IBM is working with a consortium of gold and diamond companies in the jewelry supply chain to track engagement rings from the mine to the retail shelf via blockchain technology.
The TrustChain Initiative will use the cloud-based IBM Blockchain Platform and include Asahi Refining (precious metals refiner), Helzberg Diamonds (U.S. jewelry retailer), LeachGarner (precious metals supplier), The Richline Group (global jewelry manufacturer) and UL (independent, third party verification).
Big Blue has been applying blockchain technology in various supply chain scenarios including shipping, food and banking. Jewelry is an interesting use case since it has valuable metals and diamonds and consumers want to verify the product as well as whether it was ethically and sourced in a way friendly to the environment.
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For the jewelry industry, verification is becoming a larger issue. According to Nielsen data from 2015, Nielsen found that 66 percent of global consumers are willing to pay more for sustainable brands. TrustChain is a way to show the jewelry purchased was manufactured in an ethic and sustainable way.
Jason Kelley, general manager of blockchain services at IBM, said in an interview that the TrustChain Initiative touched multiple functions of the participating enterprises. "This is an organizational and business challenge. IT is 10 percent and 90 percent is pulling it together across the industry," said Kelley.
Here's how TrustChain works:
- Diamonds and precious metals get a digital product and process verification.
- TrustChain uses distributed ledger technology based on IBM Blockchain and the Hyperledger Project to create a shared record of all transactions that took place.
- The metals and diamonds are verified each step of the manufacturing process until it becomes piece of jewelry.
- UL provides third party oversight.
- Consumers will get assurances of authenticity.
The consortium players used their own systems and data. After all, each company had the data and compliance, control and quality processes already. But Kelley noted many of the processes were paper based. Blockchain enabled a digital trail and transparency across the business processes. The blockchain network allowed for better tracking of what is mined, refined and then manufactured. "As it goes through the steps, there's a visible handshake between each company on the network," said Kelley.
What remains to be seen is whether consumers will truly pay any premium to TrustChain jewelry. In any case, the blockchain effort is a nice experiment and should provide best practices for future implementations.
TrustChain jewelry will be available to consumers by the end of 2018.