How Blockchain Could Impact Counterfeiting Across the Supply Chain
In today’s blogpost, Gavin Parnell from Go Supply Chain shares his opinions on how blockchain could impact counterfeiting across the supply chain, and introduces some applications that are being used and explored today.
Blockchain is a relatively new technology that shows great promise for use across many industries, including logistics and supply chain. The same technology that powers the cryptocurrency BitCoin can be used to reduce the introduction of counterfeit goods across the supply chain. It’s time to explore the possibilities of using this technology in our industry; it is early days but but there are many interesting developments.
Below is a TED talk with a simple explanation of how blockchain based ledgers can be used to increase trust and reduce fraud. It’s just over 20 mins long, but worth watching if you are interested in finding out more about how blockchain could impact the logistics and supply chain industry.
In case you don’t have time to watch the video, the main message is that the modifying of blockchain based ledgers is close to impossible:
Blockchain ledgers are designed to be immutable. Each record in a blockchain ledger contains a cryptographic key. This key is created using each previous record (and its key). That makes it very easy to run an algorithm that detects if the ledger has been tampered with.
Because blockchain based ledgers tend to be distributed across multiple machines on top of this, the tampered ledger can easily be replaced with the correct version of the ledger.
The applications of blockchain across many businesses is very promising, but there are particularly promising applications across the logistics and supply chain industry that could decrease delays and reduce the impact of counterfeiting significantly.
IBM are currently working with Maersk on a cross-border supply chain solution using blockchain, aiming to reduce delays and fraud across the supply chain. They are working to create a global tamperproof system that digitizes trade workflow and tracks shipments end to end.
There are also various startups attempting to address the problem of counterfeitting across the supply chain.
BlockVerify employ a blockchain system utilising QR codes on product packaging to ensure that products are traceable across the blockchain. They started out focusing their efforts on the pharmaceutical industry because they believed this is the industry they could do the most good, and counterfeitting does the most harm. They make use of Bitcoin and their own private blockchain system to achieve this.
Shanghai based company BitSE have launched a cloud product management service called Vechain. Vechain focuses on anti-counterfeiting, supply chain management, asset management and client experiences. They use NFC, RFID or QR codes to verify products are genuine. Counterfeiting is a huge problem in china and BitSE hope to provide a solution to this problem through Vechain.
For other examples on how blockchain is being used today across the supply chain, check out the second article in Go Supply Chain’s series on blockchain.
Blockchain has huge potential when it comes to reducing counterfeiting across the supply chain by providing a transparent tamper-proof system that is accessible to all. Interested parties should keep track of developments in this rapidly changing and evolving area…