Blockchain and the supply chain

Calvin Ayre at the Ayre Group describes three ways in which blockchain is reshaping the retail supply chain

 

In 2025, retailers can no longer get away with unproven sustainability claims or push their product supply chain under the rug. Ethical and reliable sourcing is now a key decision-driver for consumers, who won’t hesitate to abandon previously loved products should issues with human rights, CO2 emissions, or counterfeit products come to light.

 

Access to granular data is fast-becoming a ‘must-have’ rather than a ‘nice-to-have’ for retailers looking to adhere to guidance such as the EU’s CSRD (Corporate Sustainability Reporting Directive).

 

Advanced enterprise blockchain solutions have emerged as a unique solution to these challenges, capable of creating transparent and immutable records of a product’s journey at every stage, from warehouse to distributor to shop shelf. Full data transparency holds the key to rebuilding trust between retailers and consumers and allows brands to be more accountable about areas for improvement across their value chain.

 

Reflecting these trends, we’ll explore three ways in which blockchain is set to reshape retail supply chains, restore consumer confidence, and drive product safety in 2025.

 

You can’t control what you can’t see

Blockchain technology, at its core, is akin to a digital version of the traditional office logbook, but with a twist: every transaction and modification is shared and synchronised across a network, while ensuring unparalleled security and transparency. This is a gamechanger for a more sustainable supply chain, because detailed product tracking is easily achieved – and at scale.

 

Some blockchain technologies also facilitate integration with IoT devices to monitor and verify supply-chain data in real-time. Access to centralised data is invaluable for retailers that are facing ESG audits, freeing them from the inaccuracies and time inefficiencies associated with paper trails.

 

Procurement operations are often complex and siloed, with supply chain woes now costing the UK economy over £12 billion a year in lost revenue due to inefficiencies. Many of these issues stem from the inability to verify data quickly and accurately across multiple touchpoints.

 

Achieving visibility is a challenge across supply networks with multiple tiers; and if this weren’t time-consuming enough, many retailers remain reliant on manual paperwork to complete their audits. Blockchain is encouraging a more holistic supply chain by connecting distributors and partners on the same ledger, tracing right back to the raw materials on a production line with unprecedented accuracy.

 

Such visibility makes it hyper-easy for retailers to identify areas across the supply chain where CO2 emissions could be reduced (for example, selecting a different supplier). It also provides retailers with the information they need to remain accountable and answerable to their customers, who may have questions about sourcing.

 

Identifying counterfeit products

Counterfeit products that imitate luxury brands have been commonplace for decades, from fake sunglasses to handbags to mock-ups of expensive shoes.  In the clothing industry, the most significant consequence of a counterfeit product is an unhappy customer who is unlikely to make a repeat purchase from the same brand again in future.

 

However, the consequences are far greater when you consider the counterfeit medicine market. One study found that more than 15,000 falsified medicine packs were found in the UK’s authorised medicines supply chain over a period of two years.

 

Blockchain technologies offer a more robust process for product verification, by creating immutable records of every transaction or change in the supply chain. During a product’s journey from the warehouse to the pharmacist, each record of a change is time-stamped and linked to previous entries. When every product has a traceable history, counterfeit products are easily identified at source.

 

Not only does this identification process save manufacturers, distributors, and pharmacists valuable time, it importantly helps to keep customers safe, and safeguard retailers’ reputation as a result. Consumers can directly assess whether a product is safe to consume when it is tagged with a QR code, barcode, or RFID tag that is recorded on the blockchain.

 

Scanning these identifiers provides shoppers with an easily comprehensible view of the product’s (or medicine’s) journey through the supply chain. Any attempt to alter or counterfeit the product would become immediately evident, as adjustments to a blockchain require consensus among its participants.

 

Forecasting supply and demand

A recent report found that between 15 to 45 billion garments which are produced never make it into the hands of customers. Blockchain technologies can help to avoid issues such as deadstock by offering accurate supply and demand tracking, as well as forecasting.

 

Connecting retailers, suppliers, and sellers across the blockchain increases dialogue when it comes to inventory and sales data, so popular items are restocked at speed and the production of less popular items is adjusted accordingly. Retailers that integrate blockchain technology with IoT sensors and Point of Sale (POS) systems can create a live feedback loop, to factor in unusual spikes in demand (for example, the sale of more umbrellas than usual on a rainy day).

 

This is especially useful for supermarkets, where perishable goods need to be tracked from moment to moment to avoid waste or overstock of new foodstuffs. IoT integrations also make it possible to monitor storage conditions such as temperature and humidity, so conditions that result in food spoilage are tracked on the blockchain.

 

Into the next decade, retailers that start to integrate blockchain into their operations will achieve a significant advantage. These brands will be able to gain a competitive edge when it comes to product quality, assurance and safety, key differentiators as supply chains become increasingly complex and disparate.

 

Blockchain offers immutability and therefore rewards customers with the transparency they demand, equipping them with critical information to make informed buying decisions.

 

Retailers can rest assured when their sustainability claims are verifiable on one unified platform, with opportunities for emissions reduction and streamlining of intermediaries clearly identified across the value chain.

 

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Calvin Ayre is the Founder of the Ayre Group

 

Main image courtesy of iStockPhoto.com and Vadim Shechkov