Blockchain technology has been making the news lately through its implementation in Bitcoin. The food industry is looking at this technology to track items as they move through the supply chain.
The intent is to create transparency in the supply chain. As proof of concept, IBM worked with Walmart to track pork from China, and mangos in the United States. Before the blockchain test, it took Walmart 6 days, 18 hours and 26 minutes to trace a shipment of mangos back to its source.
With blockchain, it took 2.2 seconds.
Blockchain technology is a chain of blocks of information. These blocks are stored on an open shared ledger through a distributed computer network. Once the block is recorded it is extremely difficult (almost impossible) to change thus providing security to the system.
This post is based on the Progressive Grocer article, Grocers Embrace Blockchain in New Era of Transparency, by Jenny McTaggart, February 16, 2018.
1. What advantage does blockchain provide to the supply chain?
Guidance: The obvious advantage is the ability to quickly trace an item back through the supply chain, as in the mango example in the article. This can be very useful in case of a recall. The source of the problem can be quickly identified, and it can provide documentation on the source of the produce—providing transparency to the supply chain.
For example, customers are often concerned that food labeled ‘organic’ meets the criteria. Last year, Cargill allowed customers to trace their Honey Suckle White turkey back to the specific farm—including information on the farms themselves.
Most blockchains capture date stamps at each stage of the supply chain, allowing the supply chain to be analyzed for possible improvement, and to adjust as disturbances occur, such as late deliveries. The article mentions a delayed shipment at the border.
2. What other information could be collected? Why would it be important to the supply chain?
Guidance: A variety of data could be collected. The article mentions audit certificates and other food safety-related documents, as well as smart contracts. Smart contracts could allow for reduction in processing of payment through the supply chain. Basically any information could be collected along the supply chain.
- The medical industry is collecting temperature data in the supply chain for items that require cold storage.
- The seafood industry is attaching RFID tags on fish so that they can trace the fish from the catch to the store to insure both quality and sustainability concerns.
- Worker pay could be collected to ensure that slave labor wasn’t being used, or at least that the workers were being paid a fair wage.
In many cases, blockchain technology could be coupled with other technologies to capture information, including RFID tags as previously mentioned, wearable technologies, and the Internet-of-Things (IoT).
3. Are there any drawbacks?
Guidance: At the moment, the biggest drawback is interfacing everything together. Various organizations are developing the blockchain technology. Standardization is yet to be worked out. And in many cases, you will want to interface the blockchain with your organizations information systems, and other technologies such as RFID tags.