Tracing the Steel Industry Supply Chain

January 23, 2019

The closing date for this challenge has been extended to February 15, 2019 at 14:00 EST.

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December 24, 2018

Attachment 1 has been added. The document contains questions and answers related to the Challenge.

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This Challenge Notice is issued under the Innovative Solutions Canada Program Call for Proposals 002 (EN578-170003/C).

Please refer to the Solicitation Documents which contain the process for submitting a proposal.

Steps to apply:

Step 1: read this challenge

Step 2: read the Call for Proposals

Step 3: propose your solution

Challenge title: Tracing the Steel Industry Supply Chain

Sponsoring Department: Innovation, Science and Economic Development Canada (ISED)

Funding Mechanism: Contract

Maximum Contract Value:

Multiple contracts could result from this Challenge.

The maximum funding available for any Phase 1 Contract resulting from this Challenge is $150,000.00 CAD (plus tax) including shipping, travel and living expenses, as applicable, for up to 6 months.

The maximum funding available for any Phase 2 Contract resulting from this Challenge is $1,000,000.00 CAD (plus tax) including shipping, travel and living expenses, as applicable, for up to 2 years. Only eligible businesses that have completed Phase 1 could be considered for Phase 2.

This disclosure is made in good faith and does not commit Canada to contract for the total approximate funding.

Travel:  For Phase 1 it is anticipated that two meetings will require the successful bidder(s) to travel to the location identified below:

Kick-off meeting

Ottawa, ON

Mid-project Meeting

Teleconference/Videoconference

Final Review Meeting

Ottawa, ON

Meetings could also be called on an ad hoc basis to discuss progress in Phase 1.

Problem Summary Statement

The challenge seeks to create a novel application of a digital tracing system enabled by blockchain and artificial intelligence for the Canadian and possibly North American steel supply chain for business users and government.

Problem Statement

Steel products and inputs are not being comprehensively or securely traced with modern digital systems. Access to information related to the steel supply chain is also worsened by a lack of a standardized information-sharing mechanism which can result in delays in acquiring relevant data impacting government operations and steel business profitability. Currently there are no known applications of artificial intelligence analytics on Canadian steel sector information. Moreover, tools for trade and border activity are not optimizing tracing (blockchain) and AI technology in the steel sector.

The challenge is to develop a digital tool that would trace inputs and outputs in real time in the steel supply chain - up stream and down stream - using blockchain technology, and apply artificial intelligence enabled data analytics on this information, to better capture activities across the steel supply chain. ISED would directly benefit from such a technology as it would facilitate and enhance evidence-based policy making. Moreover, it could also be used by government to ease and digitize customs clearance procedures.

For industry, in particular downstream firms, it would offer product supply and demand predictions, instant verification of origin and quality of inputs and products (allowing for confirmation of responsible sourcing), reduced costs, increased efficiency and productivity, and predictive insights about inputs, use and demand metrics.

Desired outcomes and Considerations

Essential (Mandatory) Outcomes

Proposed solutions must:

1. provide real-time insights and information; be available to users within minutes of upload (on smart phone and web interface), in order to digitally automate steel supply chain transactions, information, and data flows; allow for export of some data;
2. be secure - where individual business information and confidentiality is regulated by guaranteeing levels of protection of elements of government and firm data; allow users to be private, public or a hybrid and have commensurate access views and functionality; business and government must be confident that sensitive information cannot be viewed outside allowed users;
3. use blockchain technology to ensure accuracy of data and transparency. To maintain a full digital trail in case of input errors, users must be able to rectify mistakes by "adding onto the log", rather than deleting mistakes entirely;
4. use artificial intelligence enabled data analytics to better capture activities across the steel supply chain. For example, using AI to have information on past, current and predicted demand for any input and output and predicting downstream product volume from supply products to name several;
5. allow for appropriate users to be alerted for anomalies in the supply chain and offer suggestions as to what action could be taken;
6. provide a comprehensive digital breakdown of the component parts of steel and steel products, such as coal, iron ore, nickel, steel scrap, and finished steel products; and,
7. easily integrate with existing government and industry digital infrastructures to facilitate adoption processes, and not be costly to adopt.

Additional outcomes

Proposed solutions should:

1. have a user-friendly interface (smart phone and web interface) that is easy to navigate.

Considerations

The development of a shared approach to integration of steel data between businesses and government would significantly increase timeliness of data access, efficiency, and communication networks. Steel businesses on occasion undergo delays at border crossings which can last weeks due to the inability to obtain required documentation. It is imperative that the technology solution allows access to information in a short amount of time to avoid these types of delays.

The implementation of a new platform could require re-training personnel as well as either updating business information systems and/or establishing new ones to ensure interoperability; the technology solution will have to be able to interface and interact properly with government and business systems. As such, adoption of this process will likely involve both monetary costs and time for Canadian firms and government departments and agencies.

Another consideration will be sharing and distributing information between governments and industry such that there is a consensus on data access and privacy. The technology solution must have the capacity to process and store large amounts of data, which will be accessible by multiple end users over geographically diverse locations. Data regarding steel and steel inputs will be able to be accessed and uploaded by steel producers, input producers, distributors, fabricators, downstream users, government offices, etc.

Convincing companies at various stages of the supply chain (steel input producers, steel producers, steel distributors, fabricators, and downstream users) to input transaction records in a shared system will be difficult. Concerns would include ensuring the security of the system and immutability of the data. As such, safety of the system is crucial and all aspects will have to be considered including: logical and physical storage security, monitoring for deviations and responding to suspicious behaviour, and protecting against unauthorized access and digital attacks. 

The development of a computerized system providing a comprehensive digital breakdown of the component inputs of steel and steel products will advance sustainability and responsible business conduct by allowing firms and government agencies to ensure responsible sourcing of materials, and verify domestic content requirements when needed. When developing the technology solution, options related to physical tagging to best trace the supply chain should be considered.

Background and Context

Current rules of origin verification methods and trade facilitation processes are built on existing and somewhat antiquated information technology systems, where origin of steel can be validated largely through documentation such as a steel mill certificate. New opportunities regarding shared value, transparency and trade could be realized through the implementation of an innovative digital system. The development and adoption of a new blockchain and AI enabled technology platform would allow for a seamless integration of industry data with government required documentation (e.g. mill certificates, licenses) which could help improve accountability and transparency through the supply chain, while also reducing costs and delays. Also, as trade and domestic policy adjusts, for example, Canada’s recent alignment of its country of origin marking regime, certification and labeling for steel products in accordance with U.S. requirements, a digital tool that is flexible and can serve new demands from government and industry will reduce transaction costs and create efficiencies for both government and industry.

There is greater pressure than ever for industry to produce more socially and environmentally sustainable products. One example of this comes from the Mining Association of Canada, whose members are leaders in corporate responsibility; their “Towards Sustainable Mining” commitment ensures that mining risks are managed responsibly. This represents an innovative pledge to facilitate engagement, drive world-leading environmental practices, and ensure the safety and health of employees and communities. The Canadian Steel Producers Association has also demonstrated interest developing a tool that will ensure sustainability in production. Other examples of these types of goals can be seen across supply chains.

An opportunity exists for the Canadian steel industry to implement a new, cutting-edge approach to the sourcing of steel and inputs, and therefore establishing “responsible steel”. This goal could be achieved through a rigorous industry-wide tracing mechanism within the supply chain, and through increased transparency.

ENQUIRIES

All enquiries must be submitted in writing to TPSGC.SIC-ISC.PWGSC@tpsgc-pwgsc.gc.ca no later than ten calendar days before the Challenge Notice closing date. Enquiries received after that time may not be answered.