How blockchains meld with ai is building trust in the retail value chain hollywood u database

Modern economy runs on 5 letters – TRUST. But traditionally, trust is ensured by intermediaries and central authorities – governments, trading platforms, stock exchanges etc. Remember, banks don’t lend their own money! They are just an intermediary between the depositors and those who need the money. So are insurance companies, stock and commodity exchanges. At their core, they are an aggregator of vast amounts of centralized data.

But blockchains bring in a previously unimagined source of trust without an intermediary. The trust comes from a decentralized database, without a central authority and distributed widely across millions of computers just like yours and mine.

Much ink has flown to paint a vision of how blockchains will revolutionize everything. If we were to believe all of it, very soon we will all be able to run like Usain Bolt, bat-like Virat Kohli and look like Tom Cruise.

But sobering reality points elsewhere.

Just 3 days later the Centre for Disease Control upgraded the alert to the highest level. Sales of spinach in all forms came to a grinding halt. In the days that followed, the number of people reporting sick was steadily going up. On 5th Oct, FBI took over the investigation.

After 276 people were taken ill, 141 hospitalizations, 31 people with failed kidneys and 3 unfortunate deaths, the outbreak was traced to a single brand of spinach produced in a single farm in a single state – California! But doubts had been cast on tonnes of spinach, hundreds of farmers and thousands of consumers across 28 states were affected resulting in losses worth hundreds of millions of dollars and creating panic amongst consumers.

Why couldn’t the infection be traced back to the point of origin any faster? Was it inevitable that the entire uninfected produce worth hundreds of millions also had to be destroyed? How would the suppliers even know where their produce was stocked, if they wanted to recall their products?

The pharmaceutical industry has regularly been in news for recalls. The problems with the pharmaceutical supply chain in India are particularly acute. The governing body, CDSCO has mandated that any Class I recall has to be effected within 24 to 72 hours, and for a Class II recall within 10 days. But the logistical challenges would make the task quite impossible for even the biggest and best-managed supply chain in the country.

Imagine you are the head of a category, say prescription medicines or a skin cream, in a retail business. You are sourcing the produce through numerous suppliers and have no clue about their origin other than what these suppliers want you to believe. How do you use blockchains to bring traceability to the source?

The journey begins with drilling down and mapping every supplier and their suppliers down to the last level including an enormous data collection exercise. Crazy as it sounds this is precisely what major retailers in the world have already done at a global scale, using conventional databases of the pre-blockchain era.

This database created a Distributed Ledger, becomes the industry standard data model for all parties in their transactions with each other. Everyone from the downstream manufacturer to the last retailer in the chain references the same ledger to read and record the transaction.

Both solutions are conceptually simple to understand, but enormously difficult to execute. There are several, unanswered questions – how do you make the entire industry agree to adopt the same ledger? Would everyone agree to the openness and transparency, which are precondition to making Distributed Ledgers work? There are large swathes of businesses in every sector which have no automation and no access to digital technologies. How are they going to be participating in the digital economy run by distributed ledgers?

While blockchain acts as a fabric of data and be attached to every product in the retail ecosystem, constantly accumulating data about the product. AI can use this data to help consumers, sellers, and other stakeholders in the retail ecosystem optimize their requirements. For consumers, this would be finding the right product for their need. For retailers, this would be finding the right supplier. For suppliers, this would be finding the right manufacturer.

For the ecosystem, Blockchain and AI are poised to deliver a transformative paradigm-shift that might altogether free the retail ecosystem from the tyranny of information asymmetry. These technologies might finally bring the modern retail economy the trust it has sought to operate from the dawn of human civilization.

There is indeed a huge interest in Blockchains as a technology. But the technology is still in search of viable applications to make itself real and relevant. Retail supply chains are promising and pragmatic areas for blockchains to become relevant.