Fashion Builds Trust with Blockchain

Fashion

The gig economy and millennial are placing experience over just customer service and rewards over loyalty. The expectations are steep rising when it comes to the Apparel and Footwear as the industry leaders are elevating to overall fashion management. Combined with richer experience expectations, consumers are demanding more awareness with granular traceability and sustainability attempting to drive deeper to know more about apparels they buy, including the story behind each garment and how and where they are manufactured. It is high time for fashion brands to prove their trustworthiness necessitating complete transparency across the value chain on ethical sourcing and sustainability. It is more important in current times where many apparel companies lack ethical supply chains, and ~10% of global emissions are produced by the fashion industry alone.

The blockchain beyond cryptocurrencies offers a decentralized structure that provides immutability, transparency, and security making data trustworthy and scalability.  Blockchain technology has the potential to enable creating a fair, safe and more transparent fashion industry.  In this blog post, I will try to articulate how blockchain can bring added value to transforming business model and culture of the apparel industry from a supply chain that prizes consumption to a demand chain that takes pride in sustainability.

By leveraging Blockchain, fashion companies can offer greater transparency in supply chains creating new incentives for companies to change the way they do business and showcase their organizations. As shown in the diagram above, Blockchain helps create a peer-to-peer and decentralized network that connects all stakeholders in the value chain (design houses, farmers, raw material suppliers, manufacturers, transporters, distributors, retail outlets, banks, consumers and other parties of the complete supply chain). Using a decentralized system, all communication between these stakeholders will be direct and will not pass through a specific central entity. Due to its decentralized nature, the blockchain platform will not have any single point of failure and will not rely on any single entity.

The blockchain has demonstrated fashion supply chain transformation improving track-and-trace and inventory management thus far. By a further confluence of Blockchain, 3D printing and AI/ML technologies, the fashion industry may very well see much more dramatic improvements. Blockchain technology empowering fashion business with uniform real-time access to updated product information supplied by brands, a universal pathway for retailers to immediately report back to suppliers on aspects like stock levels and customer feedback, and has potential to add further on to this new building block structure.

Summarizing below how Blockchain technology further augments fashion value chain capabilities that help to deliver better outcomes.

Fashion Value Chain Capability Building with Blockchain:

Blockchain technology can provide consumers visibility into the entire fashion lifecycle of a garment, including materials and vendors used, the labor sources, and even the production, shipping and warehouse locations involved. Everyone from the farmer to the textile mill to the garment factory can communicate directly with the brand that buys from them. As well, consumers can interact directly with the brand/design house for co-creation or customization of the garments, influencing pricing and even co-investing in the concept. I can all out the following to articulate how Blockchain is augmenting fashion industry capabilities,

  • Create new levels of trust among Suppliers, Brands, and Customers
  • Design better PRODUCT, Offer improved SERVICE and Tell a unique STORY
  • Transform Apparel companies to Fashion Conglomerates

Delivering Better Outcomes with Fashion Blockchain:

Global companies like Patagonia and Everlane have been successfully betting on sustainability and supply chain transparency as a distinct selling proposition enabling customers to identify their suppliers. How Blockchain is delivering better fashion outcomes is summarized below.

  1. Enabling sustainability and circular economy: Blockchain is boosting fair trade practices offering consumers’ increasingly demanding transparency and allowing them to know where the fashion product is coming from.
  2. Better Traceability and Transparency: Blockchain enables fashion companies to communicate with the customers the complete product story (DNA) for each and every fashion garment. This includes comprehensive details on all stages of product life cycle starting from design inspiration, raw materials, manufacturing and distribution to the stores and also providing visibility of all stakeholders involved in the value chain to create traceability and transparency in true sense.
  3. Improved Experience & Goodwill: Blockchain applications allow customers to scan the tag and discover the history of every garment and thus help in improving the customer buying experience. Blockchain applications also can help fashion companies who license their trademarks or designs in tracking the sales and working out the royalty payments. As well, it enables design houses to document process steps and thus having the organic evidence of ownership on the designs.
  4. Brand Authenticity:  Fashion products can be verified by both retailers and consumers since branded garments pass through the blockchain steps and hence can be tracked. This could help to reduce the counterfeiting and diverting out of authentic products. Every time a fashion item moves from one place to other, its tag or code gets scanned thus recording its location with the time stamp. Consumers would be able to scan the item and trace its journey from raw material stage to their home and would be able to ascertain if the product is real or a counterfeit. Blockchain applications can help provide protection against the counterfeiting.

