requiem for reconciliations

Copyright © 2021 Mary Lacity and Remko Van Hoek All rights reserved 2

Requiem for reconciliations: DL Freight, a blockchain-enabled solution by Walmart Canada

and DLT Labs

Mary Lacity Walton College professor and director of the Blockchain Center of Excellence (BCoE)

Remko Van Hoek Professor of practice and executive director of the CSCMP Supply Chain Hall of Fame, hosted by the Sam M. Walton College of Business

Abstract

Supply chain partners across many industries are often in disputes over the accuracy of invoices. Shippers are suspicious of unexpected charges that appear on invoices; carriers dislike fighting to get paid on time. Such disputes are largely caused by the lack of data transparency among supply chain partners. When each party maintains its own internal systems of record, the records often do not match, prompting expensive reconciliation processes on both sides.

Blockchains offer a different approach based on a shared-information system, with records distributed to authorized trading partners. Blockchains, however, do not require supply chain partners to abandon their existing technologies. When blockchain applications are connected to each partner’s internal systems of record, it can enable what is known as “triple-entry bookkeeping”. Supply chain partners get the benefits of transparency and agreement over events and charges, with minimal changes required to their internal systems of record.

In this BCoE case study, we explore how Walmart Canada and DLT Labs developed DL Freight, a blockchain-enabled solution for freight invoicing and payment processes that nearly eliminated disputes (from 70 percent to less than 2 percent). We discuss the development of the solution, present before-and-after pictures of the processes, document the business value delivered, offer lessons for other enterprises considering similar solutions, and compare blockchain technology to alternative technologies that can enhance supply chain capability.

Introduction For the past three decades, companies have been improving internal supply chain operations through the adoption of enterprise resource planning (ERP); electronic data interchange (EDI); transportation management systems (TMS); sensor devices like radio frequency ID (RFID), global positioning system (GPS), and temperature-reading devices; better inventory management practices; and Six Sigma quality improvement programs. Many supply chain operations are lean because of these investments, but only within the boundaries of the firm. Across firm boundaries, supply chain partners still face significant challenges trying to synchronize the data about the flow of physical goods with the actual flow of goods. Because each partner independently maintains its own systems of record, the records often do not match across supply chain partners, which results in disputes, overpayment, underpayment, and nonpayment.1 Transaction costs escalate as each partner’s army of accountants, bookkeepers, and support staff investigate and negotiate settlements. The reconciliation process is expensive, slow, and can sour relationships with trading partners.


Blockchain offers a different approach based on a shared-information system, with a single ledger of records distributed to, and shared among authorized trading partners. The implications for the three major accounting processes – namely, procure-to-pay, order-to-cash, and record-to-report – are undeniable. Mike Walker, Senior Director of Applied Innovation and Digital Transformation for Microsoft, said, “Reconciliations are on the endangered-species list.” How do blockchain technologies eliminate the need for reconciliations? Instead of reconciling data from multiple partners through a matching process, records are created jointly by participating parties. A blockchain application uses a tamper-resistant ledger. Smart contracts automate the confirmation of transactions based on the rules to which parties agree in advance. A smart contract, for example, can be used to automate the confirmation of a proof of delivery for the receipt of goods based on a GPS sensor reading, or can confirm that the product is viable based on temperature readings from IoT devices. Smart contracts confirm the transactions before posting to a shared ledger, i.e., they “confirm before posting” rather than “post and confirm later”. Every authorized party relies on the shared ledger and agrees, “This is what happened”. Blockchains are inherently auditable. In fact, the digital ledger is the audit trail. Blockchains move us from the long-standing, double-entry bookkeeping system to triple-entry bookkeeping,2 in which every transaction has three entries: the credit, the debit, and the receipt stored on a shared ledger (see Figure 1).

Figure 1: Triple-book Accounting

Source: Adapted from https://miro.medium.com/max/4724/1*c3OFdrYqUO2ZqO1-E7nMkQ.png

Within a blockchain application, security is increased by copying the shared ledger to all authorized host computers (called nodes) in the blockchain network (see Figure 2). The independent copies constantly chatter with each other to make sure no party can tamper or alter the records. Figure 2 also illustrates another important concept: In the Walmart Canada and DLT Labs’ solution, a key to success was for the blockchain-enabled solution to directly and continuously integrate to existing systems of record rather than replace them. Party A and Party B still operate their own internal systems, but now, agreements are encoded into smart contracts to automatically synchronize the data, validate and then add transactions to the shared ledger. Within a public blockchain, any participant can operate a node. With a permissioned blockchain solution, only authorized participants can operate a node, and only authorized participants can create, update, or read a shared ledger. In the case of Hyperledger Fabric, a permissioned blockchain


protocol, there is further security as access rights occur at the level of private channels between contracting parties inside the overall network. Blockchain technologies promise a host of benefits to trading partners, but the hype has made many senior executives skeptical.3 For the past few years, the C-suite has been assailed with messages about blockchain’s potential impact to disrupt business models, disintermediate trusted third parties, and transform “the very nature of economic, social, and political systems.”4 The extreme viewpoints may be reconciled as a matter of timing; many of us overestimate the short-term effects of a technical innovation – thus the “hype” – and underestimate the long-term effects on disruption.

Figure 2: Triple-book Accounting on a Blockchain Network

Many senior executives need concrete examples of actual business value delivered before taking a serious look at blockchain. DL Freight, the blockchain-enabled solution for freight invoice and payment processing developed by Walmart Canada and DLT Labs, serves as one such model. (See Sidebar for an overview of the companies.) After Walmart Canada and its freight operators adopted a blockchain-enabled solution in March 2020, invoice disputes fell from 70 percent to less than 2 percent. In this BCoE case study, we explore the adoption journey from conception to execution, present before-and-after pictures of the processes, peek under the hood to reveal the technical components, discuss the governance and business value delivered, offer lessons for other enterprises considering such solutions, and compare blockchain to alternative technologies.

