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3 core use cases for Vendia Share in the semiconductor industry

How to reduce supply chain complexity and improve business outcomes with distributed ledger technology (and without sacrificing a climate stable future)

Vikrant Kahlir
Principal Tech Lead, Data and Web3

Last updated: July 07, 2022

3 core use cases for Vendia Share in the semiconductor industry

Electronic technology providers place a strong emphasis on performance, dependability, and trust. However, constant monitoring and inspection of the entire supply chain (design, assembly, maintenance, and warranty...) is necessary for consistent assurance. In this blog, we discuss three key use cases that semiconductor firms must implement in order to keep their promises of performance, dependability, and trust, while also keeping sustainibility in mind.

Traceability for your secure supply chain

The need to enable end-to-end traceability spanning all the participants in the supply chain:

  • To ensure the safety of critical infrastructure
  • To maintain compliance with ever-shifting government regulations
  • To protect against counterfeiting, tampering, and intellectual property (IP) theft

To enable such traceability, semiconductor companies need a way to securely exchange data with each other so each participant can maintain control of the data they share. This allows them to protect their IP while simultaneously enabling the other participants to derive value from the data to improve yield, raise quality, and ensure compliance.

This end-to-end traceability can enable multiple use cases for the semiconductor industry. It enables root cause analysis for defects, allowing chip manufacturers to find causes for defective chips—even when causes originate through an external supply chain participant. It also enables component traceability, which can help prevent counterfeiting and tampering.

Learn more about how to build a modern, secure data exchange for semiconductor traceability on Vendia.net. Learn more

Track Scope 2 and Scope 3 sustainability at the part- and component-level for a climate stable future

The frequency of extreme weather conditions and rising awareness about climate change is influencing both behavioral change and societal support for reducing greenhouse gas (GHG) emissions. Climate change is an existential threat. So far, the responsibility has rested mostly on Regular Joes and Joanns like us. But, it is time for the industry to shoulder this responsibility now.

The growing awareness on environmental effects are influencing customer behavior. According to a 2021 PWC report, 83% of consumers think companies should be actively shaping ESG best practices, 86% of employees prefer to support or work for companies that care about the same issues they do, and 91% of business leaders believe their company has a responsibility to act on environmental issues.

It is encouraging to see business leaders at large companies putting effort into sustainability (Figure 2). Large companies have the scale and influence to make a difference at a faster clip across the cradle-to-grave product lifecycle.

Figure 1 - Part- and component-level traceability is possible, and they’re the future of a sustainable product lifecycle

As the famous saying goes, "If you can't measure it, you can't improve it.. Every effort to change things has to start with a measurement. You can't know whether you’ve achieved success unless success is pre-defined and tracked.

Some large companies are able to track direct emissions from their business operations. However, the bigger challenge for them remains: They have to track information on emissions they don’t make themselves—the emissions that come from other firms in their supply chain. Indirect emissions from upstream and downstream activities are the most complex ones to track. These emissions are part of Scope 3 emissions.

The core problem of Scope 3 (beyond heterogeneity in methods and metrics used to report sustainability by different suppliers) is secure data sharing, with control, across the supply chain partners. And this is the problem that blockchain solves without any tradeoffs.

To help calculate your product and supply chain carbon emissions, you can start by asking four key questions to yourself and your supplier(s):

  1. How many different materials make up your final product?
  2. How much of each material do you need?
  3. Where is the source of each material?
  4. How will you transport those materials for final assembly?

Tracking sustainability with precision and progression

A fundamental weakness in much environmental data is that it consists of estimates and proxies or it derives from secondary sources such as ratings agencies and annual reports. These represent a performance interpretation, not actual performance. Accordingly,the data can be unreliable. There is also a lack of transparency around the audit trail of data. This opaqueness undermines trust and, inevitably, it leads to accusations of greenwashing.

Most companies are trying to forecast carbon emissions performance based on the secondary data. ESG methods based on the secondary data are complex and make several assumptions. Some methods are so complex that you can arrive at a number, and when you compare it with the previous number estimated through the same method, you wonder what to infer from it. For instance, what does 0.2% increase/decrease mean in terms of GHG emissions?