Fashion Blockchain Use Cases:

Blockchain is creating enough traction in the Fashion industry and successful use cases are increasing day by day. Here are few use cases of interest,

  • VeChain solution to tackle the fraud and ensure anti-counterfeiting of fashion products.  It provides a company’s product with a QR code or smart chip with its own unique ID. The company embeds the code, or chip, in its products, scans it, and stores it on the blockchain. The company can then track the product along with each phase of its life cycle: from its creation to the consumer. The blockchain is tamper proof. Consumers will know when they purchase that they are purchasing the original, authentic product.
  • Fashion Coin (FSHN) is a peer-2-peer version of electronic cash for Generation Z. Based on creativity, game theory and steganography+cryptography, Fashion Coin provides seamless and effortless online payments  – with maximum speed and limitless scale.
  • LUKSO is an open blockchain ecosystem specifically created for the fashion and lifestyle industry, providing a decentralized innovation and trust infrastructure for fashion brands, start-ups, and customers. The LUKSO architecture encourages its users to design and deploy an infinite number of innovative features for the modern fashion system: it opens up digital wardrobes and sharing economies, secures IP rights and authenticity, enables omnichannel communications and novel ways of funding collections.
  • faizod is currently paving the way in this area, working together with a logistics company to pioneer a prototype of such a Blockchain-based tracking system. The prototype pairs Blockchain with radio frequency identification (RFID), which uses radio waves to transmit information to a reader.
  • Provenance is increasing the transparency in the fashion supply chain by tracking the journey of raw material through the supply chain, this collaboration between fashion designer Martine Jarlgaard and Provenance highlights the role of blockchain technology in increasing transparency and substantiating claims in the fashion industry.

Given all the advantages, blockchain clearly seems to be the future for fashion, however, to speed up the application, a single and comprehensive blockchain standard adopted by the fashion industry has to come in fast.

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Life Reimagined with Seamless Travel Experience

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Reimagining life in every aspect and bouncing ideas that create better experiences is the motto of this blog page. As per the AARP research in 2018, 57% of leisure travelers like to spend time with family and friends, 49% want to relax and rejuvenate, and 47% try to get away from routine stressed life. But the real-life experience of travelers is just the opposite of these expectations. Solutions that offer seamless travel experiences is the need of the day for better leisure outcomes. The ideal travel experience of current generation passengers would include:

  • Real-time journey information delivered to their personal devices
  • Biometric identification to facilitate their travel processes
  • Automation of more airport processes
  • Wait times of less than 10 minutes at security/immigration
  • Bags tracked throughout their journey
  • A human touch when things go wrong

What if a passenger arriving at security and immigration checkpoints has been previously vetted at check-in allowing a seamless, contactless process where the passenger simply needs to look at a smart camera to be cleared and allowed passage? Offering universal travel pass integrating cross-border security checks, hotel check-ins and entire travel life cycle tied with digital identity should be the new mantra of the travel industry.

Such universal travel passes will create a newfound demand for travel consultants to be more integrated with various service providers, making it a lucrative profession. Each traveler will be assigned a passenger record name/record locator so that all the services they opt for will be availed and kept secure, and the travel consultants will be the integral component of providing this.

Seamless universal travel experience is a great value to the travelers. And such a seamless travel experience is becoming a reality with new digital technologies. These technologies can enable travel agencies to transform into ‘digital travel agents’, enabling the booking process to become a trip planning experience, where agents will be able to provide more content, information and booking details. The congruence of technologies like IoT, Cloud, AI, Voice-Enabled Devices, Blockchain, and 5G has the potential to offer better experiences to travelers. As tourism continues to grow and route availability continues to shrink, airports are turning to seamless travel initiatives to help passengers stay on the move and increase their satisfaction.

