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Guaranteeing product traceability

Supply chain

Food, luxury, pharmaceutical, automotive…almost every industry can use blockchain technology to better monitor and follow their products.

Since human intermediaries are fallible and corruptible, the traceability of commercial products is rarely 100% guaranteed. This lack of transparency is particularly striking in the food industry. The far-reaching horse meat scandal in 2013 and the Chinese contaminated milk catastrophe in 2008 are hard to forget. According to a study by PwC, agri-food fraud could cost as much as $40 billion per year.

According to the site Blockchain France, which published a dossier on the subject, blockchain technology can help counteract obscurity and provide clear diagnoses regarding sources of contamination. To do so, supply chain stakeholders would use a blockchain to encode all the steps involved in the production process, starting from the extraction or production site all the way to the point of sale.

Encoding these steps in the register can be done manually, for example by photographing documents using a smartphone, or automatically, via smart sensors attached to products. This is one of the most promising applications of the Internet of Things. With this technology, it is possible to know the location, temperature or humidity rate of any given product in real time.

Food giants have begun to experiment – successfully – with these technologies. US giant Walmart, in partnership with IBM, has tested blockchain technology in China since 2016 to monitor the transport of pork products. Now, product origins can be determined in a matter of minutes, rather than several days as was previously the case. It is remarkable progress. So much so that Walmart’s head of food safety has declared this technology to be the “Holy Grail” of the supply chain. In Europe, Carrefour announced last month that its Auvergne chicken will now be traced using blockchain. If they wish, customers can access the entire supply chain and the animal’s life cycle via a QR code.

For health reasons, the agri-food industry is a particularly convincing case study, but the use of blockchain in logistics can apply to other industries as well. In fact, almost all commercial sectors can benefit from the technology, particularly industries with complex supply chains such as automotive, aeronautics, sea transport and real estate. But it can also be useful for sectors extremely affected by fraud: “We’re seeing blockchains being used more and more often in the luxury industry. Products are rare and expensive and there is rampant counterfeiting,” said Vincent Pignon, CEO of WeCan.fund. “For example, Canadian parka retailer Goose provides a certificate with each jacket to prove its authenticity. In the watchmaking industry, several brands are implementing similar systems. We also see this in the fine art and diamond markets.”

Lastly, blockchain could markedly improve the traceability of pharmaceuticals. According to the World Health Organization (WHO), between 10% and 30% of medicines used in developing countries are fake, which could lead to close to 700,000 deaths each year.