Whether it is palm oil or car paint – consumers, investors and regulators expect multinationals to demonstrate sound, sustainable, procurement practices, and verify the integrity of their supply chains, regardless of complexity. For companies looking to get ahead of their due diligence, fledgling technology offers a solution.
One company – French retailer Carrefour – has turned to blockchain technology to trace and authenticate the lifecycle journey of its own-brand organic products. Carrefour pointed towards a consumer drive for transparency, as the catalyst for integrating its state-of-the-art blockchain solution. Through a QR code, customers can read about the producer’s name, field and packaging locations, and transport means. Additionally, they can learn the harvest date, analysis results, variety, as well as the seasonality of the product. Blockchain is a decentralised and permission-less digital public ledger, which records transaction information on an unalterable and transparent record. Its database capabilities provide irreversible and reliable timestamping, making it the ideal apparatus to record, audit and certify information without third-party verification.
Outside its application with Carrefour, blockchain is a computerised periscope, which can unravel the obscurity of illegal goods and harness a codified model of transparency. This unalterable network can harvest, trace and interpret the provenance and ontology of tangible goods, capital flows and their productive nature, with the consequence of corroborating the integrity of an entity’s genesis and lifecycle.
A fledgling technology no more.
And yet, blockchain’s scalability and everyday adoption introduce compatibility issues, as supply chains may lack the necessary infrastructure, co-ordination and regulatory support to access and utilise common blockchain recordkeeping solutions.
Additionally, inputting data into a blockchain is not abuse-proof. Despite the potential of blockchain’s traceability capabilities, it can only provide immutable visibility, assuming that upstream data providers are collecting information that is accurate, reliable and representative of the origins of the goods, capital or nature of the labour conditions it is recording.
Knowing this, we may consider blockchain as a complementary solution to existing supply chain apparatus, rather than an overhauling authority.
It remains true that the key solutions to robust supply chains are regulatory and market pressures, especially when addressing issues as nuanced and multi-dimensional as abuses in human rights and labour conditions.
Regardless, as consumer and investor transparency concerns grow, corporates will naturally look towards integrating cost-competitive technological solutions to upgrade their due diligence profiles.
With this in mind, we can only assume that blockchain is the beginning of a long-term journey towards the use and adoption of technology-backed supply chain due diligence solutions.
Author: James Moir