Implementing blockchain into the supply chain: More ethics, sustainability and better consumer protection
As the blockchain revolution keeps gathering momentum around the world, different industries are deploying the technology to challenge current ways of operating and improve standards.
One of these industries is the logistics sector, and its long, multi-layered supply chains. A supply chain encompasses many levels, ranging from manufacturing to consumer use and everything in between.
The current globalised manufacturing system implies that these typically complex supply chains actually surpass geographical boundaries, sometimes intercontinentally. This results in a lack of transparency in the current model. Consumers have limited knowledge and understanding of the manufacturing process, allowing for flaws and gaps to go unnoticed by the public eye.
The solution? Blockchain, of course.
Blockchain technology has the ability to store a huge amount of data on an open, secure and accurate platform. The key features of blockchain technology could help revolutionise supply chain technologies.
A decentralised digital ledger network can record, track, verify and share each and every element of all the assets in one single network, which is open to public access. It can pull together links all along the chain, from raw material providers right up to retailers. The records are kept in a digital central system, as opposed to leaving it up to each participant to store data in their own isolated system.
The case for blockchain in Fashion
Since all kinds of information can be included in a blockchain-powered supply chain, companies’ unethical practices can be recorded and exposed. The fashion industry, for example, which is loaded with cash and celebrity promotion, is also known for some complacency over human and labour rights abuse.
Open information means that the culture of sweatshops, child labour, exploitation and human rights breaches could be close to an end, as a result of increased accountability for brands engaging in and profiting from it.
On top of that, a blockchain-based system would mean that counterfeit products could be traced back to origin and reduce incidence of fraudulent products. To verify goods’ provenance, the blockchain system authenticates and validates their authenticity, or any diversion from its original destination.
The pharma industry is also said to be exploring aspects of this technology . Drug fraud is indeed a concern, with figures showing that 10 percent of all pharmaceutical products around the world are fake — number that can jump to 70 percent in some countries. Fraudulent pharmaceuticals set a dangerous health precedent, so the use of blockchain in this industry could not only be revolutionary, but life-saving.
In 2017, London-based designer Martine Jarlgaard partnered with blockchain company Provenance to track the journey of all material through the supply chain. Each garment in her collection had a digital token, containing location, content and timestamps presented to consumers. Provenance tracked alpaca fleece from the moment of shearing on the farm, through to spinning, knitting, and finishing in Martine Jarlgaard’s London studio.
Matthew Drinkwater, head of the Fashion Innovation Agency at London College of Fashion, who partnered with Martine to give life to the project, said that their goal was to increase consumers’ confidence: “What we’re looking to create is a new protocol and standard for giving consumers confidence in what they’re buying. The fact that this is blockchain-verified will mean it’s a product that they can believe in. That’s where there should be a movement towards, and as the technology evolves, we’ll see the final part of the process become even more transparent and visible for consumers.”
“Full transparency and traceability becomes a stamp of approval allowing consumers to make informed choices with no extra effort,” says Martine.
Blockchain in the food industry
Similarly, the food industry can also enjoy great benefits from blockchain-powered supply chains. Until recently, it had been incredibly difficult for consumers to be sure of the origin of their food, with few mechanisms in place to check on food companies’ practices.
According to the World Health Organisation (WHO), one in 10 people fall ill from contaminated food every year. Food fraud is indeed a problem, and in many cases it arises from flaws with the supply network.
A blockchain-based supply chain had a positive impact on farmers and raw material producers, ensuring corporate responsibility from wealthy food retailers. It also benefits the Fairtrade culture, as it allows for price disclosure, enabling consumers to check for any exploitation of small-scale producers in favour of big company profits, verifying that Fairtrade standards have been respected.
The benefits of blockchain
Ø Transparency: all information available made public
Ø Greater Scalability: any number of participants can participate in the network
Ø Security: open system helps eliminate malpractices and irregularities
Blockchain can increase the efficiency and transparency of any supply chain, creating a positive impact at every step from manufacturing to delivery. It is important, though, that this information is available for consumers so that they are fully aware of the unethical practices that companies could be held to account over. Consumers ultimately have the upper hand in the market and can make informed choices about a brand or purchase.