The dominant technologies enabling seamless universal travel experience include,

  • Internet of Things: IoT can create a seamless trip where travelers are connected to their travel agents at every stage. IoT has the ability to connect customers with travel consultation throughout the entire lifecycle of the travel experience. For agents, a global or universal passenger record can allow travel consulting to change according to any requests from the customer. As for travelers, agents can provide a universal ‘travel pass’ that can be used for a trip, without separate boarding passes, hotel check-in, bus passes, and even theme park tickets. This universal travel pass would also handle multiple currencies, where travelers won’t need to worry about exchanging currencies when traveling between different countries.
  • Cloud – Improves the collaboration with travelers for a more personal experience transforming the offline model of the travel agent to have access to all cloud-based bookings regardless of location
  • AI and voice-enabled devices – AI has the potential to transform the inevitable hassles and inconvenience of airport travel into delightful passenger experiences. AI could enable travelers can leave their home with one single biometric identifier – and board a plane or cruise, check into their hotel, and hire a car with that unique identifier. Acuity Market Intelligence forecasts that the total number of airport biometric touchpoints – increasingly AI-enhanced facial recognition – at check-in, bag drop, security, and boarding gates will increase at a 27% CAGR from 2019 – 2022. Voice will be the future of booking travel. Travel agents are then able to take advantage of this and sell high value and high engagement products via voice
  • Blockchain – Blockchain technology could develop a ticket-booking solution that integrates multiple agencies – long-distance, regional,  and local agents, including Uber/Lyft car- or any other car-sharing firms. With a blockchain-based solution, travelers can book their travel with agents participating in the network with just a few clicks on a single website, without the need to switch across multiple sites and providers. The blockchain ledger can then record single customer purchase and even accurately can split the payment among the providers.
  • 5G network high speeds – 5G will give agents a better way to connect with travelers during their trips. If the traveler has a 5G connection, that allows the agent to be able to have a better video call with the traveler, without physically being there with them, assisting them along the way. 5G combining with VR/AR technologies offers a more engaging and immersive booking experience

Travel & Tourism sector should embrace the change creating a mass personalization contextualized to the travelers and leveraging ecosystem working with all stakeholders involved to maximize value leveraging biometrics and universal digital identity for truly seamless passenger experience.

Facebook Coin – A closer look

fbThis is the second initiative from Facebook after they tried to introduce Facebook Credits* (see below for the details) during 2011 and was not successful. This time it may translate into a success due to the following reasons. I am keeping the arguments on the centralization, stable coin and comparison with Bitcoin to a later post.

  1. Feasibility of massive adoption: Facebook, WhatsApp, and Telegram combined user base of over 2.7 billion. WhatsApp alone has more than 1 billion daily active users and crypto transfer can be a click of a button and trust is pre-established. Telegram biggest messaging applications in South Korea and Japan, Kakao & Line.
  2. Similar successful products in the market: Venmo has taken off in the United States by making it easier to send payments by phone. And in China, many consumers use the payment system that operates inside the hugely popular WeChat messaging system.
  3. Ease of opening a Facebook account compared to a bank account. Regulation and compliance is the next big puzzle to solve for Facebook.
  4. Coin backing with fiats making it more versatile: Unlike JPM Coin backed by USD alone, Facebook could guarantee the value of the coin by backing every coin with a set number of dollars, euros, and other national currencies held in Facebook bank accounts.
  5. Coin launch followed by Blockchain adoption making it a robust approach: As Facebook recently revealed their plans to integrate blockchain technology into Facebook Login and betting on blockchain technology by bringing data security aspects, it seems like the next level details on FC will be very interesting.

The big question facing Facebook is how much control it would retain over the digital coin. If Facebook is responsible for approving every transaction and keeping track of every user, it is not clear why it would need a blockchain system, rather than a traditional, centralized system like PayPal. Let us follow another interesting development.


* Facebook Credits was a virtual currency that enabled people to purchase items in games and non-gaming applications on the Facebook Platform. One USD was the equivalent of 10 Facebook Credits. Facebook Credits were available in 15 currencies including U.S. dollars, Pound, Euros, and Danish Kroner.  It was expected that Facebook would eventually expand Credits into a micropayments system open to any Facebook application, whether a game or a media company application. While the Facebook Credits website is still active, Facebook has announced that it is doing away with Facebook Credits in favor of local currency

Crypto adoption is next on the radar

Image result for bitcoin adoptionAs progress is made in solving bitcoin trilemma, Decentralization – Security – Scalability, the next focus area is increasing the adoption rate. With a lot of lull in the crypto market until recently, the subject of crypto adoption is being echoed by adversaries and supporters to prove their point of views. In this blog post, I will be taking a closer look at drivers of crypto adoption.

