Walmart, the world’s largest retailer, is looking into blockchain to script the future of the supply chain. The technology is well-suited for managing data spread over a number of parties.
The move by Walmart is not only a way to make their processes more efficient, but to also bring about a change in the retail market. A change from siloed data collection to a more open approach for a better world.
Bringing Verifiable Trustlessness
The main problem with retail supply chains is that there is not a lot of verifiability or traceability. This is simply due to the fact that there are a high level of participants in what seems to be a simple system.
Every product goes through multiple steps and passes through multiple hands. This is especially true in the food shipping industry, as there are many processing and preprocessing steps to be undertaken, along with a high number of middlemen involved.
However, due to the aforementioned reasons, Walmart cannot respond quickly in the case of an emergency, as it takes many days to track down the origin of a unit of food.
Currently, big retailers like Walmart have systems in order to verify the provenance of each food product they have on shelves. This causes siloing of data by a single company, leading to even less transparency in the overall system.
Increasing data silo practices have already created a logistics and supply chain market that is impenetrable. Moreover, due to the different systems used by various retailers, useful data is also difficult to find.
All of these factors led to a problem that Walmart was eager to solve. The agent of this change was Frank Yiannas, Walmart’s former VP of Food Safety, who was shifted from a blockchain critic to an ardent supporter.
The Shift To A Transparent Alternative
Walmart has, in fact, been researching alternatives and improvements to their current system for many years. Their collaboration with IBM was the latest effort in improving their supply chain systems.
IBM aimed to solve Walmart’s problem using Hyperledger Fabric. This permissioned, enterprise-level blockchain seemed like a good place for Walmart to test out the applications. The execution would also be easy, with each step of the supply chain being denoted by a node in the chain.
The technology was also aimed at bringing more accountability to the chain. Where previously paper documents were required, now a simple QR scan would bring up all the documents at the ready. Keeping in mind the efficiency of the project, Walmart took up 2 different proofs-of-concept.
The first was to track pork to shelves in China. The country as a whole has a general problem with food safety, especially concerning meat items. The blockchain solution allowed participants to simply upload the certificates of authenticity directly to it. This creates an assurance of the product.
In their second PoC, they wished to track a pack of sliced mangoes from a farm in Central America. The mangoes go through multiple steps before reaching the shelves, from the farm to a packing house that preprocesses the fruits.
After reaching the US, the mangoes are then sent to Walmart’s supplier, where they are sliced and then packaged. Determined to find the source of the mangoes, Walmart found that it took almost a week to track it back using their old system. On the blockchain, however, the process was completed in 2.2 seconds.
Vision For A More Transparent World
This convinced Walmart to not only go ahead with the product but also to start a consortium of suppliers and retailers. The purpose of this group was to create a new, scalable and efficient infrastructure for food shipping and traceability.
The previous system maintained that everyone in the network would need to know the party in front of them and the one behind them in the chain. However, as seen before, this system is inefficient and does not work in times of emergency.
Instead, the new consortium, now known as IBM Food Trust, has brought about a new standard for the shipping industry. The consortium consists of Unilever, Nestle, Dole, and many more prominent food wholesalers and transporters.
At last count, the retailer has products in produce, meat, poultry, dairy, and even multi-ingredient products on the IBM Food Trust system. This has created a new degree of transparency on the chain, with further advancements keeping the system updated.
The blockchain upgrade also allows for a faster response in an emergency situation. If, for example, a pallet of lettuce is infected with a virus, the affected lot can be traced back to the farm to prevent further spread of the virus.
Emergency situations such as these show when fast accountability is needed. With the rise of a blockchain consortium of supply chain participants, a transparent world is all but ensured.
