Blockchain Invoice Adjustment for Supply Chain Visibility
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Solution Overview
Problem
There is a lack of automated visibility and transparency in asset tracking and invoice adjustments for transported goods in supply chains, leading to disputes and inefficiencies, particularly due to changes in transportation charges during shipment.
Innovation Solution
A distributed ledger system using blockchain technology is implemented to track shipment events and automate invoice adjustments, allowing real-time calculation and recording of transportation charges, including detention and demurrage, while ensuring data integrity and controlled data sharing among network participants.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Extent of automation
If manual invoice adjustment processes are used, then flexibility in handling transportation charge changes is maintained, but automation and real-time visibility are lost leading to disputes and inefficiencies
Solution Approach 1:
A blockchain-based intermediary system is introduced to mediate between supply chain participants (shippers, carriers, receivers) and invoice adjustment processes. The blockchain ledger serves as a neutral, shared record that all parties trust, enabling automated invoice adjustments without requiring complex point-to-point integration between each participant's systems. Smart contracts act as automated intermediaries that execute invoice adjustments based on pre-agreed terms when shipment events occur.
Solution Approach 2:
The blockchain system performs multiple functions simultaneously: it tracks shipment events, records transportation charge changes, manages invoice adjustments, and provides dispute resolution mechanisms all within a single platform. This multi-functional approach consolidates what would otherwise require separate manual processes for each function, achieving automation without proportionally increasing complexity.
2Loss of information
If all shipment data is shared with all participants, then complete visibility is achieved, but data privacy and security concerns arise
Solution Approach 1:
The blockchain system segments data into different visibility layers: public data (shipment events, invoice adjustments) that all participants can see, and private data (commercially sensitive information) that is encrypted and accessible only to authorized parties. This segmentation enables complete visibility of shipment status and charge adjustments while protecting sensitive business information from unauthorized access.
Solution Approach 2:
Different participants are granted different levels of data access based on their role and authorization in the supply chain. For example, carriers can see transportation charge data, while receivers can see delivery status data, but not necessarily all data types. This localized data quality approach ensures each participant receives the specific information they need for their functions while maintaining overall system transparency.
3Productivity
If real-time invoice adjustments are implemented, then efficiency and dispute prevention are improved, but system complexity and implementation difficulty increase
Solution Approach 1:
The system uses pre-configured smart contracts that contain all the logic and rules for invoice adjustments before shipment events occur. When events like detention or demurrage happen, the smart contracts automatically execute the appropriate adjustments based on pre-agreed terms, eliminating the need for complex real-time calculation logic and manual intervention during actual invoice processing.
Solution Approach 2:
The blockchain system enables self-service invoice adjustments where the system automatically detects shipment events, calculates charge adjustments, and updates invoices without requiring manual input from participants. This self-service capability drives efficiency gains while the standardized smart contract templates reduce implementation complexity by providing ready-to-use automation logic.
Data Source
AI summary
Methods and systems for invoice adjustment are provided. A method for generating adjustments includes: accessing, by an invoice adjustment module, contents of a contract, the contract being of a purchaser for transport of goods by a carrier; receiving shipment events data regarding transport of the goods by the carrier that result in a change or addition in transportation charges; calculating an adjustment to the price based on the shipment events data; generating an invoice for transport of the goods including the adjusted calculation to the price; and adding the invoice to a supply chain distributed ledger via a network interface, the supply chain distributed ledger comprising a plurality of nodes, at least one node corresponding to the purchaser and at least one node corresponding to the carrier, the invoice being accessible on the supply chain distributed ledger to the purchaser and to the carrier.