Blockchain Network


Sidebar: An Overview of Walmart Canada and DLT Labs

Overview of Business Problem The case study begins in summer 2018, when the supply chain and logistics team within Walmart Canada asked the technology organization to assess whether IT could help improve freight invoicing. The fragmented and complex process was not working well for anyone in the supply chain. A single invoice can have up to 200 data elements from various partners in the supply chain. Because each partner maintains its own systems of record, Walmart Canada’s information often conflicted with their partners’ information. At any given time, some 70 percent of invoices were in dispute and required manual investigations, driving administrative expenses to about 20 percent of transportation costs.8 Walmart Canada was frustrated with the time and resources needed to verify carriers’ variable charges (called accessorial charges) on invoices. Carriers were complaining that it was taking too long to get paid.9 Beliaev, then-CIO of Walmart Canada, explained, “For each invoice that was in dispute, a small army of people on both sides chase down facts. Payments were outstanding, which was a significant strain on the financial stability within the carrier community. Relationships were strained, as well. It involved a back and forth on who’s right, who’s wrong. It was taking too much of management’s time to resolve.” Walmart Canada’s business team created a business case for the project. Francis Lalonde, VP of Transportation for Walmart Canada, explained that Walmart Canada set three objectives: resolve carrier payment issues, improve the efficiency of how Walmart works with carriers, and create visibility to establish trust with carriers.10 The business case estimated a substantial one-year financial return on investment.11

Walmart Canada, the Canadian division of Walmart, was founded in 1994 through the acquisition of 122 stores from Woolworth Canada.5 Approximately 1.2 million customers visit one of Walmart Canada’s more than 400 retail stores each day. Net sales for 2020 were $18.4 billion, or about 3.5% of Walmart’s overall revenues of $524 billion.6 It employs 85,000 associates. Walmart’s motto is “Save money. Live better.” Walmart Canada’s fleet of 2,000 trailers, along with more than 70 third-party freight carriers, move about 500,000 loads per year.7 Horacio Barbeito is President and CEO of Walmart Canada. Central to this case study, John Bayliss was Senior Vice President of Logistics and Supply Chain Management and is now EVP Chief Transformation Officer; Francis Lalonde is VP of Transportation; and Alexey Shlykov serves as Senior Director of Information and Analytics. Sergei Beliaev was Chief Information Officer of Walmart Canada for the adoption of this blockchain technology but has since become EVP and Chief Strategy Officer at DLT Labs.

DLT Labs is based in Toronto. After approximately 5 years of research, it was founded in 2017 by Ajay Singh, Umesh Singh Kushwaha, Neeraj Srivastava, Loudon Owen and David Freeman. It provides a software-as-a-service (SaaS) platform based on distributed ledger technology (DLT). It offers out-of-the-box, modular, and configurable core products, with a scalable architecture and a comprehensive suite of managed services. By the end of 2020, DLT Labs had approximately 300 employees, offices in the US, Canada, India, and Japan, and multiple technology partners, including Microsoft, PwC, KPMG, Deloitte and Salesforce. Neeraj Srivastava is Chief Technology Officer and Loudon Owen is CEO and Chair of DLT Labs.


While working to improve freight invoicing, Walmart Canada’s leadership asked a provocative question: Instead of reducing reconciliations, can we remove them altogether? The technology team was aware that blockchain technologies could establish a real-time, single, shared version of truth, but the solution would need to allow each carrier to continue using their own internal systems of record, yet share reliable, standardized information with Walmart.12 Blockchain could work if it could be integrated with all of the partners’ existing technologies.

Blockchain Selected as an Enabling Technology At the time, Walmart Canada’s technology team considered blockchain technologies to have advantages over traditional solutions. Compared to traditional applications, blockchain applications uncomplicate trust, reduce costs, and accelerate business processes by (1) providing a real-time, single version of the truth to reduce disputes, (2) creating a tamper-resistant, traceable history of events to simplify workflow and compliance, and (3) automating execution with tamper-resistant smart contracts. 13 Walmart Canada decided to bring on a technology partner that specializes in blockchain-enabled solutions so it could focus on its core business capabilities. Walmart Canada wanted a technology partner that could deploy a solution quickly, knowing that business partners – not only within Walmart, but also in carrier organizations – have limited time, limited funds, and many competing priorities. Although large and well-known technology providers were considered, Walmart Canada selected DLT Labs, a rapidly growing boutique technology platform developer. While most providers pitched building a customized solution from scratch in about 18 months, DLT Labs showed Walmart Canada a configurable platform that could deploy a solution more quickly than a custom-built application. The platform configuration would need to be validated, but validation would be faster than coding and testing a new application. Loudon Owen, co-founder, chair, and CEO of DLT Labs said, “Even more importantly, the DLT Labs’ platform had already been proven to be reliable in production. While individual projects were being done extensively in industry, they were being done almost exclusively for proof-of-concepts (PoCs), and not for production. Leveraging an existing platform provided certainty of both outcome and timing, and eliminated the risks otherwise associated with digital transformation.” DLT Labs was also perceived as a no-nonsense provider. It showed Walmart Canada the specific employees – all with proven track records – who would be assigned to the project. Alexey Shlykov, Senior Director of Information and Analytics at Walmart Canada, advises other leaders, “Forget about the brand names and the size of their companies. Just ask providers simple questions: Can they deliver? Who are the people, name by name, who will be working on your project? And that may help you select the right party.”

Configuration Process The development cycle took only eight months from conception to live deployment. The first two months were spent specifying the requirements for the engagement. The next two months were spent configuring and testing DLT Labs’ platform to meet specifications. The pilot phase, which included Bison Transport, one of Walmart Canada’s largest freight carriers, took four months.


Concerning the configuration phase, DTL Labs already had released a number of modules on the platform, including tracking and tracing; workflow; value transfer and exchange; contract compliance; provenance and authentication; credentials and certification; records management; and privacy and consent (see Figure 3). It only took two months to configure and fully test the platform for DL Freight, including the rigorous review process by Walmart Canada. Loudon Owen, CEO of DLT Labs, said, “Walmart is renowned for its rigorous security and compliance reviews. We went through and passed nine extensive security audits by Walmart Canada and its parent company, Walmart USA, to be confirmed in this role, and are subject to ongoing periodic reviews.” 14

Figure 3: DLT Lab’s Configurable Platform Source: with permission from DLT Labs

Walmart Canada forewent the typical PoC phase because DLT Labs had already proven that its platform was reliable in production. Instead, Walmart Canada went straight to a production pilot that included Bison Transport. Walmart Canada and Bison Transport verified the data, cost savings, labor savings, compliance, and error prevention. The pilot was then easily moved into production. Sergei Beliaev, said, “By doing a production pilot deployment instead of a PoC, you can just implement the solution with the flip of a switch.” DL Freight brings all the information from IoT devices and digital documents from trading partners into a distributed shared ledger and allows all authorized parties to view that information. Smart contracts automate the calculations needed to produce an invoice, including accessorial charges for fuel surcharges, liftgates, redelivery, layovers, shunts (movement of trailers within a site), demurrage (i.e., reimbursements for late shipments), and diversion miles. By the time the last shipment is made, all calculations are completed and confirmed, producing a final invoice that both parties accept. Loudon Owen, CEO and Chair of DLT Labs, said, “The system makes the world a lot simpler, and a lot more reliable.”15


DL Freight went live with the production-level pilot on January 1, 2019, with Walmart Canada and Bison Transport on the platform. Next, Walmart Canada had to convince other carriers to join. Some were understandably suspicious at first – would the solution benefit Walmart Canada to their detriment? In those cases, Walmart Canada met with the carriers to explain the business value to them. Alexey Shlykov said, “Some of the carriers were hesitant, and our conversations were never in a form of an ultimatum. It was always in the form, ‘Let’s talk to help you understand why this is a better solution.’ Walmart Canada’s IoT team helped with those conversations because as subject matter experts, they were able to spell it out to carriers.” Seventeen of Walmart Canada’s additional national carriers, large and small, were onboarded over the next six months. To be expected, there were some initial hiccups. During deployment, DLT Labs noticed there was a nightly increase in network congestion due to the extensive volume of concurrent reporting by the network participants. This congestion was causing lengthy times to generate the required reports, which frustrated users. DLT Labs solved the issue by releasing a set of scalable, high-performing services and algorithms deployed as part of the platform. This dramatically reduced the time to generate reports – in general, from eight hours to 30 minutes.

