Food supply chains are often plagued with a lack of visibility and transparency, extending from the farm to the fork. The primary reason for these issues is the way food is being sourced. Food sourcing is now truly global, with produce being shipped from different corners of the world and stocked in supermarkets, moving through the hands of several stakeholders along the way.
This brings complexity into managing logistics, with stakeholders at different nodes of the value chain having no visibility into the operations of the other parties involved. This has fanned interest for businesses to look into blockchain, which can help standardize supply chain processes, while also ushering in the much-needed transparency and visibility.
“As supply chains grow increasingly more global, you don’t necessarily have that personal relationship with some of the trading partners in a supply chain that you may have had 10 or 15 years ago,” said Kevin Otto, senior director at GS1 US, a standards organization that standardizes blockchain frameworks for easy adoption within food supply chains. “So the idea that you can actually track and trace products through a global supply chain and ensure that you’re shipping safe food to consumers, becomes increasingly more of an acute problem.”
Otto explained that the idea of linking supply chain trading partners together in a trustworthy environment through blockchain or any suitable data-sharing mechanism is essential because there has been an increase in the number of recalls and contamination issues in recent years – threatening authenticity within food supply chains.
“So as supply chains grow increasingly more global, it becomes a bit harder to link all these people together. So I think that’s a major problem that food supply chains have been trying to tackle for a number of years. I think the whole idea behind blockchain becomes another arrow in the quiver to be able to address that food safety concern,” said Otto.
He contended that the real value behind blockchain is its possibilities in enabling more open data sharing and in creating an audit trail – helping ease and expedite the movement of food through the value chain.
“I think the biggest concern that we are looking at is that data is still only as good as the people who are providing it. So if we need accurate and standardized data, blockchain makes it more effective to audit that data in the supply chain and provide greater visibility,” said Otto. “At GS1 US, we help the industry understand that it can’t just adopt blockchain and have supply chain visibility. You still need to actually be capturing and sharing the data in a standardized fashion for it to mean anything to trading partners down the line.”
In essence, though blockchain can bring in auditability, the technology still needs its core data to be populated and accurate to start with. The rapid rise of blockchain in the industry comes with a caveat – eager businesses that look to adopt blockchain into their operations without understanding the fundamental precincts of blockchain.
“Data governance becomes a key concern in blockchain. The standards that we provide are around identification of assets as they move through the supply chain,” said Otto. “For instance, take the barcode on a bottle of water. The ability for the barcode to capture that product’s batch number, lot and serial number as it moves through the supply chain can be used to identify physical locations like manufacturing facilities, distribution centers, farms and further upstream. All this can be done through GS1 standards.”
Otto pointed out that these standards help supply chains at-large visualize critical questions on the provenance of products – namely, the what, the when and the where part of the process.
“The important part about starting these conversations around blockchain is to know your use case. Blockchain is not a cure-all for supply chain visibility,” said Otto. “Blockchain will not be a fit for some use cases, and so the C-level people in organizations must understand the limitations before they start writing checks for blockchain pilots.”