Gold supply chain management system

Blockchain-based system for end-to-end tracking of gold

computers

Blockchain solution enabling gold supply chain transparency and efficiency

This custom web & mobile application integrates with the Ethereum private blockchain network for managing gold bar production and delivery from end to end, controlling their quality and origin, and providing a complete history of evidence for the end client.

Business context

Gold mining industry is subject to multiple environmental and labor regulations from the World Gold Council and continuous financial investigations. The solution was created for compliance purposes as a secure tool for verifying that gold is mined without violating human rights or safety regulations.

What’s more, the system has become a trustworthy source of consolidated data detailing the movements of every gold transaction for all supply chain participants, including any violations. The system verifies that gold mines have attained all the necessary certifications and comply with every regulation: CRAFT code, Market Entry Standard, Fairmined Standard, etc.

There are a vast number of companies that take part in the production and supply of gold all over the world (factories, refineries, jewelers, etc.). Until very recently, they have only been able to manage their particular part of the gold lifecycle without a consolidated view of the gold’s origin and the entire chain of movement.

business context

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

Business challenges to overcome

Meeting compliance requirements is a challenging and complex task for gold mining and production companies as the process of collecting and presenting proofs of evidence often experiences delays and requires substantial financial investments to complete.

Lack of real-time visibility and transparency into the origin of mined gold
Gold supply chains are complex, making transparency challenging. Due to its value and ease of transport, gold is easy to smuggle, exchangeable worldwide, and traded anonymously via cash transactions. All of this makes even the smallest amount of gold difficult to trace. gold is valuable and easily transported, is easy to smuggle
Need for a secure method that is capable of verifying responsible sourcing
It's hard for market participants to monitor how reasonable the price of a particular supplier is and find cost-effective deals. In addition, documents need to be checked and matched manually which can lead to a high cost of human mistakes.
No unified source of information for tracking data authenticity
Rice market participants send documents all over the world by courier increasing the risk of document loss. At the same time, there is a risk of doing business with an unfair partner that may cost a pretty penny.
Gold supply chains are complex, making transparency challenging. Due to its value and ease of transport, gold is easy to smuggle, exchangeable worldwide, and traded anonymously via cash transactions. All of this makes even the smallest amount of gold difficult to trace. gold is valuable and easily transported, is easy to smuggle
It's hard for market participants to monitor how reasonable the price of a particular supplier is and find cost-effective deals. In addition, documents need to be checked and matched manually which can lead to a high cost of human mistakes.
Rice market participants send documents all over the world by courier increasing the risk of document loss. At the same time, there is a risk of doing business with an unfair partner that may cost a pretty penny.

Blockchain-based solution for gold supply chain tracking

01
Gold is mined, QR code is applied to each ingot to track it
02
Gold ingots
are in transit
to refinery
03
QR code is scanned, unique hash is recorded in blockchain
04
Gold bars are transported to the jeweller
05
QR code is scanned, unique hash is recorded in blockchain
06
Gold bars are
transported
to the vault
07
Jeweller verifies gold quality and shipment details in the system
08
QR code is scanned, unique hash is recorded in blockchain

Technological challenges for Unicsoft team

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

Tracing something that is constantly changing

Our highest priority was coming up with a way to track the origin of every gram of gold electronically. Issues arise because the supply chain of gold involves a number of different factors and variables that have to be taken into account:
As a result, the original "product" is crushed into smaller components. It is necessary to track the journey of each component back to that original ingot from which it was forged.
01
a mine produces large ingots of unrefined gold
03
other institutions can melt these slivers into smaller pieces
02
refineries clean it and one unrefined gold ingot is used to produce several bars of a smaller size of high-grade gold
As a result, the original "product" is crushed into smaller components. It is necessary to track the journey of each component back to that original ingot from which it was forged.
GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

Ensuring system security

It was expected that the system would store a large amount of genuine information about a cache of gold’s origin, quality, movements, and transactions.
Since this data is sensitive may be subject to legal violations and supply chain frauds, we had to ensure it could never be hacked, lost, or compromised.
Since this data is sensitive may be subject to legal violations and supply chain frauds, we had to ensure it could never be hacked, lost, or compromised.

Solution

End-to-end gold bar tracking

In order to account for each piece of gold created within the gold production cycle, we applied a QR code to each gold ingot and every derivative of an individual ingot.

For this purpose, we developed a custom system for registering every operation and displacement of gold:

 

The logic of the ingot’s operations is programmed in the form of smart contracts, so their consistency can not be altered by anyone. This ensures trust and transparency for the entire supply chain.

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

solution

Immutable data storage

Due to its integration with the Ethereum private blockchain network, the system can guarantee the storage and absolute security of all sensitive information from different companies about the movement of gold.
Since all transactions are recorded in blockchain nodes, it is impossible for hackers to alter data or “cheat” the system.

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

Strict continuity of supply chain flow

The system ensures a specific flow for the lifecycle of gold production and delivery statuses that are strictly defined in a smart contract. Thus the possibility of the flow being hacked or altered is all but eliminated.

Only after meeting every strict condition pertaining to the particular status of the gold supply chain are you allowed to execute the code using EVM (Ethereum Virtual Machine) and apply the next relevant status update.

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

IAM (Identity & access management)

The system features different levels of management and access for user roles to guarantee process security and eliminate unauthorized actions.

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

Superadmin (back-office role)

has the right to view the list of registered companies within the platform, manage them, create new companies, and perform similar actions with users

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

Account Manager

responsible for their company and has complete access for adding and reviewing the profiles of new users (account managers and site managers, except operators)

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

Site Manager

handles their company’s information and users, manages the company’s gold stocks: creates new gold bars in the system, initiates new deliveries, and tracks gold

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

Company Operator

can send and receive gold batches, verify gold parameters and waybills with the help of QR code scanning, reports cases of potential fraud using the mobile application and special form

Bank-level security

The solution guarantees high reliability and integrity of data and supply chain cycle due to advanced security measures applied:

Encryption of all data and traffic

Limited access to confidential information (user-based access control)

Strict access control to the mobile app (operators use fingerprint, facial recognition, or ID to sign in)

User permissions can only be granted by a user with the authorized role (operator can only activate their account after the site manager grants their authorization, site manager initiates the creation of a new operator user, etc)

Physical verification of matching goods with their data in the blockchain by the operator (for comparison, similar solutions only provide formal tracking of deals on the document level)

GOLD SUPPLY CHAIN MANAGEMENT SYSTEM

Transparent management of shipments

In the Shipments section of the system, all supply chain members can track the status and check the details of each shipment:

  • Type of gold bar;
  • Name of the company;
  • Status of delivery;
  • Attached documents needed to verify the shipment: waybills, shipping documents, invoices, bar list, etc.

Through the system’s integration with a private blockchain network, each shipment receives its own unique hash so that the chain of custody for every shipment along with individual information for every gold bar can not be broken.

Blockchain Expertise

Private
blockchain network
Ethereum
platform
Solidity
smart contracts

Technology Stack

Node JS
GO
Jenkins Git
Ethereum
Swift
AWS
React.js

Results

As a result of Unicsoft’s collaboration, our client now operates a reliable tracking system that allows for a deeper level of control over the gold’s origin including the entire chain of events, from the mine to the end customer.

From now on, the gold mining industry will leverage supply chain transparency via the tracking of each piece of gold electronically and consolidating data from different supply chain members in a highly secure manner.

Achieved business results

Improved visibility over the gold supply chain
Increased operational efficiency
24/7 secure tracking of each piece of gold
Decreased time spent on problem-solving
Optimized routine tasks and order processing
Reduced risk of fraud and smuggling
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