IBM (NYSE: IBM) and KAYA&KATO, a German uniforms and work wear manufacturer, have joined forces to develop a blockchain network for the fashion industry. The initiative counts on the support of the German Federal Ministry for Economic Development (BMZ) and is designed to create transparency about the origin of garments. The network will provide open access to information regarding the fibre used or how the completion of the final product took place, giving consumers assurance that their clothes are sustainably produced. More and more fashion firms are adopting blockchain technology to improve their supply chains or to build trust in their product authenticity verification processes.
“Blockchain technology is a catalyst for collaboration and transparency across industries and within supply chains,” said Christian Schultze-Wolters, Director of Blockchain, IBM. “Blockchain technology today is being used to help increase visibility and agility in supply chains in industries including automotive manufacturing, mining, electronics production and even the cultivation and distribution of many types of food. By creating shared visibility, the technology helps foster trust among companies and their suppliers, businesses and especially their consumers. We want to set an example within the industry and offer other companies the opportunity to join us in advancing development and helping to create solutions for supply chain.”
Digitalisation of sustainability, an unexpected outcome of the global crisis
There is increasing demand from consumers to understand the environmental impact of the products they buy. According to a global study conducted this year by the IBM Institute for Business Value in association with the National Retail Federation, 77 percent of consumers surveyed say that sustainability is important to them, and 57 percent surveyed said they are willing to change their purchasing habits to help reduce negative impact to the environment.
Within the garment industry, these attitudes are more prevalent among and more important to younger demographics. A recent survey of European consumers by Morning Consult commissioned by IBM found that 75 percent of respondents said they are concerned about the level of waste in the fashion industry. Furthermore, 64 percent of respondents said they would be more likely to buy the garment if new technologies could prove sustainability claims.
Blockchain network to benefit sustainable and ethical producers and labels
“The advancement of sustainability and digitization is crucial to our forward-looking approach. This project combines both aspects in an excellent way by promoting supply chain transparency. For KAYA&KATO, there are multiple compelling reasons to initiate the development of a blockchain network and we look forward to implementation and eagerly await the first solutions in cooperation with IBM,” says Dr. Stefan Rennicke, co-founder and managing director of KAYA&KATO GmbH.
This new application of blockchain technology to document and trace the supply chain for textiles will allow suppliers of organic cotton and customers of KAYA&KATO alike to identify the origin and where the fabrics were processed as well as gain an understanding into each production and distribution step. The aim is to create transparency and to help develop secured protocol for the traceability of ecological materials. All the permissioned parties involved will be able to access the transaction data recorded in blocks in an unchangeable record on the chain. “The advancement of sustainability and digitization is crucial to our forward-looking approach. This project combines both aspects in an excellent way by promoting supply chain transparency. For KAYA&KATO, there are multiple compelling reasons to initiate the development of a blockchain network and we look forward to implementation and eagerly await the first solutions in cooperation with IBM,” says Dr. Stefan Rennicke, co-founder and managing director of KAYA&KATO GmbH.
Many within the fashion industry are working to help address changing consumer attitudes while creating ways to be more transparent about the environmental impact of the materials they use. Blockchain is well-suited to help garment manufacturers and their suppliers work together to create a permanent, immutable record of the origin of all materials used in production to build trust.