Jaguar Land Rover, with the help of academics at the University of Nottingham, has successfully trialled the use of secure blockchain technology to enable full traceability within its automotive leather supply chain.
In a world-first, Jaguar Land Rover partnered with supply chain traceability provider Circulor, leading UK leather manufacturer Bridge of Weir Leather Company, and the University of Nottingham, to track and securely record the progress of the raw material in its journey across the supply chain.
Supply chain experts at Nottingham University Business School, Dr Bart MacCarthy, Professor of Operations Management, and Wafaa Ahmed, a PhD scholarship student, worked on mapping and analysing the entire leather supply chain network.
With their expertise in supply chain mapping, the Business School researchers had done previous work on identifying potential supply chains where blockchain-based traceability could be beneficial. In this project, they investigated the potential to extend and scale solutions to both ends of the supply chain: the downstream manufacture of car seats, and upstream to globally sourced leather supply.
Visibility and transparency of supply chains are themes that have come strongly to the fore in the pandemic. Being able to trace a product back to its origin is a prerequisite for supply chain visibility, sustainability, and risk reduction.
Professor MacCarthy continued: "Unlike the use of blockchain for currencies or purely digital products, supply chain applications require capturing a digital record of a physical product as it moves through value-adding processing stages with the form of the material changing as it progresses. Thus, the challenge is to capture physical flow reliably and encrypt relevant information on a blockchain digital record. Organisations have begun to use blockchain platforms to capture this digital record, as Circulor has."
Supply chains are currently managed and traced with Enterprise Resource Planning Systems and Manufacturing Execution Systems. However, the digital record may be dispersed globally across multiple organisations with limited access or visibility. Such records are not tamper-proof and may not be permanent. Blockchain, as a distributed ledger technology, has the potential to provide an immutable, traceable, and time-stamped digital record of the materials flows across the supply chain.
Wafaa Ahmed, of Nottingham University Business School, said: "Blockchain applications in the supply chain are capturing great interest among academics and practitioners. Many organisations are experimenting with the technology to tackle pressing supply chain challenges such as lack of visibility and traceability. Blockchain can help organisations ensure the sustainability of their supply chain and the authenticity of their products."
Despite its great potential, it is important to critically assess the challenges for an effective blockchain deployment within different supply network configurations. This project has brought in diverse expertise to better understand and develop a strategic roadmap for blockchain adoption in the leather supply chain.
Funded by Innovate UK, a 'digital twin' of the raw material was created, allowing its progress to be tracked through the leather supply chain, physically and digitally. A combination of GPS data, biometrics and QR codes digitally verify the movement of leather at every step of the process using blockchain technology.
Defining the verification process has created a repeatable blueprint for tracing a single piece of leather at every stage. It can be used across Jaguar Land Rover's global supply chain and by other industries using leather, including fashion and footwear.
As well as tracking compliance, the digital process enabled Jaguar Land Rover to assess the carbon footprint of its leather supply network, working with UK-based Bridge of Weir Leather Company to trace its lowest carbon leather from farm to finished article – all part of Jaguar Land Rover's commitment to reducing the environmental and ethical impact of its products across their lifecycle
The project is part of Jaguar Land Rover's Reimagine strategy: a sustainability-rich combination of modern luxury, unique customer experiences, and positive societal impact. Reimagine aims to achieve net zero carbon emissions across its supply chain, products and operations by 2039. Jaguar Land Rover will work with industry experts to improve sustainability, reduce emissions and collaborate on next-generation technology, data and software development leadership.
Dave Owen, Jaguar Land Rover Executive Director of Supply Chain, said: "We are currently restructuring our supply chain as part of Reimagine, with a focus on transparency and sustainability. The outcome from this world-first trial will allow us to further improve the sustainability of the leather supply chain around the globe, ensuring the complete traceability of raw materials from origin to vehicle.
"This is one step in our journey to net zero carbon emissions across our supply chain, products and operations by 2039, enabled by leading edge digital capabilities."
Through InMotion, its venture capital and mobility services arm, Jaguar Land Rover previously announced an investment in Circulor, allowing the company to source premium materials with greater transparency as to the provenance, welfare, and compliance of suppliers throughout its networks.
The technology could be deployed to trace other commodities. Circulor is already using blockchain to improve the traceability of minerals used for electric vehicle batteries. Blockchain technology gives customers greater confidence that the sustainable supply chain is authentic, and all materials have been sustainably sourced.
Dr Warren Bowden, Innovation and Sustainability Director of Scottish Leather Group, said "In partnership with Jaguar Land Rover and the University of Nottingham, we believe there is a clear opportunity to implement blockchain technology to enhance the existing, world-leading standards of traceability and transparency that exist within UK agriculture and its Cattle Tracing Scheme.
"At Bridge of Weir, we see the potential to create carbon-positive leather – if we source from local farms where the livestock is grass fed, where there is no deforestation, and we couple this responsible approach to sourcing with ongoing innovation to create zero carbon and zero waste manufacturing processes. The blockchain technology developed in this trial will enable each stage in the process, and the entire leather supply chain, to be accurately tracked and measured."
