Blockchains as a solution for traceability and transparency

Abstract

Requirements from consumers and governments to produce more sustainable products have increased during recent years. Even if products are certified, one cannot make sure companies meet these requirements, since no chain of events can verify this exists. The transportation industry lacks certification and information on whether a product is transported in a sustainable way. The food industry, on the other hand, has integrated the use of certifications widely. However, the industry also requires traceability through the entire supply chain.

In this research, the authors study how traceability issues can be solved from the perspective of a fourth party logistics firm and how the transparency could be increased. Scholars argue that one way of solving traceability issues, and at the same time achieve transparency, could be to use the blockchain technology; a technology which stores data in chronological order, impossible to manipulate afterwards.

Therefore, the blockchain technology has been tested on a product’s flow, from loading at a supplier, through a cross-docking terminal and a central warehouse, to receiving at a client’s store. By integrating a blockchain to a smartphone application, enabling scanning of barcodes through the camera, and linking the information from the barcode to the blockchain, digital footprints between the parties could be created at each transaction. Additional information about the emission standards of the trucks were connected to the drivers, which was visualized by the blockchain together with the transported product.

To be able to implement the technology and successfully use it, three main challenges have to be overcome: cooperation between the involved parties, motivation for the user of the smartphone application, and a system integration between the different IT-systems.

The conclusions from the research are that the usage of blockchain technology is advantageous in order to achieve traceability. In addition, the technology enables all involved parties to check the product’s entire history as well as its current location. Further, the technology creates transparency for all participants. Due to the irreversible technique of storing data, the blockchain technology creates a unique level of credibility, which contribute to a more sustainable industry. The information on the blockchain enables companies to strengthen the relationships with current customers and to attract new ones.

Popular Abstract

In a real-world supply chain test, each transfer between holders created digital footprints, where the information of the transferred goods along with additional eco-information about the trucks were connected to a blockchain.

A technology that lately has been given much attention is the technology of blockchains. Scholars points out the potential of the technology to revolutionize the world. The reason to why scholars believe so, is because of the way the technology stores data. The data is stored in chronological order where advanced mathematical algorithms makes it impossible to change or alter the information stored on the blockchain. The information on the blockchains are distributed, which makes it possible for each actor participating on the blockchain to access the information. This enables reliable and validated information which is transparent, something that cannot be achieved in the same manner by existing technologies. In this research the authors investigate if the blockchain technology can be used in a supply chain for a four-party logistic (4PL) firm to achieve traceability and transparency.

Today, the 4PL company investigated in the study experience a lack of information. No information of how the transports are executed are communicated to the 4PL company. The other part of the missing information is that the 4 PL company do not get any status updates of an order’s movement, i.e. no notifications of where and when an order change holder are communicated to the 4PL company. To solve the issue, a connection between a blockchain and an Android smartphone application was developed and established. Through the camera of the smartphone, barcodes on pallets were scanned and the information from the barcodes were connected to the blockchain. By doing so, a digital footprint was created at each transaction, showing which order that was transferred and between which parties. To add transparency, additional information about the emission standards of the used trucks were connected to the driver and attached to the order. All information was stored chronologically on the blockchain.

The executed test highlights the potential of the blockchain technology; both traceability and transparency can be obtained. Simple and fast identification of the goods within the supply chain is enabled by the technology. Potential benefits that a 4PL company could achieve by using the set-up in the test are opportunities to attract new customer and stronger relationships with current ones, which is a result of the outstanding transparency the technology brings.

• author: Jeppsson, André and Olsson, Oskar
• supervisor: Henrik Sternberg
• organization: Packaging Logistics
• course: MTT920 20171
• year: 2017
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Blockchain, Traceability, Transparency
• language: English
• id: 8919957
• date added to LUP: 2017-06-30 10:09:01
• date last changed: 2017-06-30 10:09:01