Microservice Using Blockchain in Supply Chain for the Diamond Industry

By Data-Core Systems | December 29, 2022

The below is an Abstract that Data-Core presented at the Connecticut Microelectronics & Optoelectronics Consortium. We valued the collaboration between education and industry experts and look forward to many more such conversations.

Solution as a Microservice using Blockchain Technology in Supply Chain for the Diamond Industry

Abhijit Chakraborty
Varsha Bangera, Joydeep Banerjee

Problem Statement: The modern diamond industry first flourished in the 1800s in Kimberley, South Africa which then led to the rise of large-scale diamond mining and trading worldwide. Over the years, the diamond industry has evolved from hand labor to a more sophisticated process of manufacturing diamonds using modern machinery. The era has changed from when diamonds were only purchased from well-known merchants to now when there are more conscious communities who not only value diamonds with verified origins but are also curious about the entire process. Supply chain management is a chain of activities that involves the flow of inventory, finances, and information across all tiers in a supply chain until a product reaches the consumer.  However, the current supply chain solutions pertaining to the diamond industry lack the ability to provide complete information on the diamond’s provenance or purity. This lack of transparency has only given way to forgery, economic losses, human rights crimes and frangible trust and credibility.

Objective: This paper simulates a supply chain as a blockchain network and analyzes its performance to address the current problems of the supply chain management in the diamond industry. Results of this research offer a solution that is expected to have practical implications on the existing supply chain process and infuse more transparency and accountability into the system.

Methods: The method of research used is an integration of content analysis and systematic review which is a qualitative research approach. This research method has been used to identify the challenges faced in the supply chain in the diamond industry and other industries in general. Based on the findings, a more exploratory research approach was adopted as it helps to identify and provide an in-depth explanation about the success factors and implementations using blockchain technology and webservices that would address the challenges pertaining to the diamond industry or any other industry with similar challenges.

Approach: Diamonds are primarily identified by the 4Cs, (Cut, Carat, Clarity and Color). However, apart from this primary information about the diamond, the diamond retailers need a detailed information of a diamond stone from day 1 when it was mined to the current day and to ensure the authentication and ownership of the diamonds. To do so, they require more information on the diamonds like the source of the diamond i.e. mined or synthetic, the mining and extraction process and the labor practices etc.  

Blockchain Technology is our best bet to fix the existing problems within the diamond supply chain by improving its traceability and transparency. This technology creates a distributed ledger that stores all the data to authenticate the diamonds and the complete travel of the diamonds from the mining origin to the final certification of the diamonds, the carat, color etc. It also stores additional attributes of the diamonds like high definition images and videos of the diamonds at every step of the supply chain like the image of the diamonds at the mine, the cutting plan of the diamond, the 360-deg. view of the diamonds after cutting and polishing, the craftsperson’s information and the final certification. The blockchain distributed network can create a permission-less system where everyone will have view privileges, or a permissioned ledger where the permissions of accessibility can be controlled for each user in the network.

This solution can be offered as a microservice to be integrated into Web, Mobile or any third-party applications using API endpoints. The retailers can therefore use this solution as a feature on their customer interfaces to enable the end customers to have complete information of the diamond supply chain from the origin of the stone to the retailer store.

Conclusion: The scope of this research is a proposed solution as a microservice using the concepts of blockchain technology for diamond supply chain management. The solution can potentially address the transparency and traceability concerns of the diamond industry’s supply chain.  It shall also be helpful in curbing labor malpractices, identifying diamond forgery and thus adding credibility to the overall supply chain and associated sales practices.