Editors Note: While the writer filed this story before the magnitude of the global pandemic was known, the subject matter is even more vital now. Because if living with COVID-19 has brought to light anything, it is the importance of an unbroken fresh food supply chain. What follows are seven supplychainindustry experts weighing in on blockchain, sharing their unique perspectives regarding challenges and adoption, with a focus on the fresh food supplychain.
On Jan. 4, 2011, President Barack Obama signed into law the Food and Drug Administration Food Safety Modernization Act (FSMA). One provision of the Act was that theFDA will have access to records, including industry food safety plans and the records firms will be required to keep documenting implementation of their plans. The intention of this mandate was clearly to safeguard the health and safety of the American public.
But there is a problem here. These records are stored all over the country on paper, in file cabinets located in thousands of places. So when there is a serious problem of contamination with, say romaine lettuce as there was in November 2018, and again in November 2019, this explains why it can take the FDA 45 to 60 days backtracking just to locate the records, with potentially thousands of farms under review for contamination. If these records were accessible through blockchain, the potential contaminated farms would be whittled down from thousands to less than 10, and identified within a matter of seconds.
Reasons like this make a strong use case for blockchain; it is why so many food supplychainindustry leaders are focused on establishing a universally accepted blockchain platform, with particular focus on the fresh food supplychain.
Building a blockchain ecosystem for the fresh food supplychain, by bringing manufacturers, distributors, retailers and suppliers together is a seemingly insurmountable challenge to many of us involved in the industry. Let alone factoring the entire supplychainfor food and beverage, and all consumer goods.
Luckily, there are those people who do have a keen perspective on blockchain, with not only an optimistic view of it, but solutions as well. I had the opportunity to interview seven key supply chain thought leaders on the subject of blockchain and the fresh food supply chain. These were: John Haggerty, vice president, Business Development, Burris Logistics; Steve Tracey, executive director, Center for Supply Chain Research at Penn State Smeal College of Business; Kevin Otto, senior director, Community Engagement, GS1 US; Rick Stein, vice president, Fresh Foods, Food Marketing Institute; Rick Blasgen, president and CEO, Council of Supply Chain Management Professionals; David Shillingford, CEO, Rising Tide Digital & Team Member, Resilience360; and Stephen Rogers, vice president, Blockchain Initiatives for Supply Chain, IBM.
Their viewpoints were diverse, reflecting their respective roles in the industry. And their responses were incisive and broad-reaching, with a very practical perspective on what is expected to realize a universal blockchain platform.
John Haggerty Vice President, Business Development, Burris Logistics
Burris Logistics operates an expanding network of temperature-controlled warehousing and distribution centers from Florida to Massachusetts, also expanding west to Oklahoma. The company provides leading-edge logistics, transportation and supply chain solutions coast to coast through four distinct business units: Custom Distribution, PRW Plus (Public Refrigerated Warehousing), Trinity Logistics (transportation and freight management), and Honor Foods (a redistributor of frozen, refrigerated and dry food service products).
There are systems of data exchange already in place in the fresh food supplychainthat support blockchain.The GS1-128 barcode, for example, used in the meat industry, provides a global standard for exchanging data between different companies, enabling serialization and expiration to be encoded. Some seafood products, such as scallops fished in the North Atlantic, are tagged with GPS coordinates, recording location, date and time when harvested. Like the data acquired from the produce inspection capability and our customer portal, GS1-128 information is readymade for integration with the blockchain.
We are constantly testing ourselves and readying ourselves to partner with those vendors and customers who want to integrate with blockchain. But as a solution provider, we are a participant in the process. We are blockchain ready, but those suppliers producing the products and those retailers receiving the products need to be the initiators of blockchain.
Utilizing blockchain to validate temperature-controlled services and product integrity is an extremely valid and attractive option. But only a small percentage of participants in the fresh produce supply chain, such as Dole and Driscolls, provide continuous tracking of products from producer to the retailer via blockchain.
The challenge with blockchain in temperature-controlled foods, and indeed for the entire supplychain, is more fundamental than integrating blockchain-enabled companies, it is system standardization.Establishing a universal language with developed and managed standards from a recognized independent standards agency, which enables the openness like we enjoy with the Internet is where we need to focus our efforts. A uniform standard for blockchain is still a long ways away from being ready and effective across multiple channels.
Steve Tracey Executive Director, Center for SupplyChainResearch,Penn State Smeal College of Business
The Center for SupplyChainResearch connects researchers and professionals from leading organizations within a community that is shaping the future of the supplychaindiscipline. It is member strong and intellectually active in many facets of supplychainmanagement and the enabling technologies used for collaboration, visibility and integration.
