Das, Surajit
(2023)
The potential application of blockchain technology to guarantee claims on sustainability, ethics, provenance, and authenticity in the fragrance industry.
[Dissertation (University of Nottingham only)]
Abstract
Recently, digitalization of the supply chain is gaining huge attention. In this space, blockchain technology is being explored in the supply chain by different industries for its immutability, transparency and traceability functions. This research aims to investigate the usefulness of blockchain technology in the fragrance industry’s supply chain to make the supply chain activities traceable and transparent to its stakeholders. This research specifically focused on the ability of blockchain to support provenance, sustainability, ethical, and authenticity of the fragrances and fragrance raw materials (RMs). An extensive literature review has been performed on relevant claims in the fragrance industry, its supply chain complexities, current solutions on traceability, and needs on robust supply chain transparency and traceability. Additionally, detail literature review on blockchain technology and its utility in supply chain management has been performed.
This study has adopted mixed research method (quantitative and qualitative). It is wise to first find out whether provenance, sustainability, ethical sourcing/manufacturing, and authenticity are important in fragrance industry. Fragrances are used in different types of product, such as Perfume, Cosmetics, and Fast-Moving Consumer Goods (FMCG). Fragrance companies/houses supply fragrances to these industries and ultimately consumers use these products. Hence, an online consumer survey (quantitative) has been conducted to know the importance of provenance, sustainability, ethical sourcing/manufacturing, and authenticity claims of the products. The survey clearly shows that provenance, sustainability, ethical sourcing/manufacturing, and authenticity of the products and its RMs are very important to them. As fragrance is important part of these products, provenance, sustainability, ethical sourcing/manufacturing, and authenticity of the fragrance and fragrance RMs are also similarly important to them. These factors influence their purchase decision and brand loyalty. The survey also revealed that the majority of the consumers are not sure whether these claims are true or just marketing gimmick as they don’t have any way the check the authenticity of these claims. Interestingly, most of the respondents prefer a transparent traceability system through which they can confirm the authenticity of these claims. Unfortunately, majority of the consumers are unaware about blockchain enabled traceability and transparency. Nevertheless, it appears that most of the consumers will trust more on blockchain enabled traceability to authenticate the product claims if they are sure about immutability, transparency, and traceability of blockchain-based supply chain.
Based on consumer survey result, interviews (qualitative) with the subject matter experts from the fragrance industry and its customers have been executed to understand the usefulness of blockchain technology in the supply chain of fragrance. As per industry experts, transparency and traceability is becoming an absolute requirement in fragrance industry due to growing demand from its customers and consumers to prove authenticity of the claims. However, current supply chain systems are not transparent and activities are not traceable for its customers and consumers. Implementation of blockchain technology in its supply chain can help to solve these issues and improve trust among stakeholders.
This study recommends a consortium/hybrid type blockchain system in the fragrance industry’s supply chain, where its fragrance RM suppliers and customers should be part of the consortium in addition to the fragrance company itself. It will help to strengthen the trust among stakeholders (i.e., RM suppliers, fragrance company, customers, and consumers) by creating a transparent system where end-to-end supply chain activities (i.e., starting from the provenance of RMs to the products in consumers’ hand) should be easily traceable. It will also ensure consumer believability on the authenticity of provenance, sustainability, and ethical claims of the fragrances and/or fragrance RMs. However, bringing critical stakeholders (i.e., RM suppliers, fragrance company, and customers) under one umbrella system (i.e., consortium/hybrid type blockchain system) will be a great challenge as each of them use different supply chain systems. Furthermore, these stakeholders might be concerned about the compromise of their trade secrets and confidentiality. Hence, different levels of permission need to be assigned to different parties in the network to maintain critical confidentialities. This will ensure that each party have read, write or verification permission to the relevant transactions only to maintain confidentiality of the sensitive information.
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