Omnichain CEO Pratik Soni shares how blockchain can help brands and retailers reduce overproduction and run greener supply chains.
During last August’s G7 summit in Biarritz, 32 companies banded together to sign the Fashion Pact, a first-of-its-kind commitment to solving the apparel and retail industry’s sustainability problem.
It’s a big problem to solve, as the fashion world currently produces around 150 billion garments per year. Over 30 percent of these items often go unsold, amounting to 12.8 million tons that wind up in landfills. Some are even sent to incinerators, where the burning of products releases carbon dioxide and other greenhouse gases into the atmosphere.
What can be done to lessen the environmental impact of the fashion industry? One way is by better balancing supply and demand to limit the amount of excess production. That may seem difficult given today’s disparate, fragmented supply chains. But that’s where blockchain comes in.
Blockchain’s role in supply chain sustainability
Blockchain provides a distributed ledger of a product’s entire lifecycle—from sourcing and production, to transport and the retail level. The data is decentralized and available to everyone across the supply chain in real time.
Companies then gain transparency, allowing people responsible for production planning, channel allocation, demand forecasting, and replenishment upstream to have visibility downstream into what consumers are buying at any moment.
They can thereby:
- Better plan production numbers and manufacture the precise amount to satisfy demand
- Intelligently send products to the regions where they're in high demand
- Minimize the amount of overproduction and unsold stock
Less overproduction means less overconsumption
Reducing excess production also reduces the amount of resources consumed during manufacturing..
- Less water usage as required in the production process
- Less chemical contaminants that can pollute nearby water supplies
- Less agricultural impact, e.g. soil degradation due to excessive cotton production or overgrazing by goats and sheep raised for cashmere and wool.
Green is the new black
- 68 percent of respondents noted sustainability as an important factor when making purchase decisions
- 47 percent said they would pay more for an environmentally friendly product.
A version of this blog post originally appeared on Total Retail.