A recent document received from the US Patent and Trademark Office shows that Amazon is entrusting blockchain with verifiable tracking of goods on its global supply chain. If there is one thing that is restraining the growth and transformation of the current supply chain, it is the lack of trust, and for Amazon, it is … Read more
A recent document received from the US Patent and Trademark Office shows that Amazon is entrusting blockchain with verifiable tracking of goods on its global supply chain.
If there is one thing that is restraining the growth and transformation of the current supply chain, it is the lack of trust, and for Amazon, it is bête noire. For decades, Amazon has been struggling to keep counterfeit and illegal products from entering its supply chain.
Trust as a long-standing issue
The Wall Street Journal reported last year, thousands of Amazon products have either been banned or labeled as unsafe and unregulated. An additional investigation by CNBC also revealed that the retail giant was responsible for the shipping of some expired goods like animal meat and baby formula, primarily putting consumer health at risk.
Because the supply chain is heavily loaded with third-party suppliers from different parts of the world, who often share limited information about their products, Amazon exercises insubstantial control over the items sold on its website.
And such is the magnitude of this problem that prominent brands like Birkenstock and Nike even chose to withdraw their products from the Amazon marketplace, citing trust issues.
Amazon’s US patent vouches for blockchain
Thus, in its efforts to bring back the lost trust and consumer loyalty, Amazon has turned to blockchain technology to help supply chain stakeholders to track their products. The US patent filing further states that the firm will provide full accessibility of the platform to its manufacturers, logistics companies, suppliers, distributors, and consumers and empower them with end-to-end tracking of items.
A rough diagram from the US patent application demonstrates how the system will ensure trust and transparency. When an item gets added into the catalog system, its information is recorded and stored in the ledger. Further validation will verify that the item received corresponds to the detail included in the catalog.
The certification rules may also be applied to make sure that the quality of the item is intact and that a thorough check has been conducted to move it further in the supply chain.
Blockchain in supply chain
Meanwhile, blockchain technology has found several meaningful purposes in the supply chain, and many industry giants have entrusted the technology with greater transparency and security.
For the longest time, IBM has been associated with this emerging technology to streamline supply chains in every aspect of the financial services and logistics industry.