In recent years, many instances of weak spots in the supply chain have been exploited by self-serving actors given that firms have been largely unable to both efficiently monitor and supply for the digital revolutions’ accelerated demand for more consumer goods and services. From pharmaceuticals to the automotive industry, the supply chain has consistently succumb to working through unauthorized distribution channels and the resulting gray markets. As it stands currently, firms of all size and location see potential opportunity but not yet practical implementation of the task of monitoring all aspects of a process in a pool of many processes, as there currently exists too many cracks for revenue to leak through.

While the concern over these third-party unauthorized markets has certainly been lingering for some time, the recent push toward unveiling the severity of this threat through using enhanced data procurement has shown real cause for alarm in the unregulated landscape. Within the pharmaceutical industry, the World Health Organization (WHO) estimates that 10% of medicines in low- and middle-income countries are counterfeit, with Africa alone hosting more than 100,000 fatalities each year due to incorrect or counterfeit dosages. For the tech industry, the Anti-Gray Markets and Counterfeit Abatement Alliance (AGMA) affirms roughly $100 Billion of global IT industry revenues are lost each year due to counterfeiters. Furthermore, on the global scale, the Organization for Economic Cooperation and Development (OECD) found in their 2016 report that the value of imported fake goods worldwide stood at $461 Billion in 2013.

With the threat of both internal and external corruption looming, the opportunity for firms to lock down their distribution and communication channels come in the form of the distributed ledger technology. By establishing a web portal with a distributed ledger protocol underpinning, firms are able to verify the quantity of product available and who is responsible for handling it at each stage of the supply chain, as well as any other pertinent information. This paper trail is particularly useful in the event of product recalls or in ensuring the humane procurement of raw materials, both serving as a great benefit for consumers particularly in the food and manufacturing industries. Through the transparency and accountability that distributed ledgers provide, governments and firms alike will be able to better enforce trademark law across the unregulated abyss of international transactions and protect the sovereignty of legitimate manufacturers and distribution channels.

 

 

The supply chain and logistics industry consistently suffers from inefficiencies tied to internal miscommunication, outdated processes, and the elusive parallel markets, resulting in firms hemorrhaging hundreds of billions of dollars each year.

Supply Chain Bottlenecks

PROBLEM:

•  Potentiality for miscommunication regarding details and stall times.

•  Supply Chain inefficiencies vulnerable to both internal and external bad actors.

DISTRIBUTED LEDGER SOLUTION:

•  Automated real-time information regarding product status through DLT-secured IoT sensors.

• Product accounting and authentication verified through immutable ledger.

Quality & Compliance

PROBLEM:

•  Uncertain or disputed origin of product raw materials.

• Resource intensive top-down approach to upholding compliance standards when updated or changed.

DISTRIBUTED LEDGER SOLUTION:

•  Provenance tracking for procurement of product raw materials.

• Updates to compliance standards reflected in blockchain perpetuity.

 

Discontinued or Expired Products

PROBLEM:

•  Lapse of warranty or expiration date pre or mid-sale.

• Unethical release of near-expiration products to direct customers or parallel markets.

DISTRIBUTED LEDGER SOLUTION:

•  Secure product identity allows traceability throughout internal processing.

• Transparency in transfer of ownership from firm to customer.

 

Product Recalls

PROBLEM:

•  Reactive damage control.

•  Delay in ability to discover faulty product line.

•  Limited success in broadcasting to customer.

DISTRIBUTED LEDGER SOLUTION:

•  Digital product memory provides quicker discovery of faulty products or components.

•  Product tracking and tracing permits more precise customer outreach in product revocation.

 

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