Blockchain not a golden egg that everyone's been waiting for
Gus Bartholomew, co-founder of SupplyCompass, explains to Subir Ghosh why blockchain may not be a golden egg that everyone's been waiting for in the fashion industry and solve all the supply chain related challenges.
There has been a lot of hype over blockchain, but beyond cryptocurrencies, the revolution has not happened as yet. How do you react to that (especially from the textiles/apparel point of view)?
It's certainly exciting, and we've been keeping a keen eye on it at SupplyCompass, but the revolution hasn't happened yet. Blockchain presents a lot of opportunities for enhancing supply chain traceability, however, in its current form, we do not see it as the heroic solution to solve all supply chain challenges.
The industry that blockchain is most used in right now is finance-a sector which is already extremely digital. When we look at the fashion industry, there's quite a way to go to get supply chains to a similar point. In other words, there is a lot of information that needs acquiring and digitising first-particularly a transfer from manual to digital information-in order for it to be traced on the blockchain.
I don't think blockchain is the golden egg that everyone's been waiting for in the fashion industry. It's true that blockchain has the potential to drive improvements in traceability and transparency. A decentralised ledger of openly auditable information certainly speaks to this, but we expect it will have to be used alongside other things-like digitisation of information-to be a solution that has real impact. Ultimately at SupplyCompass, we're excited to see how the application of blockchain in garment supply chains evolves over time. We will continueto explore its use with our suppliers and brands.
However, we feel it's still early days. Further specialised permutations for specific use cases still need to be developed in order to find the solution which can be mass adopted by that niche. This is much like we have seen in the cryptocurrency space with hundreds of altcoins and blockchains being developed, all vying to be the 'chosen solution.'
How is blockchain usage in garment supply chains different from that in cryptocurrencies/fintech?
It needs to be specific to the use case, and supply chains have their own unique challenges. Cryptocurrencies' main issues revolve around the number of transactions that can occur per minute, which impact on its ability to scale. Transaction volumes will be far less of an issue with garment supply chains, but there will be many other sector specific challenges.
Is blockchain a solution for supply chain transparency?
The concept of an openly auditable ledger to drive visibility and traceability in the supply chain is brilliant and one we fully support. Any process that advocates easy sharing of information between all parties and facilitates new levels of visibility will be useful to the industry. Whether that is a supply network blockchain solution or something which builds on that concept-we will have to wait and see. (PC)
Published on: 20/01/2021
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