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Leveraging Blockchain in Product Recall
Vikram Sharma Senior Technical Architect, Digital & Analytics | July 8, 2020
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Background

Enterprises put checks and controls to ensure the quality and standard of service. However, due to the involvement of manual steps and reliance on suppliers for parts and raw materials, it leaves them vulnerable to the production and release of faulty or substandard products. Large enterprises have tried to ensure that their suppliers and sub-suppliers also follow the strict rules, guidelines, standardized procedures, and quality control steps during manufacturing to minimize the risk of product recall.

Challenges in Product Recall

Challenges in Product Recall

Despite their best efforts, we have seen instances where enterprises had to recall their products for replacement or servicing to fix the issues.

Following are the major steps (and challenges) during recall:

  1. Identifying the faulty part(s),
  2. Identifying the product batch(es)/series,
  3. Identifying the supplier of that part,
  4. Providing a fix to the customer

Although the process starts with the identification of faulty part(s) and ends with fixing the issues, but the identification of the exact batch or batches affected by the defect and who supplied them is the challenge we will seek to address in this blog post.

Large enterprises generally rely on multiple suppliers for the same part(s). Thus, it is challenging to identify with certainty the exact supplier of that part. Mostly in the case of items which do not come with serial numbers or manufacturer labels, identification of supplier becomes tricky. Screws for a specific machine is a good example of this. Similar issues are encountered when the part only captures the product number and doesn’t capture the manufacturer or batch information.

Categories of Parts

To solve this problem, we divide parts into three categories:

  1. Large Parts/Assemblies:
    • These parts generally have the serial number/batch number assigned and can be used to easily identify the supplier.
  2. Small Parts with Serial/Batch Number
    • These parts can again easily identify the supplier.
  3. Small parts without Serial Number/Batch Number.
    • Identification of the supplier among suppliers of the same product is difficult and raises uncertainty.

Challenges in Product Recall

* Image by Free-Photos from Pixabay

Enterprises generally capture and record information of critical parts/assemblies which have a direct correlation with customer safety. However, recording information of other parts used in any product may prove to be a costly affair, as an increase in time taken to record may have a direct impact on the cost of manufacturing. This is avoided by enterprises and becomes a challenge later if the identification of the supplier is required.

Solution to our Problem: Time-based Correlation

This problem is solved by using ‘Time-based Correlation’. Each part without batch and supplier information, is issued by the store to the assembly lines in a ‘Lot’ and assigned a lot number. The store ensures that all the parts in a lot can be attributed to the exact supplier. Wherever possible, a lot must be of fixed quantity by count or weight.

When the process of assembly starts, the lot number of parts available at the assembly line are recorded and with each product that passes the assembly line, the lot number is recorded for the product.

This solution requires minimal change in the assembly process, thereby keeping the time costs at the minimum (if any) for the production while providing a variety of benefits.

Technology: Blockchain

Challenges in Product Recall

*Image by Tumisu from Pixabay

Blockchain has evidenced itself as a technology that can change the status quo and provide a fresher perspective toward problem-solving using digital technologies. The business landscape has witnessed success via blockchain technology not just in form of cryptocurrencies, but also in the supply chain among many other domains.

Blockchain can offer a fresher perspective of problem solving using digital technologies.

How can Blockchain Technology Help?

Here, blockchain technology can bring together the suppliers and the manufacturers on a single platform. Through blockchain, manufacturers can issue purchase orders, goods received notes, split goods in lots, and assign them to the products. Suppliers can also process purchase orders received, share logistics information, and process invoices. Since both share the same ledger, they can remain informed at each step without explicit information being sent out.

Coming back to our original problem, in case a defect is identified by the manufacturer, and the product needs to be recalled, the faulty product is identified and marked on the ledger by the manufacturer. The ledger helps the manufacturer identify affected batch(es) of products, identify the exact supplier, and thus plan the replacement of the part if needed and initiate recall. Since the supplier has a near real-time copy of the ledger, he also gets notified of the defect. Now, the supplier can initiate an investigation into the cause, take the necessary corrective action, and plan to provide replacement of the faulty part.

Is Anyone Doing It?

Many brands in the automotive industry are looking into a solution that can help them with product recall and the supplier identification process for supplied parts.

Conclusion

Blockchain can help solve this problem for enterprises, and even the smallest parts can be attributed to their suppliers even if it is a screw in a vehicle. The solution also ensures minimal process changes and keeps the impact on manufacturing cost to lowest.

The implementation is not an expense but an investment that can be extended into various dimensions after the fundamental problem is solved. Some of these are:

  • Having the distributors and dealers on the platform to easily identify the impacted customers and contact them
  • Tracking logistics of parts/parts coming to warehouses or finished product reaching dealers
  • Using data available on the ledger for forecasting and planning
  • Supplier could reach out to other manufacturers on the platform, to whom the goods were supplied from the same batch