What started off as a fervor for exploring cryptocurrencies has begun revolutionizing several industries. Blockchain as we know it today has been extremely promising in its ability to bring transparency to the table, build trust through increased security and offer a high degree of efficiency to business operations.
Beyond the generally understood cryptocurrency application, where else has blockhain been making its presence known? First, there’s the financial technology space. According to a report by Juniper titled “Blockchain for Financial Services: Opportunities, Challenges & Forecasts 2019-2030,” which assessed 19 blockchain vendors on factors such as agility and complexity of their solutions, blockchain asset tracking revenues are expected to reach $4.5 billion by 2023. With such research offering insightful validation on blockchain’s potential, several companies in the fintech domain and the food processing industry are keenly looking to invest in solutions with blockchain in the equation.
As a design-led technology firm with a blockchain focus, my company has adopted a forward-thinking approach to building collaborative blockchain solutions in order to help resolve various challenges in the food supply industry.
Blockchain For Supply Chain Management: What’s In The Offering?
Some of the questions that plague the mind of an average consumer today are:
• How aware am I of the origin of the products I use on an everyday basis?
• Is the information on where the products come from or how many stages/hands they have passed through readily available to me?
• Who really makes sure the products I use are safe, authentic and secure?
A primary yet complex challenge in the fragmented food supply industry today is the need to ensure food is prepared safely and responsibly. In essence, food safety, food security and food traceability stare at the face of supply chain industries as deep-rooted issues. It is here that blockchain can come into play and be roped in to address these challenges efficiently. How? By providing the following benefits:
End-to-end visibility: Blockchain can help monitor supply chain events and processes across the entire food supply spectrum to assess pain points and preempt potential issues proactively. This, in turn, helps increase efficiency and ensure traceability and provenance of food supply chains.
High degree of flexibility: Blockchain, owing to its decentralized and distributed nature, offers industries the ability to adapt and respond to issues rapidly with no critical impact on operational costs. The ability to track ownership records and its inherent nature of being tamper-proof can be leveraged to solve a wide range of issues, including food fraud, safety recalls, supply chain inefficiency and food traceability in the current food ecosystem.
Seamless information sharing: Through the immutable and tamper-proof nature of blockchain, sharing information effectively among various stakeholders in the food supply chain will be much easier to reap the benefits of risk control and increased traceability. By holding a trusted source of data that can be rapidly and securely communicated among various partners, blockchain can add an element of inferred trust to enable more efficient and complete sharing of critical data that drives important transactions.
How do these benefits come together to tackle issues crippling the food supply chain?
By ensuring food safety: With the current spate of fragmented food systems, food safety concerns — such as foodborne illness, lack of traceability and data governance — occupy a significant proportion and can lead to neglect by food safety authorities. Blockchain can help to identify the exact source of illness or contamination, thereby minimizing food waste and revenue losses.
By simplifying payment processes: Blockchain is gaining traction in supply chain management in how it could pave the way for widespread data sharing. This is noteworthy in terms of simplifying payments in the supply chain ecosystem through automation via smart contracts, built into a blockchain solution. This automatically enforces previously agreed-upon terms and records transactions on an unchangeable, immutable ledger.
By improving provenance: The most common use of blockchain in food and agriculture supply chains is to enhance traceability. Blockchain can empower food companies to quickly categorize and give the all-clear for safe products, all while marking unsafe products back to their source and identifying areas they have been distributed.
Solving The Quality Problem With Blockchain
To realize the potential of blockchain in food supply operations, my company has been working with a customer in the confectionary food supply space. Through this project, we are exploring how replacing a regular database with a multi-chain blockchain database to store critical data can help build a tamper-proof and robust food quality assurance platform. This experience has also taught me that there are a few challenges all leaders need to consider if they begin using blockchain in the food supply industry.
Major challenges in implementing large-scale blockchain projects arise when trying to get the buy-in of multiple parties to execute the project. There are platforms that are looking to bring the data of multiple food producers, suppliers, manufacturers, etc. on the blockchain to verify the authenticity of their food quality. If this works it will be great, but it is an ecosystem solution, which is usually the toughest to crack.
Additionally, the data retrieved from the blockchain is only as authentic as the data that was put in. You’ll need to ensure there is no data tampering at the source of the data. Take data as directly as you can from the internet of things sensors that are in your customer’s production units, which can help avoid human error and interference.
Finally, there’s the issue of too much transparency. Once your food quality data is on the blockchain, it is there forever. While this is good for the consumer, not all companies are confident about their quality. This solution might be great for some but not everyone.
As you can see, blockchain has the potential to bring transparency to the table, build trust and offer a high degree of efficiency to the food supply space. But keep these challenges and best practices in mind in order to leverage it effectively.