Supply chain practices are in the spotlight, with more customers demanding transparency. Previously, it had been a competitive advantage to have an opaque supply chain. Suppliers can be in multiple countries unable to talk to each other or replicate any one product; as each supplier serves only one link in the chain.
Industries like food, timber and pharmaceuticals have a lot to gain from increased transparency in their supply chains. Tracking materials around the globe via blockchain technology has the potential to revolutionise supply chain logistics, and usher in a new era of transparent and ethical sourcing. Blockchain technology uses a distributed digital ledger framework to create a permanent and almost tamper-proof record. But before the widespread use of blockchain for supply chain takes place, a lot of hurdles need to be crossed, as with all new technology it needs time to mature.
But why would we use blockchain for supply chain when we already have fantastic package tracking e.g. Amazon Map Tracker allows you to track your package in real time. Modern package tracking has seen vast improvements thanks to the internet but you still don’t have a holistic view of your product such as its ingredients, source, and processing. In the pharmaceutical industry, for example, distributed ledger technology can be used to track intellectual property (IP) licenses and ensure products are produced, transported, and stored in proper conditions.
Right now, the only information we have as customers is from the public facing company we purchased our product from, with shipping updates limited to dispatch, en route, and finally out for delivery. But before you purchased the product, there could have been up to 30 other companies involved in the supply chain process to get the product to the final public-facing company you purchased it from, and almost every time you don’t have any information about these parties.
For example, shipping a container of asparagus from Mexico to Australia involves dozens of businesses starting with the farmer, who drops them off at the shipping yard, the boat in the shipyard transporting the goods, customs officers inspecting the produce at the other end. All done offline with paper certs and signoffs; each waiting on the next piece of information to proceed to the next step.
This is the difference with blockchain, it provides you with an ultimate holistic view of the product, not just the end product being shipped to you but where it came from, intermediaries and then to where you bought it.
Blockchain can also help make the fishing industry more ethical by reducing illegal fishing and overfishing which is causing irreversible environmental damage. Blockchain company Viant illustrates if ethically sourced fish are easily identified e.g. by a QR code; as consumers, we can refuse to eat fish that was illegally fished because we know without a doubt where it came from.
According to Viant co-founder, Tyler Mulvihill:
“It’s immutable, verifiable proof that the yellowfin tuna you got in a restaurant was caught in Fiji, went through X distributor and arrived at the restaurant you’re now eating it today.”
The timber industry is also suffering from illegal logging with deforestation a massive issue; forests are disappearing at such a rate we’ll have no forests left in 100 years. Blockchain can help by providing transparency in the supply chain; especially with the recording and protecting land records and documentation. Right now, a customer shopping for a new kitchen table has no idea where the timber has come from and if it’s been illegally cleared.
Society needs a way to help reduce illicit trade from deforestation, illegal fishing to pharmaceuticals; and blockchain based systems can make a positive impact by incentivising positive behaviour while providing accurate information to customers.
While Blockchain technology can increase transparency in areas that have been historically opaque it is not a magic bullet and can not do everything by itself, on the ground support will also be needed, but goals can be achieved faster with a blockchain as part of the solution.