Consumers are increasingly demanding that garments be produced ethically, under manufacturing processes that respect the planet and treat workers with dignity. Added to this global challenge is the problem of product counterfeiting, especially in luxury fashion. And everything is further complicated by the difficulty of maintaining transparency in a supply network distributed in different parts of the world. These challenges have led the textile and apparel sector to implement technological methods and tools to improve both traceability and transparency throughout the supply chain. For example, RFID tags that store critical product data. In addition, there is tracking technology and IoT devices that integrate with key management systems, such as ERP, WMS, TMS… But how secure is this technology? It is true that the databases of these traditional systems have security methods (access controls, role-based authorizations, data encryption, etc.). But, in reality, they are not exempt from data manipulation by those who do have access to the information. This problem of data authenticity and security is solved by blockchain technology. In this post we explain how blockchain works and explore how it can optimize 3 key aspects of the textile and fashion industry: managing complex structure, ensuring product authenticity and ensuring sustainability.
How does blockchain technology work?
First, let’s remember that blockchain is an advanced computer system that records and stores transaction data in an orderly, secure and immutable manner.
- This modern database is made up of a series of records, called blocks. Each new block contains three main components: data, a unique hash and the hash of the previous block; it is thus chained to the previous block and an unbreakable connection is guaranteed. This creates an encrypted block chain that grows continuously and maintains a chronological order.
Blockchain serves as the database that contains the one and only truth. It operates in a virtual space that consists of a huge network of interconnected servers, known as “nodes”. This facilitates the exchange of information and guarantees the unalterability of data. Why? This database is public and records transactions on several servers. Each participant, through its server, has access to the same information in real time. Therefore, in order to alter a block of information, all subsequent blocks would have to be modified and the advice of the entire network would be required, which would be an extremely costly and complex operation.
3 key areas of the textile sector driven by blockchain technology
Blockchain technology can be used in a variety of ways throughout the apparel supply chain. Below we explore three key areas where this technology makes a difference:
Managing a complex supply network The supply chain flow in the textile and apparel industry can involve the collaboration of many different actors: from the producers of raw materials, the companies involved in the various stages of manufacturing, storage and transportation, to the final distribution of the garment or accessory. Not having global visibility of all these operations can generate costs, errors, delays and, especially, can lead to unethical practices. What does blockchain do to solve industry complexity? For example:
- Automation of smart contracts. These contracts are self-executing programs within the virtual space of a blockchain. In addition to automating repetitive or routine tasks, they guarantee compliance with the terms of the contract, without intermediaries. For example, a smart contract can include all the rules and actions necessary to verify compliance with quality requirements, such as visual inspections, certifications, chemical analysis, mechanical testing, etc. As each of the steps are completed, data from each inspection, analysis or certification is automatically recorded on the blockchain. The contract confirms the conditions met and triggers the release of payment or transport of the goods.
- Synchronization of information. As the blockchain is a single shared network, each actor in the chain (manufacturers, suppliers, carriers, retailers, etc.) has access to the same version of data and records, with no errors or delays in communication, no discrepancy in information.
Guarantee product authenticity
As we have mentioned, one of the biggest challenges facing the textile and fashion industry is combating product counterfeiting. Counterfeiting represents billions of euros in losses every year, and can also affect consumer confidence and damage brand image. In this area, blockchain brings to this industry a maximum approach to transparency and traceability of the garment.
- Real-time data recording and traceability. Each garment movement and transaction generates a perpetual digital record of the origin, production process, packaging and distribution. This secure, immutable (cannot be altered) record is used to track the item throughout its life cycle. This facilitates the verification of genuine garments. Manufacturers, distributors and retailers can access the history of each product, such as where the natural fiber was grown, where and how the garment was processed, the size, color, etc. This allows quick identification of deviations or interruptions in supply and guarantees the authenticity of the product.
How does this blockchain system differ from traditional software-based tracking technologies? As we explained at the beginning, blockchain is a decentralized database that shares its information with multiple nodes (servers). Therefore, records of product processing movements are not managed by a single entity or company. In addition, each record (block) is encrypted and chained to the previous record.
- Creation of a fingerprint or digital clone for each garment. It is possible to associate each product with a unique digital identity that will be stored in a blockchain. This fingerprint is called a token. A token is first created in the supply chain, and then connected to the physical garment, using an RFID (radio frequency identification) or NFC tag. Throughout the life cycle of the item, the most relevant information is recorded on the tag to determine its origin and authenticity. This information can be verified by consumers.
For example, in the manufacturing process it is possible to embed an NFC chip in each shirt containing the unique identifier that links it to the blockchain. When the manufacturer markets the shirt and sells it to the retailer, the NFC chip is scanned and automatic registration of the change of ownership occurs within the blockchain. This registered step is crucial to ensure that the garment is authentic. When the product is finally purchased by the end consumer, the label remains active so that the customer can view the history of their shirt by scanning it, and they also receive a digital certificate attesting to its authenticity.
Ensuring product sustainability
On the other hand, blockchain also has the capacity to address the demanded sustainability in fashion, thanks to the fact that in its mechanism it can record critical information related to the ecological practices and social measures implemented. Exactly, it can help to:
- Traceability of sustainable materials.
- The registration of commodity certifications on their blockchains.
- Documentation of sustainable processes, such as eco-friendly dyeing or the use of eco-efficient machines.
- Recording and tracking compliance with labor standards. There are now IT platforms that facilitate the use of blockchain technology to ensure product traceability and transparency throughout the chain.
TECNIMUSA: Leading intralogistics automation solutions for the fashion industry
As an engineering company, we design and manufacture eco-efficient automation solutions for the internal logistics of the textile industry. Our systems and machinery make it possible to increase competitiveness, save costs and boost sustainability in operations. MANGO, PIKOLINOS and INDITEX trust us.
If you are looking to increase the potential of your company in an environmentally friendly way, contact us. In TECNIMUSA innovation and sustainability are in our DNA.