Freight processing Before and After DL Freight The DL Freight solution involved business process redesign. Before the solution, freight invoice processing typically required 11 steps (see Figure 4). The value-added steps are the ones that process data about the shipment, including confirming asset and shipment details (step 1); dispatching (step 2); accepting or rejecting delivery (step 3); issuing a correct invoice (step 7); and paying the invoice (step 11). All other steps involved reviewing data and reconciling any discrepancies within the trading partners’ data.

Figure 4: Freight Invoice Processing BEFORE the DL Freight Solution

Source: with permission from Walmart Canada and DLT Labs


After the solution, freight-invoice processing requires just five steps in the “happy path”, i.e., the flow that triggers no exceptions or error conditions (see Figure 5). In the first step, shipment details are confirmed for the bill of lading and the invoice begins to be built with the shipment details, load details, and delivery instructions. Known charges are applied to the invoice, including fuel, line haul, stops, and hazmat. During the second step, IoT devices that track temperatures, GPS locations, and times are read and posted in real time to the ledger while the shipment moves along the transportation route. Variable accessorial charges are added to the invoice along the way, such as charges for wait times, shunts, redeliveries, and layovers. In step three, the carrier agrees to the shipment details and proof of delivery from IoT devices, which automatically updates the invoice. In step 4, the carrier updates the invoice with any additional accessorial charges, the invoice is completed, payments are preapproved, and the invoice is issued to the shipper. Lastly, the invoice is paid according to payment terms captured in the smart contract. Normally, the countdown clock for payment terms, such as “pay the invoice in net 35 days”, does not start until the parties agree to the final invoice. With DL Freight, invoices are agreed upon soon after final delivery, ensuring that carriers get paid the right amount within the agreed-upon timeframe. In short, carriers receive certainty of the amount and the actual receipt of payments faster.16

Figure 5: Freight Invoice Processing AFTER the DL Freight Solution

Source: with permission from Walmart Canada and DLT Labs

So far, over 98 percent of invoices follow the “happy path”. When exceptions or errors do occur, the parties must still reconcile differences; however, discrepancies now are resolved when they happen, rather than waiting weeks or months to appear on an invoice, as before. For example, if a driver takes a detour


that was not preauthorized, an exception is triggered, and all parties can investigate immediately. Sergei Beliaev, said, “The beauty of resolving disputes right away is that the information is fresh, everybody has full context of what’s taking place right now or what has just taken place, so fact-finding is quite easy.”

The before and after pictures may also be viewed from an ecosystem perspective. Before DL Freight, the ecosystem was very complex with far too many touchpoints. After DL Freight, touchpoints are consolidated (see Figure 6).

Figure 6: Freight Invoice Processing Ecosystem BEFORE and AFTER DL Freight Solution Source: with permission from DLT Labs

Under the Hood of DL Freight While Walmart Canada was convinced of the value of deploying the solution on a blockchain, it deliberated at length as to which specific blockchain architecture it should use. More than 15 different technologies were considered.17 DLT Labs’ platform is blockchain agnostic, so it could accommodate virtually any selection. The choices discussed included a public blockchain, like Ethereum, but the relative immaturity, lack of scalability, and transaction cost variability were deemed too risky. Private blockchain code bases that drew attention included Hyperledger Fabric, Corda, and Quorum. In the end, Hyperledger Fabric was selected. Sergei Beliaev said, “We are deployed on a permissioned solution, Hyperledger Fabric, because it was better from the enterprise perspective than, for example, deploying on Ethereum.”

Hyperledger Fabric is one of the projects sponsored by the Hyperledger Project, a nonprofit organization launched by the Linux Foundation in December 2015 to advance the application of enterprise-grade


blockchains across industries.18 Although the Hyperledger Project has other major blockchain frameworks, Fabric has received considerable media attention, thanks to its active testing by enterprises such as IBM, Walmart in the US, DLT Labs and Maersk.19 Digital Asset Holdings and IBM initially contributed to Hyperledger Fabric’s code base. Twenty-six other companies – including Fujitsu, GE, Hitachi, State Street, and SAP – contributed to the open-source code that was released in 2017.20 DLT Labs’ CTO Neeraj Srivastava is a member of the IBM Blockchain Advisory Board, and DLT Labs has extensively contributed to the development of the open-source Fabric blockchain itself. Srivastava said, “Walmart Canada ultimately deployed a DLT Labs-modified Fabric, which benefitted both from the top-flight governance of Linux Foundation, and the expertise of DLT Labs.”

Fabric’s ledger is structured as a chain of blocks and has two subsystems: “the world state” and the “transaction log” of all the transactions that led up to the current world state. Hyperledger Fabric uses the concept of channels within the blockchain network so that all information remains private. Only authorized individuals within authorized channels have read and write access to the data. Fabric also has a smart contracting feature called Chaincode, which is used to automate transactions and to connect outside applications to the world state ledger. Chaincode creates a generic framework, enabling any platform to configure and store virtually unlimited master data, workflows, and business rules and calculations. Sergei Beliaev explained, “There is a fair amount of ‘smart contract’ code in DL Freight, in the form of Hyperledger Fabric Chaincode. But it is far abstracted from individual invoices – or individual anything, really – making it universally applicable. Those rules then govern subsequent calculations with virtually the same surety as if they were hardcoded in the Chaincode itself, thanks to a security-isolated, business rule-calculation engine built into every endorsing peer. This abstraction is a unique advantage to DL Freight technology and why the platform can be configured so quickly for different industry-use cases, much faster than its competitors.” Because Hyperledger Fabric is an open-source project, DLT Labs was able to modify the code base to meet requirements for throughput. Beliaev said, “There is no inherent technical limit in the number of transactions DL Freight can process. It can scale vertically, as well as horizontally, to increase throughput.” DLT Labs also builds a single integration hub and supply chain gateway to ease onboarding. Supply chain partners plug into the platform with minimal changes to their back-office systems.21 As of November 2020, DL Freight had 17 nodes across the network, including nodes operated by DLT Labs, Walmart Canada, and the large-sized carriers. Node operators upload data from their internal systems of record to DL Freight using application programming interfaces (APIs), a piece of software that connects two software applications so that they can message each other. For the smaller-sized carriers, DLT Labs operates a node on their behalf, using a SaaS model. These carriers access a portal to enter data into the system. 22 DL Freight can run on any cloud platform. DLT Labs purposefully dispersed the geographic location of its nodes to prevent electricity outages in a single region from making the blockchain network unavailable. DLT Labs runs the platform on more than 600 virtual machines to secure and protect the data. The entire network runs without direct access to the Internet. Instead, users have to go through a series of microservices and firewalls to connect. DLT Labs also adopted OIDC protocol for authentication and authorization for every member of DL Freight. Finally, on the platform, all data at rest or in motion are


