In the past, a lack of transparency in a company’s supply chain could be seen as a competitive advantage. Businesses wanted to keep insight into their suppliers and manufacturers as opaque as possible. If no one knew where supplies were coming from, no one could build identical apparel. And this thinking extended to customers, out of sight meant out of mind when it came to worries about ethical sourcing and manufacturing in the fashion industry. Many apparel companies lack ethical supply chains, and a full 10% of global emissions are produced by the industry alone.
Blockchain solutions in the industry stem from its unique ability to create a physical-digital link between goods and their digital identities on a blockchain. Often, a cryptographic seal or serial number acts as the physical identifier, linking back to the individual product’s “digital twin.” This link offers opportunities for a more transparent supply chain. Every time a product changes hands, that change in custody is recorded on the blockchain. Counterfeit goods missing the physical-digital link are obvious, as are any attempts to divert goods. The chain of custody on blockchain provides a record of the last party to gain custody of the product, showing where the counterfeit product slipped in—or the authentic product was diverted out.
Greater transparency in supply chains will create new incentives for companies to change the way they do business and even how they view themselves as an organization. Many companies are now working on solutions to collect consumer data directly from the textiles themselves and register that data on the blockchain. But to a larger extent, blockchain is only the beginning. The industry may be entering a new era with vastly different forms of production and consumption.