{"id":23108,"date":"2017-11-14T23:56:00","date_gmt":"2017-11-15T04:56:00","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/from-farm-to-store-walmart-improves-food-safety-with-blockchain-technology\/"},"modified":"2017-11-15T00:13:41","modified_gmt":"2017-11-15T05:13:41","slug":"from-farm-to-store-walmart-improves-food-safety-with-blockchain-technology-2","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/from-farm-to-store-walmart-improves-food-safety-with-blockchain-technology-2\/","title":{"rendered":"From Farm to Store: Walmart Improves Food Safety with Blockchain Technology"},"content":{"rendered":"

Blockchain: The Holy Grail?<\/strong><\/p>\n

\u201cI brought a package of sliced mangoes into my staff meeting. I put it on the desk, and I said to my team, the traceback study starts right now.\u201d Frank Yiannas, Walmart\u2019s Vice President of Food Safety, waited 7 days for his team to track mangoes from farm to store. With blockchain, he has reduced that timeline to 2.2 seconds [1]<\/a>.<\/p>\n

Blockchain\u2014the technology at the heart of bitcoin and other cryptocurrencies\u2014could be the solution to traceability issues in food supply chain management [2]<\/a>. Blockchain refers to a bookkeeping method that \u201cchains\u201d together entries so that they are very difficult to alter [3]<\/a>. In the case of the food supply chain, all participants\u2014growers, suppliers, processors, distributors, retailers, regulators, and consumers\u2014can gain permissioned access to secure and reliable information about the state of the food for their transactions [4]<\/a>. From a single receipt, Walmart will be able to uncover farm origin, batch numbers, factory and processing data, expiration dates, and shipping details [5]<\/a>. As the food supply chain becomes increasingly complex and global, such information is \u201cthe holy grail\u201d for Yiannas [3]<\/a>.<\/p>\n

\"\"<\/a>
Figure 1:<\/strong> Blockchain enables tracking from farm to store [6]<\/a>.<\/figcaption><\/figure>\n

Failures of the Current System<\/strong><\/p>\n

The current tracking process uses disparate, manual methods that are inefficient and vulnerable to inaccuracy or fraud [7]<\/a>. Costs include:<\/p>\n

    \n
  1. Human loss of health and life. <\/strong>According to the World Health Organization, every year, an estimated 600 million\u2014almost 1 in 10 people in the world\u2014 fall ill and 420,000 die after eating contaminated food [8]<\/a>. For example, the recent salmonella outbreak linked to Maradol papayas ran rampant for over two months, during which time 220 people fell ill [9]<\/a>. Use of the blockchain network to trace a contaminated product to its source quickly will help curb the spread of foodborne illnesses.<\/li>\n
  2. Food waste. <\/strong>During outbreak scares, retailers must destroy all products that are, in some way, connected to the contaminated batch. According to Yiannas, \u201cIt\u2019s the difference between pulling a few tainted packages and yanking all the spinach from hundreds of stores\u201d [5]<\/a>. In addition, without accurate shelf life data, retailers tend to discard food that is still fresh. Brigid McDermott, Vice President of\u00a0Blockchain Business Development for\u00a0IBM claims, \u201cThe more that [retailers] have granular information about particular items, the more that [they\u2019re] able to make smart decisions on how [they] merchandise them\u201d [1]<\/a>.<\/li>\n
  3. Low levels of consumer trust in the food industry. <\/strong>Increasing incidence of food fraud\u2014like the 2013 UK horsemeat scandal\u2014and information asymmetry limit consumers\u2019 ability to identify high quality food [10]<\/a> [11]<\/a>. Amid growing demand for food characterized by certain properties (GM, non-GM, ethical, organic, low carbon footprint, subject to religious constraints, etc.), blockchain will satisfy consumers\u2019 desire for more transparency in the food system [2]<\/a>.<\/li>\n<\/ol>\n
    \"\"<\/a>
    Figure 2:<\/strong> Current food supply chain inefficiencies leave significant room for improvement [7]<\/a>.<\/figcaption><\/figure>\n

