Asset utilization, prevention of cargo theft, improved tracking and rate consistency are just the beginning
Once a disparate group of entities, the modern supply chain is becoming more akin to a well-oiled machine thanks to technological advances. This includes integrated software systems that allow shippers, brokers, carriers and end-users to seamlessly “talk” to each other throughout the transactions.
But each party is still holding back, and with a more digitized approach to the supply chain thanks to Industry 4.0, that is becoming a problem. Proprietary information is but one reason, but the real culprit is trust, or lack thereof. Despite common business interests, each party in the supply chain continues to look out for its own best interests.
Blockchain technology, though, is set to alter that equation and the result will be more cooperation, more transparency, and more trust without anyone giving up their individuality.
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Blockchain technology allows participants to create a digital roadmap of everywhere a driver, a truck, a pallet, a box, even an individual mango, has been in its journey, there is potential for it to both improve supply chain visibility and efficiency if participants allow it.
Take, for instance, mangoes. Global retailer Walmart is running a pilot program with IBM using a blockchain to track mangoes.
In February, Frank Yiannas, vice president of food safety for Walmart, presented at IBM’s Genius of Things Summit at Watson IoT headquarters in Munich, Germany. His topic? Mangoes.
“There are big companies, big suppliers, big countries that have an Achille’s heel. And their Achille’s heel is traceability and transparency,” he told the audience.
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Yiannas explained why blockchain is important in the food supply chain by retelling the story of an e. coli outbreak in spinach in 2006.
“FDA came out in September 2006 and said, Americans don’t eat spinach, there is an outbreak going on,” he said. “You know what retailers and food service companies across the nation did? All spinach was pulled nationwide. You know how long it took FDA to trace back the source of that spinach to the original farm? Two weeks. For two weeks there was no spinach served and when it was all said and done, they found out it was one supplier, one farm, one lot, one day of production. An entire industry killed, all the farmers’ livelihoods [threatened] because they weren’t able to track and trace efficiently.”
In the mango pilot, Walmart and IBM are tracking the fruit from the farm to the store. Along the way, Yiannas explained, the mango must be harvested, shipped to a packing house for cleaning and boxing, transported – including across borders – sent to a production facility, a distribution center and finally to a store. Along its journey, proper refrigeration is vital to a safe and tasteful fruit.
Video: How goods move through a blockchain-enabled supply chain
And in each step of the journey, information is recorded in the blockchain that ensures traceability, transparency and even that proper refrigeration or other chain of custody concerns are addressed. When the customer picks up that package of mangoes in the store, they can scan a code on the package and see whether that fruit is truly organic, as the package says, and whether it was sustainably sourced.
“Traceability in the classic sense is one step up, one step back. This is the mango, where did I get it from, where did it go? It defines attributes that are what, where and when,” Yiannas explained. “Today, the way this is done in the food system is through disparate methods, mainly on paper, so you can never have a long view of the food system. You have to piece it together.