15 March 2018
Blockchain: enabling product traceability and circularity
Who, at this point, has never heard this word? Maybe even without knowing it but I’m pretty sure you heard this word at least once in the last 2-3 months.
On a nutshell what blockchain is, is a public distributed ledger (or database) where every transaction is recorded in each of the different nodes participating on that distributed ledger.
What makes it so powerful is that, if someone tries to change one record in one of the nodes the other nodes of the network will see it and will reject that change.
Blockchain for business
As this video suggests, Blockchain have the potential of disrputing businesses and industries the same way the Internet disrupted our society and how we handle and exchange information. Most of the possible disruptions are related to trust issues, where most of the problems rely on a third party to verify that some information, transaction or good is really what it says it is. On this case it is clear this equals to direct cost savings for the businesses exchanging or buying these products.
Disrupting supply chain management
Nowadays supply chains have become global, we buy and transport goods from one side of the World to the other side of the World, and most of the time we are buying from companies and people who we don’t even know. If we don’t know the people who we are buying from, how are we supposed to expect that what they say is 100% legit? Nowadays the only way is to hire 3rd party auditors and assessors to make sure that the products, materials or ingredients I’m receiving are really what they are supposed to be. This is a very expensive process which is done normally on a non-digitalised way.
The second problem with traditional supply chain traceability is that data is stored in one single point. This pose a risk to the whole supply chain participants because all the knowledge about their products and services can be stolen and replicated. Let’s imagine the case for the certification of a cotton t-shirt: the fabric dyer has shared his formula for a Cradle to Cradle compatible red dye, which he developed, the rest of the participants in this supply chain had to do the same, all the information is securely stored on an encrypted data base in the assessor’s location, but a hacker attack occurs and this gets stolen. Years of work have been lost.
With a distributed ledger this couldn’t happen because the rest of the network wouldn’t accept that change on the ledger.
Supply chain blockchains are normally built on a way that the participants, depending on their roles, have access to just certain amounts of data. The key difference is that now data can flow easily to the Blockchain and then be verified by the Cradle to Cradle assessor. If, for example, the dye supplier had suddenly changed the formula, the assessor could receive a notification. Then it would be needed to verify the ingredients are still complient and re-approve the certification. It adds a new layer to have live certifications instead of time-stamped ones because the information is constantly flowing to the distributed ledger and constantly being verified by the participants.
Supply chain case studies
Most of the real world applications today are centered on the
Provenance is using a Blockchain Platform called Ethereum from where they are building smart contracts that are issued every time a new interaction in the supply chain is happening. Their first case study is also with Tuna fish and is very well explained on their website.
Origin from Worldline
A joint venture from Bureau Veritas and Worldline, this Blockchain aims to digitalise supply chains. At the same time give information to the consumer through scanning of QR codes.
Their first pilot projec is on Traceability of Tuna Fish from Catch to Plate.
Another start-up trying to disrupt Supply Chains with Blockchain and a new approach to Smart Contracts; Smart Questioning. Circularise is aiming to improve the way recyclers work by giving them the information they need to decide an object is valuable and can be recirculated or not.
Network and events
At EIG we have been participating in the different events related to the Blockchain in Barcelona.
During the Mobile Congress week we visited the 4YFN to find startups using blockchain to disrupt the Supply Chain management and bring transparency but it seems like for now the tech world is still too focused on apps, Virtual Reality or IoT applications not really focused on solving circularity problems. However we did find some companies like Recircula Solutions or Tag It Smart which are both working on the waste supply chain management to improve segregation rates at household levels. We were surprised to find very little blockchain applications on this 2018 edition.
Another great event we attended was organised by Exposure Events with two high level speakers Luz Parrondo Tort and Manuel Machado both of them tried to put aside the hype of cryptocurrencies like Bitcoin and talk only on how Blockchain will disrput businesses in the future, Luz, explained with clarity the different types of tokens that exist nowadays and the different uses that you can give to them in business. Manuel presented Origin Blockchain and the case study of the Tuna traceability giving a clear scope of the benefits for companies but also explaining the different obstacles they are finding in the way, with the implementation on the whole supply chain.
Nobody knows how the future is going to look like, but we are very excited to see that transparency and product traceability have found fnially a technology that enables them to thrive. We believe this is very important for a Circular and healthy Economy. We will continue to explore the ecosystem and we are open for collaborations and ideas on such projects.