siliconindia | | February 20189cent, and the U.S. rate, last on the list, is a disappointing 34.6 percent. Overall, U.S. MSW in 2014 was in excess of 250 million tons with more than half going to landfills. Paper, glass, metal and plastic, all of which are highly recyclable, accounted for 47.4 percent (14.3 percent, 5.2 per-cent, 9.4 percent and 18.5 percent, respectively) of the total weight land-filled. The orchestration of material mar-kets, consisting of billions of tons of materials, both upstream and down-stream, delivered through multiple modes of transportation around the world is complex enough. It is com-pounded when considering the vari-ous systems and software, often pro-prietary and expensive that power the modern customer and supplier enter-prises. Complexity not only drives costs, but can do further damage by hindering innovation. Furthermore, a complete materi-al transaction requires payment pro-cessing, which adds yet another layer of complexity. While this concern is not unique to materials markets there are distinct challenges with materi-als. First, materials are often a narrow margin business, which limits the use of credit cards and similar electron-ic payments with significant fees. Second, it is very common to have cross-border transactions. In part, this is why we emphasize the import/export value of materials totaling tril-lions of dollars in the preceding para-graphs. Third, material transactions can be large. A container or railcar of material might cost more than $50,000 or $100,000, and a large customer might purchase ten containers/railcars or more at once, driving the transac-tion value over $1,000,000. Finally, currently used payment methods such as letter of credit, checks and wires are cumbersome, contributing to inef-ficiency and adding costs. Research on informational friction in commodity markets by Sockin and Xiong, and joint pricing and inventory control models by Yao, demonstrate that improved, trustworthy data ­ re-ality, versus a model of reality - im-proves operational efficiencies, reduc-es risk and optimizes profit. Supply chain operating networks (SCONs) and supply chain on blockchain are evolutionary contributions building on existing supply chain platforms le-veraging the wealth of data generated by the modern enterprise. The prima-ry benefit of these approaches is im-proved data. Typically, the SCON or blockchain is owned by the platform in which it is integrated. From the per-spective of the supply chain platform, this provides a competitive advantage and a fair value to their customers. However, considered objectively, this approach creates inherent market fric-tion due to costs and technological barriers. The overall cost and complexity of supply chain platforms, integrations, and the development and implemen-tation of pricing and supply models, makes them prohibitive to all but the largest participants. This again creates inherent friction for materials markets because the overall reach and power of this information and technology is limited to participants who can afford it. The result is a technology prolifer-ation race at the expense of enterprise core competencies and material utility, value and sustainability. In other words, if software eats materials, we all lose ­ the customer and supplier enterprises, the consumer and the environment. The purpose of the Internet of Materials (IoM) is to maximize material utility, value and sustainability by reducing transaction friction and facilitating the global trade of materials. By aligning all stakeholders - con-sumers, enterprises and even materials themselves - we identify a path for global material sustainability. Through a combination of technologies, and a basis in free and open-source software, we make the path accessible for every-one. The Internet of Materials drives growth and efficiency, supporting ma-terial utility, value and sustainability. Not only is the IoM a self-sustaining mechanism for material sustainability, but also the necessary next frontier to realize the promise of Industry 4.0. Sandra AguilarThe purpose of the Internet of Materials (IoM) is to maximize material utility, value and sustainability by reducing transaction friction and facilitating the global trade of materials
< Page 8 | Page 10 >