Last month (August 2018), "the federal government said it had seized enough counterfeit Gucci bags, Hermes belts and Tory Burch purses* to fill 22 shipping containers" according to the New York Times. The loss in retail value is *estimated to be nearly half a billion dollars.
"The goods seized were knockoffs of popular brands, including Gucci, Tory Burch, Hermes, Coach, Burberry, Michael Kors and Louis Vuitton. There was knockoff Chanel perfume, too, which concerned investigators since previous schemes had involved using animal urine instead of the perfume company’s formula" (New York Times).
These fake goods were not heading to street vendors. They were headed to leading retailers like Macy's.
Companies procure their inventory based on the credibility of their distributors, but all too often, distributors cheat. Vena Codex adds transparency to the supply chain, preventing distributors from purchasing one authentic item and selling multiple counterfeits, and by allowing procurers to track the authenticity of their purchases.
How It Works
Every time a transaction is made, the seller transfers an item to the buyer. If a seller tries to sell the same item more than once, there is a clear indication that there has been a fraudulent transaction and one or both of the sales involve counterfeits. Each component, item, and batch has a scannable ID.
Entities An entity can be a manufacturer, a supplier (still called a manufacturer), a distributor, a vendor or a customer. Each is defined as follows.
Manufacturer - Sources raw material or combines items from other manufacturers to create a new product.
Distributor - Purchases goods from the manufacturer or distributor and sells goods to a distributor or vendor. (usually in bulk) without alterations.
Vendor - Purchases goods from a manufacturer or distributor and sells to consumers. This sale is the last transaction for the product.
Consumer - Purchases goods from a vendor. Cannot resell goods but may return.
Integrating Anonymity The buyer can see previous transactions but cannot identify higher level suppliers and distributors. This is done to protect confidential suppliers and transactions. Buyers can, however, access an entity code for the supplier/distributor and enter the code into our system to authenticate that entity. A manufacturer producing shoes, for example, cannot sell t-shirts. Since the
Tracking Products are tracked using item codes. These can be identified in several ways including tying existing codes to Vena-specific codes.
DocuSign Integration While the blockchain can prevent fraudulent transactions, legal accountability is necessary. We do this by using DocuSign to tie smart contracts to each transaction. While the key associated with these contracts is publicly available on the blockchain, only Vena Codex can access document URLs and display documents to users.
Reducing Risk By increasing accountability and traceability in the network, fraudulent activity can quickly be traced back which is peace of mind for every entity in on the platform. Distributors caught for bad behavior will not affect the credibility and standing of other distributors.
Connected and Open Since the blockchain is public, transparency, openness, and trust are built into the platform. Vena Codex connects manufacturers, supplier, vendors, and consumers in a way that is secure and trackable.
We starter with exploring Ethereum Network for blockchain and create private ethereum network nodes. Afterwards, we began to create tehe backend of the application using python. For authentication of every transaction, we incorporated the DocuSign service. To make traceability and verification accessible to the masses, we allowed product IDs to be scanned in through QR code. The logical progression was planned to make the easiest, most intuitive method of verifying purchases and ensuring the quality of the products sold.
Creating the ethereum private nodes is difficult because its inherently a public network, but turning it into private network presented with solving a few accompanying problems. Planning the tree hierarchy of the software back end was confusing, and connecting the front end html pages to the back end of python and solidity. The process presented the most problems, and was going to be the most rewarding to overcome.
Commercializing Vena Codex
This platform is not a stand-alone product. Because of the complexity and specific requirements of supply chains, companies will continue to use their current ERP systems. Our job is to provide integrations with current ERP software to enable companies to use Vena Codex,