Nike to Use Blockchain for Collecting Supply Chain Data

Blockchain could help big brands like Nike to collect supply chain data. CHIP has determined that the blockchain is a functional solution to the problems of exchanging serialized data within the supply chain.

09 March, 2020 | AtoZ Markets – The chain integration pilot project (CHIP) of the RFID Lab in Alabama has published a proof-of-concept whitepaper. It seeks to demonstrate the efficiency savings that blockchain technology can achieve in the contemporary supply chain of big brands like Nike.

The Blockchain pilot collected live data from Nike, PVH Corp. and Herman Kay, and major US retailers Kohl’s and Macy’s. CHIP was launched in 2018 and is the first supply chain project to integrate information from RFID tags onto a blockchain network.

Blockchain for Gathering Supply Chain Data

CHIP saw these retailers and others operating Hyperledger Fabric nodes on a slice of their gigantic supply chains. The study also found that the blockchain was a promising way to share serialized data after tracking tens of thousands of products. It includes Nike Kids’ Air Force 1 shoes while traveling between distribution centers.

Many retailers already monitor product movements internally using radio frequency identification (RFID) tags installed in each unit. Allan Gulley, a researcher at RFID Lab Gulley, said that every box of Nike shoes has an RFID tag. It helps the giant athletic track of its sprawling stock. However, retailer labels store data differently, and data interoperability is weak or even nonexistent.

CHIP determined that the blockchain is a functional solution to the problems of exchanging serialized data within the supply chain. The report also concludes that participating companies were able to “record transactions containing serialized data in common language and share this data with their appropriate business partners”.

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Error and Inefficiency in Currency Supply Systems

The document identifies a huge amount of errors and inefficiencies in the money supply systems. However, eliminating counterfeiting and narrowing the supply chain could unlock valuable business opportunities of 181 dollars.

In the final design, each pair of retailers had a different “channel” where the pair could do their proof of concept. Nike’s vertically integrated supply chain was entirely internal. But the closest retailers and brands benefited from the support of technology providers and others.

The validation of the principle finally made it possible to match thousands of products between its different nodes. Nike registered 72,575 coder items at the distribution center; PVH and Kohl’s recorded 3,766. Macy’s, which had the most complex supply chain in the trial, matched 62 products in the three cases.

The project saw data for 223,036 goods uploaded into a distributed ledger. Stores uploaded only 1% of the data entries, 87% of the data came from distribution centers. Moreover, the remaining 12% came from an encoding point.

The RFID Lab will now move into a ” consultancy ” phase. It is trying to understand the value that DLT and RFID data sharing systems can offer businesses, by their size. However, it can make millions of dollars in efficiency with only a few minor changes to their business practices.

Gulley also predicted that the long-term sustainability of the supply chain would depend on having a more reliable network of service providers to support its growth.

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