Dive Brief:
- The World Economic Forum (WEF) launched a self-service, public blockchain traceability platform available for businesses to start mapping and tracking their supply chains with help from Everledger, the International Trade Centre (ITC) and Lenzing Group Thursday.
- The platform allows users to create maps of their materials and product flow. ITC’s other databases will soon be included in the maps — adding “key environmental and social indicators and certifications of supply chain partners.”
- WEF is seeking suppliers and brands already using blockchain for supply chain traceability to participate in a second stage pilot. Textile supplier Asia Pacific Rayon (APR), IoT platform Evrythng and blockchain traceability platform Plataforma Verde have signed on.
World Economic Forum
Dive Insight:
Blockchain is widely recognized as an attractive and effective way to bring traceability to complex, multi-tiered supply chains, but privacy concerns — along with the fickle nature of technology trends — have slowed industry adoption.
Participating in a blockchain platform requires trust since participants must share more data than they traditionally have. Although most platforms can still keep proprietary transaction data private, the issue of data ownership and competitive advantage, among other factors, has slowed adoption. Maersk’s TradeLens platform had a slow start in 2019, reportedly due in part to Maersk’s founding role and the need for competitors to share information. After pivoting to “joint venture” language, carriers eventually came on board.
Architects of the WEF initiative aim to allay similar concerns with a neutral platform and therefore speed adoption across industries.
“We hope this will accelerate adoption and encourage more companies to join and co-design the technical scope as well as how we tackle tough questions around privacy and how we connect the physical and digital worlds,” said Francisco Betti, head of the platform for shaping the future of advanced manufacturing and production at WEF.
Once the structural concerns and barriers to adoption are allayed, the next step is to prove and derive value from participation. WEF, along with several participants, argues that proving sustainability efforts to consumers is essential to competition today and that such a platform is essential to capitalizing on efforts to produce goods more sustainably.
“Circularity in the world’s supply chains of consumer goods, the path to sustainability, cannot be achieved without new networks to exchange data,” said Niall Murphy, CEO and co-founder of Evrythng.
Phase two of development will require more data to prove the true value of verifiable traceability, according to a WEF press release, which is why the WEF is seeking more participants.
APR, a textile supplier already signed on to phase two, offers an ideal example of how a supply chain could reap benefits in the marketplace from the platform.
The supplier makes rayon (also known as viscose), a very common textile in apparel supply chains and one with an increasingly complicated reputation among consumers. The pulp used to produce the textile either comes from wood or bamboo — the former more worrying for environmentally-concerned consumers than the latter since timber trees take years to regenerate and bamboo only a few months. The FTC also fined four retailers in 2015 for selling viscose products labeled as made from “bamboo,” since the manufacturing of viscose involves a chemical process that liquefies the pulp and extracts fiber like a synthetic fabric.
Since sourcing and processing for the material can vary greatly in terms of sustainability, viscose suppliers and the retailers selling finished products that contain it may seek to verify and advertise their sustainability bonafides. APR has started tracing its supply chain using blockchain on its own, but Ben Poon, APR’s business head, said in a statement that joining with other suppliers will bring more value to that work.
“The more data is shared, the more we can join the dots to harness efficiencies as a business as well as provide sustainability assurance to consumers,” said Poon.