We believe tracking the carbon emissions directly from the end-to-end supply chain at the part- and component-level offers a simple and precise solution to track sustainability without losing the capability to compare the progress. It allows you to track the actual performance rather than the estimated performance.

Distributed ledger technology can bring transparency around GHG emissions associated with energy consumption and around the carbon embodied in supply chain inputs, i.e., Scope 2 and Scope 3 emissions under the Green Gas Protocol. When something is produced, data about the greenhouse gases emitted in its production can be recorded on a distributed ledger. The record can then follow the item wherever it goes. So, for example, GHG emissions could be tracked on an open and immutable ledger from the moment that coal or gas is produced or used to generate power. Anyone who consumes that electricity, or for that matter, consumes anything that was produced using that electricity, can access the record and record their indirect GHG emissions accurately.

Distributed ledger technology allows you to share data with partners in a secure and immutable way. The data sharing with control helps you avoid the problem of double counting across the value chain. Only the party that invested in carbon emission abatement can credit itself with an improvement. Unlike carbon emissions performance measured from secondary data, this method adds an audit trail and provenance to carbon emissions calculations. You can start with the reported performance and track emissions down to the part and the component level from a specific supplier.

While regulation around sustainability data reporting will take time to settle down. The customer preferences and leaders of large organizations will continue to push sustainability initiatives. Companies can start small and eventually build an experience that will allow buyers of your product to track sustainability data attached to an individual product from the end-to-end supply chain by scanning the barcode stamped on a device or equipment.

As you consider your approach to sustainability and strive to improve it, learn how you can build a secure data exchange hub for sustainability on Vendia Share in just months.

Blockchain + device BOM = (BOM)2

These days, manufacturing is a heavily connected industry. Together OEM, suppliers, contractors, and multiple component sources create a robust, complex network of information. The information lives in silos, which results in two dangerous threats to organizations: suboptimal decision-making and delayed service delivery.

When it comes to a specific product, collecting all the required information is very difficult. With time constraints added in, it’s nearly impossible. Electronic device design and assembly with validated components is a complex process; service and maintenance add complexity, too (Figure 2).

Figure 2 - OEM, supplier, contractors, and multiple component sources create a robust, complex network of information

Service and maintenance are becoming more important with the adoption of subscription-based business models. Product service and maintenance are complex processes that bring together different companies: OEMs, service organizations, technical teams, supply chain, dealers, and technical services, involving so many different parties also means involving many different types of record keeping methods such as PLM, ERP systems, databases, Excel sheets, emails and even paper printouts.

Overcoming supply chain challenges with distributed ledger technology

You can bring the BOM of your complex electronic devices into a secure, interoperable Vendia Share ledger to connect supplier and provider ecosystems. You can enrich it further with service and maintenance records to make information available for design improvement, service, and maintenance. The distributed ledger technology also provides built-in data versioning for all data updates so historical information is still available for audit and product improvement.

The ledger provides a single, unified source of data, which creates a clear audit trail and consistency across all vendors involved in the manufacturing, supply, and service process. You can use product information in Vendia Share to answer the following painful questions:

  • What will be the cost impact if component A’s cost increases?
  • What will be the impact on product delivery and service if supplier B is shut down?
  • Do we have parts with a single-source supplier for the product?
  • How do we validate and prove compliance with the product and its components?

A recent study by IBM found that, in the electronics industry, only one-third of warranty costs go toward repair or replacement of defective goods, with two-thirds being spent on processing and administration. With adoption of subscription based business models, administrative costs will start to hurt the bottomline even more. Using Vendia Share, electronics providers improve how quickly they trace problems with a specific product component or material manufacturer. It helps increase safety, improve service, operation, and decrease the cost of maintenance and warranty.

Next steps

Want to learn more about specific use cases in detail? Check out this post on enabling traceability with a secure data exchange. Learn more

Interested customers can self-serve on Vendia Share, or you can purchase Vendia Share through AWS Marketplace.