Retail giant Walmart, IBM and Tsinghua University are collaborating to improve the way food is tracked, transported and sold across China, using blockchain technology. The project creates, “A new model for food traceability, supply chain transparency and auditability using IBM Blockchain based on the open source Linux Foundation Hyperledger Project fabric,” and coincides with the opening of a new Walmart Food Safety Collaboration Center in Beijing.
Paul Chang, a global supply chain lead at IBM, says that the trial represents a substantial improvement over earlier projects that solely used barcodes and radio ID tags. “The missing piece was a shared forum where companies could begin to see each others’ transactions and develop trust,” he said. “That missing piece is something like the blockchain.”
Information to be stored on the blockchain, where fraud and inaccuracies are much harder to get away with, includes details related to farm origins, factory data, expiration dates, storage temperatures, and shipping. “We can eliminate layers that exist today that add very little value to the industry,” Chang said.The United Kingdom's Office of Science offers this quick explanation of blockchain -- or Distributed Ledger Technology:
Ledgers have been at the heart of commerce since ancient times and are used to record many things, most commonly assets such as money and property. They have moved from being recorded on clay tablets to papyrus, vellum and paper. However, in all this time the only notable innovation has been computerisation, which initially was simply a transfer from paper to bytes. Now, for the first time algorithms enable the collaborative creation of digital distributed ledgers with properties and capabilities that go far beyond traditional paper-based ledgers.
A distributed ledger is essentially an asset database that can be shared across a network of multiple sites, geographies or institutions. All participants within a network can have their own identical copy of the ledger. Any changes to the ledger are reflected in all copies in minutes, or in some cases, seconds. The assets can be financial, legal, physical or electronic. The security and accuracy of the assets stored in the ledger are maintained cryptographically through the use of ‘keys’ and signatures to control who can do what within the shared ledger. Entries can also be updated by one, some or all of the participants, according to rules agreed by the network...
Distributed ledgers can provide new ways of assuring ownership and provenance for goods and intellectual property. For example, Everledger provides a distributed ledger that assures the identity of diamonds, from being mined and cut to being sold and insured. In a market with a relatively high level of paper forgery, it makes attribution more efficient, and has the potential to reduce fraud and prevent ‘blood diamonds’ from entering the market.The IBM, Walmart, Tsinghua pilot is motivated by safety concerns. Along the way to addressing these safety concerns, the relevant supply chains will be made minutely transparent. The availability of this detail has amazing implications for issues beyond safety.
Supply chain management differs from logistics, says me, largely in terms of how information is exchanged and managed. Logistics is about how, SCM is about where, when, and how much. Distributed Ledgers generate the potential for precisely targeting quantity and quality to demand.
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