encrypted, and connections throughout the network are secured using encryption.”23 Figure 7 shows the DL Freight solution from a data processing perspective. Walmart Canada’s Transportation Management System (TMS) serves as the source of truth on the tender and contracting data. Once Walmart Canada’s TMS uploads the shipment tender (using EDI 204 data standard) to the platform, DL Freight sends Walmart Canada’s TMS a tender-acceptance notification (using EDI 990 data standard). Carriers interact with DL Freight – either directly through APIs or through the portal – for tender approvals, as well as invoicing status and approvals. Partners also connect their IoT device systems to DL Freight so that transaction approvals can be automated using smart contracts. For example, Walmart Canada uses FourKites, a system that collects and consolidates data from GPS and IoT Devices from their network of carriers. Some smaller carriers without sophisticated IoT device systems enter their data manually onto the platform. Each of Walmart Canada’s Distribution Centers is connected to the platform to verify receipt of goods via proof of delivery (POD); its ERP system is connected and also serves as the source of truth on carrier payment status and actual payment of the invoice. 2

Figure 7: Connecting Partners’ Systems of Record to DL Freight

Source: with permission from DLT Labs


Governance Governance defines the decision-making rights pertaining to a blockchain-enabled solution. The scope of decision-making rights is complex, spanning decisions about platform oversight, software update control, data policies, rights of participation, rights of validation, overrides, ownership, and compliance. Below, we explain the purpose of each aspect of blockchain governance in general, then discuss DL Freight’s governance mechanisms. Platform oversight: Public blockchain platforms are overseen by nonprofits or communities of volunteers; private blockchains are governed by a single organization or by founding members. Many private blockchains also use a steering committee or an advisory committee. These committees typically do not have decision-making rights but are nonetheless influential in guiding, recommending, and providing expertise on the development of the platform. For the DL Freight solution, Walmart Canada controls the majority of decisions regarding upgrades and modifications to the core system. However, it has collaborative relationships with their carriers and has regular dialogues with carriers about improvements. Software update control: With a blockchain solution, software changes must be coordinated across a distributed network of nodes. Whether it’s an emergency patch for a newly discovered software vulnerability, or a planned software release, the majority of validator nodes must choose to update the software for it to take effect. For the DL Freight solution, Chaincode is the core software. Any update can only be successfully deployed when its definition is approved by enough organizations to satisfy the channel’s Lifecycle Endorsement Policy (a majority, by default). Subsequently, any software changes cannot be rolled out without having the consensus of majority. Once the update is approved, it is pushed to all participants in the network. Data policies: A blockchain solution must have a data policy that defines who owns the data on a shared ledger, how personally identifiable information (PII) is protected, and how data is to be uploaded, used, and retired. For the DL Freight solution, the ledger is distributed, so the data is shared between authorized participants in the network, and each of them “accesses” the same data. Implementation of channels ensures there is no intentional or accidental leakage of data across participants (i.e., a carrier seeing the information of another carrier). The data is never retired in a real sense because blockchain is immutable, but any updates on the data elements can be stopped by deactivating the workflow ID associated with the data elements. Carriers are free to extract data, which is shared between themselves and Walmart using authenticated and authorized API calls. It is easy to satisfy the requirements of managing any protected personal information or other data with mandatory retirement implications, and information can be selectively stored on or off the blockchain itself. Rights of participation: A blockchain solution must specify who is allowed to transact in the network. Anyone can transact in a public blockchain network, but only authorized parties may transact in a private


blockchain network. DL Freight runs on a private blockchain – an invite-based system requiring approval from platform administrators. Carriers doing business with Walmart Canada are expected to join the DL Freight network, so approval is inherent in becoming Walmart Canada carriers. According to Sergei Beliaev, “Carriers are given support to configure their existing systems to interact with DL Freight, which is a quick and seamless process. They are then given the opportunity, using DL Freight, to review all business rules and master data governing their relationship with Walmart Canada before workflow instances are started. All transaction workflows are also currently configured with multiple approval steps on both sides, plus a dispute mechanism for business escalation, to ensure there are no bad actors.” Rights of Validation: A blockchain solution must specify who is allowed to operate a validation node in the network. As mentioned in the introduction, anyone can operate a validator node in a public blockchain network by downloading the code from an open-source repository (like GitHub), but only authorized parties may operate a validator node in a permissioned blockchain network. For the DL Freight solution, DLT Labs is the network operator, so it is responsible for validation (endorsing peer and ordering) nodes on behalf of participants. DLT Labs went through nine extensive security assessments by Walmart Canada and its parent company, Walmart USA, to be confirmed in this role, and it is subject to ongoing periodic reviews. As part of the role of network operator, DLT Labs runs and manages nodes on behalf of the network participants. Rights of overrides: Rights of overrides define who is authorized to roll back the ledger in the instance of egregious errors, such as a hack. The only way to roll back a ledger is to create a “hard fork”, which is a permanent, divergent path of a blockchain. A hard fork is a highly contentious issue because it means that a blockchain ledger loses its property of immutability.25 Hard forks are not allowed on the DL Freight platform. The record is immutable. If there is an egregious error, correction entries are pushed in the form of transactions, which bring the system information to a corrected state, maintaining the record of both the error and its correction. This allows for complete transparency for audit and compliance. Compliance assurance: Every blockchain solution must answer these compliance questions: Who is in charge of ensuring regulatory compliance? Who is liable if a law is violated, or a regulation is not followed? For the DL Freight solution, business participants (Walmart and carriers) are accountable for ensuring relevant regulatory compliance. Sergei Beliaev said, “From a system perspective, this is one of the key benefits of using blockchain technology. The inherent immutability and transparency of all data guarantee the integrity of the business information and a permanent digital footprint of all changes for compliance reporting.” IP ownership: Every blockchain solution has an IP ownership policy. For public blockchains, the software often is copyrighted with an open-source software license, such as GNU General Public License, MIT License, or Apache License. Bitcoin runs under an MIT License;26 Ethereum is licensed under GNU.27 Both have disclaimers of warranty and limitations of liability clauses.28 29 Private blockchain solutions do not typically release source code.


The product IP for DL Freight is owned by DLT Labs and it provides data stewardship, but the data and the specific implementation at Walmart Canada are owned by Walmart Canada. Licenses are managed on a SaaS basis. On pricing, DL Freight is operated as a SaaS charge on a monthly basis. The price depends on the volume of transactions, the complexity of integration, and the number of players.