  • Samsung Galaxy S10 is unveiling the mass adoption of cryptocurrencies with future built-in and secure mobile technologies. Galaxy S10 is built with defense-grade Samsung Knox, as well as secure storage backed by hardware, which houses your private keys for blockchain-enabled mobile services. Would this take the crypto to the hands of mass? Here are the details.

    https://news.samsung.com/us/samsung-galaxy-s10-more-screen-cameras-unpacked-2019/

  • tippin.me get tips lightning fast. Twitter with 270million+ users has integrated tipping service on lightening network. Lightning Network is a technology built on top of Bitcoin that provides instant micro-payments almost for free. Tippin.me makes Lightning Network easier, by giving you a simple web custodial wallet to receive and manage Bitcoins through Lightning Network. Join now to start receiving tips and micro-payments right away, just sharing a link. There are a lot of features in the roadmap if this gets traction: integration with merchants, better wallet functionality, etc.
  • Lightning Network, beyond the above use case, is enabling Scalable, instant blockchain transactions for the future. The drawbacks to bitcoin’s decentralized design are that the transactions confirmed on the bitcoin blockchain take up to one hour before they are irreversible. Micropayments, or payments less than a few cents, are inconsistently confirmed, and fees render such transactions unviable on the network today. The Lightning Network solves these problems. Crypto users are soon experiencing scalable ad low-cost instant payments with an ability of cross-chain atomic swaps.
  • Making buying easy: As the avenues to buy Bitcoin gets easy and so the adoption. Since Virwox shut down its PayPal deposits in January 2019 it got really hard to obtain Bitcoins through a PayPal account. The two main methods that still allow you to buy Bitcoins with PayPal are, eToro – for those who only speculate on price and don’t need access to the actual coins and LocalBitcoins – for those who want to actually withdraw their Bitcoin to their own wallet
  • Spontaneous liquidity is becoming reality with Coinbase cash withdrawals to Paypal. Starting in December 2018, U.S. customers can instantly withdraw Coinbase balances to PayPal, providing even faster access to their funds through one of the world’s easiest and most widely-used payment platforms. These withdrawals are not only fast; they’re free and incur no fees.
  • Troubled Economies. One of the Satoshi Nakamoto’s vision for inventing Bitcoin was helping the troubled developing nations to get out of their misery brought upon them by their flawed centralized banking systems. Venezuela is one such country which has seen its financial economy go down the drains, the inflation has made their fiat not even worth the paper they are printed on. When all doors seem closed for Venezuela including petro coin (due to technical weakness), Bitcoin came in as the savior they were looking for. The government legalize the use of Bitcoin in the country and are looking to incorporate it in their financial system so that citizens can use Bitcoin in their day-to-day life.

Alongside all the above parameters, crypto wallets, transaction volumes, computing power, ETFs and Futures, games, arts, web searches for bitcoin terms, and industry hirings, shows bitcoin and crypto adoption is on an upward trajectory.

Blockchain “Potential Value” in the Healthcare Industry

BC in HC

Visualize the Healthcare ecosystem comprising of patients, payers, providers, pharma/bio majors, and medical device companies. The Blockchain Technology combined with other relevant digital forces can augment the right set of capabilities in the Healthcare Ecosystem. The blockchain technology alongside Electronic Health Records, IMoT (Internet of Medical Things), Healthbots, AI/ML, Cloud and Analytics can create the capability foundation for the healthcare industry.  The blockchain bundled capability engine thereby enables the four drivers as described below.

  • Consumerization: Transforming from wholesale to retail healthcare. The patient or consumer now can expect the same experience in healthcare like in all other parts of their “consumer life.” Blockchain can enable a radical change in driving patients to take advantage of connected technologies, social tools, and information activities in their own health and that extends further into the broader marketplace.
  • Personalization: Healthcare industry has historically treated patients en masse. But the move from the group to the individual is inevitable now. Blockchain empowers health players to build loyal relationships with consumers offering more choices.
  • Diagnosis & treatments: Blockchain can create a single source of medical truth of patient that can’t be tampered making the doctors better at their jobs – quicker, more accurate, and fact-based expediting the quality of diagnosis and treatment.
  • Communications: Enabling doctor’s effective and easy communication with patients for improvising care coordination is another pertinent role of blockchain technology in healthcare.

