Fraunhofer position paper "Blockchain and Smart Contracts" now available in English

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Blockchain and Smart Contracts position paper

Fraunhofer’s strategic position paper Blockchain and Smart Contracts, which was published by several Fraunhofer institutes collaboratively in late 2017, is now also available in English. Herein, scientific and application-oriented aspects of the Blockchain technology are investigated. In particular, it deals with possible applications and technical research questions.

SOFiA project contribution wins "Best Paper Award"

The contribution "Smart Contracts and Smart Payment in Farming 4.0" was awarded the "Best Paper Award" at a conference of the BMBF-funded project "Digivation" from 03/20 - 03/21 2018 in Aachen. The planned publication contains company-specific applications of various digital innovations. Marco Motta from Fraunhofer IML accepted the award on behalf of the team of authors led by Dominik Sparer and Philipp Sprenger.

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Demand for Procurement 4.0 Check in Asia

With a trip to China, our Procurement 4.0 theme has gained further momentum: Axel T. Schulte and Natalia Broza-Abut were on the road with the new customer Zber in Beijing, Nanjing and Shanghai at the end of September 2017. The Chinese company is a provider of solutions for global procurement and supply chain management. Chief consultant Yi Zhu first became aware of our preliminary study "Procurement 4.0 - Digitisation in Procurement". In the spring of 2017, Yi Zhu visited the IML together with his team. Zber then placed several orders with the IML.

At the 16th International Sourcing Fair Shanghai, Axel and Natalia presented the topic Industry 4.0 and digitization of procurement, as well as our Fraunhofer Procurement 4.0 Check. The trade fair organisers also appointed Axel to the International Sourcing Expert Panel. Also on the agenda was a visit to the company, which carried out the Fraunhofer Procurement 4.0 check for the first time in Asia. Eventown is China's first and largest booking platform for the conference industry. The company was voted as one of the most successful Chinese start-ups by the business magazine Forbes in 2015. The Chinese business partners were also very interested in the potential of blockchain technology in the context of SCM and procurement.

High expectations are being placed in Procurement 4.0 today - and the Fraunhofer IML makes it possible for companies to set standards here. With the "Procurement 4.0 Check" - a development from the Procurement and Finance Department in Supply Chain Management - companies have the opportunity to identify individual needs for action and potential for Industry 4.0 in Procurement.

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Commerzbank and Fraunhofer IML to conduct joint research on trade finance

Commerzbank press release July 4th 2017

Commerzbank and the Fraunhofer Institute for Material Flow and Logistics IML in Dortmund have agreed on a cooperation. At the heart of this cooperation, scenarios for the supply chains of the future are to be developed. The institute supports the bank in orchestrating these processes and at the same time provides the latest findings on supply chain management and the possible use of blockchain technologies in this area. The blockchain, or distributed ledger technology, is a decentralized data structure and, for example, the basis for intelligent electronic contracts, so-called "Smart Contracts", which focus on the automated processing of business transactions.

Many digitisation approaches of banks, companies and scientific institutions are currently focussing on international trade transactions and the related commodity and financial flows. Increasing global competition, changing customer expectations and shorter product lifecycles make the associated international supply chains increasingly important for operational decision makers. With further digitization along supply chains, many process improvements and opportunities will arise from optimized management and faster availability of data. “Talking” containers, for example, will then become commonplace in global foreign trade.

Greater networking of functions can also create completely new areas of application across companies. This applies in particular to modern applications in the field of Internet of things, i.e. for networked objects that connect themselves independently via the internet and carry out tasks, as well as for Smart Contracts. This can result in new trading systems and trade financing concepts, faster transaction procedures and ultimately new solutions in working capital management. These are the focus of the new cooperation.

“Our core competencies, 'Moving money safely', 'Financing trade' and 'Assuming risks' will also be highly relevant for our customers in the age of digitalisation. The integration of the Fraunhofer Institute for Material Flow and Logistics IML ensures the best possible insight into the currently very diverse digitization approaches along the logistics and material flow processes of our customers", said Dr. Bernd Laber, Member of the Board of Managing Directors responsible for Trade Finance & Cash Management for corporate customers at Commerzbank. “In numerous projects and consortia, we are also working with other international banks on the digitization of products and services, as well as on applications for blockchain technologies. The clear focus on the future supply chains of our customers, which we will develop together with the Fraunhofer IML, is very important to us as a corporate customer bank", continued Dr. Laber.

