October 31, 2018

Grocery Supply Chain via Blockchain, Do Explain

Leon BalarinLeon Balarin
Technical Solutions Architect

 

 

There was a time when cash was the fundamental method of exchange for goods and services. Some of you may recall receiving a dollar bill that had someone’s name written on it, a specific date or year, or perhaps a funny joke. Though most of us preferred a newly-printed crispy bill, often enough, we’d receive the graffitied version – perhaps from a cash register, an aunt or uncle, or via an egg hunt. Regardless, they still held their value, didn’t they? A change machine would gladly accept that dollar in exchange for a whirl at the nearby Galaga; however, have you ever pondered on the origin of that note? How many miles did it travel before it ended up in your hands? What cities did it visit, and what types of goods and services was it exchanged for? Were some of the exchanges unlawful? Who is this J. Fitzgerald person who wrote their name down on the back of the dollar, and how long has this scotch tape been keeping this thing together? If only that dollar could speak.

Consider this; what about the origin and journey of the meal that you had for lunch? (Ah-hah, now I have your attention.) How many different ingredients are in that to-go box, or on your plate? Where did each item come from, how many hands and machines interacted with it, how many distribution centers did it traverse, and how was it handled? We’re quick to assume that all of the ingredients passed quality control inspections and are safe to consume; however, news headlines regarding foodborne illnesses and bacterial outbreaks have us reconsidering. Imagine a world of farm to fork, where every product can be tracked from its provenance, through the entire supply chain, to your dinner table. Is this strategy even achievable, especially when several farming organizations still use paper and pen databases, including each disparate company utilizing their own ERP solutions? The answer is yes; please say hello to blockchain.

What is blockchain?

But I thought blockchain was for bitcoin, yes? Aren’t they the same thing? Great thinking – although bitcoin was the first application of blockchain, they are not the same. Bitcoin, also known as cryptocurrency, is a type of unregulated digital currency that does not require the enlistment of a third-party payment processing intermediary. A blockchain on the other hand, is a constantly growing ledger that keeps a permanent record of all the transactions that have taken place, in a secure, chronological and immutable way. The name comes from its structure, in which individual records known as blocks, are linked together in a single list known as the chain. The information is within a decentralized peer-to-peer network, and each transaction added to a blockchain is validated by multiple computers before being concatenated. With that being said, this technology can be used not only for bitcoin processing, but across other industries as well.

Blockchain and food safety

One use case in particular is in the grocery industry. A recent article published by TechCrunch revealed that Walmart has been working closely with IBM on a food safety blockchain solution, which will require all of their leafy green vegetable suppliers for both Sam’s Club and Walmart to upload their data to the blockchain by September 2019. The IBM Food Trust Solution is a perfect use case of blockchain, where traceability and transparency can give total insight into their complex food supply chain. Having the ability to quickly and effectively track down each food product from the produce isle to its origin allows Walmart to quickly respond to potential foodborne alerts by determining which of their farming site(s), produce batches, packing houses, distribution centers, courier vessels and storefront markets may be affected.

Today’s response mechanism is to eliminate entire batches of related items across every market that sells the contaminated product. This is not only an extremely expensive and time-consuming process, it results in panic, diminished reputation and substantial food waste – a very expensive guessing game. Most importantly, let’s not forget the number of consumers who may have ingested the affected product, resulting in extreme illness, and even death. Leveraging a system like the IBM Food Trust Hyperledger Fabric solution allows food retailers to reduce costs and food waste, track down food origins and their travel history, manage risk and mitigate potential issues, all while allowing their partner base to use a unified secured tracking system that cannot be altered in any form. Bottom line, food retailers want to provide a safe, healthy and reliable product to their consumers on a consistent basis.

The next time you sit in front of a meal, take a moment to consider where the food originated from, where it traversed, how many miles it traveled, and the amount of hands and machines that interacted with it before it ended up on your plate. The process is quite fascinating. Blockchain technology can provide those answers when necessary, and, just like the dollar, every piece of produce has a story to tell.

To learn more about blockchain, check out this recent podcast from Arrow Bandwidth!

If you’d like to learn how it can benefit your business, please reach out to Leon Balarin.