Outcomes The DL Freight solution delivered a number of business outcomes, not only to Walmart Canada, but to its carriers as well. Transparency among authorized parties: All relevant data is now transparent to all authorized parties. In addition to direct information about shipments being viewable, reference data, such as rate cards, is also viewable for the first time. One of Walmart Canada’s smaller suppliers noted, “For the first time, I can see the rate that Walmart is going to apply to their own calculations.”30 Real-time invoicing and processing: Before DL Freight, it could take weeks, even months, to approve carrier invoices. Walmart Canada’s finance department reviewed and approved each invoice that included accessorial charges in excess of a threshold amount; then they had to work with a trusted third party to investigate any disputes. After the adoption of DL Freight’s solution, invoicing and approvals were automated in real time. John Bayliss, Senior Vice President, Logistics and Supply Chain, Walmart Canada, said, “The biggest change for Walmart Canada since using DL Freight is the reduction in manual work to resolve disputes. The cost and the waste associated with chasing dispute resolution has come down dramatically from over 70 percent disputes of our invoices at peak times to under 2 percent with the DL Freight solution. We are seeing the proof of the waste that can be wrung out of the system from this additive technology.”31 Positive return on investment: Walmart Canada exceeded the expected one-year ROI. Cost savings derived from no longer needing the third-party reconciliation provider Walmart Canada paid to investigate disputes. Savings also resulted from more accurate calculation of accessorial payments, improved compliance, and reduced need for audits. Bayliss said, “DL Freight has gotten us over this bottleneck so we can pay our carriers on time. The cost and the waste associated with disputes has come down dramatically.”32 Walmart Canada redeployed the excess labor capacity generated from the solution to more value-added tasks within Walmart.33 The carriers also reported a positive ROI. For example, one carrier noted that they no longer had millions of dollars tied up in dispute, lowering accounts receivable after implementation.34 Improved carrier relationships: The carriers are happy because they get paid more quickly. Bayliss said, “We’ve had phenomenal reviews from all of our carriers.” 35 For example, Rod Hendrickson, VP of Finance and Administration for Bison Transport, said, “Before DL Freight, we had a large amount of discrepancy in terms of what we billed Walmart and what Walmart was expecting to be billed by Bison Transport. That’s not uncommon in this industry. Since the implementation of DL Freight, we have processed close to 15,000 invoices and have a discrepancy percentage of under 2 percent. We are very pleased; that is a significant reduction.”36 Titanium Transportation is another of Walmart Canada’s carriers. Alex Fu, CFO, said, “I would love to see other companies adopt DL Freight as their standard. The reason is simple: It creates a lot of efficiencies and simplifies the billing and payment process.”37 Alexey Shlykov added, “The relationship between carriers and Walmart has improved dramatically. It’s


not just the removal of suspicion about overpayments or late payments; it’s that our carriers realize that Walmart is doing something exciting to make their lives easier. They see it as a sign that Walmart is committed to a long-term partnership.” Opportunities for new revenue streams: Before adopting the DL Freight solution, Walmart Canada did not offer financing services to carriers because lack of transparency made the financial risks too great. After adoption, Walmart Canada felt they could rely on the data to offer financing services. Better business intelligence: Walmart Canada and its carriers now have access to more information, such as the temperature and GPS data that comes in from IoT devices. Many other parameters can supplement that data, like weather and road conditions, to perform better predictive analytics. John Bayliss said, “We can understand patterns around stores and depots that are not turning quickly and roads that are not as efficient as both parties would like them to be. The technology brings all this together into one ledger that originally was a payment platform, but we are using it much more as an information platform to give us insight on how we run our business.”38 Walmart Canada has a Smart Transportation initiative, and data from DL Freight will funnel into that solution.39 Alexey Shlykov added, “We can generate quite exotic ways of reporting on that information and providing analytical support to both Walmart Canada and our carriers. It opens up a new field based on the information we are collecting now – for instance, to add tracking the produce provenance, freshness, and transportation conditions to the platform.” Recognition as leaders in innovation: Walmart Canada, DLT Labs, and carriers on the platform are getting a lot of international attention from DL Freight. For example, DL Freight was recognized among the top six innovators of the year by the Council of Supply Chain Management Professionals (CSCMP)40 and ultimately earned first runner-up (Silver) for the CSCMP’s prestigious 2020 Supply Chain Innovation Award.41 Dan Conway, Professor of Information Systems at the University of Arkansas, remarked, “Everyone wants to play on a winning team.”

Lessons Learned DL Freight offers a number of lessons, in the form of practices, for other enterprises to consider. To indicate whether practices are unique to the case or are emerging as best practices across contexts, we compare the practices from DL Freight to others learned from our research on first-generation enterprise blockchain solutions.42 1. Let the business lead the project; IT is there for support. The DL Freight solution began with Walmart Canada’s supply chain and logistics team. Everyone in the supply chain was frustrated by the cost and duration of approving and paying freight invoices. Walmart Canada’s business side wanted a solution that would provide business value to both itself and its carriers. The business-led project specified a solid business case to ensure that the solution would deliver business results, with IT as a key enabler. After completion, Walmart Canada estimated that 80 percent of the effort was business related, and 20 percent was IT related.43 This practice was evident for other successful enterprise blockchain solutions we examined. Business-led projects aim to solve ecosystem-level challenges that turned out to be well-suited for a blockchain


backbone. To properly signal that important point, we have called these solutions “blockchain-enabled” rather than “blockchain” applications. They are successful not because of blockchains – which are just one component of an end-to-end solution – but because ecosystem partners overcame the difficult challenges of getting enterprises to work together to deliver business value for all.44 2. Redesign business processes before applying blockchain technologies. The DL Freight solution redesigns the freight invoicing and payment process, primarily by removing steps that no longer are needed to validate information. So far, about 98 percent of invoices follow the “happy path”, which requires just five steps, compared to 11 steps before implementation. Sergei Beliaev commented, “If you are into Six Sigma, this is a huge opportunity to take the waste out of the business process. This is business process engineering at its best.”