“Digitalization approaches in supply chain management, such as the development of smart containers that are able to route themselves, commission logistics service providers and pay for them independently, will enable completely new business models for banks in the areas of financing, risk management and transactions", explained Prof. Dr. Michael Henke, head of the Fraunhofer IML institute. “I am convinced that technologies such as block chains and smart contracts are key enablers for linking physical and financial supply chains. With Commerzbank as an innovative cooperation partner, we will develop new, safe and fast solutions for the supply chain of the future.”

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Fraunhofer Procurement 4.0 Check

You want to determine where your procurement department is situated in terms of Industry 4.0 and which fields of activity are on their way to procurement 4.0?
The Fraunhofer Procurement 4.0 Check serves as a starting point for the implementation of Industry 4.0 within your procurement department and supports you in finding answers to your questions.

Evaluating both qualitative and quantitative success factors of your procurement department, the essential fields of activity regarding Industry 4.0 are identified by means of a gap analysis.
Furthermore, you will receive an evaluation of the most relevant KPIs as well as a determination of your progress level on the way to procurement 4.0.
Therefore, the Fraunhofer Procurement 4.0 Check serves as a foundation for the development of an individual roadmap to the implementation of Industry 4.0 in your procurement department.

Fraunhofer Procurement 4.0 Check

Procurement can assume a leading role

Fraunhofer IML and BME present new pilot study on the digitalisation of procurement

The digital structural change of industry will not be successful without the participation of procurement. However, opinions on its role vary greatly, ranging from “active driver” to “mere supporter”. Therefore, procurement has to intervene more actively in the discussion on Industry 4.0. As an innovation scout as well as an expert on technology and management, its voice will be heard. These are the central findings of the study “Procurement 4.0 – The Digitalisation of Procurement”, conducted by the Fraunhofer Institute for Material Flow and Logistics and the Association Supply Chain Management, Procurement and Logistics (BME). From august 2015 through april 2016, 25 procurement managers and CPOs of renowned industrial companies, as well as representatives of two universities were interviewed.

Key findings of the survey:

A strong internal and external connectivity is crucial, if Industry 4.0 is to be developed successfully. While the connectivity within the own company affects all departments equally, the procurement department is required particularly regarding external connectedness. It is the exchange of know-how with other companies and organisations which only makes it possible to benefit from the advantages of digitalisation. Procurement is the driver of this external connectivity and, as such, bears the full responsibility. It assumes a decisive role in the implementation of Industry 4.0: It has to bring innovations and technologies into the company, so that it can successfully master the fourth industrial revolution.

Procurement has to be able to react in real-time. This is only possible, if all its processes have largely been digitised before.

Procurement has to manage an increasingly digitalised purchasing portfolio. Not only the procurement processes, but also the products that are to be procured are subject to the change of digitalisation.

Operative procurement processes can be digitised almost entirely. They do not need to be handled by an employee, as new technologies and e-solutions will take over this part. The strategic procurement department only controls and oversees these processes from then on. As a consequence, an operative purchasing agent is a discontinued model.

The challenges and expectations of the strategic procurement are increasing and with it the demand for an increased value contribution.

The occupational profile of a buying agent is changing fundamentally. His traditional role is a thing of the past. He becomes a digital interface manager, both inward and outward.

Technologies create many new opportunities for companies, but they do not replace personal relations. Particularly in the procurement department, personal contacts to suppliers and internal customers remain as an important foundation.

Procurement does not bear the overall responsibility for the implementation of Industry 4.0 – but it plays a crucial role in it.

The current study is a starting point for proceeding, more detailed examinations of the topic Procurement 4.0. For this purpose, BME and the Fraunhofer IML have founded a think tank as a provider of experiences and ideas. The assignment of this body of experts is to gather practical experience values and to determine the challenges to procurement which arise from the advancing digitalisation of economy.

