Blockchain Revolutionizing The Steel Industry

Oftentimes, when one thinks of counterfeit products, they think of items such as knockoff handbags or Rolex watches. But building materi

Rosa Shores
December 9, 2021
Blockchain Revolutionizing The Steel Industry

Oftentimes, when one thinks of counterfeit products, they think of items such as knockoff handbags or Rolex watches.

But building materials, especially steel, has a counterfeit problem that experts estimate to be in the billions. While there is an abundance of solid data on counterfeiting in fashion/retail, there is little documented on counterfeit steel. What is known is that counterfeit products have caused significant impacts on overall costs and quality.

In 2011, theConstruction Industry Institute (CII)formed a task force to investigate the scope of counterfeiting in the construction industry. The task force found that the “threat of counterfeit products entering the supply chain on construction projects is undeniable and should not be underestimated.” The CII investigators found that even though many countries have signed agreements to protect intellectual property rights, counterfeit products are more available than ever in the market.

Surprisingly, most of the counterfeit items identified in North American supply chains came from vendors on the company's approved vendor list. Many U.S. companies are not actively updating their supplier lists, and not testing materials because they think they are dealing with a trusted source. By mixing bogus goods with legitimate ones, detecting counterfeits in shipments is much more difficult.

An approach to protect goods with certificates of authenticity is an excellent idea in theory, however, manipulation is possible by means of paper-based inspection documents or in the form of PDF documents, whereby counterfeit goods can be sold as branded goods. It is common practice to pass on original inspection documents when selling goods. However, since these are not adjusted for each transaction, the certificates can be duplicated, and more goods can be sold than the original quantity. PDF documents can easily be manipulated with suitable image processing software. This means that it is not possible for the buyer to trace or recognize whether the goods come from France as stated or whether the quality actually meets the requirements. The manufacturer itself has hardly any chance to learn of any manipulation of the inspection documents. For this reason, the need to digitalize documents is crucial to fight counterfeit goods.

This is where blockchain technology can be leveraged. Blockchain creates and assigns a unique digital identity to a physical product and traces its individual path through the entire supply chain. All steps of upstream production, including trading and processing, are registered, logged, and traced with a certificate. Contrary to the physical ones, these digital certificates can be found, analyzed, and retrieved instantly. Documentation can be attached to the product and easily shared between relevant parties, providing more trust and leaving zero room for counterfeits.

AtBlockSpaces, we see the challenges that the construction and steel industry are facing.The BlockSpaces platformprovides a solution for the industry to seamlessly collaborate with their lists of suppliers and use the technology to build trust and reduce fraud/counterfeit goods. Within any ecosystem or business process, there are layers of technology that require integration. Our workflow automation platform utilizes a library of pre-built integrations to connect everyday business applications with multiple networks to provide data visibility and efficiencies beyond individual, disparate systems and information silos.

As the amount of counterfeit construction materials such as steel continue to rise each year, an overhaul of the sector's processes is necessary. Implementing blockchain technology is a step in the right direction to combat the losses seen from counterfeit products making their way through the supply chain.

If you are in the metal/steel sector and are interested in being a part of the future of blockchain,BlockSpacesis now accepting reservations for our early accessPilot Program. 

Why join ourpilot program?

Clearly, we get a lot of value from the feedback we receive from pilot customers. But what are the big wins for you? 

  • Impact development:Give feedback on features and put your mark on the results.
  • Get a head start:Discover new features and upcoming versions before anyone else and win ample time to plan a successful start.
  • Safe roll-out:Your technical resources gain confidence to roll out the software to all users from thorough testing and issues fixed.
  • Free guidance:Get advice in utilizing the new features and receive free consultancy and software usage. 

Improved Connect:Benefit from a multitude of improvements resulting from feedback from ALL pilot customers in addition to your own.