Is blockchain the answer to supply chain visibility?
Using live data from three brands, Nike, PVH Corp. and Herman Kay, as well as two retailers, Kohl’s and Macy’s, the Auburn University RFID Lab has proven that a blockchain network was capable of sharing item-level data encoded in RFID tags.
In past research dating back to 2018, the RFID working group found improved supply chain visibility could solve “three chronic pain points”: claims/chargebacks, shrink/unaccounted inventory and counterfeiting/gray goods. These issues cost U.S. retail $181 billion in 2017.
According to the new white paper, “Chain Integration Project (CHIP),” previously existing networks for exchanging data were built for “antiquated internet technologies” and are unable to handle today’s massive volumes of serialized data that came with the arrival of RFID tags and QR codes. The study noted, “The item-level visibility supplied by these systems is constrained by the industry-wide ineptitude for sharing serialized data.”
Communication between systems is often the holdup. For instance, one stakeholder may use a different vocabulary, such as the term “carton” versus “case,” or a different methodology, such as the metrics they use for counting contents.
In the study that used a Hyperledger Fabric-based data exchange mechanism, item-level data streams were able to be traced from source to store, creating a history for each product that passed through the supply chain. In all, 222,974 products were recorded on the blockchain from 12 different supply chain nodes.
Such automation promises to eliminate the need for human audits. The study concluded, “While there are still many opportunities for improvement, each partner pair was able to record transactions containing serialized data in a common language and share that data with their appropriate trade partners.”
Allan Gulley, RFID Lab research fellow, told coindesk.com that a more robust network of service providers will likely be necessary to support blockchain’s potential for supply chains. “The system as it stands right now can process what we need it to, but in the long term we’re talking about billions of products flowing through the retail supply chain with these RFID tags,” he said.
Last year, New Balance, LVMH and Coca-Cola all began experimenting with blockchain to support traceability in the supply chain.
- New Research Confirms Blockchain’s Effectiveness for Improved Data Sharing in the Retail Industry – Yahoo Finance
- Auburn University study proves viability of blockchain as a common platform for supply chains – Auburn University RFID Lab
- New Research Confirms Blockchain’s Effectiveness for Improved Data Sharing in the Retail Industry – Auburn University RFID Lab/PRNewswire
- CHIP PROOF-OF-CONCEPT RESULTS – Auburn University RFID Lab
- Project Zipper – EPC/RFID Retail Supply Chain Data Exchange Study – Auburn University RFID Lab
- Nike, Macy’s Run Blockchain Trial With Auburn’s RFID Lab – Coindesk
DISCUSSION QUESTIONS: How confident are you that combining blockchain and RFID technologies will eventually enable retail trading partners to share granular, item-level data with one another? What hurdles does blockchain face as a practicable supply chain tool?