The underlying technology of blockchain is a distributed ledger technology and encryption, which has been around for a while. It got popularized with bitcoin, and although it uses the same underlying technology, it is almost completely the obverse of how it is used for bitcoin. In a bitcoin use case, the trans-actors are anonymous, and the transactions are public, across a large network base. In a supplychain, the trans-actors are public, and the transactions are private, across a very small network base. You might have 50,000 or more network nodes around a bitcoin transaction, and in a supplychainuse case you are talking about much smaller numbers, maybe 10s or 100s.
Where I see blockchain being applicable in the long run are things like smart contracts. Blockchain could potentially speed up procure-to-pay systems, which would make the velocity of money and the speed of transactions go much faster, and significantly reduce administrative overhead.
Another great use case is chain of custody in the food business. Being able to track and trace chain of custody from point of origin to point of use. This is another case where you could have big data streams managed with data integrity, creating a high trust value.
From a data security perspective, one of the myths about blockchain is that it is perfectly accurate. It is not. If you put bad data into a blockchain, the only way to correct that bad data is to go back and append that block with the correct data. So blockchain doesnt eliminate data quality issues. What it does do is encrypt data in a way you can trust the data. The combination of the encryption technology, the blockchain itself, and the distributed ledger system, where you are actually verifying the same data on multiple nodes in the network, creates a high level of data trust. As long as you put the right data in, and it is verified from the nodes in the network, you have a high level of trust that the data as input is trustworthy.
The wide adoption of blockchain, in particular use cases, is going to come from pilots through networks of different organizations figuring out actual data sustainability models, and getting all the right players onto the network where they all have buy-in, and actually have a vested interest in having the data. To work, I believe it will need to be a win-win scenario, with the ability for everyone in the network to see value in both contributing and drawing data from the system.
Kevin Otto Senior Director, Community Engagement, GS1 US
GS1 US is a not-for-profit information standards organization. With more than 300,000 members, GS1 standards are the most widely used supplychainstandards in the world. GS1 US administers the Universal Product Code (U.P.C.) barcode, as well as other information standards and data carriers.
In our cross-industry blockchain discussions encompassing healthcare, food service, retail grocery, apparel and general merchandise, supply chain visibility is the first use case that companies are looking at to see how blockchain can fit into their operations. Because GS1 already has universally accepted standards in place for visibility that can be used in blockchain, and other data sharing mechanisms, we are in a unique position to foster interoperability between blockchain users. Essentially, GS1 Standards are fundamental to the evolution of blockchain.
Because of consumer demand to know more about the quality and origin of the foods they are purchasing, we are seeing a considerable increase in discussions around the ability to constantly monitor the quality of food products as they go through the supply chain, and then feed this information into a blockchain. This need is making it less practical to record and maintain this information paper-based, while at the same time it presents a barrier to getting participants onboard to record this data digitally, like at the farm level where they may not be electronically equipped.
In food, companies in the supplychaindefinitely have to know where a product came from and where it went, per FDA and USDA guidelines. Since GS1 Standards are broadly adopted in the food industry, these standards are being shared electronically, by and large. The challenge of getting smaller upstream suppliers (farmers and other producers) to use GS1 Standards for identifying, capturing and sharing information is therefore a first-step and prime concern, while the challenges of adopting blockchain are being discussed and evaluated. One-hundred percent supplychainvisibility cannot be achieved without all participants in a blockchain ecosystem on-board with the same standards of capturing and reporting data. I think it is necessary to have bigger players come forward to push and facilitate smaller participant companies to come to the table.
Essentially, the food industry, as well as other supply chain sectors, is engaged in utilizing other systems to achieve supply chain visibility, until they figure out exactly the best way to leverage blockchain technology.
Rick Stein- Vice President, Fresh Foods, Food Marketing Institute
The Food Marketing Institute (FMI) advocates on behalf of the food retail industry, which employs nearly5 million workersand represents a combinedannual sales volume of almost $800 billion. FMI member companies operate nearly33,000 retail food storesand12,000 pharmacies.
FMI guidance to its members is to work with their supply chain partners and focus on prevention of contamination, increase communication with FDA and supply chain partners, and provide simple and agreed-upon data elements for traceability and flexibility in how those data elements are shared. Our members want to be able to make technology choices on their own, and we fully expect technology to advance as it has done so in the past.
We firmly believe in the importance of the safety of products and the increased use of technology as a tool to share information among supply chain partners. Our members will choose which technologies they adopt but are moving toward the ability to trace their products back to its origins. Blockchain is among some of the technologies used, but its the data within that is critical to the success.
