Supply Chain

Blockchain provenance: Where’s my new sweater really from?

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Recently we learned that a major steel company falsified inspection certificates that detailed the quality of aluminum and copper it sold. This scandal is now reverberating through the global supply chain.

Hundreds of major auto, aircraft and train manufacturers worldwide have long relied on this company to provide raw materials for their products. These companies are now trying to determine if substandard materials were used in their products and whether they present a safety hazard. It’s a huge task, because these multinationals source from many different suppliers and producers.

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Better monitoring of materials’ lifecycles

All I could think about when I read about this scandal is how blockchain, a distributed ledger technology, could really help here.

Blockchain technology can take a manual process, such as those inspection certificates, and reduce the time and cost and increase the trust around the process.

How blockchain can help

First, blockchain could ensure that the original inspection certificates are not false and enable approval through consensus. And, if a problem did develop, blockchain could ensure that the provenance of the materials used by the auto, aircraft and train manufacturers is known.

Blockchain could also provide a “birth to death” view of the aluminum, copper or any other material in the supply chain, which would make that task of finding where those substandard products are much easier.

So, whether it’s tracing aluminum, copper or anything else, blockchain can help.

It shows up in unexpected places

Blockchain has even been used for transparency and sustainability in the fashion industry — what fabric or yarn was used in my new alpaca sweater, who did the knitting, where was it designed. And one of the main advantages of blockchain is the ability it gives companies to react quickly to safety scares. Under its old system, a major retailer discovered that it took days to trace a package of tainted mangoes all the way back to the farm. With IBM Blockchain, it was possible in seconds.

Find out more about what you can do with IBM Blockchain at IBM Z Technical University, November 13-17 in Washington, DC.

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Earl Springer

A great example. There seems to be no shortage of justification for blockchain technologies. Your example reminded me of a few things that relate directly to what you were highlighting.

In the late 1980s several US suppliers to the; military, aerospace, transportation and construction industries were indicted for falsifying test reports and distributing counterfeit nuts and bolts. The ramifications of their collective deeds was huge. Within a five year period 61 plane crashes and several hundred transport truck crashes, resulting in hundreds of deaths, were directly linked to those suppliers.

NASA alone lost hundreds of millions of dollars. They had to scrap an entire Space Shuttle that Rockwell International had assembled for them and they also had to spend millions to disassemble and reassemble several satellites that were readying for launch, delaying missions for months and years in some cases, all because a key fastener supplier admitted to falsifying the material strength test reports.

A darker example, is what’s happening to the drug industry. The pharma companies are now trying to combat tens of billions of dollars of counterfeit drugs hitting their supply chains each year around the world. The WHO recently said that over 700,000 people die each year because of these counterfeit drugs, 200,000 die from fake malaria drugs alone. Today, more than 50% of Africa’s pharmaceutical supply chain is filled with counterfeit drugs resulting in tens of thousands of needless deaths each year.
Even within the US we’re not immune from a tainted pharmaceuticals. There are numerous incidents of counterfeit cancer drugs entering our highly-secure drug supply system even reaching into CVS and Walgreens.

Blockchain not only has the potential to disrupt every industry as we know it, but it can make industries more efficient and safer while removing hundreds of billions of dollars from the criminal underworld. The best part, it will save millions of lives each year as well !!