    Walmart: Next Steps and Recommendations<\/strong>\u00a0<\/strong><\/p>\n

    Walmart\u00a0has already run blockchain pilots with IBM tracking Chinese pork and Mexican mangoes [12]<\/a>. In the near term, Yiannas hopes to scale in China, stating last week that all 400 of the company\u2019s stores across China are \u201cin active conversation to accelerate the process\u201d of blockchain. \u201cChina is probably the place to scale its adoption as the Chinese government is already interested in tracing [the supply chain of food] and Chinese consumers are so tech-savvy,\u201d he said [13]<\/a>.<\/p>\n

    \"\"<\/a>
    Figure 3:<\/strong> Blockchain technology will provide users with a complete history of their food\u2019s journey through a simple scan [12]<\/a>.<\/figcaption><\/figure>In the future, Yiannas hopes to build an ecosystem of multiple players along the food supply chain. He realizes the limits of being able to identify dangerous food within Walmart\u2019s supply chain if other players are still using the traditional system to trace food origins [14]<\/a>. However, in order to build this ecosystem, Walmart must promote monetization opportunities for all supply chain participants, especially those upstream. Growers and distributors, for example, will be loath to adopt blockchain technology if they do not see a clear value proposition. And, as McDermott warns, \u201cIf only one segment of the ecosystem participates\u2026a food safety solution does not work\u201d [15]<\/a>.<\/p>\n

    McDermott\u2019s \u201cif\u201d is a big one and poses a legitimate concern for the future of blockchain. A recent survey on blockchain in logistics and supply chain management reveals that, of 152 respondents, only two logistics services companies experiment with blockchain today. Most cite regulatory uncertainty and the concern that different parties will have to join forces as barriers to adoption [16]<\/a>.<\/p>\n

    \"\"<\/a>
    Figure 4:<\/strong> Potential barriers to blockchain adoption [16]<\/a>.<\/figcaption><\/figure>Despite this skepticism, does Walmart have the power to build an ecosystem for the successful adoption of blockchain for food? Is the food industry ready for more openness, or will existing players resist such extreme transparency? If the industry is ready, when will blockchain achieve scale such that the death toll from foodborne diseases drops, food waste declines, and consumer confidence increases?<\/p>\n

    (777 words)<\/p>\n

     <\/p>\n

    References:<\/p>\n

    [1] Walmart, \u201cOutside the Box: Breaking Down Blockchain with Brigid McDermott: VP of Blockchain Business Development & Ecosystem at IBM & Frank Yiannas: VP of Food Safety at Walmart,\u201d June 20, 2017, podcast, https:\/\/corporate.walmart.com\/outside-the-box-podcast<\/a>, accessed November 2017.<\/p>\n

    [2] Fabrizio Dabbene, Paolo Gay, and Cristina Tortia, \u201cTraceability issues in food supply chain management: A review,\u201d Biosystems Engineering<\/em>, September 20, 2013, via Google Scholar, accessed November 2017.<\/p>\n

    [3] Nathaniel Popper and Steve Lohr, \u201cBlockchain: A Better Way to Track Pork Chops, Bonds, Bad Peanut Butter?\u201d The New York Times,<\/em> March 4, 2017, https:\/\/www.nytimes.com\/2017\/03\/04\/business\/dealbook\/blockchain-ibm-bitcoin.html<\/a>, accessed November 2017.<\/p>\n

    [4] Roger Aitken, \u201cIBM Forges Blockchain Collaboration With Nestl\u00e9 & Walmart In Global Food Safety,\u201d Forbes, <\/em>August 22, 2017, https:\/\/www.forbes.com\/sites\/rogeraitken\/2017\/08\/22\/ibm-forges-blockchain-collaboration-with-nestle-walmart-for-global-food-safety\/#10bcc4b23d36<\/a>, accessed November 2017.<\/p>\n

    [5] Olga Kharif, \u201cWal-Mart Tackles Food Safety with Trial of Blockchain,\u201d Bloomberg, <\/em>November 18, 2016, https:\/\/www.bloomberg.com\/news\/articles\/2016-11-18\/wal-mart-tackles-food-safety-with-test-of-blockchain-technology<\/a>, accessed November 2017.<\/p>\n

