Implementing blockchain in your food supply chain has many advantages — mainly the increase in visibility, transparency, traceability, and provenance across the entire supply chain.
But did you know it can help you make significant strides towards your sustainability goals as well? For example, blockchain (especially in combination with Internet-of-Things enabled smart sensors) can help you
- Improve The Efficiency Of Your Supply Chain Processes
- Eliminate Redundancies & Bottlenecks Across Your Supply Chain
- Create Less Food Waste
- Drastically Improve Food Safety
- Run Highly Efficient Product Recalls When Needed
- Establish Consumer Trust In Your Sustainability Efforts
Let's have a look at each one in more detail.
Improve The Efficiency Of Your Supply Chain Processes
Sustainability is all about designing processes as efficiently as possible while using available resources effectively.
Blockchain technology is particularly suited for supply chain management in that regard as it relies on a decentralized database that verifies and stores immutable, encrypted copies of all transaction records across 'nodes' accessible for all participants. This creates a potentially unprecedented transparency and traceability across the entire supply chain — something that essentially has never been possible before in the industrialized food industry.
With this new level of insight, inefficiencies, bottlenecks, and sub-optimal use of resources become immediately apparent. Every action at every step becomes measurable and therefore manageable — with almost instant feedback loops. This means improvements can be implemented quickly and their impact is quickly visible.
Eliminate Redundancies & Bottlenecks Across Your Supply Chain
With somewhere between 15-30 hand-off points in today's food supply chains with no more visibility than one step back and one forward, there are bound to be redundancies and bottlenecks! It is simply unavoidable. While we all strive to improve the resiliency of our supply chains, simply minimizing redundant, wasteful, and delaying processes isn't sustainable — environmentally or financially.
Because of blockchain technology, you and all your supply chain participants can not only keep track of every step in this complex and lengthy process, but also know what happened before and after you. This across-supply-chain view quickly highlights any low hanging fruit in terms of process improvement as well as opportunities to iteratively fine-tune it over time.
Create Less Food Waste
There cannot be a sustainable food supply chain without significantly reducing food waste. According to a new study, 17% of the food wasted in North America is thrown out during production, 6% while handling and storing, 9% during processing, and 7% while distributing. In other words, 40% of this food waste happens within the food supply chain! And most of this loss is preventable.
By combining blockchain with Internet-of-Things (IoT) enabled smart sensors, we are able to act quicker to prevent spoilage. Because they monitor the environmental conditions, like temperature, humidity, light exposure, shock, and more, they can alert you if a pallet of perishable products approaches a predefined and acceptable window for tolerance — for example, insufficient refrigeration. This real-time notification allows us to take action right away and prevent perishables from spoiling.
Drastically Improve Food Safety
Sadly, food safety has become a major concern. This year, one out of six people will become sick with a food-borne illness. While the quality and loss of human life is the primary concern, the enormous amount of organic waste created and the resulting methane gas produced from the wasted food rotting in landfills comes in close second.
Blockchain technology holds tremendous promise to drastically reduce the number and impact of food safety incidents because of the increased transparency and traceability it brings — but the real potential is realized by implementing it with smart sensors. An IoT smart sensor attached at the point of production to a pallet, crate, or container travels with your products all the way onto the shelf. This way, you KNOW the food is safe. With the right legislation and packaging in place, this could change the way we approach food labels.
Here is how it works:
Run Highly Efficient Product Recalls When Needed
Because during a food safety incident we need to err on the side of caution (and until now we didn't have a choice), we throw out (read: waste) an enormous amount of perfectly safe food because it could potentially be contaminated. For example, in April 2018, 200 million white eggs had to be destroyed in a single recall.
By implementing blockchain technology across your supply chain, you can quickly and confidently trace back a contaminated product to the source and track down other products that are contaminated. In a Walmart trial in 2017, the team was able to trace back a pack of mangoes in 2.2 seconds instead of 7 days. Imagine how much less food would be wasted (and how many fewer people would be potentially exposed) if we traced back food that fast.
Establish Consumer Trust In Your Sustainability Efforts
While some companies pursue sustainability goals because they truly believe in them, most large food producers and processors certainly place profits before environmental or social concerns. Luckily, the two goals don't have to be mutually exclusive. Many younger generation consumers are willing to pay a premium if they believe the brand's sustainability claim.
Blockchain allows you to provide your consumers with immutable evidence to back up your claims. This could include the place of origin, ethical sourcing, the miles traveled, the amount of CO2 emitted, and much more. The blockchain-generated data also significantly helps to certify your product as organic or fair trade produced.
While our list above is by far not exhaustive, it does highlight some of the most impactful ways that blockchain (and smart sensors) can tangibly contribute to your sustainable supply chain goals — while contributing to your bottom line! I hope this inspires you to further explore this new innovative technology. Please feel free to reach out if you have any questions.