The above drivers collectively are positioned to deliver the following outcomes to healthcare ecosystem.

  • Patients: Improved experience with better care coordination
  • Payers: Shift from B2B to B2B2C models
  • Providers/ISVs: Better usability enabling on-the-go services and health predictability

To better contextualize Blockchain Technology in Healthcare ecosystems, the relevance of technology for Patients, Payers, and Providers is discussed below.

I. Blockchain prominence for Patients:

Patients can benefit from improved experience from better health coordination. With blockchain technology, patient health records can be cryptographically secured and shared among healthcare stakeholders, increasing interoperability in the ecosystem. Use cases for blockchain are getting started with projects that reduce duplicative work but eventually shift to a system where the patient’s control access rights to their data. The following is one of the paths of evolution of blockchain in healthcare,

  • In short term it is more of a closed consortia, PoCs, managing providers information, bringing drug supply chain on the blockchain, but not really porting patient data on the blockchain.
  • In the medium term, systems can scale with permission of stakeholders and handle some patient data. Applications include claims management, payments, and prior authorization, health information exchange & research data, and trial design data etc.
  • But over a long term, a patient-driven blockchain system with master health records and access rights in the hands of patients is a definite possibility.

To design a robust blockchain solution, the architecture should store and scale voluminous transactions, urgent data, and more on a blockchain, while larger data storage needs could be met by private repositories. The bundled On-Chain and Off-Chain solutions can be built to solving both scalability and data sensitivity needs. A typical blockchain solution for healthcare patients’ data can be described as follows.

Data is generated about a patient, a doctor’s visit occurs etc. Transactions are recorded on a public, view-able blockchain, which also designates the location of the data. The data is stored “Off-chain” in private data repositories. Patients give a third-party access to their records via public/private keys. Data is located, decrypted, and retired from storage on-demand.

Blockchain could bring patients to the center of the healthcare ecosystem by giving them the power over one of their most valuable resources – data

II. Blockchain driven Improvements for Payers:

The blockchain is driving the transformation in Payers and/or Health Insurance space to reimagine business models progressing from BB to B2B2C channels. As per the analyst reports, 5 to 7% of claims are denied due to inaccurate or lack of information. Imagine blockchain technology offering an opportunity to automate the claim process and simplify the administrative processes to reduce transaction costs and minimizing frauds.

How Blockchain technology does this is by leveraging the consensus with smart contracts, maintaining a benefits database, determining patient insurance for self-execution with SOPs driving terms and conditions. This will potentially bring in a discipline of pay for outcomes and incentive-based behavioral health programs that offer peer-to-peer insurance models. Imagine a day where patients have a peer-reviewed and/or a peer-adjusted claims system.

III. Blockchain-based Collaboration for Providers:

Healthcare providers could be hospitals, medical device companies, pharma or bio majors and many more. Let us examine the following opportunities.

  • What if blockchain enables a multi-fold increase in medical device makers ability to bring their devices onto a medical IoT platform solving the current data privacy and security concerns? Blockchain can enforce medical device identity management by promoting IMoT and as well cryptography techniques can offer an additional layer of trust to minimize cybersecurity threats for medical devices. Blockchain also ensures patient privacy by proving secure and selective access to their health data.
  • Serialization and counterfeiting are few of critical issues pharma supply chain faces today. It is a multi-billion dollar problem to solve. Blockchain ability to create a chain-of-custody log of a pharma value chain can enable drug manufacturers to track each step of the supply chain at the source by raw martial or constituents and their origins. Blockchain also offers the technological feasibility to automate serialization process across the pharma supply chains

Blockchain technology has the potential to exponentially add value to the healthcare ecosystem offering significant cost savings, enforcing privacy and security, creating a chain of custody for pharma value chain, improving collaboration, and simplifying the claims processing.

I welcome further discussions on this topic via email kishor.akshinthala@gmail.com.