Rick Blasgen President and CEO, Council of SupplyChainManagement Professionals (CSCMP)
CSCMP is a network of more than 6,000 global supply chain professional members worldwide. It is the preeminent worldwide professional association dedicated to the advancement and dissemination of research and knowledge on supply chain management.
To me, blockchain is almost like RFID was some years ago. We have this technology that is probably ahead of business practice. People dont know exactly what to do with it.
There are a lot of pilots and use cases in progress, people trying to figure out how the technology and the business process will work. But at this point, who knows where it will go. It is a bit of a leap of faith, in a way. But, this is how new ways of doing business are accomplished.
As a technology which is enabling movement of data between partners, if blockchain produces productivity and offers a more accurate and secure way of transacting business, it will lend toward being accepted by the supplychain. The question to be asked is: What do I get out of it that improves my business process?
I think the track-and-trace capability will be the main draw for blockchain. Greater visibility into where the inventory has been, and where it is, at any time, in the supplychainwill increase productivity. This will drive supplychainleaders to pilot it, and try to figure out how to best employ it in their supplychain.
David Shillingford CEO Rising Tide Digital, Team Member, Resilience360
Resilience360, was developed in DHLs Global Innovation Center, and has since become an independent company receiving venture funding from Columbia Capital. The company is an innovative supplychainrisk management software platform that helps businesses predict, assess, mitigate and react to supplychaindisruptions and delays.
There are a number of different ways that blockchain relates to supplychainrisk. Ultimately, at the heart of it is having accurate supplychainvisibility that you can trust, and sharing this data with all parties involved. This can be done with todays technology, but in some cases, can be done better with blockchain, because it is data that can be trusted.
This extends to the legality and paperwork associated with product movement. When a container is moving from point A to point B, specific financial transactions relate to what is in the container, who owns it at any particular point on the Earth and having location verification. This permits financial transactions to be initiated through smart contracts, which would be difficult to do without blockchain.
Today, the state-of-the-art of supplychainrisk management encompasses bringing together two sets of data. One relates to supplychainassets, which could be manufacturing locations or distribution centers, or the shipments that are made between them. This, of course, is being mapped or tracked in real-time in the system. But this is then overlaid with future risk indicators or information about an event that has happened that might be a disruption to the supplychain. These can include weather and geological disruptions, labor issues, political upheavals, anything that might disrupt the supplychain.
This level of insight and analytics brings together what a companys supply chain looks like in real-time, combined with what might happen to it given known data. Ultimately what a company wants to know is what it should be concerned about and the actions it should take to mitigate any disruptive events. At its core, a blockchain-enabled supply chain can outperform traditional supply chains because it is powered by accurate data, leading to better evaluation and decision making.
Stephen Rogers Vice President, Blockchain Initiatives for Supply Chain, IBM
Since 2016, IBM has worked with hundreds of clients across financial services, supply chain, government, retail, digital rights management and healthcare to implement blockchain applications, and operates a number of networks running live and in production. The cloud-based IBM Blockchain Platform delivers the end-to-end capabilities that clients need to quickly activate and successfully develop, operate, govern and secure their own business networks. IBM is an early member of Hyperledger, an open-source collaborative effort created to advance cross-industry blockchain technologies.
The Internet of Things (IoT) and blockchain are going to be almost interchangeable because they will be working so closely together in the future. Right now they are viewed as two separate technologies, but they are going to come together. I would even describe blockchain as the most likely operating system for IoT networks because of its ability to provide security.
Food, and its supplychain, is one of those that you really want to make it an industry solution. Because having gaps in your information between the store that is selling it, and the farm that produced it, means you really dont have a solution. You need to have information of where it was grown, where it was shipped to, and if there was any kind of an aggregation point, where that was shipped to for packaging, and where it was shipped for distribution and then shipped to the stores. You want to make sure you can capture all of that information.
Walmart is starting out with a blockchain pilot with leafy greens, because of the past problems that have occurred with recalls. So IBM is out there with Food Trust, the first and biggest blockchain solution associated with food. (Food Trust is an IBM blockchain-based solution that brought together a host of companies in the food industry into a network, including supply chain services companies.)
The technology of blockchain still has a ways to grow. It still needs to be able to support higher levels of transactional throughput. There are a lot of people who describe blockchain as the golden hammer. It is not that. It is a technology. Just like robotic process automation or hybrid cars or AI, it addresses a specific set of problems. Its just that these problems happen to be big intractable problems, so it is really important.
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Jim McMahon is CEO of ZebraCom, Inc. He writes on industrial and technology solutions, and his features have appeared in more than 2,500 trade and business publications worldwide. You can reach him at jim.mcmahon@zebracom.net.
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7 Industry Experts Weigh In On Blockchain and the Fresh Food Supply Chain - Global Trade Magazine
