Using Dust and DNA to Trace Products All the Way Back to the Factory

(Bloomberg) -- DNA analysis has long been the gold standard for establishing identity. Now there’s technology that may do the same for product provenance—as in, where exactly clothing, furniture, food or pretty much anything else comes from.

Bacteria, pollen, tiny fungi and—as the entire world knows all too well—viruses can be found in dust coating every object and floating in the air around us. What you may not know is that every place on the globe has its own unique signature of different kinds, amounts and combinations of these micro-organisms.

If you take a cotton swab, wipe it across your desk, and sequence the DNA of the microbes it collects, you’ll find a blend of microscopic objects that is unlikely to occur anywhere else. That’s the nutshell version of the science behind San Francisco-based Phylagen, one of the more recent entries in the supply chain track-and-trace market. It’s a segment that businesses use to verify whether their products came from where suppliers say they did.

Given growing sensitivity to the climate crisis, environmental preservation and illegal labor practices, such services have become increasingly popular. 

“Life forms are location-specific across the globe, and tell a story about what happened in a place, and also of how things are moving around,” said Phylagen co-founder and Chief Executive Officer Dr. Jessica Green.

Beyond its implications for sustainability, contracts secretly outsourced by suppliers mean products can end up substandard, presenting risks to brand reputation.

Unsurprisingly, companies are seeking better ways to make supply chains more transparent. Lilac Nachum, professor of marketing and international business at the City University of New York, said that while companies often don’t own their suppliers, “they’re accountable, not only for their suppliers, but for the suppliers’ supply chains.” Gary Marion, director of manufacturing for Providien, a medical device contract manufacturer in California, said the reality is “you can’t always trust your partners overseas.”

Track-and-trace technology has often involved scanned bar codes and radio frequency identification tags to monitor shipping containers as they make their way to your warehouse. But as supply chains grow more diffuse, demand is growing for more ironclad methods—particularly in the pharmaceutical industry, where counterfeit products kill thousands annually. These days, track-and-trace is a $2.2 billion industry, according to Grandview Research.

Leaders in the field include Siemens AG, Zebra Technologies, Optel Group, Tracelink, and Antares Vision SpA. The only company doing something similar to Phylagen, however, is New Zealand-based Oritain, which analyzes ratios of stable isotopes and trace elements like potassium and zinc. These vary based on soil conditions and other factors. Samples are run through statistical models to determine whether each is consistent with a claimed origin. But it only works with food, pharmaceuticals, and fibers such as cotton and wool.

In 2014, Green co-founded Phylagen with Dr. Harrison Dillon, who helped start the industrial biotech firm Solazyme. Phylagen, which has 25 employees, received $14 million in Series A funding last year from Peter Thiel’s Breakout Ventures, Working Capital, 3M Ventures, and others, according to Crunchbase. The name is a play on “phylogeny,” the evolutionary history of a type or part of an organism.

Phylagen says it’s “building the world’s largest environmental microbiome database,” working directly with its clients’ channel partners, usually located in the region where products originate. Testing involves obtaining samples from the air and surfaces inside a supplier’s factory—the start of the supply chain. Samples are sent back to Phylagen for DNA sequencing and analysis by machine learning algorithms.

At the end of the supply chain (the client’s warehouse) packaging is opened and the inside swabbed, since it’s essentially a time capsule of the factory or farm where the product originated. If the samples match, all is well. If not, the customer knows something may be wrong.

Green maintains that her technology can be used to identify the origin of apparel, pharmaceuticals, raw materials (such as cotton and minerals) and even food. Of course, Phylagen’s matching tests are only as accurate as their samples. If someone is making winter coats with goose down sourced from multiple farms, Phylagen would need to take samples at each one. For a laptop assembled in Shenzhen, China, the factory where its batteries were made must be tested, too.

“Some customers want more visibility [into] the deepest parts of their supply chain,” Green said.

Food, however, may not be so easy, said Pablo Perversi, chief innovation, sustainability & quality officer at chocolate maker Barry Callebaut. Phylagen’s verification methods would be difficult for his products, since cacao beans—like palm oil and other crops—come from different farms and are mixed together near their point of origin. For specialty brands that rely on specific sourcing, he said, “it would be very difficult to keep one farm’s beans separate from another’s.”

Scientists emphasize that Phylagen would also need to account for how a location’s microbiome changes over time. Phylagen says it collects several samples from a location at different times to account for seasonal variability, and movement of different people and objects into the location.

Phylagen’s services add to existing offerings by companies including SafeTraces, (focusing on food tracking), Provenance (a blockchain solution) and SourceMap (supplier discovery and risk calculation). Green, though declining to reveal the specifics behind her company’s testing methods, said Phylagen can pinpoint specific “factories, farms or warehouses” where products originated.

Experts in the field say such track-and-trace precision is theoretically possible.

Brandi Cantarel, assistant professor of bioinformatics at University of Texas Southwestern, and Pieter Dorrestein, a professor at the Skaggs School of Pharmacy and Pharmaceutical Sciences at University of California, San Diego, agreed that a comprehensive database of microbiome data might allow for such hyper-transparency.

While there are challenges tied to metagenomic sequencing techniques, Dorrestein said, “you could capture microbes’ slight variations at the genetic level.” Green contends her customers have independently validated Phylagen’s results, though she declined to name them.

“There are multiple reasons why you want to know more about your supply chain than you used to,” said Malcolm Preston, a former head of sustainability for PricewaterhouseCoopers. Chief among them is unauthorized subcontracting, which can be tied to forced labor or damaging environmental practices. 

Today, the coronavirus outbreak is bringing new complexity to supply-chain verification. Movement restrictions cover millions of people across the globe. With factories shut down, companies must shift operations and sourcing. New suppliers are under pressure to provide their new customers products on time and at scale.

“It’s under those conditions when suppliers feel the most pressure to outsource,” Green said. She added that Phylagen is looking to incorporate novel coronavirus tracking in its protocols to help “monitor the biome in buildings and public spaces to assure customer and worker safety.” Green said the company is now equipping organizations with a Covid-19 surface test to detect the pathogen’s presence in built environments across the supply chain.

©2020 Bloomberg L.P.