Interview: Angel Versetti, CEO of Ambrosus speaks to Supply Chain Digital
Ambrosus is one of a few companies disrupting existing supply chain models through innovative use of new tech and a collaborative approach. The Swiss-based startup aims to combine development of its own tamper-free sensors, for the quality assurance of food products and pharma, with a bespoke, scalable blockchain tailored for the supply chain to work with sensors that deliver data you can trust.
“We have a bolder vision than most for a blockchain with a general-purpose protocol,” argues Ambrosus CEO Angel Versetti. “Around this protocol, through the usage of our token Amber (AMB), we have created the opportunity for developers and other stakeholders in the industry to create software or hardware solutions integrating our protocol into what they’re doing to create a new stream of revenue for themselves.”
Right now, Ambrosus is focused on developing APIs (application planning interface) to connect with existing infrastructure to bring companies on board which already have their own sensor systems, enabling them to turn those sensors into oracles. “An oracle in blockchain terms is a trusted source of information,” explains Versetti. “The parameters that the sensors record can immediately be registered directly on the blockchain or, if data intensive, could be stored off chain, so the cache could be stored on the public repository to give all parties access.”
The most basic service Ambrosus will provide to the supply chain is proof of process, the tracing of objects and a guarantee of quality. It also programs smart contracts to enable different stakeholders to enter commercial agreements with each other. “Alongside this value proposition we enable real time auditing and automatic audit controls of the supply chain, where parties can agree on what parameters must be part of their deal,” adds Versetti. “For example, in the case of vaccines, what temperature must they be stored at? What types of processes need to be applied? All these parameters are recorded alongside the deal and we have a convenient user interface giving an overview to the participants of what happened to the product.
“Plus, if you’re delivering a batch of meat to a restaurant, but it hasn’t been stored in the correct conditions for a couple of hours, the restaurant may reject it for not meeting its standards. However, if the meat is still safe to consume, you, as an intermediary supplier, have a perishable product you need to get rid of. Here, we would have what we call a fall-back function where a secondary client is, by default, ready to purchase that meat at a specified discount and immediately that contract can be transferred to the new client allowing you to recover some of your costs.”
Versetti sees any commercial transaction involving the actual transfer of value working in this way and this disruption is sure to provide competition for traditional incumbents on the supply chain: “Because it’s a blockchain you can transfer both the cryptocurrencies as well as tokenised currencies and they are coupled with smart contracts, so you have the quality assurance.” Ambrosus is currently working to make its blockchain compatible with norms and regulations. “If your business is in a particular area where parameters of quality in your product must be proved, instead of spending on assessors or carrying out other random checks you could have the transparency of all the necessary processes recorded on the blockchain,” Versetti adds. “Then this information can be easily shared with governmental authorities and other entities.”
Versetti concedes that though the building blocks are in place for Ambrosus to grow, there are challenges to overcome to make its services fully scalable. “First you have the bottleneck issue with the blockchain technology itself – it’s still a very big experiment,” he says, qualifying the fact that it’s been a successful one, but still early days, and offers a key question still to be answered: “Can we have a solution that is scalable in terms of the number of transactions that it can record per second?” Versetti notes that with literally trillions of sensors due to come online in the next five years they’ll need to be processed and validated through the network.
The second challenge identified by Versetti is the need to turn sensors into oracles. “We are the first blockchain to propose a workable solution,” he argues. “An oracle is not just a trusted source of information, it also speaks directly to the blockchain and yet, so far, there hasn’t been an oracle connected to the real world, because blockchains have been self-contained systems. You can relay instructions from the outside, but that doesn’t generate data from the outside.” Versetti explains that oracles rely on public wisdom but that protocol is both complicated and inefficient. What does he propose as a solution?
“In terms of having a sensor supply information into the blockchain, it could be done by sensors also generating a private signature to notify the blockchain it is neither hacked nor broken, therefore you can trust the information it transmits. Because, in the end, if you record data on the blockchain it’s securely stored, but what if the data itself is not real? This is the major challenge to solve and we have a proven concept. But in order to make that scalable we need a large number of sensors, so we’re doing a series of pilot projects to have a sensor talk to the blockchain without running a node – a node can be 20gb, but a sensor has only 54kb of memory and a tiny CPU. You need to enable an ultra-wide client for sensors to be able to interact with the blockchain so this is another key solution we’re focused on.”
Ambrosus is combining its business goals with an altruistic approach to the deployment of its tech via its work as an official partner in the Sustainable Food Systems cluster at the United Nations (UN). “Due to global inefficiencies there is a distressing amount of food waste, so we’re seeing how we can apply our solution to significantly decrease it while creating new streams of revenue for participants,” says Versetti.
