Blockchain & Supply Chain Management
As industries evolve, technology enhances business operations, especially in the supply chain industry. One of the technologies that have gained popularity in recent years is blockchain technology. Blockchain technology is a decentralized digital ledger that records transactions across multiple computers. The technology is famous for its transparency, security, and immutability.
Recently, I had the opportunity to attend a session with Professor David Steven Jacoby, a renowned expert in supply chain management. In the class, we discussed the impact of blockchain technology on the industry's future. One of the solutions we discussed was the IBM Food Trust and Walmart collaboration. Walmart has collaborated with IBM on food safety blockchain solutions using IBM Food Trust.
Walmart’s inventory management system, Just-in-time cross-docking, distributes products directly from suppliers to customers, stores, and retailers with minimal processing or storage time. The system helps Walmart minimize inventory, shipping costs, and transit times and eliminate inefficiencies. Walmart has invested in IoT and collaborated with IBM to improve how food is tracked, transported, and sold as an alternative to paper and manual processes. Walmart installed IoT sensors with near-field communication technology (NFC), allowing the company to track product and production attributes throughout the supply chain.
IBM Blockchain technology adds transparency and traceability to the ecosystem and digitizes Walmart's food supply chain operations. IBM Food Trust is a specialized technology that is more process and product-focused and currently has a few partners such as Nestle, Dole, and Walmart, among others. However, it requires everyone in the supply chain process to be willing to participate, and it could be difficult for some businesses to adopt new business strategies. Therefore, IBM should market the technology more to expand to new clients and make them understand the business value they can provide.
The IBM Blockchain platform provides traceability, transparency, and trust. Blockchain simplifies traceability and allows companies to track products, identify their authenticity, and prevent counterfeit/damaged goods from getting into the supply chain. It helps define the origin and recall problematic goods on time and helps customers to know about the country of origin, brand authenticity, and under what conditions their food was produced. Once the information is recorded, no one can edit or alter its content, thus preventing food fraud through information immutability.
Insights from the pilot show that FoodTrust reduced the time to track products from 7 days to just 2.2 seconds end-to-end for a mango traceability case. IBM developed a tool to measure enhancements inherent to Walmart’s onboarding process. They carried out a comprehensive analysis of the advantages and disadvantages of using blockchain technology.
However, the technology is still evolving, and it might incur future investments in the onboarding teams and the IT departments of the company. The benefits of blockchain technology in supply chain management are numerous. The technology allows businesses to control and manage shipping data and customize innovative apps for collaborators, partners, and customers. The permission model: sync and update data at every logistics stage and auto-trail updates powered by blockchain.
In conclusion, blockchain technology is improving the supply chain industry. It creates a sustainable traceability ecosystem by bridging gaps between sources, processors, shippers, retailers, regulators, and consumers. The technology is still evolving, but with more mature markets, it could become more challenging for IBM to keep its service dominance. Business Partners have been a crucial strategy to succeed in Maritime Shipping, Food Traceability, Trade Finance, and Oil & Gas provenance. The blockchain enables IBM(Hyperledger Fabric) to do safe and trustworthy sharing of data and transactions with multiple of these supply chain partners at the same instant of time, leading to transparency.
