Like it or not, blockchain may come to your business

I have tended to ignore anything coming across my desk with the word “blockchain” in the subject line. Blockchain ledger technology was developed to support bitcoin cryptocurrency, and I am definitely not interested in being paid in bitcoins or spending them at Starbucks. Maybe it’s a generational thing, but I bet you have not invested much time thinking about blockchain, either.

It is time that changes.

Blockchain technology is finding uses beyond bitcoin, and manufacturing is a guaranteed target for companies and organizations pushing the technology, including plastics processors.

At its core, blockchain is a transparent and tamperproof digital ledger. It consists of a growing list of records (blocks) that are linked using cryptography. Each block contains a cryptographic connection to the previous block (chain), a time stamp and transaction data.

A blockchain for businesses is typically managed by a peer-to-peer network that sets a communications protocol and validates new blocks. Blockchains are considered secure by design and open to anyone in the network.

Consider the case of a new Ford automobile that is made up of raw materials that have been touched and manipulated by hundreds of companies. If a defect is discovered, through blockchain Ford could easily see the history of each raw material and step that was performed to create the part that failed.

That is why Ford launched several blockchain pilot programs last year. Walmart is also testing blockchain to monitor its own supply chain.

Sustainability and environmental issues also are a driver for the use of blockchain technology within the plastics industry. Some blockchain proponents are even using it to help clean up and prevent ocean pollution.

Three companies have set up a collaborative project, called Circularise Plastics, to make it easier for materials suppliers, processors and brand owners to choose traceable, sustainable and circular materials via blockchain technology. The group, consisting of Domo Chemicals, a German polyamides supplier; Covestro, a German resin supplier; and blockchain provider start-up Circularise, based in the Netherlands, announced their venture at K 2019 and exhibited at CES 2020 in Las Vegas. They are looking for additional partners.

A Norwegian startup called Empower is trying to use blockchain technology to document plastic waste brought to collection centers.

Dell is using blockchain to track the recycled plastics used in its laptops and packaging. The company has a healthy supply chain for recycled material, primarily in Asia, and is using blockchain to record the material at every step — from the collector to the aggregator to the recycler to the resin seller to the manufacturer — to prove the recycled content is authentic.

Dell is also using the technology to spot human trafficking. It can verify that the people who collect the waste plastic are getting paid for their labor.

S.C. Johnson & Son has partnered with a venture called Plastic Bank that is trying to divert plastic from the ocean and fight poverty at the same time. S.C. Johnson is buying plastic that Plastic Bank has purchased and recycled in developing countries. Blockchain payments provide proof to buyers like S.C. Johnson, Henkel, Aldi and DM, Germany’s largest drugstore chain, that the recycled resin was actually diverted from the ocean.

Plastics processors may have a difficult time accepting the transparency blockchain provides. Documentation previously provided only to a direct customer becomes visible to that customer’s customer. But there are advantages, particularly simplified record-keeping.

I suspect that machinery and auxiliary equipment manufacturers may also have to embrace blockchain if it becomes prevalent in manufacturing.  A complicated piece of processing equipment is subject to many of the same quality expectations as an automobile or airplane.

There are many blockchain providers and I have no idea if that number will grow or shrink.  Right now, IBM is among the leading platform providers. In 2017, it unveiled a cloud-based service to help customers create, deploy and manage their blockchain networks in the IBM cloud.

At a level below providers like IBM, there is a growing layer of companies to help create and operate blockchains.

IBM offers a free, downloadable book titled “Blockchain for Dummies,” now in its third edition. You can find it at www.ibm.com/blockchain/what-is-blockchain. Blockchain is a new technology you need to understand.

Ron Shinn, editor

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