Though it is still early days, but blockchains will be in heavy use by early adopters in 2025, opines Mark Burstein, chief strategy officer, NGC Software. Burstein also discusses with Subir Ghosh how in the next stage, blockchains may be tracking the environmental impact - greenhouse gas emissions, from fibre origin to final delivery to the consumer.
Many people believe that blockchain will eventually make or break supply chains. Do you think it is an overstatement which will change the game altogether or do you think it is an understatement in the sense that probably there is more that blockchain can do?
Blockchains will govern the supply chains of the future; so, I feel that it's an understatement. The RFA (retail, footwear & apparel) industry has never been overly concerned about the source of the materials (and components used in those materials). As long as the finished goods were delivered on time, with the appropriate quality and price, most brands and retailers did not exert the necessary effort to dig more deeply into the various tiers within supply chain. The thinking has changed due to the Xinjiang cotton issue and the increased consumer awareness related to sustainability.
There has been a lot of hype about blockchain and people have known about it for a few years now. But then, beyond cryptocurrencies and beyond fintech as such, the revolution so far has not kind of happened. How do you react to that?
The revolution is happening right now. My company, NGC, has introduced a blockchain platform that tracks all supplier transactions from cotton origin to the finished garment in order for retailers to comply with the current US legislation regarding Xinjiang cotton use. The next stage for blockchain would be tracking the environmental impact, such as greenhouse gas emissions, from fibre origin to final delivery to the consumer.
Do you think these are still the early days for blockchain?
Yes, we are in the very early days of blockchain. No, it will not take decades. I anticipate that blockchains will be in heavy use by early adopters in 2025. By 2030, blockchain will be as pervasive as the iPhone.
Is lack of standards one of the challenges blockchain has to deal with? What are the important topics that NGC is trying to address?
I agree that there is no standard and that's a problem NGC is trying to solve. We are engineering our blockchain solution so that it is extensible and can become a plug-n-play platform for all types of uses. However, there is a lot of deliberation regarding the concept of a 'distributed ledger.' The majority of brands and retailers are discussing private blockchains as they are apprehensive of sharing their entire supply network with their competitors and the public. However, I think this is because the blockchain concept is so new. The other important topic that NGC is addressing is transparency. It seems as though a private blockchain and transparency are in conflict with one another.
How is NGC's traceability platform different from other blockchain platforms?
In recent months, supply chain traceability has become the primary concern for every fashion brand and retailer that sources products from China. Due to forced labour allegations in the Xinjiang Uyghur Autonomous Region of China, recent legislation by the US government seeks to prohibit the import of any merchandise that includes any inputs manufactured wholly, or in part, using forced labour. The traceability component of NGC's Cloud Digital Supply Chain platform uses a private blockchain to ensure that companies can track chain-of-custody throughout the supply chain by storing and managing all supporting documents related to every transaction between all supply chain trading partners at every level. This solution identifies the digital thread for every product and creates a compliance certificate that summarises each exchange of products and materials from fibre origin to destination.
Who would be NGC's ideal client?
NGC's ideal client is the brand/ retailer, aka the 'importer of record.' Based on the current US legislation in the Congress, the brands and retailers who will suffer the most are those whose shipments of product will become detained by CBP due to WROs (Withhold Release Orders). Since they have the most to lose, they have the highest motivation to implement a traceability solution like ours.
This article was first published in the December 2020 edition of the print magazine.
Published on: 29/01/2021
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