Our research consistently found that broken processes need to be fixed before applying any automation technologies. As a corollary, trading partners also need to clean up data before automation; otherwise, trading partners only have more visibility into poor data. The maxim “garbage in, garbage out” is a perennial truth. 45 3. Select solutions that minimize change management. Innovations often require significant changes to people, processes, and technologies. Managing change well is widely known as a critical success factor. The more change required, the greater the risk of failure. Beliaev summed it up by saying, “Nothing kills a project faster than change management.” Walmart Canada wanted to minimize change management for itself and its carriers. DLT Labs was selected as the technology partner – in part, because it had a configurable platform with an easy onboarding process. (Other providers proposed to develop new bespoke solutions with inherent uncertainty of outcome and timing). DLT Labs also tailored the onboarding process to minimize change management, depending on the carrier’s size and existing technical capabilities. For large organizations, like Walmart Canada and Bison Transport, DLT Labs plugged their existing systems to DL Freight using API calls. Onboarding with API connectors typically takes four to five weeks. For small organizations with little to no technology infrastructure – for example, a carrier that operates a few special-delivery trucks – DLT Labs provided access to DL Freight through a portal. Onboarding to the portal takes about 72 hours. Alexey Shlykov summed up the practice by saying, “Change management was reduced because it was driven by the business and because DLT Labs was pretty good in working with both the business and carriers. The speed was very crucial. The business didn’t lose their patience. The carriers saw it can be adopted quickly, and the whole thing just came together very nicely.” Walmart Canada made change management a key criterion from the start, something we did not commonly see across other implementations. Many enterprises focus on producing the application and worry about change management only when the system is nearly ready to go live. Delaying change management until later phases of development can lead to under-resourcing, as it may not be fully accounted for in the business case. The need for change management is even more pressing in the context of inter-organizational innovations.46 4. Pilots are better than PoCs if the objective is a live deployment. Walmart Canada and DLT Labs made the crucial decision to forgo the typical proof-of-concept (PoC) phase. According to Loudon Owen, “Walmart had already accepted the effectiveness of blockchain technologies in principle. For example,


Walmart had piloted the IBM Food Trust in the USA and had tested a platform built with PwC and VeChain in China to trace food from farm to store. A few steps further along, DLT Labs had already gone live with other solutions. After extensive review of DL Freight, Walmart was confident it was the first production-level, industrial grade platform that was reliable and ready to go live in production at scale. As a result, it is the largest deployment of enterprise blockchain to date globally. Right from the outset, the Walmart Canada-DLT Labs team went straight to a full production level pilot.” Bison Transport was part of the minimal viable ecosystem (MVE), i.e., the minimum number of ecosystem partners that are needed to successfully launch a minimal viable product (MVP). The production pilot included business leaders, IT security, legal, and regulatory requirements from the start so that the MVP could be brought to market quickly. From our other research, many companies still choose to begin with a PoC. PoCs are normally a concept that is developed in a sandbox environment to assess the efficacy of a new technology. Up to 90 percent of PoCs never make it out of the sandbox. In contrast, blockchain-enabled solutions that began as pilots considered all of the enterprise’s requirements from the beginning, which makes the practice more complex because more stakeholders need to be involved. But once every requirement was met, the pilots were moved into production swiftly, just as Walmart Canada experienced.49 Moreover, while many enterprises run new systems as shadow systems until trading partners are convinced that the live production system works as it did during the pilot, the business side of Walmart Canada was convinced of the system’s efficacy by launch date. Walmart Canada’s contract with the third party to investigate disputes expired about the same time the system went live, and management decided they did not need to renew, nor did they need to operate a shadow system after implementation. Walmart Canada decided it was best to have DLT Labs operate the solution. For one reason, Walmart Canada sees its core business competency as a retailer, not as an IT provider. But more importantly for the adoption by other carriers, DLT Labs serves as a neutral facilitator. Sergei Beliaev said, “Otherwise, if it became a purely Walmart Canada-run solution, it would not be as immutable, guaranteed, and trusted.” Walmart in the US made the same decision when it decided that IBM should operate the IBM Food Trust. We found the use of neutral facilitators in other ecosystem solutions as well, including MediLedger, a solution to trace pharmaceutics; Smart Resume, a job market platform where hiring organizations can search for candidates with qualified credentials; and ANSAcheck, a platform for verifying the authenticity and provenance of a news source. Besides making it comfortable for competitors to join a solution, neutral facilitators provide and manage services, such as operating network nodes, protecting digital wallets on behalf of clients, enforcing access rules set up by members, and managing software updates. 5. Ensure that the solution creates business value for each participant type. One key to DL Freight’s success is that each participant type gains significant business value from adoption. Walmart Canada reported positive business value from real-time invoicing and payments, a drastic reduction in discrepancies and disputes, better business intelligence, improved carrier relationships, and opportunities for new revenue streams.


The carriers also realized business value. From their perspective, the advantages of this solution include shortening the payment delays to almost nothing, improving cash flow, and making sure they receive more information that enables their internal analytics to make the operations more efficient. Sergei Beliaev said, “Now, for the first time, the small carriers have access through the portal to the same facts that the bigger players enjoyed. They can see all of the information as it happens.” Rod Hendrickson, VP of finance and administration for Bison Transport, added, “I think this solution has the potential for being a game changer for supply chains across the industry. We have hundreds of customers, and when we see the improvement to the cleanliness of the accounts and the timeliness of payments, I think if I had all of my accounts in such good shape, I would be very happy.” 50 This practice is a critical success factor in other case studies. Blockchain-enabled solutions must be designed to attract participants beyond the initial minimal viable ecosystem to maximize network effects. Research can help inform some design principles to consider. Everett Rogers’ diffusion of innovation theory suggests that attributes of an innovation account for 49 to 87 percent of the variance in adoption rates. For Rogers, the five attributes that make people want to adopt innovations are relative advantage over how the process works today; trialability, or the ease with which an innovation can be tried before formal adoption; compatibility with existing norms (and technologies); observability, or the ability to see others using the innovation first; and lack of complexity, the innovation is easy to understand and use.51 DL Freight scores high marks on more of those attributes.

Blockchain Compared to Other Supply Chain Technology Applications Table 1 offers a quick overview of blockchain technology in comparison to other widely used and considered technologies in the supply chain. The table shows how blockchain is not only different from existing technologies, but also how blockchain’s unique features make the technology particularly relevant in the supply chain.

Data exchange across multiple steps in the process. Whereas ERP and TMS systems provide technology infrastructure for planning, operating, and reporting, EDI, radio frequency identification and blockchain enable data exchange in the process, and between steps and parties in the supply chain. Robotics are often deployed in a specific way within an operation to automate specific actions. While blockchain shares with EDI and RFID a focus on data exchange in the supply chain, it offers unique automation of exchanges based on smart contracts and added capability potential in the supply chain. At Walmart Canada, the DL Freight blockchain application explicitly targets multiple steps in the freight process with one application. Data exchange across multiple tiers, and more instant and full dissemination. Whereas ERP and TMS often are used in a stand-alone application, focusing on in-company processes; and whereas robotics often stands alone in automating an operation within a process; EDI, RFID, and blockchain disseminate data within or between process and supply chain tiers. RFID can enhance and accelerate data capture within a step (for example, instant inventory count or inventory positioning), and a setup can be developed where this data is used between process steps by using other technology, such as EDI. Data exchange using EDI tends to focus on dyadic, one-to-one exchange between two supply chain parties or steps. The exchange can be extended by adding sequential exchange links. Blockchain can disseminate across multiple tiers and parties almost instantly, breaking the age-old mold of partial and sequential


information exchange and dissemination in the supply chain. DL Freight accommodates a multiway exchange, visible to all instantly, and eliminates the need to review – and track and backtrack steps in the process – as part of settlement.

