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Blockchain and its relevance in the apparel industry

by Apparel Resources

14-January-2019  |  11 mins read

Blockchain
Image Courtesy: fashiontechie.com

Gone are the days when people would place an order and wait for it to be delivered, without knowing how and where the product is. Today, customers want transparency about where their products are and what they are made of. However, the complex network of global and fragmented supply chains of apparel industry sometimes leads to lack of transparency. Also, this network is often linked to unsustainable practices including both environmental and social dimensions. Blockchain technology, through its decentralised data storage solution, helps in providing transparency to its users while ensuring that the information is accurate. In this article, Team Apparel Resources discusses blockchain, its relevance in the apparel industry and the future prospects of this technology.

What is Blockchain…

Whenever we hear the word ‘blockchain’, we probably think of bitcoins. While the technology originally started with its use in virtual payment, other uses of this have rapidly been developed across different sectors. According to digital trend, it is a database that is validated by a wider community, rather than a central authority. In simple words, it is a decentralised structure that makes data available to everyone, while maintaining security and making data trustworthy. Consider this as a money transaction that has to be made. Each and every one in that particular group will be made aware of the transaction made but the technology secures it so that there are no manipulations made within that. Therefore, the technology is decentralised, immutable and verified. Everything in the network is verified as it is digitally signed. A digital signature in this case is a login password.

Blockchain relevance in apparel industry…

Until a few years ago, apparel industry relied only on automation, but lately, it has started discovering possibilities of Industry 4.0 concepts. Blockchain is one of them. Though it might be a new term for the industry, there are retailers which are using this technology to view each and every step of the production in a factory where they place orders. Blockchain assures the users that the information received is accurate since it’s protected by secure, decentralised data storage solutions.

The very first implementation of blockchain was done in collaboration between Danish fashion designer Martine Jarlgaard and blockchain technology provider, Provenance. They developed a pilot project to track the product from farm to finish. Each step in the production process was registered and tracked in the blockchain via the Provenance app and registered through all the consecutive steps in production: from spinning the yarn to knitting it into a garment. This process even creates digital history of the garment-making process. A unique digital token is assigned to each garment, which provides digital history of each step taken to create that product, with information like where the garment has been manufactured and what raw material has been used for its manufacturing, etc.

All these information can be traced through the app, which anyone interacting with the garment can have access to through QR code or NFC-enabled labels.

Benefits…

Using the blockchain technology, brands as well as manufacturers can deliver a number of benefits to the apparel industry. The most important of them being that it allows the data to be more interoperable. This makes the data informational to be shared and be available with manufacturers, suppliers and vendors. It maintains transparency which helps in reduced delays and disputes, preventing any blockage in the supply chain. All this is possible due to the real time tracking of the product, which makes the chances of misplacement rare.

Image Courtesy: medium.com

The other benefits that the apparel industry can get by using the technology are that it has the capability to make the production cycle more transparent. The use of this technology can help the manufacturers build greater trust in business along the fashion supply chain, enabling them to provide verified information about the material, processes and people behind the product. The technology helps in record keeping and provenance tracking as the product information can be traced through embedded sensors and RFID tags. It even provides detailed history about the product right from its origination to where it is at the present time.

The data is made available to a wider audience, which is accessible from multiple locations from around the world. The higher level of security that the technology has makes the data secured and trustworthy. Moreover, this technology can be made for a private environment too where the data will be accessible only to the limited persons, having access to it.

China is setting an example…

China is a frontrunner when it comes to grabbing opportunity to do something innovative using technology. Be it infrastructure development or a manufacturing unit, China is way ahead of other Asian countries on the technology front. Therefore, it goes without saying that the apparel retailers from China have started utilising the benefits of the blockchain technology. The recent example is the ‘Blockchain-based Clothing Authenticity Traceability System by Waltonchain (WTC). The project has been a joint collaboration between Waltonchain and Kaltendin, China’s leading high end clothing brand.

The idea applies RFID core technology to the smart management system for smart production, warehousing management and seamless shopping experience. The technology has helped the brand to handle its production from the start till the end. This is considered one of the most revolutionary applications of Big data and IoT in the apparel industry.

On the production side, the technology provides assistance starting from order receiving till the garment leaves for the warehouse. It starts with automatic data filling from production order, label printing, barcode printing, automatic print record storage, factory real time order receiving, conformation and amendments, automatically generating packaging reports. All the data is directly imported in blockchain and factory information is tracked in real time which improves the production efficiency.

In the warehouse, the technology starts with fast scanning of garment on arrival. The real time data storage of the information reduces errors and related costs associated with it. The recorded information updates the inventory in real time. The RFID system further helps the item to be quickly relocated for faster management and search.

Once the garment reaches the store, it can be automatically scanned for the number. In the store, the smart closet rack system uses a multimedia platform to display the clothing design concept ideas to simulate sales while reducing the number of shop assistant queries.

The smart fitting room automatically records the garment pick-up and try-on rate. It automatically generates the periodical statistical reports, conducts digital analysis of market demand, quickly fills orders and establishes a quick response high end clothing supply chain. The system automatically sends the merchandise report to the warehouse for automatic replenishment of the product, which further helps them to save the sales loss due to unavailability of the product.

The platform utilises blockchain to upload the apparel circulation information including the material, design, production and logistics. Customers can instantly check the garment material content, which satisfies the demand for sustainable production and gives them details of what is their product made of.

The use of such technology can therefore help the enterprises to improve development by endorsing quality products through blockchain. This is a one-stop solution catering to all the needs of the apparel industry starting from managing its manufacturing to delivering an excellent shopping experience to its customers. Besides, it helps the retailers in many ways by providing better transparency to solve retailing issues. In fact the most appropriate way of utilising this technology is transparency generation.

Today’s customers are more aware and advanced as they know about the unethical and environmentally harmful practices being conducted by their suppliers. So they want to be responsible customers who buy from responsible suppliers. They are cognizant about the fact that lack of transparency costs lives. It is impossible for companies to make sure that human rights are respected, working conditions are adequate and the environment is safeguarded without knowing where their products are made and that’s why transparency is essential.

Transparency alone is not enough to fix the industry’s problems; this is just the necessary first step towards a wider systemic change. Transparency throws further light on bigger issues hidden or subdued in the dark.