Food supply chain tracking and authentication, to truly understand provenance, is critical to finding and helping to address sources of contamination in the food supply chain worldwide. In October 2016, Walmart, IBM and Tsinghua University signed an agreement to explore food supply chain traceability and authenticity using blockchain technology. The project comes as Walmart announced its new Food Safety Collaboration Center in Beijing.
Like most merchants, the world’s largest retailer struggles to identify and remove food that’s been recalled. When a customer becomes ill, it can take days to identify the product, shipment and vendor. With the blockchain, Wal-Mart will be able to obtain crucial data from a single receipt, including suppliers, details on how and where food was grown and who inspected it. The database extends information from the pallet to the individual package.
“It gives them an ability to have an accounting from origin to completion,” said Marshal Cohen, an analyst at researcher NPD Group Inc. “If there’s an issue with an outbreak of E. coli, this gives them an ability to immediately find where it came from. That’s the difference between days and minutes.”
It’s also the difference between pulling a few tainted packages and yanking all the spinach from hundreds of stores, according to Frank Yiannas, vice president of food safety at Bentonville, Arkansas-based Wal-Mart.
“With blockchain, you can do strategic removals, and let consumers and companies have confidence,” Yiannas said. “We believe that enhanced traceability is good for other aspects of the food systems. We hope you could capture other important attributes that would inform decisions around food flows, and even get more efficient at it.”
More than 1,000 foodborne outbreaks investigated by state and local health departments are reported each year, according to the Centers for Disease Control & Prevention. The CDC estimates roughly 48 million people are afflicted annually, with 128,000 hospitalized and 3,000 dying. Chipotle Mexican Grill Inc. has suffered a year of falling sales as a result of several outbreaks.
The goal is to improve the way food is tracked, transported and sold to consumers across China harnessing the power of blockchain technology designed to generate transparency and efficiency in supply chain record-keeping.
Scientists from IBM Research – China are among the leading edge technologists at IBM now in the forefront of the rapid evolution of blockchain. Working alongside top talent in transaction security and authentication technology from Tsinghua University and with Walmart’s expertise in supply chain, logistics and food safety, they are creating a new model for food traceability, supply chain transparency and auditability using IBM Blockchain.
Blockchain provides a permanent record of transactions which are then grouped in blocks that cannot be altered. It could serve as an alternative to traditional paper tracking and manual inspection systems, which can leave supply chains vulnerable to inaccuracies.
When applied to the food supply chain, digital product information such as farm origination details, batch numbers, factory and processing data, expiration dates, storage temperatures and shipping detail are digitally connected to food items and the information is entered into the blockchain along every step of the process.
The information captured in each transaction is agreed upon by all members of the business network; once there is a consensus, it becomes a permanent record that can’t be altered. Each piece of information provides critical data that could potentially reveal food safety issues with the product. The record created by the blockchain can also help retailers better manage the shelf-life of products in individual stores, and further strengthen safeguards related to food authenticity.
Across ecosystems, business model changes enabled by blockchain can bring strengthened trust and transparency, and a new nexus for value exchange. Whether it is individuals looking to complete transactions involving multiple parties, or enterprises collaborating across multiple organizational silos — wherever there are documents or transactions that are required to be confirmed, settled, exchanged, signed or validated, there are frictions that can be eliminated to unlock greater economic value using blockchain technology.
source: IBM and Bloomberg
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