As part of its commitment to provide the lowest everyday prices for its consumers, Walmart Canada has a sharp focus on supply chain logistics. One vital piece: the freight transportation that ensures Walmart is sufficiently stocked to service more than 1.2 million customers across 400 stores every day.
Walmart partners with third party transportation companies, referred to as carriers, that work around the clock, and through all seasons, to deliver goods. These carriers are a vital link in Walmart’s supply chain. However, there is a high level of complexity to managing the information flow and invoice payments with the carriers, which is a big deal as shipping is a capital-intensive business with a high degree of cost volatility (fuel prices, delays, unexpected events).
It is not uncommon to have invoice disputes in the range of 70% or more for every load a carrier delivers (one invoice per load). Despite various service providers trying to solve this puzzle using the full spectrum of existing technologies, disputes continue to plague the industry with high administrative costs and lengthy payment delays, and invoice reconciliation often simply means one side or the other capitulated.
For Walmart, the complexity is multiplied by working with up to 70 different carriers in its supply chain, each of which has its own respective process for calculating shipping costs based on individual contracts that outline varying rates for fuel, line haul and other charges.
Walmart Canada enlisted the help of DLT Labs™, a global leader in the development and deployment of an innovative enterprise-level platform using distributed ledger technology, to develop a solution that would solve the perennial dispute problem once and for all.
In early 2019, DLT Labs rolled out the world’s largest full production blockchain solution for any industrial application: DL Freight™. Remarkably, because the platform is fully configurable, DL Freight was configured for the demanding needs of Walmart in just 60 days. The new system tracks deliveries, verifies transactions, and automates invoices in real time. Reconciliation between Walmart and its fleet of carriers is no longer even necessary because they are all working off the same information and calculations by way of smart contracts.
DL Freight is built on Hyperledger Fabric, an open source platform that allows Walmart to bring together all the carriers within its multi-partner freight operations under one architecture to automate and implement universal workflows across the network. At the same time, through Hyperledger Fabric’s unique “channels” feature, the solution allows independent and protected relationships for each organization directly between itself and Walmart, and the information is not accessible to other members.
Within DL Freight, carriers are the peers, and the governance of the platform is controlled by the applicable contracts, as in any conventional business. The difference is that the freight, legal, and finance departments of Walmart, as well as all the carriers, have all agreed that the solution fairly and accurately represents those agreements so it processes them automatically. As a result, it has removed the guesswork and any real potential for dispute over the interpretation of agreements.
Hyperledger teamed up with DLT Labs and Walmart Canada on a case study about the creation and adoption of DL Freight, the national standard for freight invoice management for Walmart Canada and its national network of carriers. It delves into key design decisions and outcomes as well as security safeguards and the roadmap for DL Freight as an industry platform.
Read the full case study here.
Join the conversation about solutions and applications in the supply chain market with #HyperledgerSupplyChain this month on social channels.