As consumers, regulators, and other stakeholders demand to know the origin of products on the market, producers, distributors, and retailers struggle to provide it. In today’s global supply chain, goods pass through numerous intermediaries from origin to consumer, leaving data spread across multiple systems in different formats. Piecing together the full product journey to ascertain authenticity and safety can be difficult, if not altogether impossible. Sure, there are digital track-and-trace systems in place, but this information, too, is centrally held by a single stakeholder—and it can be costly to implement and maintain.
Blockchaintechnology offers a solution to product tracing’s complexities by storing each
leg of the journey on an immutable distributed ledger. With appropriate
permissions in place, real-time visibility becomes systemic, enabling not only
live track-and-trace but also numerous opportunities for increased efficiency.
Product
visibility that supports the circular economy
According
to a recent report by the UCL Centre for Blockchain Technologies, early
projects are already yielding results. For example, the global olive oil
market, and extra virgin olive oil (EVVO) in particular, is plagued with
deceptions and outright fraud, including shipping products from one country to
another to increase its value, or blending cheaper oils to cut costs. Italian
olive oil producer Certified Origins uses blockchain to substantiate its product’s
provenance. The olive oil is fully traceable back to its point of origin via a
customer app that obtains the product journey information from the blockchain.
Exposing
counterfeit goods with blockchain technology
The
circular economy has also opened up a bourgeoning secondary market,
particularly for luxury goods, which poses additional challenges for companies.
How, for example, can a luxury brand support a secondary market for its
products without cannibalizing its sales and destroying value? Previously,
stakeholders had to rely on trusted intermediaries to ascertain authenticity.
But blockchain’s distributed ledger extends visibility beyond the supply chain,
past the original purchase, and into the secondary market without
intermediaries. With the ability to verify the authenticity of their products
even after they’ve left the store, consumer goods companies can make it easier
for consumers to distinguish real from counterfeit, removing doubt and
increasing the product’s value in their customers’ eyes. The original producer
or retailer could increase incremental sales by buying back and re-selling the
same product multiple times, not unlike the auto industry’s certified pre-owned
model.
Leveling
the product tracing playing field with decentralized data
Certainly,
implementing blockchain faces some obstacles, largely around the issue of
interoperability. If I've got a blockchain system and you've got a blockchain
system, we need to find a way to communicate. Any solution would raise issues
of data governance since such an exchange could potentially break the chain.
Large companies like Walmart have the leverage to make suppliers use their
blockchain, but smaller companies don’t have that power. What’s needed is
standardization, so that everyone’s on the same page. That’s the advantage of a
platform like the Oracle Blockchain Cloud Service. It’s an industry- and
application-agnostic foundation that makes building and implementing blockchain
applications much easier. Moreover, thanks to the inherent standardization of a
platform, these applications can be more flexible and future-proof.
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