Metz Lewis Brodman Must O'Keefe

Metz Lewis Brodman Must O'Keefe

Posted on August 22, 2017

If you’ve heard of blockchain, it’s probably been in connection with Bitcoin.

However, IBM recently announced a collaboration with leading retailers and global food companies, including Nestle, Walmart, and Unilever, to employ blockchain technology to help accountability and traceability in the global food product supply chain.  This is good news for both industry and consumers.

According to IBM, Blockchain “is a shared, immutable ledger for recording the history of transactions.”  As described in the January 2017 edition of the Harvard Business Review, blockchain can serve as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”

Blockchain works by connecting product and raw ingredient information (e.g., supplier, location, expiration date, etc.) to the actual product or raw ingredient at every step of the supply chain, creating a permanent, immutable ledger of the information.  This information is readily available to anyone in the supply chain that requires and has permission to access it.  If there is an issue, a brand owner or manufacturer can trace all ingredients back to source (and all steps in between) nearly instantly.

Application of blockchain technology to food product supply chain management enables a much higher degree of reliability and more expedient retrieval of information – particularly important when a recall arises.  Rather than engage in a very labor- and time-intensive audit and examination of purchase orders, invoices, and other communications, a manufacturer or brand owner can simply access the blockchain with respect to the product at issue.  One pilot test found that by applying blockchain technology to food product supply chain management reduced the time to trace certain food products from nearly a week to just over two seconds.

The high degree of reliability inherent in blockchain means greater safety for consumers.  The speed with which reliable data can be obtained greatly reduces the administrative burdens imposed on raw ingredient suppliers and contract manufacturers.  As blockchain technology is increasingly employed in food product supply chain management, administrative costs for industry players will decrease while food safety for consumers will increase.

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