The Supply Chain and Blockchain. II: BlockTac Solutions

We ended the previous article by suggesting that the difficulties in addressing the supply chain management problem would be simplified if we were to consider who are the subjects affected by this problem and, among them, which would the main one.

It should not be difficult to agree that the primary purpose, and therefore the main problem to solve, is to ensure the authenticity of the products that the consumer acquires. It is his pocket what is at stakes and sometimes, when it comes to drugs or food products, his life.

And producers or manufacturers care about the authenticity of the product they deliver with their brand, and that reach the consumer in full through trusted channels, that will not change or divert their products to illegal markets.

Finally, honest distributors want their proper behavior to be disclosed and to differentiate themselves from those who make them illegal competition through tricky behavior.

And what about efficiency, process improvement and cost reduction …? They are certainly important, but not to the point of going ahead of the primary goal. However, given the difficulty of finding an answer to the problem of authenticity, a more complex path it’s been addressed: to trace the movement of the product through the distribution chain, using sensors, engineering and information systems.

The truth is that this approach does not solve the main problem, since counterfeit products are introduced into the chain, nor is the movement of the original product completely followed, due to the lack of cooperation of some elements of the channel and making useless the investments made.

At BlockTac, and as a result of the interaction with our customers, we have developed the single-use digital seals registered with Blockchain technology for all types of products, but being particularly suited to the needs of food and consumer products.

The main characteristic of our digital seals is to act as proof of authenticity. Each unit, of the product in question, holds a unique identifier, a covered and hidden QR code in a double layer label. When the buyer discovers the QR and reads it with a smart phone, it links to the manufacturer’s website. It is there where the confirmation of the authenticity of the product occurs, when the verification button is activated. And this very same action serves to break the seal, recording also the time and date where the verification has taken place.

A prominent property of the seals is that it helps “ends fraud” of products to which they are applied. If someone intends to make false copies of the product and incorporate duplicates of that identifier, each and every one of the copies would automatically be classified as fakes. A buyer can immediately denounce a fake copy by sending an e-mail, alerting the manufacturer and highlighting the seller of the product. This dramatically reduces the economic incentive to carry out fraud.

Another feature of these digital seals is their functionality as a direct marketing tool. The verification page of the producer or manufacturer may include additional and diverse commercial information about a product. This can consist of data of the company or other products, satisfaction surveys, links for direct purchases or even a registration process so the buyer to register as a preferred customer. The content of all this complementary information can be updated at any time to respond to new product campaigns, regardless of when the product was distributed through the channel or reached the point of sale.

Another feature that our digital seals incorporate is the “nuclear button”. This is a functionality of use designed for extreme circumstances. For items of products stolen or diverted from the official distribution channel, or situations of conflicts with customers who refuse to pay, the manufacturer can activate the “nuclear button”. By blocking the authentication process and modifying the information presented in relation to the affected products, the manufacturer can impair the authenticity of the product.

Another notable feature of our blockchain registered digital seals is their simplicity of use. We have found it essential to focus on seals that serve as proof of authenticity of the purchased product, and that every consumer can confirm the product’s origin immediately, using only a mobile phone. No specific apps are required. Only access the camera (in the case of iPhones) or have a QR code reader (for devices with Android system). Making it so simple will serve the buyer to protect the authenticity of a product purchased.

Another feature of our digital seals is its singleness. In comparison with other technological solutions, their implementation does not need costly investments nor does it require the incorporation of complex electronic devices. Neither ask the full and fair participation of all the elements of the distribution channel to carry out its functionalities as authenticators of the products or traceability informants.

Finally, our technological solution stands out for its economic efficiency. The launching of this technological solution is carried out, in all cases, in less than two weeks. The implementation costs are so low that they do not have a significant impact on the price of the product. And considered from the point of view of marketing and advertising, the seals become the smallest and most efficient investment.

These digital seals can be combined with our digital certificates registered in Blockchain to track the product through the different partners in the supply chain. The activation of the certificates associated to the product items confirms their progress through the supply chain. When, at any step, such activation does not occur, due to lack of cooperation or fraudulent behavior, it will be possible to identify where the chain was broken and all the products of the shipment will be declared as counterfeit.

Will our solution make fraud disappear completely and in all industries…? Maybe not. There will always be careless or confused consumers who can be deceived, but without any doubt, we are contributing to a striking reduction in fraud and counterfeit, making it riskier to participate in these criminal operations.