Refer to related blog posts below:

https://akshinthalakk.com/2018/02/10/counterfeit-combating-with-blockchain-technology-2/

Blockchain Reference Solution Architecture (BRSA)

BRSA

I have been publishing Blockchain perspectives over the past couple of years and rarely come across the real details on what it takes to implement a Blockchain solution. Nailing down the solution architecture is “where the rubber hits the road” in preparing an enterprise to gear up for blockchain implementation. Initially thought of offering a detailed technical architecture diagram which can easily lead to misinterpretations. Hence getting focused on describing a “Blockchain Reference Solution Architecture (BRSA)” in this blog post.

I would envision the following 6 foundation layers of BRSA and narrate it with a CPG use case for implementing Blockchain for “Diamond” product class.

1) User Interface: Any solution starts with a user-friendly UX. In our use case, let us say consumers walk into a jewelry store with an intent to buy a diamond for his fiancee. The consumer is”digital-aware” and carrying a mobile and an app on it that is designed to the diamond supply chain to gain the confidence of purchase. Henceforth one of the key features of the mobile app is a read-only application in the first place and will therefore not require any log-in. The consumer then is able to scan a barcode, RFID sensor, QR-code or for that matter invoke computer vision and access the information related to a particular product (in this case diamond) that may involve multiple the steps in the supply chain and tracking the source etc.

2) Data/File Storage: The next solution component is designing file storage. Typically the information stored in blockchain includes contract verification, hashes, and identification of who has added this information. In our example of diamond products, if a miner at source takes a photo of diamond drawing/marking at the source and add it to the blockchain. How this data could be stored on the blockchain, is a critical solution element and the following are 3 possibilities for storing that photo,

  • Upload to the blockchain and make it transparent to all the nodes in the blockchain, but this requires the blockchain to store a significant amount of information.
  • Upload photo to a separate database but accessed by the blockchain. Access can be restricted or open for everyone who interacts with the blockchain.
  • Store in a database that is owned or controlled by an administrator to upload the photo, but it is not possible to access through the blockchain. Only the creator of the file/photo decides who they want to share their data with.

Hence deciding a right data storage mechanism is a critical component of the BRSA component.

3) Blockchain Platform: Choosing the blockchain platform is the next step in the solution design. As mentioned above, the blockchain platform verifies files, contracts, and stores transactions. Platform options include public, private or a hybrid. Platform selection for diamond use case is primarily driven by transaction costs to a least and transaction capacity near real time. The public blockchains platforms include Bitcoin and Ethereum etc. If not the transaction costs, Bitcoin is not considered in this case due to a very low transaction rate. Even if the transaction cost in Ethereum is significantly lower, transaction capacity is still limited. Both transaction costs and transaction capacity be a restriction in a price/service sensitive CPG products. One way to handle this is to go for second layer solutions as they get matured. On the other hand, private blockchain can be most attractive, but only trusted partners are allowed to validate transactions and blocks. The validated and recorded content of the blockchain may or may not be published to the public. The platform selection is really a trade-off

4) Application / Smart Contract: The application or smart contract is another key element of the solution. The most well-known blockchain solution for applications is Ethereum, where the contracts are called as distributed applications (dApps). The applications are run on the blockchain by all nodes, they are distributed. In some other cases the contracts are not run on the blockchain – they are confirmed in the blockchain, and their verifications are embedded in the blockchain but the entire application is not run by the blockchain network. For generating a diamond smart contract, the diamond store must upload the GIA certificate for each stone to be listed. Tracking can be enabled for a single diamond of high value or for a basket of diamonds. The blockchain solution can be designed for distributors listing their diamonds, or for peer-to-peer sales. The transactions here can be virtual but in our case, it is physical in store, and a secure completion of the purchase could trigger the delisting of the smart contract. Many technology providers want their applications to be possible to run on different blockchains and this is much easier if the application is not run by the blockchain. This could potentially be an option for our use case.

5) The ID and authorization: The key CPG actors who are going to authorize the different steps in the process have to be identified and some sort of ID solution is required to be built into the overall architecture. In our use case, either diamond distributor can handle the ID-creation and directory within the blockchain system, or rather create the ID-system and let the private administrators of the system be responsible for the ID-solution. The system then creates the private and public keys of the participants and may use extra security such as IP-addresses to control for the authority of the actors. A simple barcode-based unique ID can incorporate complex data science models to create a unique signature for either a rough or a polished diamonds.

