Blockchain a game changer for sustainable supply chain management

One of the biggest challenges facing companies today is the ability of commitment and responsibilities about social and environmental issues. The pressure is increasing when consumers are everyday more aware about the products they are buying and how sustainable the process of production is. The name of the new tool of change is Blockchain and it is delivering immutability and traceability of every stage of the product during the production process. Consumers are not anymore just end customers, they are in control while supply chain transparency is no longer a choice.

While notions of transparency, fair trade, and sustainability are gaining importance in customer’s purchasing decisions, most business must deal with complex and non-integrated supply chain network. This prevents comprehensive and efficient end-to-end traceability and surveillance along the chain.

Nevertheless, development of new technologies will support industries in resolving parts of the challenges they face. Among others, Distributed Ledger Technologies (more commonly known as Blockchain technology) and the Internet-of-Things (IoT) have the potential to solve important glitches in traceability and provenance challenges.

Just few months ago was Starbucks facing a huge problem about their cups if they are made from sustainable or biodegradable materials. A petition https://mobilize4change.org/starbucks of more than one million signatures is trying to put the giant coffee chain under pressure, with success.

Sustainability supply chain is one of the benefit of Blockchain technology, which will help forge a relationship between business, workers and consumers, built on trust and transparency.

Smart Solidity GmbH will dig deep in this new area of technology to deliver answers and clarifications how sustainability in supply chain is one of the biggest profit of Blockchain technology. The following objectives are the main pinpoints, where we are going to have them as our main research.

Transparency and accountability

The biggest problem in supply chain and manufacturing is accountability, when you have different companies, different players, different factories and all of them are factoring or producing the same good, how exactly pinpoint where a defect occurs or how exactly pinpoint where a player mismanaged the raw materials? This is an issue of transparency and without transparency we can’t have accountability and Industry is losing millions of dollars each year.

Origin Tracking

This is important for distributors, for the stores, for the companies selling the products to end customers. For them it is important to say to their customers, that our products are produced in good and fair way. We don’t use child labor, we don’t use toxic chemicals. But the question here, can we prove that? It is extremely hard to prove. Huge companies as H&M or Benetton and many others have difficulties with this, specially when it comes to child labor. The vision of blockchain here is that we can lookup which steps our products went through. And this will take us to the next point namely the real time data.

Real Time Data

One of the major feature of Blockchain is that data can and will be delivered in real time. This is a major advantage where everyone in the blockchain is able to get the information at real time, when requested. This is not any more a big issue regarding to the current situation when most of the parties involved in the supply chain have to deal with information siloes.

Information Siloes

The current situation in a global economy where many companies are part of the supply chain is that every single company is using its own data pooling, own infrastructure, own cloud. This is leading to the issue of information siloes, where we don’t have data in homogenous way. We need to build huge complex integration- and bridging systems to be able to exchange data and this is not working properly. So how can we ensure that the data coming from the origins is not changed or manipulated, when we are building along the ways so many interfaces? In a sensitive industry like military or research, information need to be documented and certified in a secret way that only specific parties can have access to it. Blockchain is solving this problem by eliminating the middlemen and providing consensus and immutability in it whole network.

Bassem Fawaz

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