Over the past months, we have talked a lot about what blockchain is, its benefits in the food supply chain, and how it could help revolutionize the food industry by improving traceability and overall supply chain transparency and efficiency.
We also had a LOT of conversations with food safety experts, buying managers, regulatory officials, media representatives, and other professionals in the food industry — and we are beyond thrilled about their responses when they see Chainvu in action. The competitive advantages gained by implementing a smart-goods logistics solution like Chainvu are enormous in the food industry!
But often that tangible excitement is quickly clouded over with questions of how to get started:
- Where would I start evaluating this?How can I run a pilot or trial in my complex supply chain?
- How can I get my partners on board with this?
- What is this going to cost me?
- How much effort/process change do I have to do to make this work?
- What is the worst case scenario?
While the prospect of implementing a full trial or pilot across your supply chain seems daunting at first, I promise it won't be as difficult as you think — especially if you keep these proven industry best practices in mind. Over the past year, we found these guardrails extremely useful as they have helped our prospects set up and run successful trials or pilots.
(BTW: When we refer to a trial below, we are talking about a one-month road test of our blockchain and smart sensor technology, while a pilot is a 3-6 months full implementation of the product.)
Decide On A Realistic Scenario
Let me start by stating what is maybe the most obvious (yet the most likely to be overlooked) criteria for a successful blockchain trial: deciding on what you want to do and being realistic about the opportunities but also the limitations of this new technology. While this might sound straight-forward enough, it is actually the hardest decision you will make.
The Gartner prediction that "by 2023, 90% of blockchain-based supply chain initiatives will suffer ‘blockchain fatigue’ due to a lack of strong use cases" indicates how important it is to be real about what can and cannot be done.
This isn't to say that blockchain isn't going to revolutionize the food supply chain, change the way we approach food safety and recalls, or enhance how we trace our food from fork to farm (because it 100% will!), but it is crucial to be honest about its limitations. Maybe this is the careful Canadian talking, but if you have talked to us in the past, you know that we prefer to undersell and over-deliver.
Focus On A 'Clear Line of Sight'
In addition to being realistic, you will want to choose a scenario that enables you to showcase the potential benefits for other use cases within the organization and has immediate and tangible benefits (or a 'clear line of sight'). This can easily be achieved by tackling a process in your supply chain where you are already facing real problems. For example:
- Your easily broken or spoiled products (e.g., eggs, raw chicken or beef, fresh leafy greens) get damaged during transport by a failing cooling system, longer than anticipated travel times, or through shock impact.
- You currently have huge amounts of money tied up in disputed bills of lading and you are looking for ways to make the hand-over at receiving bays faster.
- You currently have a lot of disputes because of the unclear chain of custody.
- You are unable to quickly trace back items in case of a food safety incident.
- You have to guarantee refrigeration of valuable products or ingredients at any point in time to prevent spoilage or waste.
- You are unable to comply with regulatory food safety guidelines as reporting on the current paper trail is impossible.
While the point of a trial or pilot might not be to try to generate huge savings in such a short amount of time, you want to be able to experiment with the full set of features and see what is possible — while realizing some of the potential benefits blockchain could bring to your organization.
Manageable Risk & Uncertainty
The last thing you want to do is start a trial and disrupt business operations. Therefore, try to choose a scenario that operates within a somewhat contained environment and limit the amount of call interaction with existing systems to minimize the potential for business disruption. Also, consider how much time, effort, resources, and investment this scenario consumes versus other potential scenarios.
Regulatory Compliance Issues
The food and pharmaceutical industries are highly regulated, and our customers often require FDA process approval. While the FDA and other regulatory bodies are starting to embrace blockchain and other new technologies to improve traceability and transparency, each trial or pilot should be evaluated for potential regulatory compliance issues before going live — just to be on the safe side.
Define SMART Goals For Your Trial Or Pilot
Next, be sure to formally specify goals for your trial or pilot. We always recommend using the SMART acronym to remember to define specific, measurable, attainable, relevant, and timely goals. For example, improving supply chain efficiency is not a SMART goal as it does not define any key performance indicators or time frames. On the other hand, these are:
- By January, we are able to trace a single carton of eggs from retail store back to the farm within seconds rather than weeks.
- Eliminate 90% of the paperwork at the receiving bay by using smart sensor technology, blockchain, and smart contracts by July.
- Reduce food spoilage rate by 35% by tracking and monitoring the products along the journey.
Be sure to ask yourself if these goals that you set yourself are specific enough, measurable (and how will you measure them), realistically attainable, relevant to your business, and achievable in the time frame. If the answer is yes to all these questions, be sure to get all stakeholders to sign off on them.
Create A Tangible Business Case
Now that the hard part is done, it is time to write a business case. There are plenty of guidelines on how to create a water-proof business case so I am not going to walk you through this here in detail, but I want to point out two things:
- Don't skip this step. I have seen many times where this step was skipped, the trial was done anyway and, after the trial, executives didn't come on board.
- Get real numbers. Executives want to know what to expect. While this can feel a bit like a Catch-22 (you won't know until you have done it), it is important to get data on the problem you are trying to solve (this should be the easy part as this data should be available internally), realistic industry benchmarks, and estimated return-on-investment.
I hope that by sharing these proven industry best practices we have established over the past year, the next steps are becoming a little clearer. But even if it still sounds a bit overwhelming, know that we are happy help you figure out what the best scenario for your unique situation is, how to best define your goals, and how to make this a successful trial period.