Blockchain Enabled Lateral Transshipment System for the Redistribution of Unsold Textile Products in a Circular Economy

Abstract

With the rise of carbon footprint awareness and the circular economy, the need to improve supply chain traceability and visibility has increased. Traditionally, companies have used database-driven platforms to improve traceability, reuse, and reduce waste. In practice, lateral transshipment among stakeholders also aims to improve reuse and reduce waste by redistributing unsold products. Although the optimization issues are well-studied in this field, there are many challenges in sharing data about ingredients, processes, delivery stages, and the lifecycle of a product. Manufacturers, retailers, and consumers have only limited access to this information. Blockchain technology can help to manage the complexities of managing a circular supply chain, especially in the context of lateral transshipment. This study presents a framework for blockchain and smart contract-enabled lateral transshipment among fast fashion retailers. There are three main components of the framework: inventory management system by the organizer, introducing retailers’ excess inventory and orders into the inventory sharing pool, delivery with execution of smart contracts. The proposed framework not only contributes to the visibility and traceability of the system but also increases responsiveness, flexibility and efficiency.