Blockchain and Traceability: What are we Talking about?

Blockchain in brief

Although its first use in 2008 led to the creation of the famous Bitcoin, blockchain is not limited to the financial sector. Literally translated as “chain of blocks”, blockchain technology allows the storage and transmission of information in a transparent and secure manner. What makes it special? It operates in a distributed manner, without a central control body.

By extension, we speak of blockchain to designate a database built from this technology. This secure database, shared by different users and without intermediaries, maintains the history of exchanges between authorized users so that everyone can check the validity of the chain in all blocks. Therefore, it can be applied to many sectors, such as the Supply Chain.

What is logistics traceability? How does traceability work?

Traceability refers to the possibility of knowing the origin of a product and being able to follow its course throughout its transformation and distribution chain. Traceability rules are defined by standards issued by national or international control bodies and vary according to the nature of the goods. Within the European Union, the traceability software for food products is, for example, under the control of the European Food Safety Authority (EFSA).

Blockchain at the Service of the Supply Chain

Blockchain has many advantages for the supply chain sector: it is programmable, reliable and allows for obtaining real-time information on operations carried out. The objective? Being able to act as quickly as possible in the event of an incident. These characteristics make it a guarantee of quality for companies, especially in the food industry.

Task scheduling

In the distribution chain, it is particularly interesting to be able to automate certain tasks in order to increase efficiency and processing speed. Thanks to a programmable blockchain, it is possible to plan, for example, for the automatic release of payments upon receipt of the goods. If the order has not been received, a conflict management process can be automatically triggered in the same way.

Accessibility to real-time data

With blockchain, the various actors in the value chain can also detect problems or fraud in real time. This is a scenario that cannot be compared to the current situation, where it takes at least two weeks to identify, for example, foods that may have caused food poisoning.

Quality assurance

In the agri-food sector, blockchain is expected to speed up the identification of sources of contamination of a product. In concrete terms, this means that each agent in the supply chain must record on a blockchain all operations carried out with a view to the distribution of products. In this way, from production to the point of sale, a vector of contamination can be quickly identified by tracing the circuit.

The Carrefour Group has just launched the first agri-food blockchain in Europe to ensure the traceability of a product, in this case, of its chain of free-range chickens. Incubation, breeding, feeding, slaughter, storage and sale: each stage of the production, processing and storage of poultry is recorded and constitutes an element of the blockchain, guaranteed by personalized access to all levels of the chain.

Advantages of Traceability

In the supply chain, blockchain offers multiple advantages. It allows stakeholders to gain operational efficiency, but also to improve their brand image.

Reduction of transit and shipping times

Today, an international shipment of goods requires, on average, 30 different inspections during its journey. These numerous inspections are still mainly based on the manual verification of paper documents. If one or more documents are missing, a container or a truck will be stopped at the inspection site.

All these inspections inevitably delay the delivery of goods and represent significant costs for supply chain operators. However, by using blockchain it is possible to eliminate these impediments.

Reducing development costs

Blockchain is a low-cost technology that holds great promise for the logistics sector. Without major investments, all economic agents will be able to benefit from accessible solutions at a lower cost.

Improving the Brand image of Companies

From a marketing perspective, a brand using blockchain traceability can also significantly improve its image and increase consumer trust in its products. How? Take fashion brand Baby Ghost, for example, which has been using blockchain to track its clothing and accessories since its Spring/Summer 2017 collection.

By scanning an NFC chip or a QR code embedded in each item, consumers can access the complete history of the product they have purchased and verify the authenticity of their purchases. Thanks to this technology, the brand claims to have succeeded in increasing interactions with its customers. The use of blockchain therefore has real marketing potential for brands concerned with customer relations.