In a world that is increasingly conscious of environmental and social concerns, the need for sustainable and transparent supply chains has become paramount. Businesses and consumers alike are demanding greater accountability, ethical sourcing, and responsible production practices. This is where blockchain technology, with its built-in characteristics of transparency, immutability, and decentralization, is stepping in to revolutionize the way we manage and trace the flow of goods and information. Here in this article, we will explore the significant role that blockchain can play when it comes to sustainability and traceability across various industries.
Sustainability and Blockchain: A Perfect Match
Blockchain's greatest asset is its transparency. Through a decentralized ledger, participants in a supply chain can record every transaction, providing real-time visibility into the movement of products. This transparency allows businesses and consumers to verify claims related to product origins, ethical sourcing, and eco-friendly production methods. This is down the chain-link nature of the blockchain. Each recorded action on the blockchain is connected to the previous block – this means that all actions within a blockchain can be verified and can never be altered.
One of the key aspects of sustainability is the ability to trace a product's origin back to its source. Blockchain's immutable ledger ensures that every step in the production process is recorded and cannot be altered, allowing for a comprehensive and unbroken history of a product's journey from raw materials to finished goods. This unbroken journey can span multiple parties within the supply chain, as the raw material is refined into various intermediate products, before finally being refined into the finished product. As this process takes place with the involved of multiple companies and business, the blockchain can keep track of each step in the process and maintain an irrefutable record that can be verified by end-consumers and society in general.
The benefit of an integrated blockchain solution, is that we can build trust by continuously uploading small pieces of data, from each step of the process. We can then combine each of these small pieces of data, into a full and complete picture of the product journey, which can be verified through each step, by the downstream consumers. This breaks with the previous dominant way to share sustainability, where the entire process is described at the of the process. Through blockchain we record every little step of the process, and we all benefit from this enhanced level of visibility.
Blockchain is also ideally positioned to be used to optimize logistics and transportation within a supply chain. By streamlining the supply chain and reducing inefficiencies, it can lead to fewer emissions and lower transportation costs. Smart contracts, a feature of blockchain, facilitates easy handling of data between parties, and can be used for
automating actions, on the basis of correct data being passed from party to party. This can include shipping routes, container releases and shipment tracking. In addition to the transportation aspect, the blockchain can also be used to isolate each step of the supply chain and production processes, and measure the carbon footprint of each step in the process. This allows companies to drive business decisions based on sustainability. Changing fossil fuels for electrified solutions, as well as utilizing renewable energy sources, to achieve this electrification and reducing the carbon footprint of the operation.
Renewable energy can also be taken beyond the production environment. Companies can look to optimize sustainability practices in their office environments as well, using solar powered energy to power the lights, computers and coffee machines in the offices.
This leads to opportunities to increase efficiency and optimize the production processes in general. These positive effects are multiplied through the use of the appropriate software solutions, that can help with the analysis of the entire supply chain and production processes.
Linking the blockchain software solution directly to your operational IT systems, means data can be analyzed in real-time, and companies can affect changes based on this data, to achieve the efficiencies we are all after.
Using software solutions based on blockchain technology also allows for sustainability certifications, such as Fair Trade, organic, or carbon-neutral, to be achieved easier with the integration of the blockchain technology. Creating these records through the journey of a product, allows for easy interaction between stakeholders in the journey, while keeping each party accountable for their portion of the process. One example could be chocolate moving from farmer -> Aggregator -> Shipping company -> OEM -> Customer. Documenting each step of this entire journey creates a verifiable chain of custody for the product from raw material to finished good.
Having this complete chain of custody for a given product, will easily allow the certifying bodies of the sustainability certifications to verify the supply chain in genuine, along with the authenticity of the product, and approve any claim for using the sustainable markings on products.
This builds confidence in sustainable certificates and their branding for downstream consumers, and supports them in their purchasing decisions.
Blockchain technology can facilitate better waste management by tracking and verifying recycling and waste reduction efforts. This can encourage more businesses to adopt environmentally friendly practices. Recycling their own scrap and waste back into their on-going operation, or recycling and reclaiming raw materials from end-of-life products back into the production of new products. With a blockchain based sustainability software solutions, companies can document this recycling process, and maximize the benefits of these efforts, by sharing them with their downstream customers and end-consumers.