Table 1: Supply Chain Technologies Supply chain

application ERP TMS Robotics EDI RFID Blockchain

Typical supply chain function

Operations planning and reporting

Transport planning and management

Automate operational tasks

Data exchange in the supply chain

Data exchange in the supply chain

Data exchange and automation of rules in the supply chain

Typical supply chain objective

Productivity and forecasting

Reliable and efficient delivery

Improve operational productivity

Faster data sharing

Product tracking and inventory tracking

Visibility, tracking, responsiveness, authentication

Typical supply chain scope

Stand alone Stand alone Inside operations

Dyadic; 1-to-1 data interchange

Information can be shared across multiple tiers

Multiple relationships across multiple tiers

Adoption Customized to planning process

Customized to transportation planning process

Customized to specific operation

Customized deployment to the dyadic interface

Customized in application area

Customizable in process, application and interfaces

Interaction with other systems

Establish planning and reporting infrastructure that may pull in data feeds from other systems

Establish planning infrastructure that may feed into other systems

Limited but linked to controlling systems

Embedded into systems to feed data

Feeding data into other systems

Can pull data from other systems, as well as feed into other systems

Sequentiality of information exchange

Sequence of the planning and reporting process

Steps in transportation planning process

Discrete process step

Sequential, one to the next

Instant dissemination within tier

Instant and full dissemination

Customizable to process, application, and interfaces. The implementation of technologies in the supply chain requires a degree of customization, and depending upon the technology, this takes different forms and shapes. ERP and TMS systems need to be customized to the planning process within the company that is implementing them. Robotics need to be customized to the specific operational task. EDI needs to be customized to the dyadic interchange. Blockchain offers the benefit of the ability to develop a specific adoption in terms of processes, application area, and interfaces included or excluded. At Walmart Canada, consideration is given to where next to deploy DLT Labs’ successful blockchain adoption. Complement existing technology by both pulling from and feeding into. Blockchain also offers a different inter-relation with other supply chain technologies. ERP and TMS systems provide an infrastructure and may pull data feeds from other systems, whereas robotics is often more stand-alone with some controlling software. EDI and RFID can push data feeds into other systems. Blockchain can both be fed and feed into as it complements existing infrastructure and technologies in the supply chain. The DL Freight application uses data feeds from other technologies and feeds into payment systems.


Conclusion The freight invoice and payment processing problems described in this case are by no means unique to Walmart Canada and its carriers. Across industries, freight processes are highly fragmented, with many unknown a priori data – i.e., weather, delays at Customs, changes to equipment types, off-route miles, traffic delays, and other events that trigger accessorial charges that need to be verified by partners. This need to verify data leads to slow invoice settlement times of more than eight weeks, or even longer, and high administration costs for all parties. Up to 38 percent of invoices are overpaid because it’s sometimes cheaper for shippers to simply pay the invoices than to investigate unexpected charges.52 Across the US transportation industry, an average of $140 billion worth of invoices are in dispute on any given day.53 This case study shows that freight invoice and payment processes can be significantly improved by automating and validating events in real time, rather than doing one post hoc validation on the invoice at the end. Known charges can populate the invoice during the tender and bill of lading phases, and accessorial charges can be automated and validated as they occur. So, for example, if a carrier is delayed at Customs for eight hours, the event can be verified by the GPS device on the truck. The partners can agree to costs per hour for delays at Customs in advance, and a smart contract can automatically update the invoice based on the GPS data that verifies the location and duration of delay. With blockchain technologies, every transaction in the ledger is already verified, balances are guaranteed to be correct and current, and everything is transparent to authorized parties. The DL Freight case study shows that this is not only possible technically, but the business value is proven for the shippers and carriers in the ecosystem. If shippers and carriers are the winners in this scenario, who are the losers? The business process outsourcing (BPO) providers, who currently earn billions per year in freight validation services on behalf of shippers, are primed for disruption, as blockchain-enabled solutions obliterate the need for such services. We hear a requiem for reconciliations. However, while blockchain-enabled applications may eventually eliminate all reconciliations, this does not necessarily mean the demand for accounting skills will decrease. Blockchain technologies could actually create more value-added work for accountants by freeing them up to tackle tasks that require judgment and advice. According to the Institute of Chartered Accountants in England and Wales (ICAEW), “the spectrum of skills represented in accounting will change [because of blockchains]. Some work, such as reconciliations and provenance assurance, will be reduced or eliminated, while other areas such as technology – advisory and other value-adding activities – will expand.”54 Ultimately, each enterprise must decide whether to lead blockchain development, participate in the development with ecosystem partners, or wait until others develop the application and then join. Each approach has advantages and disadvantages. Leaders and active ecosystem participants architect the future, become renowned visionaries, and increase brand awareness, but they bear the most risk. Followers may end up with suboptimal choices. John Bayliss, formerly Senior Vice President, Logistics and Supply Chain and now EVP, Chief Transformation Officer, Walmart Canada, says, “When you are first, you have the opportunity to set the standard.”55


About the Blockchain Center of Excellence (BCoE)

The Blockchain Center of Excellence is housed in the Information Systems Department of the Sam M. Walton College of Business at the University of Arkansas. The BCoE was officially launched by Arkansas Governor Asa Hutchinson on August 1, 2018. The center’s vision is to make the Sam M. Walton College of Business a premier academic leader of research and education on blockchain-enabled technologies and digital ecosystems. The BCoE’s case study series is one activity toward achieving that vision. Acknowledgements: Thank you to Walmart Canada and DLT Labs for their input on this case study. We also thank Stephen Caldwell, Chief Word Architect at Wordbuilders, and Melony Jamieson, Chief Communications Officer of Get it Done Inc., for their editing services. Disclosure: Walmart is a founding member of the BCoE’s Executive Advisory Board and is an active participant in the University of Arkansas’ blockchain research and events.


Endnotes

1 Lacity, M. (2021). Tracking assets in supply chains with distributed ledger technologies, Journal of Business & Information Systems Engineering; forthcoming.

2 Yuji Ijiri (1989). Momentum accounting and triple-entry bookkeeping: exploring the dynamic structure of accounting measurements, Studies in Accounting Research, American Accounting Association, Sarasota (31).

