Strengths of the platform business model

Platform thinking has redefined business and given us some of today’s most valuable companies. Everyone knows Amazon, Uber, Twitter and Alibaba, but not everyone understands the platform business model that powers their success.

What makes a platform special?

So what is a platform? According to Deloitte it is, “a business model (not a technology infrastructure) that focuses on helping to facilitate interactions across a large number of participants.”

Facilitation is the key; Amazon and Uber don’t rely on owning inventory or just providing a service, their successes are the networks that facilitate people’s interaction with each other. They provide the platforms where products or services and communities or traders can connect.

Platforms can vary from social networks and development platforms to multitudinous markets for products and services. What they have in common is their ability to create value by connecting participants and creating fundamentally new markets, discovering value that was not previously available.

Uber disrupted the ride-share segment, Amazon changed the retail world and Airbnb has altered the way the hospitality industry interacts with customers. So could a platform business model be used to improve visibility and foster collaboration across the global supply chain?

Container shipping is ready for a platform model

The transportation industry has always searched for ways to foster connections and loosen the exchange of information up and down supply chains.

But there is a wasted opportunity: While vendors or supply chain management companies provide specific events to specific individuals, there are others within the supply chain who want to see and use that data to create new ways of working and improve the process.

A platform model can achieve what different manifestations of software solutions and shipping portals have been trying to accomplish for years. And it does it by doing what platforms are good at: facilitating exchanges of information—and by fostering connection among participants from end to end of the supply chain.

Applying a platform model to the supply chain means bringing together an ecosystem of participants to create a lot of data about shipments. The ecosystem benefits all participants by revealing the events of shipments from their source, visibility of trade documentation, integrating sensor reading data. This provides incredible insights and enables participants up and down the supply chain to use the data for their specific needs.

In the global supply chain space, blockchain provides the means for securely storing, structuring, sharing and collaborating on the digital document workflow.

Putting the platform model to work in global supply chains

Three key technologies make platforms possible today. In the global supply chain space, blockchain provides the means for securely storing, structuring, sharing and collaborating on the digital document workflow. Cloud computing enables infinite scalability. And APIs enable fluency between differing systems and software. Together these tools will break the paradigm of one-to-one information transfer. They will help foster true collaboration and cultivate and environment for transacting business processes across organisations. Platforms enable transformative change in the industries they serve. 

Industry veteran and TradeLens Product Manager, Jeffrey H. Ivinski describes how a platform model that is underpinned by a permissioned blockchain should work:

When information is uploaded by a participant, they have the right within the consignment, document or shipment to see the event data they’re permissioned to see up to that point. That includes things like when a container is loaded on a vessel, arrives at the port or clears customs.

Participants throughout the supply chain benefit from this visibility. For instance, a customs authority may get information earlier, which can help a shipment clear earlier.

“The ability to share information and data broadly enables participants to save time versus the same old step-to-step-to-step-to-step within the supply chain,” Ivinski says. “And when that happens, you can start to innovate and create solutions across the network participants so that everybody benefits.”

Platforms provide unprecedented benefits to the global supply chain

Widespread Event Visibility

A platform business model can bring to the container freight industry the ability to open event information, providing new transparency to every player at every point in supply chain ecosystems, including ocean carriers, customs authorities and inland transportation providers. That visibility has far-reaching benefits.

TradeLens Product Manager, Thiago Rodrigues explains, “You're breaking down the information silos on the supply chain by having a set of data available to anyone. That’s never been done before in this industry.”

Trusted Data On Demand

When supported by a permissioned blockchain, a platform creates an environment that allows the parties of a supply chain to input and share information that is secure and immutable. Participants of the ecosystem access this trusted data in unprecedented ways. For example, entities like customs authorities and terminals that have permission can use the new information to plan better and operate more efficiently.

Platforms are agile and responsive to what their users need, and can quickly deploy new features and functionalities

Super Scalability

Unlike many shipping portals and software solutions limited by onsite servers and legacy systems, platform models can leverage cloud technology from the get-go. As a result, they’re built to evolve with the ecosystem and facilitate endless connections. Rodrigues describes the possibilities, “As an application deployed on the cloud, platforms are agile and responsive to what their users need, and can quickly deploy new features and functionalities.”

The platform business model holds tremendous promise for supply chains and global trade. It combines technology that exists today, agreed standards, interoprability, scale of understanding and creation of new workflow processes. The industry must all be vigilant not to replicate the today's challenges in a digitized world but let platform business models create something entirely new.  

The creation of platforms, which then build network-of-networks, was a topic at the recent IBM's Think conference in San Francisco this month. Watch the full Think conference video from IBM blockchain, including Karen Oldfield, CEO & President of Port of Halifax. 

Imagine the potential of new business models. Learn more about the TradeLens ecosystem that is building a global supply chain platform.

Imagine the potential of new business models. Learn more about the TradeLens ecosystem that is building a global supply chain platform.

Related content

Advancing eBL adoption and the role of MLETR

The global acceptance of eBL is in motion, how can MLETR and other legislative initiatives help?

read more

Unlocking the digital world with TradeLens

We sat down with senior global trade experts, Diana Jones, Director of Solution Architecture, and Juanjo Ruiz, Strategy and Business Development at TradeLens to discuss the proliferation of electronic bills of lading (eBL) and the disruption of blockchain as an emerging technology with a substantial opportunity to support banks with unlocking a $3.4 trillion trade gap in the trade finance market. The following is a Q&A on these topics.

read more

Citi Completes First Pilot Transaction on the TradeLens Platform in Asia Pacific

Bangladesh/Hong Kong – Citi Treasury and Trade Solutions (TTS) Asia Pacific has completed its first pilot paperless trade finance transaction using the TradeLens platform. Leveraging blockchain technology supplied by TradeLens, the pilot illustrates the effectiveness of the technology to improve supply chain efficiency by significantly reducing document processing lead times.

read more