As new business technologies come on the scene, even in nonretailing industries, food retailers should pay close attention to how these solutions could benefit their supply chains, according to Paul Chang, global supply chain subject-matter expert at Armonk, N.Y.-based IBM. That’s exactly what Bentonville, Ark.-based Walmart has done by launching a test with blockchain, a database technology that has already been in use in the financial services industry for several years. IBM co-developed the technology being used in the experiment.
Blockchain is essentially a digital ledger system that lets all parties involved in business – including growers, distributors and retailers in the grocery industry – record their transactions securely in the cloud. Walmart is interested in seeing how the technology could improve the safety and security of fresh food in its supply chain.
Perhaps most promising of all, blockchain presents a new level of trustworthiness, since the data that are recorded can’t be easily changed or reversed. “I think Walmart was intrigued by blockchain because it creates this network of trust,” explains Chang.
In the U.S. market, Walmart is testing blockchain with a packaged produce item, and in China, its test is with pork.
“By choosing pork in China, Walmart is showing a rather significant commitment to food safety, knowing that China is both the largest consumer and producer of pork,” notes Chang.
“With blockchain, they can have a better understanding of who all the actors are, including the suppliers, as well as the third-party logistics and transportation folks,” he adds. “This gives them an immutable database that they can reference if anything goes wrong. It also prevents people from doing anything unethical or illegal along the supply chain.”
If Walmart is ultimately pleased with the test, blockchain could gain ground with other retailers, and could eventually become a “movement for the entire food industry,” Chang says. “The fact that all this could be done with very minimal investment and little infrastructure or process change is good news for everyone.”