Walmart Reimagines Supply Chain Traceability with Blockchain Technology

by Michael Clarke | 10/02/2018

 

Supply chain traceability is often a time-consuming and costly challenge for food producers. When food bacteria outbreaks such as E coli and salmonella infest any portion of a grocer’s produce, they are forced to throw out an entire batch for a lack of a quick and accurate method to easily identify where it originated from and discard the infested produce. Consumer trust and brand protection are integral to this process where retailers would rather be safe than sorry. As supply chain visibility has become paramount to identifying these outbreaks and mitigating them before they become dangerous to consumers, Walmart’s integration of blockchain technology has stood out as an admirable solution to strengthen their produce supply chain transparency.

Blockchain is most notably known as the underlying technology of cryptocurrencies such as Bitcoin or Ethereum, but its distributed ledger system that records a history of business transactions has several use cases for supply chain traceability. A block is added each time that a member of a blockchain records a transaction—a record that only others in the chain can read, but no one can alter. This immutable record is backed by the underlying algorithm that cross-checks the original record against its distributed copies in order to reject changes to the original record. These blockchain ledgers can either be public or permission based. Blockchains like Bitcoin are decentralized public ledgers where anyone with the practical skills can read the chain, add a block or join the network whereas permission-based ledgers such as IBM’s Food Trust, determines who or what enterprise acts as a transaction validator and inputs data into the ledger. In this sense, blockchain maintains an unalterable record stream of transaction data, which can be leveraged to solidify supply chain traceability. Giving the ability to grocers and food producers to track and trace every part of the supply chain process from cultivation to delivery and purchase in store, blockchain has the potential to transform retail workflows.

After undergoing a two-year pilot program to implement the underlying blockchain technology, Walmart announced that it plans to employ this digital ledger solution to trace their spinach and lettuce produce beginning in the third quarter of 2019. Developed and curated by IBM’s Blockchain division, Walmart’s utilization of IBM Food Trust, is aiming to bolster their supply chain visibility through the digitalization of the process, requiring its extensive produce network that includes well over 100 farms to input detailed information into their blockchain database. At each stop along the supply chain network, producer personnel will make entries into the blockchain, signing off when and where they received it, as well as when they move it to the next person across the supply chain. By leveraging the blockchain database that can store unalterable information in a digital format, Walmart aims to reduce the time it takes to locate the supplier and pin point the origin of the produce that may be impacted by bacteria outbreaks. 

The ability to quickly and accurately identify the origin of infected produce will save Walmart time and money in their supply chain workflows. Previous processes with Electronic Data Interchange (EDI) that are effective in the management and record of transactional data, have shortcomings in the recording of  transportation, sourcing, and manufacturing data, which causes a lag time in identification and often takes up to a week to source the origin of produce. Leveraging a centralized ledger to store this origin information from farm cultivation to transportation to the store shelf as each exchange is recorded into the ledger in real time, reduces this tracking to a matter of minutes or even seconds utilizing IBM’s blockchain technology. This revamped supply chain process allows Walmart to only throw out the effected batches of produce and guarantee safe fresh food to customers where brand loyalty and reputation is paramount in the food industry. Moreover, Walmart will provide its customers with further detail of the origin of its produce emphasizing its freshness and quality as it aims to take on Amazon’s Whole Foods.

While IBM’s Food Trust blockchain network can strengthen supply chain traceability, it is not without its shortcomings. Despite being able to track and trace the origin of produce from cultivation to in store purchasing, the blockchain solution does not inherently prevent fraud. The ledger system can trace and record the items across the supply chain, but cannot detect if these batches have been altered or verify if the product matches the record. Thus, there is a certain level of trust in the system and there is a need for hands on human verification. However, the ability of blockchain to centralize supply chain data for enterprises with immutable records with such granule detail from the sourcing of parts, drug manufacturing, or the cultivation of food across a unilateral network, strengthens supply chain visibility in a more digitally empowering manner. Thus, with the integration of blockchain for supply chain traceability and human verification of products and records, supply chains across industries will evolve towards digitalization as the underlying blockchain technology gains increasing adoption from tier 1 enterprises.

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