Traceability in supply chains: Blockchain is the Solution

BLOCKCHAIN
Supply Chain
TRACEABILITY
Traceability in supply chains: Blockchain is the Solution

08/04/2020

Traceability’s shortages in supply chain management

Traceability is acknowledged as one of the must-have solutions bringing significant values in terms of cost savings, risk management, and earning customers’ trust for businesses in various industries. However, there is still room for improvement in the current Traceability systems. Before talking about what needed changing. Let’s discuss some shortages of the current traceability system.

Most of the current Traceability systems have centralized database, which is a database that is located, stored, and maintained in a single source where operators can access and input the data. There are many risks of handling a centralized system;

  • If it gets attacked by hackers, all the data will be lost or changed. Moreover, the data can be changed internally by somebody who has the right to access the system with unethical purposes.
  • Information changing in a centralized system is also hard to retrieve and recover. If this happens, the traceability information is unreliable and meaningless to all stakeholders in the supply chain; therefore, the system is useless and gains no value to the business.
  • The fact that this kind of system is limited and not transparent due to its changeable characteristic and cannot build consumers’ trust and loyalty to the brand.
 

                                       Most of the current Traceability systems have centralized database

Blockchain is the solution for Supply Chain Traceability Management

Blockchain — a technology for storing and handling information, is an ideal graft to make Traceability perfect. However, this term is hard to understand for most people and sometimes is misunderstood as Bitcoin; but Bitcoin is just an application of Blockchain. Plainly explained, a blockchain is a time-stamped series of immutable records of data that is managed by a cluster of computers joining into that blockchain. Each of these blocks of data is secured and bound to each other using cryptographic principles. Therefore, there is no central server to execute data recording. Since it is a shared and immutable ledger, the information in it is open for anyone and everyone to see. Hence, anything that is built on the blockchain is by its very nature transparent, and everyone involved is accountable for their actions.

Unlike the centralized system, the decentralized nature of blockchain technology means that it doesn’t rely on a central point of control. A lack of a single authority makes the system fairer and considerably more secure, more transparent, and immutable. Once the data is updated on Blockchain, it will be recorded with the exact time of updating called time-stamped, and it is unchangeable. Everyone can access to Blockchain to retrieve the data easily and read the history of information updating. This makes Blockchain data trustworthy and solves the weaknesses of current centralized Traceability systems.

 

                      Blockchain is the solution for Supply Chain Traceability Management

Blockchain-based Traceability vs Non-Blockchain-based Traceability

Consumers these days consider very carefully about choosing which products to buy among a majority of choices. They not only care about prices and brands but also about the origin of the product and how safe it is for their health and environment. Traceability can help to provide their needs of tracking and tracing information on the production and distribution processes, but it’s not enough for a comprehensive traceability solution because the information from a centralized system is untransparent as it is modifiable. That is why Traceability needs Blockchain to complement these flaws.

Blockchain will revolutionize the current Supply Chain by making the information flow more efficiently, more sustainable, and more reliable. All information that is permanently stored and cannot be altered or deleted, will enhance the transparency in all stages of the supply chain, reduces risks from counterfeits, business frauds, and gray markets and encourage consumers to buy more products from a brand. Furthermore, Blockchain integrated with IoT technology can help to eliminate the needs of a third party, enhancing the accuracy of recorded information, thereby significantly reduces overhead costs and general complexity.

 

                                                                        Blockchain vs centralized system

Currently, there are some Traceability projects based on Blockchain platform; however, only a few of them have successfully made the idea come true. One of those is WOWTRACE– a comprehensive Traceability solution combining Blockchain, AI, and Cloud data. This project has successfully deployed Blockchain Traceability for Vietnamese mango market and achieved a flourishing result. Before implementing Blockchain, the mango producers have faced ingenuine products with uncontrolled quality that damaged their brand name and hurt the revenue. Knowing their problem, WOWTRACE helped them with a low-cost solution. All what the producers needed to do is to attach a unique Blockchain QR code that cannot be imitated to each product, then, the QR code will be recorded and updated on Blockchain constantly. Consumers can scan the QR code with their smartphones and get transparent information about the products. With this solution, their brand name is protected from impostors, while consumers can easily distinguish the genuine products with counterfeit one; this makes their revenue increase amazingly. This is just an example of how a Blockchain-based Traceability can help protect company brand names, including supply chain management, sales, and marketing aspects.

                                                             WOWTRACE solution for Vietnamese mango

About WOWTRACE

WOWTRACE is a completed ABCD (AI, Blockchain, Cloud, Data) Traceability Solution that brings sustainable growth and transparency to the supply chain across Asian countries. Thereby, all stakeholders achieve end-to-end visibility and control over their operations on the supply chain.

Learn more about WOWTRACE at: https://www.wowtrace.io/

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