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Revolutionizing Supply Chain Management: A Look into Provenance's Blockchain Approach

By: Carla Chinski

Twitter: @thelatestbyte

Post Date: 2024-02-06

Opening the Conversation: The Need for a Revolution

Supply chain management has always been a complex undertaking. Every product we purchase has a story, an often intricate journey it has taken from source to consumer that is usually hidden from view. Unscrupulous practices, environmental damage, and labor exploitation can lurk unseen in these opaque supply chains. But what if there was a way to make these chains transparent, verifiable, and efficient? Provenance, a UK-based tech company, thinks it has the answer: blockchain technology. Blockchain, the technology behind cryptocurrencies like Bitcoin, may seem an unusual solution to supply chain issues. At its core, blockchain is a type of database, a digital ledger that records transactions across many computers, so the record can't be altered retroactively. This provides a level of transparency and security that is transformative in the context of supply chain management.

It has been a fast and furious ascent for supply chain management via blockchain, but recent studies from 2023 show that not only can this technology “[reduce] the costs and time that arise in the supply chain, [by providing] significant advantages to enterprises such as the transparency of the operations performed.” It was only three years ago, in 2020, that whitepapers were published stating that one risk was that “there can still be human error or intentional misconduct in inputting the initial data onto the blockchain,” and that “Therefore, blockchain data is not perfect information.”

Tracing Back the Traditional Way: Quality Assurance and Traceability

Traditionally, traceability and quality assurance have relied on a mix of trust-based systems and bureaucratic oversight. From farm inspections for organic certification to third-party audits for fair trade, businesses have had to go through layers of verification to assure consumers about the quality and origin of their products. While verification is a necessary step, it often hinders innovation, which has been proven repeatedly; this is partly due to the mistrust innovation brings in the larger population. Going back to tradition, fairtrade might mean complying with laws against oligopolies and monopolistic practices, but it also implies making sure the value chain and its related information are evenly distributed across actors. However, traditional processes are not foolproof. They can be manipulated or corrupted, and they often lack transparency, making it difficult for consumers to verify the claims being made.

Moreover, traditional traceability systems tend to be linear and hierarchical. Information flows in one direction, and the power to verify and audit lies with a few key players. This centralization can lead to inefficiencies and vulnerabilities. Information can get lost or altered as it moves up the chain, and the system as a whole can be slow to respond to issues or changes.

Here, blocks act as protective walls of information processing that are very hard to bypass. Blockchain is now making internal operations concerning supply chains much more competitive, as it implies storing data from interconnected business processes as a private or hybrid information network. Customer relations, demand management, production flow, and stock management and storage are the main concerns in operations, no matter how big or small. Reducing operating costs, guaranteeing product stock, and reducing damages are secondary to providing what is called “service continuity.” In light of customer demands from e-commerce brands to be efficient and deliver on time and in regard to their promises, blockchain supply chain management is another important, though often invisible, link.

Today, perishable products and goods with quality assurance requirements by law must be treated with care, that is, through hybrid blockchain structures (that combine public and private information decentralization.) that allow for traceability in the traditional sense. Furthermore, using blockchain doesn’t mean that traditional tracking practices–or even those such as GPS mapping from a few decades ago–are being done with. Quite the contrary, auditing and tracking processes can integrate with other, prior digital systems.

Provenance in Practice: Real-world Impact

Provenance has already begun to demonstrate the real-world impact of its approach. In 2018, it partnered with the international food and beverage company, Princes, to track tuna from catch to can using blockchain. This pilot project allowed consumers to scan a code on the can and see the entire journey of the tuna inside, from the vessel that caught it to the cannery that processed it. The success of this project has led to others, from tracking organic cotton in fashion to verifying the authenticity of rare whiskies.

Provenance harnesses blockchain's decentralization and immutability to provide transparency and traceability in supply chains. Using their platform, every step of a product's journey can be securely recorded, from where a coffee bean was picked to where a diamond was mined, all the way to the end consumer. Provenance aims to use blockchain to instill trust and transparency into supply chains. This platform allows businesses to showcase the origin, journey, and impact of their products in a way that is secure, trustworthy, and accessible.

For businesses, Provenance could mean greater efficiency and reliability. Information can be recorded and verified in real-time, and there is no need for a centralized authority to manage the process. For consumers, it certainly means greater confidence in the products they buy. They can become a part of an end-to-end product journey, from origin to end consumer, and know that a trustworthy source has verified the information. But it's not just about transparency for consumers. Provenance's platform also benefits businesses by streamlining operations and building trust with consumers. By providing a clear and verified history of a product, businesses can differentiate themselves in a crowded market and build loyalty with conscious consumers. And, while Provenance's work is promising, the journey is just beginning. There are challenges to overcome, from the technological complexities of scaling up to the need for industry-wide acceptance and collaboration.

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