i Beating the Counterfeiters
The Organization for Economic Cooperation and Development (OECD)estimatesthatcounterfeit
and pirated imports account for nearly a half
trillion dollars a year in the global economy.
In the automotive industry alone, it has been
estimated that counterfeiting costs $12 billion dollars in lost sales annually, with a potential impact on up to 200,000 jobs2.
Counterfeited products rarely meet the
quality standards of the manufacturer, or related regulations and testing. There is no validation of country of origin of either materials
or place of manufacture. And they don’t meet
our expectations of performance or useful life.
This can have a dramatic impact on costs,
innovation, and even safety for the manufacturing sector. For example, a recent epidemic of drug overdoses has been attributed
to counterfeit Hydrocodone, Percocet, and
Xanax pills. These were found to all include
Fentanyl, a potent and dangerous drug more
than 50 times more potent than Morphine 3.
The tamper evident distributed ledger as-
sociated with blockchain provides an oppor-
tunity to solve these counterfeiting problems
– ensuring quality, reducing costs,
improving efficiencies, increasing
visibility, and improving safety.
Using blockchain technology,
every transaction throughout the
supply chain is recorded in a block
that is transparent and secure.
As new transactions occur, new
blocks are added to the chain with
all necessary data or documentation attached. This creates a permanent record for the product’s
entire lifecycle and provides complete transparency across every
step of the supply chain process.
This may include the source of raw materials, country of manufacture, all inspections,
condition of any equipment used, certification levels of those doing the manufacturing
or inspection, transit methods and duration,
environmental conditions such as temperature and humidity, or other factors such as
vibration during transit; everything that is
deemed important to assure compliance.
With the increasing use of connected sensor and IoT technologies throughout the
supply chain, updates to the blockchain will
enable even greater transparency in the future, providing buyers with complete confidence they are getting exactly what they ordered and that it is in perfect condition on
i Smart Contracts
Supply chain contracts can be com- plex. Change of ownership, pro-for- mas, bills of lading, payment terms,
quality standards, and letters of credit all
create contract complexities. As the documents are often written, they can be long and
cumbersome, entangled with legalese, and
difficult to execute and change.
Smart contracts using blockchain tech-
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still some real
in where, and
made and de-
Feature/ Will Blockchain for Supply Chain Change Everything? 6/;
2 Ford website: http://