Revamping the supply chain

Image source: FSG Centro universitário

Getting to know the person that grew the food I was eating, was never an issue at home, as everything was purchased from farmers markets. In bigger cities, people are always in a rush and therefore, the go-to-place for grocery shopping are the supermarkets. Meeting the person who planted the seeds of your tomatoes is close to impossible due to the amount of links in the supply chain.

Knowing from where and how your food comes into your plates, might mean nothing to some and might be very important to others. As I am part of the second category, I’ve done some research and discovered that vague or even false advertising is more common than I’ve expected it to be.

How organic is organic?

Let’s play a quick game: do you know where your food comes from? Are you 100% sure that the organic coffee you’re buying is actually organic? From the plantation to our favorite drink, coffee beans go through a lengthy supply chain: growing the beans, harvesting, hulling, drying, packing, bulking, blending and finally roasting. The journey is very long and involves many intermediaries that can tamper with the provenance and the quality of the product.

“The organic food market in the European Union (EU) is booming” as the latest Global Organic Trade report shows, but so is the false advertising of products as organic. The chain being so long, information about provenance might get lost or distorted on the way to our shelves; and that is why an alternative chain can help us make the whole industry more transparent. The need for a public ledger or a record of all transactions comes in more than handy and can make the customer experience much more transparent and trustworthy.

In the highly perishable food industry, there is a need to be able to identify immediately if something goes wrong along the chain. Countless epidemics spread due to the presence of a weak link that could not be easily identified along the way. This resulted in great profit loss, but most importantly, the endangerment of human lives. Walmart, the biggest American retail corporation, has faced this particular issue when they were not able to identify the cause of the E.coli outbreak fast enough. As the Wall Street Journal stated, five people died and more than 200 got sick. In order to prevent such things from happening again, Walmart is asking their food suppliers to implement Blockchain technology starting next year.

By using a QR code and a Decentralized App, consumers are just one scan away from knowing everything from the farmer who worked at the field, to any bump on the way to the shelf of the supermarket.

The Helix Protocol is well suited for all industries that are dependent on storing and accessing a large amount of data. Since it is a Directed Acyclic Graph, it performs better when more stakeholders are using the network.

Combating fake medicine with Helix Protocol

Another relevant example would be the pharmaceutical industry. According to GT Nexus Commerce Network the top 10 challenges of pharma supply chain are:

1. Lack of coordination
2. Inventory management
3. Absent demand information
4. Human resource dependency
5. Order management
6. Shortage avoidance
7. Expiration
8. Warehouse management
9. Temperature control
10. Shipment visibility

All of which can be resolved by linking every transaction that ever took place in an immutable ledger. By using Smart Tags, each product will have a chronological history recorded on the Helix Protocol, providing valuable information both for producers and consumers. The use of such tags will be a game changer for producers who will gain access to real-time information on where the product is and the exact time of its arrival, not to mention the humidity and the temperature the merchandise is transported in.

WHO report shows the urgency to address pharmaceutical supply chain problems, as the current industry is providing a getaway for falsified drugs to enter markets. The extent of the problem is of great significance: “Some 15 years ago, global sales of medicines rose above US$ 500 billion for the first time. Since then, sales have doubled again, to approximately US$ 1.1 trillion, with by far the largest growth occurring in middle-income markets. Unfortunately, this growth has opened the door not just to quality, safe and effective medicines, but also to medicines, vaccines and other products that do not meet quality standards and that are sometimes positively dangerous.” To better understand the phenomena and the importance of real-time information and control, you can see below a medicine’s journey:

Fig taken from WHO Global Surveillance and Monitoring System for Substandard and Falsified Medical Products_

Another important feature that Helix Protocol is providing is smart contracts. The smart contract is an agreement between parties involved in a transaction that holds each party responsible for their role. Coordination, trust, accuracy and speed can benefit if Smart Contracts are to be implemented.

Creating the Inventories of tomorrow

One of the radical changes that you can see as a business is in inventory management. The most time consuming and wasteful thing for a firm to do is to keep inventories. The space that is needed, counting each product and matching the scriptable units with the existing ones, are some of the biggest challenges business have to face each quarter. That, in addition to unforeseen human errors that occur on a regular basis, could become history if Smart Tags are going to be introduced. DLTs can completely change the way things are done at the moment. From automated warehouses, which were successfully implemented by Amazon and are saving up to 20% of operating costs, to actual know-your-customer data, that can be used to optimize the production based on past orders, reducing the costs of inventory even more.

It is said that data is the new oil, and distributed ledger technologies are a great tool to gather, store and interpret every single piece of information out there. By giving the customers the means to challenge the authenticity of products, that in many cases might actually save lives to helping companies save costs and streamline.

As I’ve explained above, DLTs and DAGs are going to improve the shopping experience of consumers and will ease the way for manufacturers and producers, for logistic companies instead, the implementation of such technologies will represent a big challenge and a huge investment. In order for all these new features not to be transformed into a higher price, Helix, as opposed to many others, is coming with a zero-cost protocol. This characteristic will make the implementation much smoother and cheaper.

As always there are two sides and nothing comes without disadvantages and the main one is the current state of this technology, which is quite new and needs testing and improvement in order to sustain such use cases. Another drawback is represented by the people’s perception of DLTs in general, having a false belief that they only represent cryptocurrencies.

As economics teaches us, where there is demand, there will be supply. Consumers are becoming more and more concerned about the provenance and authenticity of the products they buy, and companies need a more reliable and sustainable logistic system. That is why, Helix is committed to developing a protocol, which enables the supply chain to improve, making it much more accessible and transparent.

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An article by Ioana Lunescu - Social Media, Helix Cognitive Computing GmbH, originally posted on Medium