Chain of Custody Solutions in Supply Chain Management

How Chain of Custody Strengthens the Supply Chain

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A Chain of Custody solution increases transparency, enhances efficiency, and it brings more accountability to the often opaque processes within the supply chain.

What is a Chain of Custody?

The concept of “chain-of-custody” originated in the legal context of handling evidence. In this context, chain-of-custody tracks who has touched and processed the evidence.

Chain of custody, in legal contexts, refers to the chronological documentation or paper trail that records the sequence of custody, control, transfer, analysis, and disposition of physical or electronic evidence. (“Chain-of-Custody,” Wikipedia)

This type of audit trail of handlers and transfers also serves to discourage careless handling and helps enforce compliance with proper procedures. It can also help identify cases where evidence has been mishandled.

But the concept of chain of custody is much more widely applicable.

Used with serialization and authentication, a chain-of-custody means knowing who has what, when and where. It is a chronological documentation of all parties that come in to contact with an item, and a history of all transactions.

It is useful in any context where sensitive information, or vulnerable goods, or valuable products are handled between many parties and the possibility of “contamination” exists and would have serious consequences. Examples are the movement of pharmaceutical drugs, the handling of blood, food products, aircraft and automotive parts, and precious minerals.

How a Chain of Custody Solution Benefits Companies

Chain of Custody in Supply Chain Management
Unless a Chain of Custody solution supports real world scenarios, it offers very limited business value. A chain of custody solution should support the complexities inherent in global supply chains, including: serial tracking, lot tracking, hybrid tracking, lot splitting, tracking through consolidation and de-consolidation, tracking through blending and discrete mixing, hierarchical IoT operations, and partial chains-of-custody.

In any one of these cases, pharmaceuticals, food, etc., knowing exactly where your products are and who is in control, as well as having an audit trail, is invaluable. It enables better management of the supply chain in general. It enhances managers ability to make better decisions and manage the supply chain more efficiently and effectively. They can identify potential issues early and respond to fix them much earlier.

Having a Chain of Custody solution is invaluable. It simultaneously makes the supply chain more transparent and trading partners more accountable. Click To Tweet

A Chain of Custody solution has other benefits too.

Firstly, it brings an unprecedented level of transparency to the supply chain, which helps discourage theft and improper handling and encourages compliance with proper procedures.

Secondly, when there is a serious problem that affects customers it can often help in pinpointing the source of the problem and diagnosing the root cause.

Thirdly, should a recall be necessary, you can use highly targeted recalls to minimize the frustration of customers and execute more efficiently, pulling back affected product quickly.

If you understand the origin and history of your product throughout its journey, you are in a much better position to identify and fix any problems quickly and efficiently. Let’s take an example.

If a flaw is identified in an automotive part, say a steering mechanism due to improper tightening at a factory, knowing the origin of every steering mechanism in every car would mean only those cars with equipment from that particular factory or production line need be recalled. Instead of panicking every driver of that model, undertaking the huge task of recalling the entire product line, and checking each for the defect, the company can simply notify the relatively small number of drivers affected and fix the issue quickly.

A robust chain of custody of affected goods enables faster, much smaller recalls that limit disruption to the customer, save money and preserve brand reputation.

Blockchain for Chain of Custody

Blockchain is ideally suited to providing a chain-of-custody. As a tamper-proof record, once chain-of-custody transactions are written to the record, they are immutable. That chain-of-custody is also available to all parties on the blockchain, so in order to check it, parties need only read the blockchain.

One Network’s ONE Blockchain is built using a blockchain adapter framework. ONE Blockchain supports Ethereum and Hyperledger Fabric via adapters.

The solution provides serialization and tracking across complex supply chains that involve multiple parties and hand-offs. It uses the power of Blockchain to help protect against threats such as theft, counterfeiting, spoilage, and more.

Read more about it here: Chain-of-Custody Solution for Complex Supply Chains

Imperial Logistics is using this technology to enhance and secure their supply chain. Watch the video here: Imperial Logistics’ Blockchain-Enabled Control Tower


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Nigel Duckworth