In its purest form, repackaging takes previously used products or their previously used parts, reconstituting them. You then resell them – usually at a lower price. Reconditioning is common for products such as medical devices, wood, computers, machines, vehicles, toner cartridges and more.
Blockchain Technology can eventually revolutionize the entire repackaging supply chain in terms of tracking and establishing a transparent and trustworthy system, in which each part and its condition are securely recorded on a ledger and where the data are accessible in real time.
The benefits of repackaging
Reconditioning can be described as a win-win-win situation, in that it benefits the manufacturer, the environment and customers:
- Repackaging creates more local jobs. If a product has been manufactured abroad, it can then be rebuilt in another part of the world.
- It offers higher profit margins for remanufacturers because recycled parts tend to be cheaper and money is spent on parts rather than manufacturing.
- Remanufacturing also strengthens customer relationships by allowing long-term customers to be compensated for parts they would have originally thrown away if a rebuilding company did not exist or if a company they were loyal to did not offer a renovation program.
- Refurbishment results in less landfilling. Instead of throwing away the pieces, they are reused until their quality deteriorates to the point that they can no longer be used.
Reconditioned products usually come to 60-80% of the cost of their new counterparts because they are cheaper to produce. This allows customers to realize substantial savings. Refurbished products that were originally manufactured abroad will also be available much earlier than their original counterparts.
What are the problems faced by secondary processing companies?
Production in the repackaging industry can be difficult because the quality, quantity and availability of used products can be random and unpredictable. Unlike new parts, refurbished parts depend on the availability of parts already used. There is no way of knowing when these parts will be available on the market, how much they will be and how good these parts will be.
Another problem is the lack of simple organization in supply chain management. The blame does not necessarily rest on the remanufacturers themselves, but is mainly attributed to the uncertainty associated with the entire reconstruction process.
Introduce counterfeit coins into the mix, and the problem becomes even more important. Blockchain technology, with its ability to function as a distributed large digital book, can bring transparency and efficiency to the supply chain for repackaging.
Our future will rely on three cutting-edge technologies: blockchain, artificial intelligence (AI) and the Internet of Things (IoT). Although everyone brings their own uses to the table, the blockchain can optimize and revolutionize existing processes.
In addition, by using a distributed digital book, blockchain gives nodes, or members of the channel, the ability to see what all other members of the chain see. This is how trust and transparency develop. Changes can only be made to the chain with the consensus of the majority of the chain as a whole.
For this reason, the blockchain is the subject of much research by companies around the world. The medical, banking and pharmaceutical sectors all found their reason to use the blockchain. Repackaging could be the next to be reinvented with the help of this technology.
How can Blockchain help?
So how exactly will the repackaging companies benefit from Using the blockchain for the supply chain purposes?
On the one hand, blockchain can provide an industry-wide system in which data is stored and managed transparently. Ideally, a platform based on the blockchain could be created so that all members of the repackaging chain can see and add to it.
For example, a chain of automotive rebuild blocks can be constructed, parts can be displayed for potential buyers to view, or users can publish the type, quantity and quality of parts they need. Payment options could then be automated via smart contracts when shipping parts. Blockchain would also have the ability to track these parts as they progress through the repackaging chain. If handled properly, it is easy to remedy the difficulty of locating parts.
Reconditioned items could also be labeled with Radio Frequency Identification (RFID) to determine where the parts are, their quality and their service life. Newly added items may also be subject to a quality assurance system to prevent counterfeit coins from entering the blockchain. Any piece without an RFID tag would ultimately be considered counterfeit because it would not be authenticated properly.
Eventually, the blockchain could revolutionize the supply chain of repackaging. He would be able to identify when new pieces enter the chain, their quality and legitimacy. As parts move through the supply chain, their locations and quality are tracked in real time and recorded in a large ledger at the sight of all companies in the re-manufacturing sector.
Currently, Filament is a blockchain solutions company that develops systems that combine blockchain technology with repackaging companies. Filament's Blocklet allows you to automate old part payments and expiries, reduce overhead costs with one-time updates, and increase transparency and visibility of the supply chain process.
It tracks commitments in near real-time and accelerates dealer payments after inspections. By providing immutable records to every party involved, Filament is designed to improve process confidence and security.
Building solutions with Blockchain
As climate change quickly becomes an integral part of our future reality, it becomes clear that something must be done to slow down or completely stop climate change. As a highly efficient recycling-based system, repackaging does so while benefiting all three parties involved: the reconditioner, the customer and society as a whole.
As mentioned earlier, repackaging is a more sophisticated version of recycling. It helps reduce CO2 emissions and offers many benefits to communities around the world. You would think that more is being done to help this industry grow, but unfortunately that is not the case.
Fortunately, blockchain has the ability to provide solutions to the important problems faced by second-hand processors. It can improve supply chain management by providing a transparent and trustworthy system across the sector.