Why did the chicken cross the road? More importantly, was there traceability of its journey and how many miles did it cover? Maybe blockchain can help us answer this age-old question…
Do you find yourself thinking more and more about the journey your food has taken to get to your plate? It’s not just because you’re a supply chain professional. It’s because, as a community, we are increasingly interested in the origin and safety of the food we consume.
Farm to Plate – Tracked and Traced
Consumers have an increasing interest in and focus on sustainability, food miles and the concept of ‘farm to plate’. The pressure is on the supply chain to maintain quality while providing both transparency and a fully auditable trail.
Production lines can be stopped and deadlines missed. But if fresh produce doesn’t get to where it needs to be on time, there isn’t any end product.
Delayed, incomplete, incorrect or damaged shipments create a monumental volume of administration. Productivity tanks, costs mount and trust erodes as the parties enter into a “we said, they said” situation, with each party trying to avoid being the ones to blame. This has led to a situation that as the food supply chain has grown, the level of trust has diminished.
However, one of the hottest new technologies, blockchain, has proved to be an invaluable tool in helping provide transparency and maintain trust.
Network of Networks
In most supply chains, communication is point-to-point and one direction. There is no single, shared record of events across multiple parties. Damages or changes – malicious or accidental – may surface in the moment, or potentially only when they are raised by consumers.
According to research published by Gartner in 2017, there is a movement for mature supply chains to operate in a “network of networks”. The network of networks acts as a self-fulfilling prophecy, as mature supply chains in these networks achieve higher levels of maturity, including improving ecosystem visibility.
By placing a supply chain on the blockchain, it makes the process more traceable, transparent and fully digital. Each node on the blockchain could represent an entity that has handled the food on the way to the store, making it much easier and faster to identify the source of food safety issues with much greater precision.
The attributes of blockchain technology are ideally suited to networks of partners, big and small. By providing a shared, single version of the truth through a shared, digital ledger, blockchain increases trust and creates efficiencies by eliminating the “we said, they said” problem and creating a shared understanding of all possible disruptions that could impact OTIF delivery.
With blockchain, transaction records are immutable, or tamperproof, and agreed upon by all parties. Immutability creates an audit trail. Privacy is maintained by setting the appropriate levels of data visibility for different parties. And business rules are shared and enforced by the system through smart contracts.
Trust and Traceability
A prime example of the effectiveness of blockchain in the food supply chain is Walmart. The retail giant has been working with IBM on a food safety solution, using IBM’s ‘Food Trust‘ solution, which was specifically designed for this purpose.
Before working with IBM to move some of its food supply chain to blockchain, it typically took Walmart approximately 7 days to trace the source of food. With the blockchain, it’s been reduced to 2.2 seconds. This time may be the difference between a consumer eating unsafe food and it never reaching the shelves in the first place.
IBM has also played a major role in the development of blockchain tracking for another retailer, Carrefour. The organisation uses blockchain ledger technology to track produce including meat, milk and fruit from source to shelf. The technology has enabled tracking on the consumer side too, with shoppers able to scan QR codes on products, allowing them to read product information on provenance and process.
Carrefour has credited the technology with increasing consumer trust in the brand, resulting in an increase in sales. It’s an example that many other retailers may look to follow soon.
IBM very recently announced a new blockchain network, ‘Trust Your Supplier’. The network, not solely limited to the food supply chain, has been designed to improve supplier qualification by creating a form of passport for suppliers. This will help to reduce time and resources for validation, with everything verified by third parties, such as Dun & Bradstreet, to square the circle.
The network, and network of networks, look set to revolutionise how organisations and consumers look at supply chains. The food supply chain is merely the first where the technology is making strides, though the fashion industry has also made moves to implement with significant success.
As consumers buy less fresh produce to reduce food waste, they are willing to spend a bit more to ensure quality. With blockchain, organisations can shine a light on the provenance of their goods, but also earn the trust of consumers by proving the safety and traceability of the goods. And in a fast-paced environment, those organisations who don’t engage with blockchain face the reality of being left behind.
We might never know why the chicken crossed the road. But with blockchain tracking the supply chain, we’ll be able to understand where it came from, how far away and track it’s route all the way to your plate (sorry Colin!).
Blockchain: Supply Chain’s 21st Century Truthsayer
From farm to plate, the food supply chain can now be tracked in an open, transparent, fully traceable and entirely digital way. We may never know the why, but the how and where are within our grasp!
In our latest webinar, Blockchain: Supply Chain’s 21st Century Truthsayer, we’ll be exploring the full applicability of this great technological innovation, understanding how Walmart and Carrefour have turned this to their advantage and revealing why it’s a must have for supply chains of the future! Click here to sign up now.