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Paving the Way to Technology-Driven Supply Chain Transparency: Blockchain Technology

Updated: Nov 22, 2021

Supply chains have become increasingly global and complex. Throughout the manufacturing process, products often pass through many countries, various organizations, and countless hands before they are purchased by the consumer.

This complexity, combined with the lack of transparency, makes it very difficult, if not impossible, for consumers to see where their products come from and under what conditions they are produced.

Technologies like blockchain can reverse this and offer new ways to maintain supply chain transparency.

Blockchain technology emerged as part of a movement connected with cryptocurrencies and the Internet of Things and provided good-to-own features such as traceability, authenticity, and security to industries that want to use this technology.

In the retail industry, Blockchain provides users with information about the time and place of detailing, the origin of the raw materials, the quality of the materials involved in the production processes, information about the people or companies working on it, etc. Provides the opportunity to monitor details.

Using the blockchain as a means of tracking and identification throughout the entire process provides the opportunity to control and monitor textile products from the first steps of their production or import to their acquisition by the end consumer.

This technology can also be used by the apparel industry in general and more specifically for apparel to track suppliers and customers along the entire logistics chain.

The apparel industry that produces, distributes, and “uses” clothes flow in an almost entirely linear fashion. Because of the large number of clothes, an increasing amount of waste is produced in fabric production. Usually, it is used only for a short time, after which the clothes are discarded and the materials are lost.

What's more, apparel companies are often unable to balance their sales earnings with environmentally sound improvements. Cotton production accounts for about 30% of all textile fiber consumption.

Large amounts of water, pesticides, and pollutants are required for the growth of fibers. In reality, an average of 23 kilograms of greenhouse gases is produced from the creation of one kilogram of fabric.

The supply chain in the textile and clothing industries is complex and fragmented and includes a large number of actors dealing with raw materials from a wide variety of sources and processes.

There is no standard way for garments that are produced in one country in a factory far from the store, spun in a different country, dyed and embroidered in the third, and transformed into garments. The challenge in this industry is not only how to guarantee the final product, but also the intermediate products.

The fashion industry is characterized by factors such as high volatility, short life cycle, low predictability, and high-speed purchasing.

In this context, blockchain technology has emerged as a new paradigm in the globally interconnected world.

There is an increasing need for traceability for both foreign suppliers, and domestic manufacturers are increasingly using blockchains to provide transparency, traceability, authenticity, and security to their supply chains, and therefore blockchains are an ideal solution to the problems of Industry 4.0. is a candidate.

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