Sapthagiri College of Engineering

Technical Seminar

Presentation on

Tracing Manufacturing Processes using Blockchain

based Token Compositions
by
HARSH RAJ(1SG15CS028)

Under the Guidance of

Dr. Ananda Babu J
Associate Professor
Department of Computer Science and Engineering
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 OUTLINE
• Abstract
• Introduction
• Applications
• Technical details (survey of different techniques
existing, Algorithms/Protocol/Design or
Architecture or Block Diagram or any other)
• Results
• Conclusion
• References
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 Abstract
• Growing consumer awareness as well as manufacturers’ internal quality requirements lead to
novel demands on supply chain traceability.

• Existing centralized solutions suffer from isolated data storage and lacking trust when
multiple parties are involved.

• However, they currently do not capture the transformation of goods in manufacturing

processes.

• Therefore, the relation between ingredients and product is lost, limiting the ability to trace a
product’s provenance.

• We propose a blockchain based supply chain traceability system using smart contracts.

• In such contracts, manufacturers define the composition of products in the form of recipes.

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 Introduction
• Providing traceability of goods from resource to retailer has become increasingly important
in the past decade. Consumers have a larger interest in consuming goods that comply with
certain ecological and ethical standards.

• To cope with these requirements, supply chain management systems should ideally be
operated by multiple business partners to trace a product’s origin and its transformation
process.

• However, traditional supply chain management systems are operated isolated from other
participants and are not capable of providing comprehensible provenance information.

• Resulting shortcomings include insufficient trust between parties, isolated data storage and
unsatisfactory standardization in communication and data formats.
.

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 Applications
• Blockchain based decentralized supply chain management system
based on smart contracts.

• Additional functionality like certifying goods, transferring,

splitting and combining tokens which facilitates cross-business
traceability.

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 Literature Survey
Blockchain ready manufacturing supply chain using distributed ledger [1]
S. A. Abeyratne and P. Monfared , Published 2016

Current blockchain-based solutions for supply chain traceability promote

tracking goods over multiple tiers by utilizing markers such as RFID and
QR codes.

Sustainable evaluation and verification in supply chains[2]

J. Gualandris, R. D. Klassen , Published 2015

The approaches mentioned are limited to non-modifiable goods and do not

consider the production processes.

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 Literature Survey (contd.)
Blockchain in Logistics and Supply Chain: Trick or Treat? [3]
Niels Hackius , Moritz Petersen, Published 2017

Traditional supply chain management systems are operated isolated from other
participants and are not capable of providing comprehensible provenance
information.

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 Technical Details
1. BlockChain

2. Tokens

3. Smart Contracts

4. Ethereum Virtual Machine(EVM)

5. Projecting the production process onto digital tokens using smart

contracts

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 BlockChain

• BlockChain is a distributed network means there

is no Central Server or System which keeps the
data of Blockchain.
• If a node has to be added at the end of a
blockchain then it has to do the following steps:
1. A cryptographic puzzle must be solved.
2. The solution or something called as Proof of
Work is shared among all the computers on the
network.
3. The network verifies the Proof of Work.
Fig 1: Block

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 BlockChain(contd.)

• A block has 3 parts:

1. Data tells about which type of data is to be stored.

2. A Hash which is a function that converts an inputs and letters

into an encrypted function.

3. A Previous hash is one that contains the hash of previous hash.

◦ The value of the previous hash of a block should be equal to the

value of a hash of previous block.

• If a intruder tries to change the value of previous hash of a

block then the previous hash does not match with the hash of
the previous block. So in this the attacker has to change the
hash and previous hash of all the blocks which isn’t possible.
Fig 2: Tampering in BlockChain

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 Tokens

• A token is typically of two types:

1. Utility tokens

2. Security tokens

• Utility tokens are essentially cryptocurrencies that are used for a specific
purpose, like buying a particular good or service.

• For example, if you want to store information online, the most common way
today is to become a customer of a hosting service like Google Drive,
Dropbox or Amazon Web Services.

• A idea that was given by Filecoin Network is users will store their data, in
encrypted form, on the spare hard drive space of other regular people. This Fig 3: Tokens
needs a different form of tracking of how much space a person uses, and a
new way to pay all the people whose hard drives host the data.

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 Smart Contracts

•Smart contracts can be described as “bundles of coded logic or procedures which

sit beside the entries in the ledger.”
•Smart contracts allow the performance of credible transactions without third
parties.
•If the preconditions of the contract are satisfied, the agreed upon business
operations will automatically commence and do not require additional human
interaction..
•Transaction costs reduction and increased transparency are two key elements
achieved through increased digital efficiency by cutting out the middle man.

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 Ethereum Virtual Machine (EVM)

• Ethereum is a programmable blockchain. Rather than give users a

set of pre-defined operations Ethereum allows users to create their
own operations of any complexity they wish.

• Like any blockchain, Ethereum also includes a peer-to-peer

network protocol. The Ethereum blockchain database is maintained
and updated by many nodes connected to the network.

• Each and every node of the network runs the EVM and executes
the same instructions. For this reason, Ethereum is sometimes
described evocatively as a “world computer”.

• Decentralized consensus gives Ethereum extreme levels of fault

tolerance, ensures zero downtime, and makes data stored on the
blockchain forever unchangeable and censorship-resistant.

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 Projecting the production process onto digital tokens
using smart contracts

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 Projecting the production process onto digital tokens
using smart contracts(contd.)

1. Resource suppliers create goods without any input. When a forester cuts trees,
several inputs, such as the labor or gasoline for machines, are required. However,
they never become physical part of the resulting product.

2. Producers in turn do require input goods for producing outputs. To represent this
process on the blockchain, the processing industry entity first defines all the
goods that are required to create a certain product.

3. Logistics and Retail firms acquire tokens, but do not alter a good itself.

4. Consumers ultimately receive and consume products. This process results in the
representing token batch to be deleted, meaning it can no longer be used as part of
the supply chain.

5. Certifiers issue certificates of equality for multiple goods. They are responsible for
guaranteeing quality, following certain product standards or labour safety
requirements.
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 Results
• Increase in cost reduction in supply chain.
• Reduction in cycle times.
• Reduction in involvement of third party verifiers.
• Increase in efficiency at every aspect.
• Increase in transparency.

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 Conclusion
• The proposed blockchain-based supply chain
management system enables tracing and tracking
goods including their transformation in the
production process using smart contracts.

• Defining compositions for creating products and

enforcing them using smart contract enables the
documentation of consumed resources in the
production process.

• Through this mechanism, products are not only

traceable from production to retail but starting from
resource exploitation.

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 References
[1] S. A. Abeyratne and R. P. Monfared, “Blockchain ready manufacturing supply
chain using distributed ledger,” International Journal of Research in Engineering and
Technology, vol. 05, September 2016.
[2] J. Gualandris, R. D. Klassen, S. Vachon, and M. Kalchschmidt, “Sustainable
evaluation and verification in supply chains: Aligning and leveraging accountability
to stakeholders,” Journal of Operations Management, vol. 38, pp. 1 – 13, 2015.
[3] N. Hackius and M. Petersen, “Blockchain in Logistics and Supply Chain: Trick or
Treat?” in Proceedings of the Hamburg International Conference of Logistics (HICL),
October 2017, pp. 3–18.
[4] F. Glaser, “Pervasive Decentralization of Digital Infrastructures: A Framework for
Blockchain enabled System and Use Case Analysis,” in Proceedings of the 50th Hawaii
International Conference on System Sciences, 2017.

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 THANK YOU

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