The Purple Tornado, a West Hollywood, Calif.-based foresight and strategic intelligence consultancy, announced a report on digital identifiers in the supply chain.
Commissioned by the Department of Homeland Security (DHS), Washington, D.C., the report explores the current state of the supply chain, the role of digital identifiers within the ecosystem as well as how physical products are identified and how their data is shared. In its conclusion, The Purple Tornado calls for the expansion of research into digital identity technologies, including persistent identifiers, the development of data structure standards and harmonized global regulations.
The supply chain and current trends
More and more companies are using Internet of Things (IoT) sensors, data sharing models and blockchain technologies to solve proof-of-origin and identify counterfeit products, but these have largely been conceptual or proof-of-concept.
“Future privacy and integrity of supply chains, including supplier and customers data, must be secured,” says Heather Vescent, CEO of The Purple Tornado. “Digital identity and blockchain technology offers promising solutions to be able to securely share data that was previously unavailable. This liberates provenance data collected in the supply chain, making it securely available to end customers who increasingly choose to purchase sustainably produced products, while at the same time maintains supplier privacy.”
Systemic problems in the supply chain
The report highlights Top 4 areas of concern for the state of the global supply chain:
Numerous jurisdictions. The lack of harmonization of local, national and global rules increases complexity and compliance costs, and leads to slow adoption of digital standards.
Industry collaboration. Supply chain collaboration is not about getting one industry to work together, but getting all the industries, from mining to apparel to farming to pharmaceuticals, to work together and use the same set of standards.
Technology interoperability. Without standards, it is difficult to interoperate and harmonize systems, as vendors are not transparent about how their data is collected or stored, and all companies must deal with some sort of legacy technology systems.
Economic problems. Supply chain problems occur when the market system incentivizes profit above all and does not include all costs, including market externalities, in their profit equation. Irresponsible resource consumption and a lack of accountability continue to wreak havoc on areas of the supply chain.
Solving for the future
In order to address supply chain problems, companies must work together to upgrade systems to ones that function and thrive in a digital world. This includes the expansion of research into digital identity technologies, including persistent identifiers, the development of data structure standards and harmonized global regulations. The report states the private sector can leverage these innovations to develop competing products, while government systems can use the same innovations for secure vetting of trade passing through our borders.
“If we’re going to secure and authenticate the oceans of data that circulate through our global markets, we need to reinvent our classification systems,” says Vescent. “We have to fundamentally shift our understanding of how data is generated, identified, stored and retrieved. And to do that, we need a new taxonomy that meshes with the latest in blockchain digital identification and encryption.”