By Nour Chaarani
Let’s take a time machine! Here you are Manager of the supply chain of a multinational company. You are aware of the complexity of the supply chain management (management of the network between a company, its suppliers and the final buyers). From the activities involved in the scope of the SCM arise several challenges at different levels of the chain. Firstly, the supply chain management being centralized on the needs of the customers is about giving the right quantity and the right quality of the product for the right amount of resources. The adjustment to the customer’s preferences all in the perfect timing and sitting is surely a complicated task that requires investment in new technologies. Another aspect that constitutes an issue would be in regard to the risk factor. A risk management plan is required to overcome complications related to the constant change in the market. Meaning that, you’ll have to implement a specific software. Another probable constraint would concern the delays due to the variety of shipping time frames, which requires an efficient warehouse management system to be able to track deliveries. The intricate aspect of the SCM comes from its purpose to establish a multi-stakeholder collaboration environment, that being possible by including distributed activities from upstream production related operations to downstream distribution related ones. You find yourself in a situation similar to the previously stated ones and you have to come up with a solution.
At this point, I assume you know the way out to all of these obstacles within the supply chain. Yeah that’s right, 10 letters, decentralized and with an infinite number of possible uses. BLOCKCHAIN. It’s now established that Blockchain spreads in all aspects of the economy like a juicy piece of gossip in a small village. This information technology can provide several potential applications related to operations and supply chains; it can solve the problem of immutable ledgers distributed to several actors in the chain.
Let’s forget now about that time machine and move to a more standard activity: Grocery shopping. Don’t you wonder sometimes where do the products that accumulate in your trolley come from? Well, before deciding to go vegetarian because you heard that story about that supermarket substituting beef meat by horse meat, or that chicken you thought buying from an honest farmer being actually from a slaughterhouse where it has been horribly treated or even that those veggies you thought organic were drowning in pesticides. Track your food thanks to blockchain! We don’t want you to starve, do we?
The implementation of the blockchain technology can solve the lack of transparency, efficiency and speed, in the supply chain of food. The distribution, safety, and immutability features of this technology is what gives it that one size fits all character. Fresh products can use real-time temperature monitoring through the blockchain. A decentralized blockchain provides a tamper-resistant, immutable ledger, which means less room for fraud. A fully digital supply chain system is cost-efficient in the long term and its use in tracking foodstuff would be then a solution to avoid meat or baby-formula industries’ scandals.
There are roughly two approaches for supermarket outlets to start adopting blockchain. The first one is customer focused. In an attempt to restore some of the lost trust, it enables consumers to have access to a transparent and traceable production and distribution process. The second approach is business oriented by fully digitizing the supply chain, with the ability to be updated on a real-time basis, the entire process can be monitored more closely, and in the event of for instance a temperature drop, measures can be taken much quicker and misplaced cargo can be traced in seconds by checking the digital ledger.
Many large organizations have built their own identities and systems to maintain a global coverage of operations. Walmart collaborated with IBM on building a food safety solution expecting every supplier of leafy green vegetables to upload their data to the blockchain. Carrefour, Europe’s largest food retailer, in their intention to improve product traceability, is using blockchain technology to track eggs, chicken and tomatoes as they travel from farms to the supermarket shelves. French-headquartered retail group, Auchan, has signed a collaboration with blockchain-based TE-Food, to oversee their blockchain-based food traceability.
Briefly, Blockchain once again proves efficient to substitute centralized regulatory bodies or intermediaries and to avoid low transparency. Not only does it enable food origin tracking but also Fraud prevention, Management of loyalty points, Staff time tracking among other things.