSTDs with their partner Henkel.

Within minutes, information and data can be exchanged in conjunction with legally binding digital agreements for all business transactions.

This will lead to greater efficiency and transparency in processes, cost reductions and competitive advantages for all ecosystem participants involved.

“In the long term, taXchain will enable frictionless cross-border sales and open up savings opportunities for all multinational companies that buy, sell and produce physical products across borders.”

taXchain describes the benefits:

• Dashboard to manage & track the E2E LTSD process: LTSD can be requested or issued digitally.

• Fraud prevention: Certificates are used to ensure that no contractor can impersonate another.

• Improved audit: Because data are stored immutably on the blockchain, it can be furthermore determined at any time by whom and when the LTSD was issued.

• Change tracking: Changes in the origin of goods can be continuously recorded and referenced to the respective LTSD ensuring the best possible use of preferential agreements.

• Largest use of free trade agreements.

👀 Take away for other industries

Typically, innovation departments boast about fancy new ideas, such as new business models or never-before-seen new features.

But they should not forget the "boring" processes of a company. Honestly, who has fun with customs certificates (yes, I see you nerds 😘)?

But it is precisely in the tedious processes that there is great potential for optimization. Keep an eye out for it!

What's the most boring process you know?

📩 Tell me by hitting reply!

Have a great day! ☀️