Blockchain enhances traceability and safety in food production
Advances in blockchain technology could enable the food and beverage industry (F&B) to enhance traceability. In the US alone, food recalls and foodborne illnesses cost some $77 billion per annum, including discarded products, loss of revenue, damage to corporate reputations and healthcare costs. Better traceability could significantly reduce these.“Blockchain comes into its own when the data needs to be highly secure, or if smart contracts are to be managed,” says Marc Ramsay, VP Industry Business Unit, Schneider Electric South Africa.
“If an F&B manufacturer is handing off a finished product to a logistics company, which then delivers it to a retailer that stores it within a cold storage facility, the F&B stakeholders want to make sure that the logistics company does not damage the product and that it gets to its destination on time.“Blockchain technology gives F&B organisations the ability to be much more precise in how they track their goods, and could simplify the execution (invoice/payment) of supply contracts. When an issue occurs, they can be more accurate about what needs to be removed and what can be kept in the food distribution pipeline.
“Verifications could all be dealt with within blockchain through smart contracts. At the IIoT level, sensors could be placed on transportation devices, such as pallets and packages, allowing variables like temperature and vibration levels to be monitored and the data stored in the blockchain.“Stakeholders would then have real-time visibility into the stipulations of that contract and whether or not any of the agreed rules had been breached. This powerful tool provides traceability, security, transparency and real-time access to contracts that affect the upstream and downstream supply chain.”Blockchain process unpacked.
In a blockchain process, networks of computers use consensus mechanisms and cryptography to allow each participant on the network (or along the supply chain) to update a distributed ledger in a highly secure manner, without a central authority. (For a hacker to breach one of the blocks in the chain would be difficult; to breach all the links at the same time would be nearly impossible.)In a private blockchain, this can be complemented by access rights rules, defined by each participant of the blockchain based solution, making it is difficult to access the ledger data without the proper access rights. Moreover, some blockchain technologies have ‘smart contracts’ capability, which allows defined rules to be executed on the data in a secure way.
As a result, the level of trust built into such a system is high. When working within a trusted system, the time and cost associated with lengthy back and forth business processes is reduced. The ability to track movements across the various stages of a product lifecycle become much more acute, thereby improving the efficiency of the entire supply chain, i.e. defective products can be quickly traced and loss of revenue or damage to reputation limited.
More work to be done“Although the use of blockchain in this type of application is still in the experimental and pilot stages, Schneider Electric is prototyping new ways to leverage its expertise in plant automation and process control to build and develop solutions that improve traceability across product life cycles,” concludes Ramsay. “By partnering with blockchain technology specialists, such as Microsoft and IBM, we are assessing its contribution to the development of blockchain-based solutions that will support a multitude of key manufacturing and process industry requirements.”
For more information contact Silindelokuhle Dumakude, Schneider Electric SA, +27 11 254 6400, email@example.com, www.se.com/zaCredit(s)
The Irrational Exuberance That is Blockchain IT leaders must cut through the hype and apply blockchain for maximum benefit. The recent rapid rise and fall in the value of Bitcoin has thrust blockchain into our everyday vocabulary and into the minds of most boards and CEOs. Blockchain promises genuine long-term potential for global-scale transformation of economies and industries which, over time, will lead to the era of the programmable economy, in which value is exchanged peer-to-peer without central authority, and new exchange mechanisms are created by any participant.
We asked John Lovelock, vice president and distinguished analyst at Gartner what CIOs and IT leaders need to understand to make sense of this promising, but radical technology. Blockchain is poised to create one of the most transformative and dramatic impacts in the next five to 10 years, but multiple business cases are yet to be proved. At what stage is blockchain right now? We are in the first phase of blockchain use, what I call the ‘irrational exuberance’ phase.
There is significant experimentation with blockchain across every industry around the world. Corporations that have long relied on centralized systems for control and security are being pushed to accept the concept of decentralization and distributed control that is central to blockchain. However, 66% of respondents of a recent Gartner survey believe blockchain is a business disruption and have set budgets accordingly; 5% of those surveyed said they will spend over $10 million on blockchain, however CIOs and IT leaders will need to evaluate where the investment makes the most sense for their organizations.
What impact has the first phase of blockchain had? The irrational exuberance phase has had two demonstrable effects: evolution and hucksterism. Blockchain has been used successfully in cryptocurrencies, but the technology is still not “enterprise ready”. In 2017, we saw some evolution on that front as blockchain platforms such as Hypeledger Fabric announced new versions closer to enterprise use and Ethereum progressed towards making these solutions perform and scale to suit enterprise needs. However, the exuberance has also led to new levels of hucksterism. For example, we have seen companies with dubious blockchain abilities add blockchain to their name or business to try to increase their stock price. In response, the U.S. Securities and Exchange Commission (SEC) said it will crack down on such companies It is critical at this stage in blockchain’s evolution that hype is recognized, and the emergent nature of the technology and its capabilities are clearly understood.
At this early stage, how should companies approach blockchain projects? Gartner does not expect large returns on blockchain until 2025. Which means today companies will have to try different blockchain projects to determine if there is value for them in blockchain — that is, whether there will be new revenue possibilities, cost savings or improvements in their customers’ user experience. However, obtaining that value may require organizations to wait until the technology is more robust, is more reliable or requires less custom development.
Most current uses of blockchain are not disruptive, because the majority of organizations that undertake blockchain projects find it hard to conceive of systems that are outside of their legacy, centralized models (both business models and technology platforms). As with other waves of technology-driven business transformation, disruption will likely come from small risk-taking ventures rather than established, risk-averse companies. In the case of blockchain technology, it is possible that the greatest social good will come from the nondisruptive transformation of global supply chains, although eventually many other sectors will be impacted, in both disruptive and nondisruptive ways.