Solutions like Myneral will provide a fully customizable white-label platform, where you can share your products’ provenance and sustainability, which can build a far stronger relationship with downstream stakeholders and decision makers, allowing a company to separate itself from its competitors.
Traceability: Ensuring Ethical Practices
Blockchain's secure and tamper-proof nature makes it extremely effective in preventing counterfeit products from entering the supply chain. Consumers can easily verify the authenticity of products through a simple scan of a QR code. Through Myneral Labs’ solution, this QR code can be printed on documents, packaging or even engraved on the product itself, so that consumers can verify the authenticity at any time, just by using their mobile device.
In the food industry, traceability is essential for ensuring the safety and quality of products. By recording every step in the supply chain, blockchain can help quickly identify and isolate contaminated or unsafe products, minimizing the risk of foodborne illnesses. Being able to single out a unsafe batch or batches, and the downstream consumers who received the corrupted batch, makes a recall process much quicker and far more efficient.
By using digital technologies like blockchain provenance can also be used as a selling point, by showing the story of products. An example of this could be farm -> packaging -> distribution -> consumer. Sharing the provenance of a given product, along with the traceability and sustainability of the product, while engaging with the consumers directly on the product, allows companies to truly compete on something other than price.
Industries like electronics and jewellery can end up knowingly or unknowingly sourcing minerals from conflict zones, which indirectly funds armed conflicts and human rights abuses. Blockchain technology can be used to ensure that minerals are sourced responsibly, without contributing to conflicts. Tracing the provenance of products and having the ability to document the origin of any raw material, is a powerful and confidence building tool for a company to possess. This type of transparency can transform a company’s sales processes, marketing campaigns and overall fortune. Being able to reduce overall liability throughout the entire supply chain along with enhanced visibility, will allow the company to focus on other aspects of their business, and add increased value throughout the business. It also makes it easy for consumers to base their purchasing decision on provenance, which results in higher levels of engagement with the product and thus increases brand retention.
The pharmaceutical industry can use blockchain to track the production and distribution of drugs, ensuring that counterfeit medications do not enter the market. This can save lives and protect public health. As with food, having the ability to pinpoint which pharmacy, drugs outlet and patient has received unsafe products, make a recall process very efficient, and can allow for fast and targeted treatment of patients, who has ingested unsafe drugs. This will help to build valuable trust among the customers base and increase confidence in a company and their products.
Integrating with IoT – Internet of Things
Integrating blockchain technology into your operational IT systems, also opens a pathway into sensor data and true transparency into your production processes. Solutions like Myneral Labs can integrate with any type of hardware machinery such as smelters, conveyor belts, capsule filling machines, packaging machinery, etc. in your production environment. This gives you live-feed data on energy consumption per unit or steps in your production process. You can measure accurate performance and inefficiencies in your process, and it even becomes possible to expand your transparency beyond your own factory facilities within your supply chain.
Companies in the extraction business like mining, can add sensors to their blockchain environment, and measure air-quality, humidity and temperature, while also integrating wearable sensors for employee safety.
Blockchain technology holds immense potential to revolutionize the way we approach sustainability and traceability. With its transparency, security, and immutability, it is uniquely positioned to address the growing demands for ethical sourcing, responsible production, and transparent supply chains. As businesses and consumers continue to prioritize these values, we can expect to see blockchain play an increasingly vital role in creating a more sustainable and ethical global economy.
Professors at well renowned universities have been forming theories on this topic for years, such as the E-liability theory created by Professors Robert Kaplan (Harvard) and Karthik Ramanna (Oxford), which describes the accumulated carbon footprint of a product, as it moves through its supply chain and multiple companies during the journey from raw material to finished good.
These theories can be tough to implement into existing supply chain operations in a smooth way, but if you partner with established companies like Myneral Labs, you can integrate these concepts and theories into your everyday operations with great ease, minimum impact and start harnessing the real power of blockchain technology. Myneral offers fully integrated solutions, as well as stand-alone solutions, that can bolt onto your existing operations.
By harnessing the power of blockchain, we can work towards a future where products are not just commodities but symbols of responsible and sustainable practices.