Seagate is building out a blockchain-based supply chain tracking system that will allow it, storage array maker IBM, its technology integrators and users to follow hard drives from assembly line and installation to end of life.
Seagate is working with IBM, which is supplying the Hyperledger blockchain platform via its cloud service; IBM will also benefit by becoming one of the permissioned blockchain users as it’s one of the Seagate’s drive customers.
Once up and running, the blockchain will be able to track the provenance of tens of millions of hard drives shipped each year, according to Manuel Offenberg, managing technologist for Seagate’s Data Security Research division.
“Once a drive is shipped to a customer, such as IBM, we kind of lose track of the drive,” Offenberg said. “So, IBM either integrates it into their own systems or we’re shipping on behalf of IBM to a third-party integrator or a warranty hub, where drives sit until a third-party may take one out and use it to replace one in a system.”
What may also happen is authentic Seagate drives can be replaced with counterfeit or black-market drives by third-party service providers. Those drives may then be presented as Seagate’s and if they fail are shipped back to the company through their reverse supply chain.
Seagate can be left without the ability to determine where the counterfeit drives came from, a problem that spans not only hard drive manufacturers but makers of any electronics. According to the International Anti-Counterfeiting Coalition, global trade in counterfeit and pirated electronic products is now worth more than $1.7 trillion. Counterfeit drives can result in compliance violations and data loss for the companies that unwittingly install them, according to IBM and Seagate.
The permissioned blockchain technology will create an immutable record throughout a drive’s lifecycle; no single party can change or append the data without the consensus of the network. Once it’s part of the blockchain, data can be shared with other authorized supply chain partners, whose ability to view information can be restricted to trading partners or be completely open.
The drive maker is modifying IBM’s Blockchain Platform with product authentication data based on Seagate’s Secure Electronic ID (eID) system. It assigns a unique identifying encryption key to each drive at the point of manufacture. A type of electronic fingerprint, the drive identifier can be used to verify the authenticity of a drive at any time during its product life cycle and verify when Seagate employs its certified drive erasure technology.
The erasure is electronically signed under Seagate’s public key infrastructure (PKI) and will be stored on the blockchain ledger for compliance management with emerging global data privacy laws, such as Europe’s GDPR.
“The ability to work with Seagate to combine blockchain with advanced cryptographic product identification technology is what sets this work apart, and signals blockchain’s potential to reimagine the electronics product life cycle management processes,” Bruce Anderson, global managing director of electronics industry for IBM, said in a statement. “Counterfeit electronics components is a global issue that requires an ecosystem-wide effort to address.”
Counterfeit hard drives and fraudulent returns are issues IBM recognizes exist. But “this is not a major problem we face,” Anderson said via email, pointing to IBM’s own “stringent procurement processes.”
“Our objective in working with Seagate on this is to prove how blockchain can be applied to this issue to help improve outcomes for the industry in general,” Anderson added.
Currently, Seagate is conducting a proof-of-concept of the hard drive-tracking blockchain ledger; it expects to complete that sometime early next year. The results will be presented to executives from both IBM and Seagate, and then it expects to roll out a “full-fledged pilot” that will include IBM and will track specific drive SKUs sometime next spring, Offenberg said.
Once live, Seagate hopes to eventually include other drive customers on the blockchain and eventually even hard drive parts suppliers, enabling granular tracking of disk components, Offenberg said.
A lot of companies are interested in blockchain for creating more efficient workflows, but supply chain management is one of the “big, killer apps,” according to Vipul Goyal, an associate professor in the Computer Science Department at Carnegie Mellon University (CMU).
In January, Maersk and IBM announced a joint venture to deploy a blockchain-based electronic shipping system that will digitize supply chains and track international cargo in real time.
The new platform could save the global shipping industry billions of dollars a year by replacing the current electronic data interchange (EDI) – a 60-year-old technology – and paper-based systems, which can leave containers in receiving yards for weeks. De Beers and other jewelry industry giants also created private blockchains to verify the origins of gems.
Walmart also developed a supply chain tracker, based on IBM’s blockchain cloud service, that tracks produce from farm to shelf.
SAP is working with more than two dozen produce, pharmaceutical, tech and shipping companies on an automated blockchain-based supply chain tracking system that it believes will bolster visibility and ensure the authenticity of goods such as food and drugs.
“One of the benefits of blockchain technology is that the more parties involved, the more value it has,” Offenberg said. “So, we definitely envision doing this with our supply chain. And, we expect other [electronics manufacturers] would be interested in a similar solution, as well.”