3 Madnick, S. (2020). Blockchain isn’t as unhackable as you think, Sloan Management Review, Reprint 61216.

Michelman, P. (2017). Seeing Beyond the Blockchain Hype, Sloan Management Review, Reprint 58417

4 Iansiti, M. and Lakhani, K. (2017). The Truth about Blockchain, Harvard Business Review, Reprint R1701J.

5 Walmart Canada, https://en.wikipedia.org/wiki/Walmart_Canada

6 Walmart Inc 2020 Annual Report

7 SupplyChainBrain (November 1, 2020). Walmart Uses Blockchain to Fix ‘Broken’ Freight Audit and Payment Process, https://www.supplychainbrain.com/articles/32130-walmart-canada-fixing-a-broken-freight-audit-and-payment-process-with- blockchain

8 SupplyChainBrain (November 1, 2020). Walmart Uses Blockchain to Fix ‘Broken’ Freight Audit and Payment Process, https://www.supplychainbrain.com/articles/32130-walmart-canada-fixing-a-broken-freight-audit-and-payment-process-with- blockchain

9 Hamilton, S. (September 24, 2020). MOBI Community Innovation Lecture: The partnership between DLT Labs and Walmart Canada, https://dlt.mobi/mobi-community-innovation-lecture-the-partnership-between-dlt-labs-and-walmart-canada/.

10 DLT Labs (August 18, 2020). Walmart and DLT Labs Disrupt Freight Invoicing with 97% Reduction in Disputes, https://www.youtube.com/watch?v=trwQOeZLpkw

11 Hyperledger (2020). DLT Labs™ & Walmart Canada Transform Freight Invoice Management with Hyperledger Fabric, https://www.hyperledger.org/wp-content/uploads/2020/10/HyperledgerCaseStudy_DLTLabsWalmart.pdf

12 Walmart news release (September 1, 2020). Walmart Canada and DLT Labs Recognized for Supply Chain Innovation, https://www.walmartcanada.ca/newsroom/2020/09/01/walmart-canada-and-dlt-labs-recognized-for-supply-chain-innovation

13 Shlykov, A., and Beliaev, S. (2020). Practical Blockchain – lessons learned from Walmart Canada, Blockchain Center of Excellence Executive Advisory Board Workshop, University of Arkansas.



17 Hyperledger (2020). DLT Labs and Walmart Canada Transform Freight Invoice Management with Hyperledger Fabric, https://www.hyperledger.org/wp-content/uploads/2020/10/HyperledgerCaseStudy_DLTLabsWalmart.pdf

18 The Linux Foundation (January 22, 2016). The Hyperledger Project Charter, https://www.hyperledger.org/about/charter

19 Connell, J. (June 2017), On Byzantine Fault Tolerance in Blockchain Systems, https://cryptoinsider.com/byzantine-fault- tolerance-blockchain-systems/

20 Groenfeldt, T. (July 13, 2017), Linux Foundation's Hyperledger Fabric 1.0 Ready For Production, Forbes Magazine, https://www.forbes.com/sites/tomgroenfeldt/2017/07/13/linux-foundats-hyperledger-fabric-1-0-ready-for-production/ - 624d7632902e


21 Hyperledger (2020). DLT Labs & Walmart Canada Transform Freight Invoice Management with Hyperledger Fabric, https://www.hyperledger.org/wp-content/uploads/2020/10/HyperledgerCaseStudy_DLTLabsWalmart.pdf

22 Hyperledger (2020). DLT Labs & Walmart Canada Transform Freight Invoice Management with Hyperledger Fabric, https://www.hyperledger.org/wp-content/uploads/2020/10/HyperledgerCaseStudy_DLTLabsWalmart.pdf



25 For example, Ethereum split into Ethereum and Ethereum Classic in 2016, when the community disagreed about remediating the DAO hack. The DAO (Decentralized Autonomous Organization) is perhaps blockchain’s most ominous heist because its perpetrator(s) didn’t steal private keys from a digital wallet stored off a blockchain. Rather, the perpetrator(s) exploited a weakness in a smart contract launched on the Ethereum blockchain. Some community members thought nothing should be done, while others argued the ledger should be rolled back. The decision was made to let miners vote, weighing their votes by their hashing power. The miners voted for a hard fork, a permanent divergence in the Ethereum blockchain. The blocks were rolled back, and the stolen ether was returned. Those miners who refused to follow the fork proceeded mining with the original code, leaving us with Ethereum (fork followers) and Ethereum Classic (non-fork followers), where the thief can still cash out.

26 https://github.com/bitcoin/bitcoin/blob/master/COPYING

For example, MIT’s license reads, in part, “THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.”

27 GNU General Public License: https://www.gnu.org/licenses/gpl-3.0.en.html

28 GNU General Public License: https://www.gnu.org/licenses/gpl-3.0.en.html

29 https://github.com/bitcoin/bitcoin/blob/master/COPYING


31 Walmart Press Release (September 1, 2020). Walmart Canada and DLT Labs Recognized for Supply Chain Innovation, https://www.walmartcanada.ca/newsroom/2020/09/01/walmart-canada-and-dlt-labs-recognized-for-supply-chain-innovation

32 From video played at Shlykov, A., and Beliaev, S. (2020). Practical Blockchain – lessons learned from Walmart Canada, Blockchain Center of Excellence Executive Advisory Board Workshop, University of Arkansas.










41 DCVelocity (September 23, 2020). Intel takes home CSCMP Innovation Award, https://www.dcvelocity.com/articles/47258- intel-takes-home-cscmp-innovation-award

42 Lacity, M., and Van Hoek, R. (2021). What We’ve Learned So Far About Blockchain for Business, Sloan Management Review, REPRINT #: 62310.




Van Hoek, R., Fugate, B., Davletshin, M., and Waller, M. (2019). Integrating Blockchain into Supply Chain Management, Kogan Page, London.

46 Lacity, M., and Willcocks, L., (2015), Nine Keys to World-class Business Process Outsourcing, Bloomsbury Publishing, London.

47 Lacity, M. (2020). Blockchain Foundations for the Internet of Value, Epic Books and the University of Arkansas Press, Fayetteville.

Van Hoek, R., Fugate, B., Davletshin, M., and Waller, M. (2019). Integrating Blockchain into Supply Chain Management, Kogan Page, London.

48 Palmer, D. (June 25, 2019) Walmart China Teams with VeChain, PwC on Blockchain Food Safety Platform. Coindesk, https://www.coindesk.com/walmart-china-teams-with-vechain-on-blockchain-food-safety-platform

Mitra, R. (August 28, 2019). VeChain partners with Walmart, BYD, DNG VL and BMW. FXStreet. https://www.fxstreet.com/cryptocurrencies/news/vechain-partners-with-walmart-byd-dng-vl-and-bmw-201908280048

49 Lacity, M. (2020). Blockchain Foundations for the Internet of Value, Epic Books and the University of Arkansas Press, Fayetteville.


51 Rogers, E.M., Diffusion of Innovations, New York, Free Press, 2006, fifth edition.

52 Hamilton, S. (September 24, 2020). MOBI Community Innovation Lecture: The partnership between DLT Labs and Walmart Canada, https://dlt.mobi/mobi-community-innovation-lecture-the-partnership-between-dlt-labs-and-walmart-canada/



54 ICAEW (2018). Blockchain and the future of Accountancy. https://www.icaew.com/- /media/corporate/files/technical/information-technology/thought-leadership/blockchain-and-the-future-of-accountancy.ashx


requiem for reconciliations

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