Supplier Diversity

Blockchain for Impactful Supply Chain Storytelling

Socially aware consumers want to know the beginning-to-end story of product production and disposal. Blockchain will enable companies to share product provenance, the process and impacts on people, economies, and the environment.
— By Sharon Ross

Provenance: The beginning of something’s existence. Ask business professionals what the very first step was in the process of producing a final product, and they might respond with "RFP" or “purchase order” or something along those lines.

The answer often ignores where the materials or components came from, who extracted materials from the earth or assembled them in factories, and how they arrived to their final destination. Were people paid a fair wage? Did farmers get their fair share of revenues for their agricultural products? Can the company honestly claim and prove a product is organic? Was the most environmentally sound logistics system employed?

Every product has a history, and consumers care about the details. Organizations need to have the ability to tell the product’s story details, and blockchain is likely the enabling technology. By partnering with non-governmental organizations (NGOs), businesses can develop transparent supply chains that promote global economic equality and use the information to attract and keep customers who make informed purchase decisions.

The Proof is in the Technology
Blockchain technology is moving toward becoming a disruptor of industries, supply chains and the consumer decision-making process. Business decisions based on CSR or Corporate Social Responsibility are supposed to have a positive social impact. But, how does a company or its stakeholders know it is making the desired impact if it does not know the product’s story from beginning to end?

For example, a company implements a reduce, reuse and recycle policy, but the materials were originally produced by child labour in a foreign country. A food company manufactures organic products, but the farmers only get a fraction of the money due to them. Fashions are made with cotton fabric, but they are manufactured by women working in unsafe conditions for long hours, seven days a week.

Every product has a story, and blockchain technology can make it possible to record and tell the story details. Forward-thinking companies sincere about CSR, and realizing the competitive opportunities, are partnering with NGOs to leverage blockchain as a means of demonstrating social impact.

This strategy goes beyond using blockchain as a means of tracking goods in supply chains, or when combined with the IoT, for tracking consumer product uses. The business-NGO partnerships are using blockchain to improve people’s lives as well as attract consumers who choose products based on a company’s commitment to social responsibility.

BanQu1 is a U.S.-based for-profit company that offers blockchain-as-a-service software that helps the “unbanked” by connecting them to the global supply chains in which they participate. The unbanked are people living in extreme poverty who do not have an economic identity, making them vulnerable to abuse and unable to improve their lives. They do not have a credit history, bank accounts or other forms of identity that people in developed economies take for granted.

The software uses blockchain to connect global brands to supplying farms and manufacturers and to provide a platform where “last mile” people can maintain a profile for tracking transactions and relationships in order to create a vetted economic identify. Companies, governments, and NGOs can use the platform to verify customers served, ensure aid reaches intended destinations, and target marginalized communities of people.

First Mile to Last Mile
It is exciting to see technology put to use in a way that includes all people in the economy. This approach realizes the full power of technology to include people in the global economy while also enabling businesses and NGOs to achieve their organizational goals. is another company using blockchain technology, but it is focused on gathering product information from the “first mile” that begins the product’s journey to the marketplace and eventually its final destination. The company enables shoppers to discover verified product information and supply chain stories, businesses to strengthen supply chain transparency and allocate resources where they will have the most impact, and organizations and sustainability experts to gather product supply chain data.

In one project, Provenance used blockchain to verify that 55 farmers were paid a living wage while tracking coconuts from South East Asia to Europe. Provenance worked with the NGO Fairfood to track ethics claims on 1,000 coconuts by tracking payment one way and product transportation the other way, registering the harvest, and verifying the chain of custody in the supply chain.

Blockchain is a decentralized database where recorded data is unalterable. Wherever it is applied, it offers transparency, authenticity, security and new ways of tracking products.

As a tool for CSR, it is also pointing to a future in which companies will have increased accountability for its CSR claims. Instead of just claiming products are organic, made by people who are paid a living wage, have low environmental impact, and so on, they will have a demonstrable product story. On the flip side, blockchain will lead to companies admitting failures from which everyone can learn.

Blockchain technology is also an exciting concept because globalized supply chains are so complex, and tracking is difficult as the supply chain becomes more global.

Shopping a Store
Business leaders who understand the potential of blockchain have a vision in which customers can walk into a store or research a product online and find a product story. The story offers a materials list, environmental footprint, ethical sourcing, carbon costs, and other social and environmental impacts. Consumers can compare product stories and choose the product that meets their expectations. The possibilities are unlimited.

Blockchain is a decentralized database where recorded data is unalterable. Wherever it is applied, it offers transparency, authenticity, security and new ways of tracking products.
For environmental sustainability alone, blockchain could track things like use of clean power or sustainable land use, habitat protection, fishing sustainability, water efficiency, and clean fuel use.

Finnish retail cooperative S-Group used IBM blockchain technology to enhance the customer experience. The organization can trace perch freshwater fish or a fillet of pike to its home waters by using a QR code on the package of fish or by accessing a tracking website.

One of the biggest challenges blockchain faces is its implementation. Unfortunately, it already has to overcome its reputation as being only “cybercurrency.” The underlying blockchain technology is an exciting opportunity to make real progress in CSR impacts on a global basis.

Blockchain is still in its early stages of utilization, but make no mistake about it: It is here to stay.