Blockchain applied in the CityName Service Parts Supply Chain Contents

Our business 03 IBM in the past and in the future 03 Service Parts Operations in IBM GTS 05 Support as a Service 07

Blockchain explained 08 A word on TradeLens 10

Cross-bordering parts 12 A customs invoice 12 Process and application 13

Key take-aways 16 IBM is in business over 100 years and many inventions have been very relevant to the world we live in

IBM has been at the IBM has been at the IBM researchers have at IBM has been on the basis of many software basis of innovations that times been recognized forefront of standards & platforms have had a big impact to for their contributions developing computing the world technology • , 1957 • Mainframes (from • Developed the DRAM • Relational Databases S/360 in 1964 to chip in 1967 (1970, DB2) the Z14 in 2017) • Developed the • IBM PC in 1980 • Operating systems magnetic stripe card in • Leo Esaki, 1973 (IMS, CICS, TSO) 1969 • RISC computing Electron Tunneling 1992 IBM is now working on • Helped set the first this with others on Open • Binnig & Rohrer in • Quantum man on the moon Source platforms (Linux, 1986 for Scanning computing Blockchain) as we can’t tunneling microscopy do it alone! • Bednorz & Müller in 1987 for high 3 temperature super- Security – becoming ever Artificial intelligence with more important IBM also wants to be relevant to society in the future and is working on some exciting technologies IBM principle: the data of our clients is precisely that

Augment human IBM will help derive judgment intelligence from your data but will not use it itself

Analytics (big data) Blockchain technology This is not Bitcoin! This technology will revolutionize the supply chain and will develop networks of companies From DB2/QMF into machine learning IBM Cloud

4 Service Parts Organisation – who are we?

General Organization Overview

4PL – A fourth-party logistic provider, 3PL - a third party logistic provider

5 SPO Value Proposition

Facts & Highlights . 3 worldwide hubs . 200,000 part numbers (50,000 non-IBM) . 30 million movements a year WW . ± 400 parts suppliers . >750 stock locations WW (180 countries) . 96% availability in 58 countries . 99.9% inventory accuracy . SLA support from 2hrs to 2nd business day . Transport / warehousing has been outsourced . Globally managed and integrated processes and systems where possible, geographical solutions where needed IBM TSS : Support as a Service Blockchain Technology: Registering a transaction on the blockchain uses a chain; tampering with data will break the chain

© 2018 IBM Corporation Advantages of applying blockchain technology powered by Hyperledger Fabric

Automated data interfaces from / to all parties within the blockchain environment

Visibility Auditability and trust Scalability Flexibility of smart contract

To all actors of all Modification of data not Everything is the same yet documents as needed possible without detection Hyperledger Fabric and Cloud there are always small (permissioned based run-time environment differences, e.g. from country o Clear liability in case of blockchain) disputes allow for the application to to country see increase usage over time 24/7 to o Official entities can get without concerns documents access to the data in the blockchain

9 TradeLens Overview Introduction 27-May-19 10

GLOBAL TRADE IS HIGHLY INEFFICIENT AND BURDENED BY -BASED PROCESSES Inland Transportation

Customs Shippers / Beneficial Data trapped in organizational silos Brokers Cargo Owner Information is held in paper and various digital formats across dozens of service providers along the supply chain, requiring complex, cumbersome, and costly peer-to-peer messaging. The result is inconsistent information Supply Chain Visibility Systems across organizational boundaries, latency in obtaining shipment visibility, and Customs blind spots that hinder the efficient flow of goods. Systems

Manual, time-consuming, paper-based processes The collection and processing of up-to-date data, as well as inefficient trade Trade document exchange, requires manual checks and frequent follow-ups and Ports and Association results in errors, delays and high compliance costs. Late filings are common Terminals s due to missing information.

Clearance takes too long and is often subject to fraud Supply Chain / Risk assessments by customs authorities lack sufficient and trusted Transportation Ocean Carriers information resulting in high inspection rates, added prevention measures Management against fraud and forgery, and delayed customs clearance. Systems

High costs and poor customer service These challenges have significant downstream repercussions. The inability Authorities Freight to forecast and plan effectively, address supply chain disruptions in real-time, Forwarders / and trusted information across the supply chain leads to excessive 3PLs safety stock inventory, high administrative costs, operational challenges, and ultimately poor customer service. Port Community Systems; Terminal Operating Systems Financial / Insurance Services 27-May-19 11

https://www.youtube.com/watch?v=tdhpYQCWnCw TradeLens Overview Introduction 27-May-19 12

THE TRADELENS PLATFORM Inland Transportation Digitizing the global supply chain

Customs Shippers / Beneficial Connects the ecosystem Brokers Cargo Owner Brings together all parties in the supply chain - including traders, freight forwarders, inland transportation, ports and terminals, ocean carriers, customs and other government authorities, and others - onto a Blockchain- Supply Chain Visibility Systems based platform with a secure permission and identity framework Customs Systems Drives true information sharing Provides for the seamless, secure sharing of real-time, actionable supply

chain information across all parties to a trade - encompassing shipping Trade milestones, cargo details, trade documents, the structured data embedded in Association Ports and THE PLATFORM IS BUILT ON AN OPEN trade documents, customs filings, sensor readings, and more Terminals s TECHNOLOGY STACK AND IS UNDERPINNED Fosters collaboration and trust BY BLOCKCHAIN TECHNOLOGY Enables the digitization and automation of the cross-organization business Supply Chain / Transportation processes integral to global trade, including import and export clearance, Ocean Carriers Management with Blockchain ensuring secure, auditable, and non-repudiable transactions Systems

Spurs innovation Lays the foundation for ongoing improvement and innovation through an Authorities open, non-proprietary API, the use of standards and promotion of Freight interoperability, and the launch of an Applications Marketplace that parties Forwarders / 3PLs can use to build and deploy TradeLens-powered applications for themselves, their partners, and their customers Port Community Systems; Terminal Operating Systems Financial / Insurance Services Customs Invoice example Cross border shipments require a number of steps

start

Push to bin / Pull & Pack TMS ship to final END dest. IBM / 3PL

Status: Ship Case Receive Case Case packed

Packed Case Customs Invoice MRN Airway bill Import approval data Data BLOCK CHAIN

Provide COS Export Customs Pay Duty / Intrastat / owned data Approval Clearance Owner Extrastat Inventory Shared ledger allows for increased trust in data

Warehouse Invoice Transport Warehouse System Print module Management System

IBM / DHL PC ID EA AB IA Ledger 1 H L F Inventory PC ID EA AB IA owner A Ledger 2

Owner Export Import Broker System Broker

Local Customs Local Customs Pilot implementation approach, MVP This environment makes import clearance data available to carriers and brokers in an automated way, fitting their business

IDDE Transportation Management Individual Gateway import broker

Semi-automated interface (pull) Customs Invoice Packed Shipment Data Case Data Case Data BLOCK CHAIN Automated interface (push)

Enrichment interfaces DHL Express (carrier)

Service Parts Product ERP Classification Key take-aways

• Blockchain technology for Supply Chain Management is mature and new applications of the technology are being developed and will become available in the next five years, potentially causing the business to transform significantly

• Working together with multiple parties is what drives the need for blockchain technology and also what complicates the ability to create successful applications – competitors will need to work together

• QUESTIONS? Thank you!

Jaap Hazewinkel Manager of Strategy and Transformation TSS Service Parts Operations

— Hazewinkel@nl..com +31 6 1250 6288 ibm.com