Thank you for Subscribing to Food Business Review Weekly Brief
The Problem with Food Traceability
The world’s food system is changing. An increasingly complex supply chain provides consumers with year-round access to fresh fruits and vegetables. With this, customers expect the variety and availability of an endless shelf whether shopping online or in a store. Our customers also trust us to ensure safe, high-quality, sustainable, and affordable food. Walmart operates a complex business spanning 27 countries and serving over 265million customers weekly. We recognized an opportunity to use our size and scale to positively change the food system by minimizing food safety risks earlier in our supply chain. This led to an obvious question: “What does our entire food supply web look like?” To find out, we embarked on a journey to enable traceability and transparency using blockchain. Why Blockchain? Our first problem was scale. We struggled to find a technology that encompassed our global operations. After hearing about blockchain, which was being used to track cryptocurrencies like Bitcoin, we invited a group of our U.S.- and China-based suppliers and competitors to participate in a pilot to test, learn, and scale the technology. The pilot showed permissioned blockchain could provide value and solve real-world problems in food supply chains. Immutability, consensus-driven, and democratic governance are few of the benefits of blockchain we identified. That’s when we formally launched our blockchain initiative with fresh leafy green suppliers and recently expanded to our green bell pepper suppliers. "As with any digitized system, data integrity and accuracy are critical to blockchain’s success" Challenges and Opportunities Blockchain relies on each supply chain actor providing accurate information. We had to streamline supplier onboarding to the blockchain platform to create buy in and end-to-end visibility. Our suppliers range from large multinational corporations to small mom-and-pop farms, so not everyone had digitized data, which is a pre-requisite to using blockchain. Others—including Walmart—had data in multiple systems. We worked with our suppliers to integrate data from internal systems while ensuring data consistency across our supply chains. We also had to acknowledge beginning assumptions needed revisions as we rolled out the first phase. As with any digitized system, data integrity and accuracy are critical to blockchain’s success. We encouraged the use of Internet of Things(IoT) devices and sensors to capture data, reducing opportunities for human error. We are also working on using predictive analytics to identify data inconsistencies before they become a food safety problem. For example, if we see a shipment notification on the blockchain from a supplier with an expired food safety certification, could we automatically reject the shipment—even before the truck leaves the supplier’s facility? This helps reduce supply chain costs and waste. With improved data accuracy, we can also identify data inconsistencies and errors during normal business operations, not during a crisis. Our emphasis on global data standards like GS1 and support for open source communities like Hyperledger help us tackle this issue at scale. We recently became a member of the Hyperledger community, which presents a unique perspective to share with the open source community. In addition, we wanted to build an ecosystem that benefited all participants. That’s why we invited competitors alongside our suppliers to help develop the blockchain with us. Suppliers also have more visibility to data in blockchain than they had before. Not everyone benefits the same. For some, it’s about compliance and food safety. For others, it’s about optimization and efficiencies. For Walmart, it’s about protecting customers and members while delivering on our customer promise: saving time for busy families and providing an improved shopping experience so they can live better. What’s Next? Since launching blockchain, we enabled farm-to-store visibility for romaine lettuce with a majority of our fresh leafy green suppliers. Our green bell pepper suppliers have until summer 2020 to do the same. As we build on lessons learned blockchain is no longer a simple “initiative.” The technology is being integrated into our enterprise systems and processes across merchandizing, compliance, technology, and supply chain teams. To better manage food safety, compliance, freshness, and quality, we’re building out analytics to create greater supply chain efficiencies. By identifying and alleviating bottlenecks, we can do several things like provide fresher foods to our customers and reduce food waste in the supply chain and our customers’ homes. Eventually, blockchain could be used to prevent large-scale recalls, or at least limit their impact on our operations and for our customers. While blockchain technology has benefits in the crypto space, we have also found benefits in enterprise blockchain deployments: - Data sharing benefits all parties involved; the organization generating the data decides who sees it, putting permissioning in their control.- Trusted data in a shared ledger helps all organizations on blockchain network make informed business decisions. Decentralization allows for consensus-based verification by different organizations.
- Governance of ecosystem is just as important as implementation of the tech itself to help build trust across the supply chain. Our goal is to build a smart, transparent food supply chain to protect customers and deliver an improved shopping experience. Blockchain helps make that vision reality. We cannot succeed without continued collaboration across stakeholders, including industry associations, academia, government agencies, nonprofits, and our competitors. While our size and scale can influence change, we know we are better together.