    [6] David Galvin, \u201cIBM and Walmart: Blockchain for Food Safety,\u201d PowerPoint presentation, 2017, IBM Corporation, https:\/\/www-01.ibm.com\/events\/wwe\/grp\/grp308.nsf\/vLookupPDFs\/6%20Using%20Blockchain%20for%20Food%20Safe%202\/$file\/6%20Using%20Blockchain%20for%20Food%20Safe%202.pdf<\/a>, accessed November 2017.<\/p>\n

    [7] Karen Lewis, \u201cBlockchain: four use cases transforming business,\u201d Internet of Things<\/em> (blog), May 25, 2017, https:\/\/www.ibm.com\/blogs\/internet-of-things\/iot-blockchain-use-cases<\/a>, accessed November 2017.<\/p>\n

    [8] World Health Organization, \u201cFood safety,\u201d October 2017, http:\/\/www.who.int\/mediacentre\/factsheets\/fs399\/en<\/a>, accessed November 2017.<\/p>\n

    [9] Centers for Disease Control and Prevention, \u201cMultistate Outbreak of\u00a0Salmonella<\/em>\u00a0Infections Linked to Imported Maradol Papayas (Final Update),\u201d November 3, 2017, https:\/\/www.cdc.gov\/salmonella\/kiambu-07-17\/index.html<\/a>, accessed November 2017.<\/p>\n

    [10] Felicity Lawrence, \u201cHorsemeat scandal: the essential guide,\u201d The Guardian<\/em>, February 15, 2013, https:\/\/www.theguardian.com\/uk\/2013\/feb\/15\/horsemeat-scandal-the-essential-guide<\/a>, accessed November 2017.<\/p>\n

    [11] \u201cHow the Blockchain Can Revolutionise the Food Industry,\u201d arc-net<\/em> (blog), April 10, 2017, http:\/\/arc-net.io\/blog\/blockchain-revolutionise-food-industry<\/a>, accessed November 2017.<\/p>\n

    [12] Robert Hackett, \u201cWalmart and 9 Food Giants Team Up on IBM Blockchain Plans,\u201d Fortune,<\/em> August 22, 2017, http:\/\/fortune.com\/2017\/08\/22\/walmart-blockchain-ibm-food-nestle-unilever-tyson-dole<\/a>, accessed November 2017.<\/p>\n

    [13] George Smith, \u201cChinese consumers to trace food through Blockchain,\u201d New Food Magazine<\/em>, November 6, 2017, https:\/\/www.newfoodmagazine.com\/news\/45975\/chinese-consumers-trace-food-blockchain<\/a>, accessed November 2017.<\/p>\n

    [14] Michael del Castillo, \u201cWalmart, Kroger & Nestle Team with IBM Blockchain to Fight Food Poisoning,\u201d CoinDesk,<\/em> August 22, 2017, https:\/\/www.coindesk.com\/walmart-kroger-nestle-team-with-ibm-blockchain-to-fight-food-poisoning<\/a>, accessed November 2017.<\/p>\n

    [15] Simon Creasey, \u201cThe potential for blockchain in the food industry,\u201d Just \u2013 Food Global News, <\/em>October 26, 2017, via ProQuest, accessed November 2017.<\/p>\n

    [16] Niels Hackius and Moritz Peterson, \u201cBlockchain in Logistics and Supply Chain: Trick or Treat,\u201d 2017, Hamburg International Conference of Logistics, via Google Scholar, accessed November 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Walmart, the world\u2019s largest retailer, has announced a blockchain collaboration with IBM to improve the way food is tracked, transported, and sold to consumers.<\/p>\n","protected":false},"author":10319,"featured_media":23109,"comment_status":"open","ping_status":"closed","template":"","categories":[2608,2123,33,2042,17,44,2149,637],"class_list":["post-23108","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-blockchain","category-digitalization","category-food","category-ibm","category-supply-chain","category-supply-chain-management","category-traceability","category-walmart","hck-taxonomy-organization-walmart","hck-taxonomy-industry-food-and-beverage","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nFrom Farm to Store: Walmart Improves Food Safety with Blockchain Technology - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/from-farm-to-store-walmart-improves-food-safety-with-blockchain-technology-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"From Farm to Store: Walmart Improves Food Safety with Blockchain Technology - 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