Blockchain: Coming to a Supply Chain Near You

The advent of blockchain technology as a tool to enable secure, accurate sharing and verification across entire supply chains is fast approaching, moving it beyond the realm of Bitcoin transactions, attendees were told at Home Delivery World in Atlanta.

Paul Chang, global blockchain industry lead for distribution and industrial markets at IBM, said the challenge is that supply chains can involve three, five, 10 or more different partners, with every one managing their own business process.

“You can try to reconcile data over the air using EDI communication, but what if there’s a disagreement among partners? Who has the correct data?” Chang asked. “With blockchain, everyone has a distributed version, a single source of truth shared among parties. It’s more secure, immutable and automated with smart contracts.”

“If you have a business purpose around trust, with all the layers of the supply chain there is increasing risk downstream of not getting the right information or product,” said Bob Wolpert, president of quality custom distribution for Golden State Foods. “Blockchain transaction technology takes the whole supply chain and allows every section to be immutable, attach information, certify and do quality assurance.”

Wolpert said trust and the provenance of its products from farm to fork are huge concerns with Golden State Foods, which makes 25,000 domestic deliveries per week primarily to quick-serve restaurants, convenience stores and cruise lines. “One food-borne illness causes a big issue – think of Chipotle a couple years ago,” he said.

He said the beauty of blockchain is that it doesn’t involve dispensing with current technology but can be layered on top of existing supply chain systems using ASN or EDI data feeds, populating the path as products are added. Golden State Foods conducted a successful blockchain pilot in July 2017, tracking the temperature of fresh produce using serialized RFID on every case. Farmers anywhere in the world use an app that records shipments into the ecosystem, tracking goods all the way to the retail outlet.

“There are now multiple efforts underway,” Wolpert said. “Technologists are saying that blockchain implementations are 5-10 years out, but I believe we’ll see the production of quality systems in the next year.”

Chang said IBM is involved with Hyperledger, a private blockchain standard developed by the Linux Foundation. In addition to Golden State Foods, other major players that partnered with IBM last year on its blockchain initiative include Walmart, Unilever, Nestle, Kroger and Wegmans. He said data from competitors can sit in the same blockchain “but we can still guarantee that your data is not visible (to them).”

“We are developing some interesting technology, looking at various consensus algorithms (to drive blockchain processing speed),” Chang said. “While a single Bitcoin transaction can take 10 minutes, we can now drive 5,000 transactions per second. Even that is not acceptable to a company like Walmart which is looking to enable 50,000 or even 100,000 transactions per second down the road.”

Just as it has with strict vendor standards on transit times and delivery through its “on time in full” program, Wolpert said he expects Walmart to begin implementing vendor requirements for blockchain in the near future to ensure greater supply chain accuracy and visibility.

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