Business Case Calculator for innovative business models

Business Case Calculator
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Business Case Calculator

Initiated by technological developments and research projects in recent years, a tremendous supply of Industry 4.0 applications emerged in Germany alone. Among other aspects, throughput times were reduced, productivity levels were increased and capacities were optimized. But do these innovative applications live up to their promises? Is an investment in them profitable? The implementation has proceeded only hesitantly until now. Especially the SME area exhibits a low degree of implementation of Industry 4.0 at the moment. There are many reasons for this reticence, primarily the question: What are the benefits of Industry 4.0 for my company?

So far, investment decisions have been made predominantly based on the monetary advantageousness of investment projects. The major challenge in terms of Industry 4.0 is the uncertain economic benefit in conjunction with the high investments. There exist little to no experience values regarding the costs or benefits. Statistical forecast procedures based on the past offer only limited valid results. Furthermore, uncertainty prevails regarding future developments and environmental conditions, especially on the quest for reliable figures. In times of disruptive innovations, more qualitatively strategic decision-making parameters (non-financials) should be used to safeguard investments.

Together with you, the Fraunhofer Business Case Calculator allows for a quick and simple business case validation from various perspectives. Taking into account both classic “financials”, and qualitative potential benefits (i.e. “non-financials”) as well as project risks of an innovative business model, you are able to protect yourself when making investment decisions.

Smart objects and smart finance approaches (SOFiA)

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Kickoff for the research project “Planning and control of value networks by integration of smart objects and smart finance approaches (SOFiA)”

Dortmund, February 01st 2016.


Within a given value network, delays occur during the planning process of a sea freight shipment. The sea freight container will not reach the planned vessel in time. Replanning, rebooking and the corresponding payments have to take place on short notice. This scenario describes the classic and time-consuming daily life in the logistics and supply chain management. Via innovative smart objects and smart finance technologies, the container itself becomes the dispatcher. It recognizes delays, analyses action alternatives and chooses the best transportation route. Subsequently, it assigns a carrier (logistics service provider)   and handles the payment via mobile Business-to-Business (B2B) payment technologies in real-time. The logistical objects are equipped with all the logistical and financial information to allow for a completely autonomous decentralized decision and transaction. In addition to this transport case of application, the SOFiA-project also focuses on the fleet control of harvesting machines for the transport and storage of agricultural commodities.

Therefore, new industry 4.0-based management approaches regarding the self-control and self-organization of logistics, production and the appropriate tasks of payment transactions and supply chain finance are addressed by the SOFiA research project. It is part of the subsidy program “Service innovation by means of digitalisation” by the German federal department for education and research. The project’s objective is the improvement of the process handling within complex manufacturing and logistics networks through integration of smart objects and digital B2B smart finance approaches.

The project was initiated in November of 2015 and has a total duration of three years with the project consortium consisting of the agricultural machinery manufacturer CLAAS E-Systems KgaA mbH & Co KG, the logistics service provider Ekol Logistik GmbH, the financial IT solutions provider Wincor Nixdorf International GmbH and the Fraunhofer Institute for Material Flow and Logistics (IML).

The consortium partners’ subgoals, aligned with the project objective, are:

  • Development of management procedures for industry 4.0 based on decision-making methods for intelligent logistics objects for the autonomous logistical and financial control within complex value networks (Fraunhofer IML)
  • Intelligent machine fleet control by means of autonomous logistics objects from a manufacturer’s point of view (CLAAS)
  • Intelligent logistics control by means of autonomous logistics objects from a transport service provider’s point of view (Ekol)
  • Innovative, decentralized B2B payment methods for autonomously operating logistics units within value networks (Wincor Nixdorf)

On behalf of the consortium leader Fraunhofer IML, the project is headed by Prof. Dr. Michael Henke (Institute director) and the department heads Marco Motta (Supply Chain Engineering) and Dr. Axel T. Schulte (Procurement & Finance in Supply Chain Management). Additional information on the research project will be published at