6) Asset Registry: In diamond CPG industry there exists many organizations and authorities that can have an interest in labeling the products with their certificates. Hence in our use case, there should exist a public authority to assign a code to keep track of the diamond and their production. After creating the signature as described in the previous step, diamond can forever be verified against it to prevent fraud of any kind. The amount produced or sold by the diamond maker etc. will then get a code in the blockchain and lives on immutable.

All the above components collectively build a robust solution architecture as depicted in the diagram above for implementing the Blockchain solution for Diamond CPG supply chains.

CPG Blockchains

scmCPG Supply Chains are undergoing an unprecedented change looking out for new ways of improvement. I am focusing on this blog on how net-new technologies including  Blockchain is transforming the CPG supply chains.  Evaluating few real-life examples in CPG space triggering a discussion on Blockchain relevance in CPGs.

CPG sectors that benefit from Blockchain are widespread. Fashion products, which is one of the prime CPG sectors ripe for Blockchain adaption where supply chain provenance plays a significant role. The other product classes include garment or makeup products, fine wine, art, luxury items or for that matter diamonds that can benefit from Blockchain adaption. I have been evaluating on how CPG companies can promote an “ethical fashion” or “ethical products” with Blockchain based applications. Let us dive into details.

Blockchain relevance to CPGs:

Focus areas chosen are supply chain provenance, transparency, counterfeiting, and sustainability. The enterprise-wide Blockchain platform could help to increase business velocity, create new revenue streams, and reduce cost and risk by securely extending the supply chain to drive tamper-resistant transactions on a trusted business network.

Provenance & Transparency: Do you agree that the relationship between CPG supply chains Transparency (access to information) is not always linear & straightforward with Traceability (provenance)? Let us look into how to build a Blockchain based solution for CPG supply chain provenance.

Blockchain could help in improving the transparency of the fashion supply chains, promoting sustainability and addressing fashion companies’ lack of ethical supply chains that are contributing to >10% global emissions, and as well in combating to counterfeiting.

Blockchain can play a role in transparency in transforming fashion supply chains through technologies such as track and trace and inventory management. With Blockchain, it is possible to create physical – digital link between goods and their digital identifiers. Cryptographic seal or serial number can be used as a physical identifier linking back to the product’s digital-twin. An example to quote is “Better Kinds”, with a focus on decentralized manufacturing allowing everyone to know where your clothes come from.

Counterfeiting: Blockchain solution as well helps fashion CPGs in combating counterfeiting by recording on blockchain every time goods change-in hands. The chain of custody on blockchain provides a record of the last party to gain custody of the product, showing where the counterfeit product slipped in, or an authentic product got diverted. Read my blog post, Combating Counterfeiting With Blockchain Technology

Sustainability:  The promising outcomes of Blockchain in this space include, sustainability gains in the form of reduced environmental impact and better assurance of human rights and fair work practices. Having a clear record of product history helps product buyers to be confident that goods being purchased are coming only from sources that have been recognized as being ethically sound. More accurately tracking substandard products and identifying their occurrence further upstream in supply chains will help reduce the scope of rework and recalls, providing considerable greenhouse gas reductions and other resource savings. the ultimate goal of Blockchain will be improved supply chain optimization gaining access to a more complete longitudinal supply chain datasets eliminating redundancies and bottlenecks, and ultimately, decreases in resource consumption.

Blockchain implementation process for CPG Blockchains:

Blockchain solutions could help fashion CPGs in their brand positioning as environment-friendly and tech-savvy. Existing technologies like ERPs, Enterprise Data Warehouse, Integration Technologies, and existing e-commerce website can enable provenance, but with practical limitations.  That is where new technologies including Mobile App Development, Public/Private Blockchain Platform, Crypto-Fiat payment gateways & wallets, Digital-Twins, Artificial Intelligence and Advanced Analytics, IoT Sensors, Robots & New Handheld device Hardware etc.