“Most of our biggest partnerships in the private sector are currently under non-disclosure agreements,” concedes Versetti, but reveals Ambrosus is “working in Switzerland with every single major company” and in contact with the likes of Nestlé through events like the Hello Tomorrow global summit for innovative start-ups. The company is also partnered with Trek Therapeutics, developing a pilot project seeking FDA approval with its blockchain capabilities endorsed at EU level. Meanwhile, Ambrosus continues its marketplace development with another ongoing pilot project involving producers of coffee in Africa, the distributors and transporting companies involved there and coffee suppliers and distributors in Hong Kong and China.
“We’ve also been approached by entities specialising in metals, fuels, diamonds and different commodities who are interested in using the same protocols for their industries,” he adds. “We’re happy, because the more stakeholders we have using our network and token the better it will become.”
Currently, Amber is not transferable, but people are using IOUs and other financial operations with it and Ambrosus plan to provide escrow functions. “The Amber token itself is innovative in this space,” believes Versetti. “Many tokens existing in blockchains today serve little purpose. At most they serve as an app coin – like using a coin to operate the washing machine in a launderette. Our token can work in a similar way but the key difference with Amber is that it is a data-bonded token proposition. The token becomes a digital certificate accompanying a product as its unique identifier. The token is moving along the supply chain accompanying the product and all the sensor readings of quality parameters and exchanges is assigned to that product so you can see its provenance and full history.”
Amber signals an opportunity for Ambrosus to move ambitious plans forward with Versetti particularly excited about a solution that can make supply chains automatic, and not just with food and pharma. “In three years this would be a realistic goal,” he asserts. “Supply chains could govern themselves and look, for example, at the amount of basic resources in the economy of a particular town or area and, if there is a shortage or excess, change the numbers accordingly. And certain quality and safety norms wouldn’t have to be checked constantly so the system could intelligently monitor them and take certain decisions itself. The challenge for us would be to deliver this technological convergence and only then could you have the truly smart city with an automated supply chain.”
Grupo Espinosa: 70 years of constant evolution
Founded in 1952, Grupo Espinosa has been relentlessly supporting the publishing industry with producing more than 100 million copies every year – whether its books, magazines, catalogues or single-order custom prints. No project is big or small for Grupo Espinosa, as the facility can scale up on demand and their turnaround times are highly competitive. Grupo Espinosa works with on-demand digital press or offset press, in paperback with glued softcover binding, PUR softcover binding, stitched paperback binding, binder’s board, hardcover, saddle stitched, Spiral or Wire-O. Equipped with the experience needed for a product to leave the plant ready for distribution, Grupo Espinosa delivers anywhere inside or outside Mexico. Traditionally starting off as a black and white printing press, Grupo Espinosa has experienced transformation first hand – from colour to digital offset printing. Currently, Grupo Espinosa is also looking at making capital investments into audio books to match with the increasing demand.
So how did a seemingly local operation in Latin America become a world-renowned printing facility trusted by hundreds of clients? As Rogelio Tirado, CFO of Grupo Espinosa for the last six years says “It all comes down to our market experience and our dedication to quality”. With nearly 70 years behind them, and located in Mexico City, Grupo Espinosa has two major locations – one spanning 75,000 square metres and the other about 45,000 square metres. Both locations are controlled by a single ERP (Enterprise Resource Planning) system ensuring speed, consistency and quality of work. Tirado says this isn’t their only competitive advantage. He adds “Our competitive advantage is the relationship we have with customers and the trust they put in us with their intellectual property”. Speaking of trust, global publishing giant Macmillan Education exclusively partners with Grupo Espinosa for their Latin America operations, as part of Macmillan’s decentralized hub strategy. Having a facility that offered the full spectrum of service – from storing digital content to printing and distributing – was one of the major requirements for Macmillan, and Grupo Espinosa was recognized as the leading printing hub for providing this 360 infrastructure. Another factor that has led to success for Grupo Espinosa is the absolute focus on quality and time. The staff are committed to providing the best quality in the best possible time, without causing wastage of resources. Sustainability is a huge factor playing into Grupo Espinosa’s operations, and they’ve created a healthy environment with the sustainable use of paper and energy resources as well as keeping their employees – most of them associated with the organisation for over 10 years – happy. He adds, “In order to be truly successful, you need to be good to the environment, employees, suppliers, and your customers. But most importantly, you need to be sustainable, you need to have proper working conditions, pay proper salaries, proper prices for paper, source the paper from sustainable sources, pay your taxes, basically be a good global corporate citizen and that's probably one of the biggest achievements that we have.”