Supply Chain & Provenance Using Blockchain Technology

In 2015, diners at a US-based fast food restaurant contracted an E. coli
infection. Despite independent reviews by state and federal regulatory officers as well as detailed independent investigation by various investigating agencies the company filed to stock exchange that there was no single food or ingredient that caused the infection.

It is speculated that products like beef and agri produce like cilantro caused the outbreak, but sources are still unknown. In another example, Apple came under pressure from various organizations to audit its entire supply chain and confirm that chemicals used in manufacturing such as tantalum, cobalt, gold, tin, and tungsten were conflict-free and not sourced from companies that funded armed groups or violated human rights.

Steve jobs admitted this was challenge stating, “Until someone invents a way to chemically trace minerals from the source mine, it is a very difficult problem”. These examples highlight the pressing need to know the origins of a product and trace its lifecycle from source to consumer, a process known as product provenance.

The importance of this is significant when one considers how Mattel, the maker of Barbie dolls and Hot Wheels cars, had to recall around 1 million toys that had lead paint.

From tracing non-GMO ingredients in the food supply chain to knowing
whether leading apparel brands source from manufacturers who abuse
human rights, product provenance is critical to supply chains and extremely challenging.

Companies must trace their ingredients or components to protect their
reputation, ensure component quality, and inform the customers about the
quality and authenticity of their finished products. However, supply chain or ERP software cannot provide such information as ERP is confined to a specific company or enterprise. The modern supply chain has become increasingly complex involving multiple parties/stakeholders across the world.

Thus, companies need a centralized software platform that leverages a
decentralized approach to connect disparate systems across the globe,
irrespective of location or technology used.

Blockchain offers this very functionality. Product provenance can be used for a variety of products like packaged food, produce goods, seafood, diamond jewelry, precious metals, garments, rare earth elements, and fashion products to name a few.

The use of blockchain to enable product provenance is seeing rapid adoption through two main types of solutions:

  1. Independent tracking via blockchain: Companies such as Provenance,
    Sourcemap, and Owlchain provide independent product tracking right
    from raw materials/origin to the end product that is delivered to the
    consumer. Provenance works on Bitcoin as well as Ethereum platforms and is a complete blockchain solution. Sourcemap is an interactive mapping platform that uses a global map to show users where the various elements came from. Now, Provenance and Sourcemap have linked their digital platforms to benefit customers, which is a breakthrough.
  2. Custom-built provenance solutions: Software service providers can use the blockchain framework to build provenance solutions for its customers (permissioned blockchain). For instance, Infosys has developed a product provenance solution using Oracle Blockchain Cloud services that is based on Hyperledger fabric [12–14]. Infosys has also developed a coffee bean tracking provenance solution for its customers. These examples prove that there is a need for custom built provenance solution which can be developed with product or industry specific validations.

It is important to note that the idea of provenance can only work when all
the supply chain stakeholders are a part of the blockchain network. The
architecture of blockchain inherently traces products as they pass from
one supply chain entity to another. These transactions are stored as blocks
and are chronologically linked according to the physical movement of
the goods.

A fitting example of supply chain provenance and visibility is the ethical
seafood traceability solution provided by Hyperledger. The Hyperledger
Sawtooth framework records the journey of seafood from its origin, i.e.,
where it is caught till the end consumer. Consumers can view all this information on their smartphone using a mobile application. When seafood is caught, it is attached with IoT sensors that track its movement during transportation.

The tracking mechanism monitors ownership, possession, location, temperature, humidity, motion, and shock among other things.

Another example of product provenance is the Everledger Blockchain that
provides provenance for diamonds. With more than 1.6 million diamonds on its blockchain network, it creates a digital record of a physical diamond by capturing attributes like color, carat, and certificate number, which is etched on the diamond through lasers.

The goal of such solutions is to provide consumers with instant information about the source of products and their physical movement. With growing customer demand to know the source and path of products, it will be imperative for manufacturers to enable supply chain transparency and product provenance. Several multinational companies and large retailers are already planning to adopt provenance solutions. Soon, this will become the new norm in modern supply chains, and blockchain is a promising and acceptable technology to achieve this. The connected ERP’s to the centralized blockchain system will definitely ease the information flow
and provenance.

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