Blockchain implementation for CPGs is an art. The new technology adaption process includes building a public or private blockchain network bringing connecting all key stakeholders using a DLT. Create a token that promotes the use of such application and potentially incentivize the users and suppliers. Create wallets to store tokens and collect incentives. Integrate with payment gateways and exchanges. This forms the Blockchain Core. Then build business and application logic with workflows that support the provenance functionality. Integrate the Blockchain core with back-end transaction systems and ensure seamless flow of information ensuring the data integrity and privacy. It may be a good idea to consider a second layer solution for improved transaction rates and at the same time confining certain confidential information, in this case, supplier data to open access to all competitors via a blockchain. Developing a mobile app and lastly, integrating UI, Application (Blockchain Core) and back-end systems. A brief description of 3 layers of foundational architecture is provided below.

  • User Interface: Customer experience plays a significant role in provenance applications. Should have access to a friendly UX that should support consumers to be able to walk into their favorite retailers, use phones and scan the tag on a garment or makeup product to be able to pull up full supply chain information.
  • Application Logic: Build business and application logic with workflows that support the provenance functionality. This is the core platforms that developed and rolls out provenance application.
  • Data and Back-end Transactions: Brands should get a better handle on what’s really happening in their production processes and chosen technology should relieve a logistical headache by streamlining the record-keeping and verification processes. Second, it requires brands to voluntarily invite their suppliers (who will need to in turn invite their own suppliers, and so on down the chain), to adopt the technology.

How to calculate ROI for CPGBlockchains?

Setting up a Blockchain based application for CPG supply chain provenance involve a capital investment for infrastructure and development costs and ongoing maintenance costs. ROI is a derivative of whether such application attracts more consumers demand and/or willingness of consumers pay additional fees for access to truth and sustainability and/or reduced costs of the current supply chain with streamlined operations. Hence ROI should be computed as “[ Increased revenues from consumer demands & adaption + Premium fees consumer willing to pay + Reduced costs of supply chain operations – Total Investments & Costs (CapEx+OpEx)]

The real ROI of Blockchains come from handling the volume of CPG products and transactions having a second layer solutions to offload/ off-chain transaction volumes from core Blockchain. Estimating components is a challenge in computing Blockchain ROI. But there exists an opportunity to estimate parameters with a degree of accuracy. Such parameters include,

  • Improving the efficiencies of running workloads. Smart contract automation can save significant time in real life transactions avoiding manual interventions
  • Cost reduction is a great value in horizontally integrated supply chains. Blockchain can easily create a global view without expensive third parties
  • Increased trust among key stakeholders that would improve supply chain performance
  • CPG/Retail plastic/waste management can be incentivized leading to a better sustainability

Let us examine use cases:

The following two case studies offer a great insight into how Blockchains can enable provenance. From these examples, taking a value chain based approach for identifying incremental benefits along various supply chains components could fairly offer potential ROI perspective from Blockchain adaption.

  1. Examining the Everledger based blockchain application for traceability of diamonds. The key challenge of the diamond industry is certification of the ethical origin of the diamond. Noticed that Everledger has been trying to create a database of diamonds registering on the blockchain to certify the final cut diamond was ethically-sourced from “conflict-free” regions. Such examples can be used to create an anti-counterfeit database for other valuable goods such as fine wine and art.
  2. Moving on to another example, Blockchain enabled traceability application for yellowfin and skipjack tuna fish. The Etherium based platform trying to track the entire supply chain from fishermen to distributors. End users could track the source of their tuna fish sandwiches via a smartphone. This platform would enable determination of information about the producers, suppliers, and procedures undergone by the end product. allow confirmation of a given fish’s origin tracking the supply chain. Such a solution would present a viable model for product certification to an end consumer.

In Summary…

The complex blockchain solutions will provide an unprecedented level of transparency and traceability, to build the highest level of trust in the sustainability of the CPG supply chains. The CPG products are able to be traced on the blockchain through their unique tracking code with the information collected from linking all information sources within the global supply chain covering from the source through the production process up to the final point of sale as described in the case examples above.

Working as a single source of truth, Blockchain can change the way business transactions take place. From a supply chain perspective, such visibility will help ensure efficient transactions, while promoting safety, efficient recalls, the elimination of counterfeits, and the assurance of ethical trading.

I continue to research further on Blockchain relevance to CPG supply chains. While the core principles of Blockchain are being established, the companies adopting the new technology progressively evolve alongside. ABC (AI+Blockchain+Crtptocurrencies) continues to significantly alter Retail / CPG business models.

Reach out to me for further discussions @ kishor.akshinthala@gmail.com.