There is a lot of hype in the market right now on blockchain, especially in the food chain, as blockchain keeps records of digital transactions so that anyone who is granted access can view in a network.
Yes, blockchain technology is increasingly being eyed by the supply chain industry as a means to bring new efficiencies and lower costs. The use case in retail, specifically for FMCG, is a means to store captured transactions and to make it safe, reliable, quicker and easier to trace products – especially in the case of food safety check or recall issues. It’s the idea of a new platform, independent of all the links of the supply chain, ensuring data reliability with many new technology partners. But even if the technology is ready, standard rules have not emerged yet for this use case.
Whoever (suppliers, retailers, shipping agents) has access to the platform has access to the same information or common structure to alleviate corruption of data.
I know that our customers are starting to talk about this. Is this something they’re asking for?
Today our retailer customers are asking for traceability and recording traceability along with goods movement in supply chain. We are not yet in a situation where they have asked us to be compatible with a real external blockchain platform, independent of them. So, they must lead the way to progress blockchain because today there is no real shared standard currently.
From your perspective, can you share more with us about traceability and then expand on standards?
We have developed and delivered a system that has delivered trackability – combining capture of traceability indicators and storage (lot#) on a unique environment shared by WMS and the store back office.
Part of a suite of inventory management solutions, SR Supply Chain Tracking is live for many customers in Europe and Russia.
The challenge in the market today is to answer the end-to-end traceability (from farmer to the warehouse to stores). The first benefit of a blockchain is that nobody really owns the data, so if there is a conflict it can be quickly resolved: data is trustworthy. Another benefit could be easy access of that data by the final consumer: if a tag/id was printed on the package, he/she could access producer information, item history etc., just by scanning it with a smartphone.
How can blockchain provide benefits to the food chain?
It addresses the weakness of the trust issue. The fact that data is independent of any of the links in the supply chain. But the principle is still the same though in regards to supply chain data. Data needs to be collected by each actor (manufacturer, supplier, retailer, agent etc.) and published.
Where do you see software providers getting into blockchain?
The issue is not technology but the standardization. All the projects currently do not have a standard topology of content that should be captured. As an example, at one stage, we must have committees to decide what is the minimal data to be captured and stored. The same way we had to decide UPC or GS1 for item attributes. This will take much more time to standardize than technology.
For our solutions, we can send information to a blockchain easily. Actually, capturing data on each movement (creating inventory, shipping, etc.) is what requires the biggest effort.
As mentioned previously, blockchain is in the experimentation stage today and is done by very large retailers some of them also manufacturers of private labels. They can create their own internal standards for their own needs.
If we look at traceability end to end – we need to convey this to the consumer. We need and id for customers printed on the package. Blockchain should expand traceability capture on the POS with the scanning of this ID along with the loyalty card of the consumer understanding what the consumer purchases – to ensure targeted recall campaigns or improve safety recalls execution.
Today, we solve this issue in SR Supply Chain Tracking by making a specific communication. If the lot number is in store for a given period, we guesstimate one of the consumers in this store during that period purchased it. We push inventory tasks to the mobile associate during that period to remove goods from the shelves.
What about food safety and blockchain?
As a conclusion, food safety will not be ensured by blockchain alone. There’s a mix of activities at the consumer communication level, store and warehouse level as well.
I think there is a bright future, but it won’t depend too much on the new blockchain technology. Rather, the speed of adoption will depend on the capability to define the standards.
Farmers won’t want to send different information to Walmart and then to Kroger. There needs to be consistency. For food attributes, there is a lot of work for standardization going on for allergens and ingredients.
We mainly discussed traceability here but there’s a much broader focus: prices, deals (rebates), service level agreements between vendors and retailers (penalties). All contractual interactions between vendors and distributors could potentially be recorded. We are only at the beginning stages.
- Read the blog by MIT’s Media Lab Advisor, Michael Casey, who will cover blockchain in detail at Xcelerate.
- Read more about SR Inventory Management