Blockchain, meet supply chain
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Blockchain certainly isn’t the be-all, end-all solution to better supply chain traceability. But more companies seem willing to explore whether the digital ledger technology — first born as part of bitcoin — can help connect the dots more efficiently, securely and credibly.
The latest proof point grows out of the cotton sector, and it involves a number of startups along with several forward-thinking fashion and apparel companies: luxury brand Kering; shoemaker Zalando; men’s clothing powerhouse PVH; and fashion retailing maverick C&A.
In early March, this corporate quartet stepped forward to support the Organic Cotton Traceability Pilot, which aims to identify the origin, purity and distribution of raw materials for the textile supply chain. The first field tests are being carried out in India among farmers that support manufacturer Pratibha Syntex.
The "digital trail" that will enable all that information to be captured and shared as appropriate will be managed by blockchain company Bext360, which has previous experience in supply chains for coffee, seafood, minerals, timber and palm oil. But it will take a lot of other technologies to pull this off, including innovative on-product markers from Haelixa, IN-Code Technologies and Tailorlux; along with machine vision, artificial intelligence and microbiome sequencing.
"The time was ripe to take a bold step towards full traceability in the organic cotton value chain," said Anita Chester, head of sustainable raw materials for the C&A Foundation. "We believe this technology solution has potential and were eager to support the experiment to prove it."
Other backers of the project include Fashion for Good, which is focused on scaling innovation and technologies that make the industry more sustainable, as well as the Organic Cotton Accelerator.
Daniel Jones, founder and CEO of Bext360, has extensive field experience in encouraging sustainability sourcing practices, and believes blockchain brings benefits along the entire supply chain. "With the work we have done to trace organic cotton from farm to gin, we are confident that in the next phase we will be able to make the gin to consumer, eventually making it possible to swiftly and efficiently trace organic cotton straight from the farm to the consumer," Jones said in a statement.
For large multinationals, it could provide a means of verifying whether certain practices are being followed — those practices could be as simple as completing a training course or as complex as proving the genetic makeup of a particular plant. All of these can add up to easier auditing of marketing claims. As the World Resources Institute recently reported, it’s really tough to quantify climate benefits today, and most companies do a really bad job at it.
For the growers in the organic cotton project, the initiative could be a means of demonstrating not just that their crops are more sustainable, but that they are worth a higher value. Once the foundational technology is in place, it even could be used for other applications: verifying conditions for loans; keeping tabs on labor conditions; or validating agricultural methods that remove carbon emissions and issue the appropriate offsets or credits for that activity.
An example from late February: Accenture is teaming up with Mastercard, Amazon Web Services, blockchain firm Everledger and humanitarian organization Mercy Corps on a system that would let consumers reward small-scale producers with "tips" or other rewards based on the adoption of sustainable business practices such as better waste management or water conservation. This effort to support "conscious consumerism" could affect smallholder farmers in Kenya, India, Mexico and elsewhere.
There are many possibilities, which is why so many projects are going on — or should I say pilot projects? Indeed, while many tests are going on, there isn’t much happening at scale yet — although the participation of companies such as Walmart, Unilever and Tyson could bring scale quickly.
One development to watch closely will be the emergence of data-collection technologies. These don’t have to be all that sophisticated: Walmart’s blockchain food-safety system, as an example, just requires someone to submit information using a mobile phone. You don’t have to actually do this in the field: someone can take a photograph and then upload it later, if wireless access is wonky.
But many sensor-driven options are cropping up all over the place that should, in theory, help automate the gathering process — especially for food-related purposes.
It seems to me that many precision agriculture platforms pushing their way into fields could be the source of valuable information about provenance. As those become more ubiquitous, the need to analyze and verify all those metrics becomes more acute. That alone could help push blockchain from pilot-du-jour status into a regular ingredient for supply chain traceability initiatives.