Kouvola Innovation: transforming the logistics industry with blockchain

By | 5 minute read | December 20, 2016

Asset Management and Supply Chain

I first met Mika Lammi, Head of IoT Business Development for Kouvola Innovation, about six months ago. He had received a grant to outfit shipping containers with devices which would share data through a private blockchain. The city of Kouvola is a transportation hub of Finland and is the home to over 200 logistics companies. This project had breakthrough potential.

I was struck by the passion he had for his work and his eagerness to share his story. He did just that at the 2016 IBM World of Watson conference where we captured an interview with Mika, Jerry Cuomo (Vice President Blockchain Technologies, IBM) and James Murphy (Offering Manager, IBM Watson IoT Platform – Risk Management & Security).

The three of them sat down to discuss the following:

Blockchain brings trust to the Internet of Things

Kouvola Innovation builds trust in their supply chain with Blockchain

Key use cases intersecting Blockchain and IoT

How can clients engage around IoT and Blockchain?

Blockchain and Kouvola Innovation, a Q+A

The more I learn, the more intrigued I become so I set out to ask Mika some follow-up questions. You’re sure to be inspired as well.

Q: Where was your project at the beginning of the year?

A: We were still waiting the word from the EU Interreg Central Baltic Programme, if our grant funding would be coming through or not. We were making all kinds of non-permanent preparations for the eventuality of getting the grant, up to and including preparing a next phase project funding application, not knowing if the first one passes or not. Happily everything went well and we got the grant – and our next project application which is meant to expand on the first, has passed the concept review phase already!

Q: Did it progress as anticipated?

A: It actually went exactly as planned – which is always a very scary position to be in, because you start to constantly worry what it is that you have forgotten because life has taught us that things generally just don’t work as you intended. Even better than that, we found many additional interesting angles and possibilities, and have successfully incorporated some of them into our concept as a whole.

Q: Are there any challenges that you’ve encountered that you’d recommend your peers take into consideration?

A: Not so much as in specific challenges, but in the overall approach we found that taking your time with the planning and talking with involved people before you jump into the action is very important. When you try to put together an incredibly complex and a quite abstract concept, and then make plans to execute it in a project form, you simply cannot spend enough time planning and preparing. Contingency planning will give you peace of mind so you can concentrate on the core stuff.

Q: Your position is unique in that you work on economic development projects and you received grant funding for your blockchain project. How easy (or hard) was it to get support for your project?

A: It was kind of both, easy and hard in the same time. What made it feel like it was easy at times was the fact that 2016 was the blockchain year of peak hype, and everybody and their cat was finding and talking about this magical technology which will surely change the world… So it was easy to get people’s attention… What made it hard was to get everybody to understand exactly what I was proposing we do, in the middle of all that hype and distortion. It was, again, very important to make all involved parties to understand very clearly what we are doing and even more importantly, what we are definitely not going to do. Failure to accomplish that would have resulted in a nightmare – initial success coupled with unrealistic expectations and misdirected resources and activities. I don’t think any idea, no matter how good, could survive that.

Q: Did you find key stakeholders and grant reviewers receptive to this technology or did you have to “sell it” to get people on board?

A: The way we put together the grant application and the accompanying texts was very simple and straightforward. Make a promise to accomplish one important goal, focus everything so that all activities are portrayed as a part of that one solution. Again, the hype surrounding the core tech helped, but it had to be handled very carefully. Keeping things simple is really good general advice for anyone, in any circumstance. Blockchain, at the end of the day, is not too much rocket science so you couldn’t explain it to a layman, and you never should make it more than what it is – a precision instrument which works in a quite narrow set of specific problems. What makes it magic in my mind is its scalability and scope! Once you get these ideas across, the rest should be quite simple.

Q: How did you begin a relationship with IBM?

A: Back in late 2014, I came across an early copy of a whitepaper written by John Cohn… I read it once, twice, three times… I remember feeling like struck by lightning, because the paper in my mind made extraordinarily clear of what blockchain really is, and gave very delicious hints on what it could one day become. I was at that time occupied with the task of finding something relevant from the field of IOT for the logistics businesses in the South-West Finland area, and the whitepaper was everything I needed, and much more. I realized that what I had stumbled on was huge, and that I had a perfect use case in my hands for it. However I wanted to know more, and so I approached the people listed as the authors of the paper… So basically the whole relationship started just because John picked up the phone and returned my call, which turned out to be the most peculiar and unorthodox way to begin a relationship with the IBM.

Q: And why did you decide to partner with us?

A: This was a very simple decision – at that time, and even now when the others have entered the race, IBM was and is the most advanced expert on the use of industrial/business level blockchain tech. There is not even really a comparison in my mind, others are so far behind. Of course I have been privy to seeing and learning a lot of stuff not available to the general public, but in this I trust my initial feeling – you are the best bet at the moment, if someone wants to get something done in a serious way. Demos and hobbyist projects aside, the business value is the metric these things are measured by, nothing else… You saw the same potential than we did, in a point of time when it was nothing more than an unpolished PowerPoint presentation, and you helped us when it was important.

2016 is just the beginning of Mika’s story and I look forward to sharing more of their progress in the new year. In the meantime you can learn more about IoT and blockchain on our website.