Blockchain’s potential to rehaul the logistics and supply chain industry by providing the tamper-proof tracking of products is being recognized by an increasing number of global industry giants, among them Maersk, IBM, FedEx, Samsung and Walmart.
The most recognized startup in this area these days is VeChain, a Blockchain-as-a-Service (BaaS) provider that targets enterprise-level businesses. The company is already working with several famous corporations to test its upcoming offer for supply chain traceability.
Established two years ago in Singapore, VeChain’s vision is to record and store all components securely, for retailers and manufacturers to be certain of the quality and authenticity of their products, and to guarantee consumers that what they are buying is really what they think it is.
A product on the VeChain platform is assigned a unique ID, which is stored simultaneously in the blockchain, and placed on the product with an NFC chip, RFID tag or QR code. At any point during the product life, the chip, tag or code can be interacted with, whether it’s a distribution or retail partner or a consumer learning more about a product provenance.
To overcome the obstacles present in current distributed ledger consensus models, the company designed its own consensus algorithm, called Proof of Authority, to build a platform with low computational power requirements, no requirement for communication between nodes to reach consensus, and optimized for system continuity. To qualify as a contributor, the individual or entity must voluntarily disclose their identity (and reputation by extension) to the VeChain Foundation in exchange for the rights to apply to be an authorized node that can validate and produce blocks.
The company envisions a broad range of applications, including brand protection, anti-counterfeiting, and food safety in several key industries. The blockchain startup has already been exploring the automotive industry by participating in the BMW USA Startup Garage program, and eGrid, a leading publicly listed ERP, SCM and CRM solution provider active in China’s automobile industry. In addition to these partnerships, VeChain also announced a collaboration with Oxford University to advance the technical development of the platform.
According to the Vechain team:
“The existence of VeChain’s car maintenance solution provides onboard IoT solutions that power the understanding of driver’s driving habits, frequency of brake uses per 100 km, acceleration speed, and more metrics that can empower big data sets within insurance packages, car manufacturer improvements, and cart part manufacturers.”
In the luxury goods sector, VeChain aims at cooperating with the French multinational luxury goods conglomerate, LVMH, to develop solutions to track its products. Furthermore, PricewaterhouseCoopers Hong Kong (PwC), a multinational audit and consultancy firm, has acquired a minority stake in the Chinese startup. With this move, PwC reportedly intends to integrate VeChain’s service platform into its infrastructure.
The company has also been involved with Shanghai government bureaus and enterprises to form the Shanghai Wine and Liquor Blockchain Alliance to complete product quality traceability system by 2020. The Shanghai Wine and Liquor Blockchain Alliance aims to establish a cooperative platform in order to build a solution for the tracing of alcoholic beverages in the municipality.
Last but not least, Vechain is also co-developing a supplier evaluation system with Deutsche Bahn (DB) Schenker, still targeting China’s logistics industry. This specific application is designed to score the German logistics leader third-party partners in China based on data collected on the blockchain platform – the result being an evaluation for services such as packaging, transportation, and the quality of goods.
VeChain is to launch its platform in the next few weeks. We are expecting soon the release of the first commercial use cases to improve transparency and traceability within the supply chain industry.