The producers, distributors and retailers struggle to provide the origin of the products as the regulators, consumers, and the other stakeholders’ demand for it. In the current scenario of the global supply chain, the goods pass through the various intermediaries from the factory (origin) to the consumer (ultimate recipient). During this process, data is spread across multiple systems in diverse formats. Joining the pieces of the complete product journey to establish authenticity and safety, it becomes quite a task but not impossible. There are digital tracking systems in place, but for the fact, it is centrally held by a single stakeholder and can be expensive to implement and maintain. Blockchain technology applications come to rescue due to its commendable abilities.
In this context, the blockchain technology or the technology behind the Cryptocurrencies offers a solution to the complexities created during product tracing. It states that each leg of the complete product journey can be stored on an immutable distributed ledger. Having appropriate permissions, real-time visibility becomes way more systematic. This not only enables the live tracking but open doors for the numerous opportunities for increased efficacy.
Circular Economy Supporting Product Visibility
The latest report submitted by the UCL Centre for Blockchain Technologies states that the previous projects are already yielding the results. For instance, the massive demand for the Extra Virgin Olive Oil (EVOO) has helped various FMCG companies introduce their extra virgin olive oils. But there are deceptions and frauds going around it such as:
- Shipping from a different country to increase the value of the product.
- Blending in with the cheaper oils to cut the cost.
Thus, the Italian Certified Origin olive oil producer utilizes the blockchain to prove the authenticity of its products. The actual source of the olive oil can be traced through a customer app that feeds in the product journey information from the blockchain.
A remarkable set of blockchain uses the case centers that revolve around the “circular economy” where waste reduction, reuse of the products, and the recycle materials come to notice. A couple of the most prominent brands have launched their circular economy initiatives, namely - Neiman Marcus, Adidas, IKEA, and Nordstrom.
Counterfeit Goods Exposure With Blockchain Technology
The “circular economy” has also paved the way for the secondary market, exclusively for the luxury goods that invites additional challenges for the companies. Earlier to this, the stakeholders had to depend on the trustworthy intermediaries for establishing authenticity. But the distributed ledger of the blockchain extends its visibility beyond the supply chain, the past original purchases, and also into the secondary market devoid of any intermediaries. Having the ability to verify the authenticity of the products, even after the people have left the store, the consumer goods companies can get an easy opportunity to help customers distinguish between the real and counterfeit.
Leveling Product Tracing With Decentralized Data
Implementing the Blockchain technology (the technology behind Bitcoin Cryptocurrency) would bring in some obstacles in the interoperability. Two entities having access to the blockchain system can very easily communicate. Large companies say, for example, Walmart can leverage the suppliers to use its blockchain. But then things would not be easy for the smaller ones as they lack the power. Thus, standardization is required to bring everyone on the same page.
This is just an insight of the Blockchain’s potential to trace the products. What the blockchain can do is help break down the piles of existing data structures and creating an auditable, secure product history that can be accessed in real-time.
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