Blockchain’s role in creating colder, fresher, safer food supply chain
Even though blockchain maturity is several years away, now is the time for companies to become educated on how it can lead to vast improvements in the food supply chain.
What can support a discreet level of data communication, document a product’s chain of custody, reduce human error and create a tidal wave of interest in the food industry?
It’s blockchain, which has reinvigorated the industry’s drive to achieve fast, end-to-end food traceability and enable product information transparency. Even though blockchain maturity is several years away, now is the time for companies to become educated on how it can lead to vast improvements in the food supply chain. To know how it will affect your business, it’s important to first understand the basics of what it is, how it works and how it applies to the cold chain.
Blockchain is a type of distributed ledger technology that decentralizes data exchange. A decentralized structure allows all parties to have visibility into how data is replicated, shared and synchronized across multiple geographic locations. This structure makes the data more trustworthy, as there is a documented single source of the truth. Information is also immutable on a blockchain, meaning it cannot be modified or deleted.
Blockchain also supports “smart” contracts, meaning the automated execution of previously defined terms and conditions. A trading partner is prevented from writing a business transaction to the blockchain ledger that is outside of the rules specified in the smart contract, which could lead to more certainty around what is being shipped and when.
The cold chain stands to benefit from this reduction in human errors. Blockchain enables key access to real-time information to make exception management possible. Additionally, future applications of blockchain in combination with Internet of Things (IoT) sensors can help ensure the integrity of cold chain products. As companies begin to implement sensors in logistics units (trays, cases, pallets) and on transportation equipment (refrigerated containers), they can automatically capture data such as temperature, time and location in real time. The blockchain ledger records a trail of events, and can keep a record of temperature over time and at particular locations. These activities can also be provided off-chain to authorized requestors.
However, introducing more automation can’t guarantee accuracy. Preparing for blockchain means prioritizing the quality of supply chain data, otherwise a blockchain will simply process bad data faster.
Blockchain for traceability
Blockchain is conducive to the cold chain because it helps companies effectively manage supply chain data across a complex network of trading partners. For example, Walmart and IBM’s pioneering blockchain pilot proved that a product recall across international borders could be reduced from days to seconds. However, without a foundation for data sharing built on GS1 Standards, traceability through blockchain is not possible.
Instead of using proprietary identification systems, globally unique product identifiers and standardized data sharing enables interoperability across multiple systems, one of the most important foundational elements for blockchain. The interoperability of standards allows for the internal data and processes a company uses to track products to be integrated into a larger system of external data exchange that takes place between trading partners. It leads to more accurate maintenance of product information that supports not just “one up/one down” visibility of the product’s movement through the distribution channel, but beyond, enabling full traceability.
This year’s major foodborne illness outbreaks resulting from contaminated romaine lettuce and eggs have renewed the sense of urgency to automate the food supply chain and raised awareness for the benefits of investing in interoperable systems. Many key industry stakeholders are hopeful that the discussion of blockchain will spur meaningful developments in traceability that lead to better food safety in the long term.
Blockchain for transparency
Food manufacturers have used standards for decades to manage their inventories, but lately, new consumer demands have caused a shift toward also using standards to enable product information transparency. Standards help companies supply comprehensive information to consumers, including the disclosure of allergens, the sourcing of ingredients, environmental impact and helpful information for those with special diets.
Companies committed to transparency are looking to tap one of blockchain’s core strengths—the ability to document a product’s complete provenance. Coupled with a GS1 Standard for physical event data sharing called EPCIS (Electronic Product Code Information Services), a blockchain can record granular information about a product’s transformation and journey from the source to the consumer with a high degree of validity.
As blockchain enterprise solutions mature, the cold food and beverage industry can expect to see more transparency pilot programs, similar to the one launched by Cargill, where blockchain was used to help consumers trace turkeys to the exact farm where it was raised.
Ben & Jerry’s, South Burlington, Vt., announced a unique blockchain pilot that helps the ice cream manufacturer prove its commitment to carbon footprint reduction.
Also, the foodservice industry shows signs of blockchain leadership. FoodLogiQ, Durham, N.C., and two of its partners—Tyson Foods, Springdale, Ark., and the Independent Purchasing Co-Op for SUBWAY, Miami, Fla.—launched a blockchain pilot designed to raise transparency within their supply chains. These and other pilots will be critical to charting blockchain’s future in the food supply chain.
In summary, blockchain is an exciting technology that will help the industry process and exchange data faster than ever. Companies should continue to educate themselves on blockchain technology while implementing the necessary core fundamentals for supply chain visibility in order to maximize their chances at a successful implementation.