Walmart – one of blockchain’s early adopters

The problem

When it comes to food traceability, it is vital to show where the food was sourced from and where it has been. This is because when an outbreak of a food-borne disease happens, it can take days, if not weeks, to find its source.

In 2022, in the US alone, there were 13 multistage foodborne outbreaks (CDC website). This does not take into account recalls due to other contaminants. For a global view, Food Safety News published outbreaks and recalls on a regular basis.

Better traceability could help save lives by allowing companies to act faster and protect the livelihoods of farmers by only discarding produce from the affected farms.

In 2016, when Walmart’s Vice President of Food Safety asked his team to trace a pack of sliced mangoes to its respective suppliers, his team took 6 days, 18 hours, and 26 minutes (Source: Walmart’s website).

Solution

This started Walmart on its journey to implement a food traceability system using blockchain. They partnered with IBM to create a traceability system based on Hyperledger fabric. Walmart ran two proof of concept initiatives to test this system.

The first proof of concept was for pork in China to install trust in a system where there was none.

The second proof of concept was for mangoes in the US. The purpose was to trace their provenance so that product recalls are faster and more effective.

The results

Pork in China: The new system connected and verified various pork suppliers, packaging companpanies, shippers, and buyers with those who were involved in moving the product around China. It allowed uploading of certificates of authenticity to the blockchain, instilling trust where it used to be a serious issue.

Mangoes in the US: The time needed to trace mangoes to their suppliers went from 7 days to 2.2 seconds!

By 2020, Walmart could track more than 500 food products using blockchain and could provide the FDA with detailed information on the original source of a potential contamination within an hour.

Source: Walmart Website, Hyperledger Foundation website and Foley.com

Learn more about this new technology :
Our blog : “Blockchain in FMCG supply chains”

Blockchain in FMCG supply chains

Blockchain is a technology that can publicly validate, record, and distribute transactions in encrypted ledgers that cannot be altered or changed. In this blog, we look at how Blockchain can be applied to FMCG supply chains to improve efficiency & traceability, and increase compliance

Here is a great illustration of how a transaction is created by McKinsey:

Not only is this technology great for applications where increased security is a must, but it also has the potential to increase transparency and end to end visibility of the supply chain.

What are the applications of Blockchain in FMCG supply chains?

There are 2 key aspects to supply chain transparency:

  • Visibility: Accurately identifying, collecting and classifying data from all parties/links in the supply chain
  • Disclosure: Ensuring only relevant information is disclosed to the viewer, depending on their approval access internally and to external stakeholders

Implementing blockchain technology for supply chain contexts solves for both aspects providing:

Improved communication and collaboration

Due to its nature, blockchain technology improves communication and facilitates collaboration among all parties in the supply chain. Greater traceability and transparency eliminate waste, duplicate orders, invoice fraud, payment issues and unapproved spend/orders too.

Transparency in sourcing

The nature of this technology makes it easier to verify where materials and goods come from and how they pass through the supply chain. This also reduces counterfeiting of products including premium/super premium alcohol, prescription drugs and luxury goods.

Sustainability & efficiency

Using Blockchain in FMCG supply chains also results in efficient gains. Using blockchain in conjunction with other technologies results in more efficient stock holdings, reducing waste. Also, blockchain enables companies to go paperless as it relates to their supply chain and the immutable nature of the technology enables data to be stored efficiently for future teams to refer to.

Effective product recalls

Blockchain technology enables a more transparent and traceable supply chain, enabling manufacturers to locate affected products quickly and efficiently, thereby, increasing the effectiveness and efficiency of recalls. Contamination & quality issues can be traced to specific lots of batches and also the relevant suppliers identified by using this technology.

Compliance

Increased transparency in supply chain due to blockchain adoption also results in a more sustainable and compliant supply chain, by enabling sustainability & ESG tracking. Not only this, combining this with QR codes has the potential to increase visibility of sustainability credentials for consumers, directly impacting sales.

Many companies are already exploring the benefits of leveraging blockchain technology in supply chains, such as smart contracts, purchase order payments and supply chain tracking.

To learn more about the applications of Blockchain in supply chains and listen to how a start-up in this space is changing FMCG supply chains, tune in to the Salesbeat podcast next week on Tuesday, 20 December 2022.

You can also listen to salesbeat podcast to learn more. Stream now!