Category Archives: Supply Chain

Could Blockchain help to Build a More Ethical Food System?

Article by Ryan Whibbs PhD, George Brown College

In recent months, discussion about potential applications for blockchain technology has exploded. Nearly every major sector of the economy has at least some parties examining how blockchain might be applied in finance, supply chain management, manufacturing, education, government, security, and even in food systems. Key to many of these discussions are questions about data: what information is significant? To whom? How can it be used? Who can access it? When it comes to the role of food in highly dynamic, information-driven societies, the answers to these questions can be complex.

In a recent article posted on LinkedIn, Offering Manager for IBM Blockchain, John Widdifield, outlined the problem insofar as coffee is concerned: “we typically delegate the responsibility of knowing a product’s origin to the organization from which it was purchased. However, the organization itself is often unaware of the product’s origin and unable to verify any existing knowledge. Consequently, there are significant challenges in trust and transparency across the complete supply chain for coffee and other products.” Indeed, although proponents of sustainable food systems have made strides in increasing awareness of the interconnectedness of macro-level food systems, consumers are often still in the dark when it comes to product origin, production locale, labour conditions, and transit itineraries and timelines.

For many chefs and consumers, supporting an ethical food system is an ideal that they strive toward. Very often, discourses among chefs stress the need for local and sustainable ingredients, waste reduction, and resource conservation in order to lessen the foodservice industry’s environmental impact. The ideal exists; the degree to which these discourses result in tangible effects is something that requires more nuanced research.

In fact, any movement toward a more carbon-neutral, sustainable ingredient selection requires a good deal of constant research. In the restaurant industry, chefs and purchasers do much of the connecting with suppliers, while in the grocery sector consumers usually leave this research to brands themselves. Still, suppliers change and unless chefs, purchasers, and consumers are prepared to do constant research for the same ingredient every time they purchase it, they may or may not be achieving sustainable ideals that they set out for themselves. Especially when one considers colder northern climates where imported perishables are necessary, separation between consumer and producer is accepted and rarely recognized.

The major problem here is transparency. How do I know that the lettuce I bought is actually local? Is it produced on an industrial farm, or is it from a family farm? If these are important factors to me –and they are to many– I may decide to go to retailers who offer access to product information that helps to verify product source and production conditions. Sustainable eating could, with much effort, become sustainable shopping.

With much effort? Yes. Chefs and buyers seeking specific ingredients from specific sources invest hundreds of hours each year into research about product origin, supply chain, producer, and production capacity. Still, product substitutions and changes happen continually, so even they find it difficult to keep on top of current market conditions. Domestic consumers at the grocery store have even fewer options given that they must select from what is available at the time. No one has time to trace every product they eat.

This is one of the most exciting potentials that a food blockchain holds. In much the same way as it does with cryptocurrency, a food blockchain would capture and hold data associated with a food item, and allow consumers access to this data when seeking to trace or verify information about safety, product origin, product quality, or even to geolocate and map the journey an item took to your table. At the beginning of 2017, almost no one was mentioning the connection between blockchain and food. By the end of 2018, investment in food blockchain technology will easily have eclipsed investment in developing any other food data technologies. It seems that, shortly, the food blockchain will be at our doorsteps.

Still, whereas questions about environmental sustainability are often front-of-mind, questions about social sustainability can lag behind. Who produced this? How much were they paid? Is it a living wage in their region? Many consumers are asking these questions, in addition to questions about environmental impacts. Along this vein, a passage in Widdifield’s article caught my attention: “One of the biggest problems facing coffee plantations are lack of worker documentation, non-existent labor contracts and forced labor or low pay. When plantations utilize forced labor, one of the first things they seek to do is erase documentation associated with the workers; as such, the first step in addressing this problem is to document the workers. Once each worker has trusted identification [TI] represented on the blockchain, plantation owners can then create and record a labor contract that specifies information such as payment terms, expected work hours or output, contract length and labor conditions. Workers can then receive payment digitally, of which the receipt is automatically recorded to the blockchain and payment confirmation is shared with organizations downstream.” Therefore, the technology will exist for consumers -even those who live in cold climates that depend on long-distance imports- to learn more about the people who produced their food. Whether governments force compliance or not will likely impact greatly on the strength of TI. Sustainably-minded consumers, however, will likely demand this information in the future, and retailers and restaurants seeking to attract eco-consumers will undoubtably find ways to leverage this data.

One wonders, though, how restaurant consumers will access this information, and through what filters? Suppose a restaurant customer wants to order a low-carbon, socially and environmentally sustainable meal. How will they be able to verify this information? Will it be possible? Will that be up to the restaurant, or will there be a credible third party who can somehow assist customers in accessing this data? Are there innovations being planned to help foodservice customers acquire more transparency about the food on their plate, independent or at least arms-length from the restaurant operator? As well, will TI extend to restaurant workers closer to home? Can restaurants who wish to add this level of traceability and transparency to their operating ethos be able to do so? It seems that this would be key to the system maintaining credibility in the public eye.

Certainly blockchain has potential to fill one of the major gaps that currently exists in sustainable food system movements. Access to impartial information is exactly what so many consumers invest time and money into achieving. With blockchain, much of the important data -even living conditions of workers- could be demanded by consumers. Without such demands, retailers and operators will likely control information flow. However, if the system is to maintain widespread credibility for both consumers and producers, it will be important for developers to establish ways for consumers to access product information independent of vendors.

Bio of Ryan Whibbs PhD

Experienced Professor with a demonstrated record of interdisciplinary teaching and scholarship in the fields of Food Studies, Cultural History, and Culinary Arts. Skilled in Research Design, Lecturing, Curriculum Development, Academic Writing, and Copy Editing, Dr. Whibbs co-developed and coordinates Canada’s only Culinary Arts undergraduate degree program: the B.Comm. (Culinary Management) program at George Brown College. A Subject Matter Expert advising on the newly revised Provincial Cook Apprenticeship Curriculum of the Ontario College of Trades, Dr. Whibbs also possesses extensive project management and foodservice management experience.

Photo by Nandhu Kumar on Unsplash

The current food supply chain is broken. Here is 5 reasons

Supply chains. We know surprisingly very little about most of the products we eat every day. Before even reaching the end consumer, products travel through an often-vast process flow of retailers, distributors, transporters, storage facilities, and suppliers. Here is five reasons the current system aren’t working:

1. Complexity – In the beginning, two centuries ago, the supply chain was a revolutionary idea. The idea was improve visibility and control of products through interorganizational exchange, as they moved from A to Z. But this old concept and the inherent technology can no longer support today’s production and supply cycles of products, which have become extremely fragmented, complicated process and geographically scattered across the globe. The effect is, that supply chains now is a blurred process that is extremely hard to manage for retail businesses, to effectively track and trace their products, and thereby paving the path for, e.g. fraudulent behaviour. The emphasis on providing cheap food has led to complex supply chains which are ripe for fraudulent activity, according to Prof. Chris Elliot.

2. Demand – We, as consumers, are very demanding when it comes to food. We want fresh bananas, juicy tomatoes, tasty mango all year long, no matter the season, we want it. And your local supermarket knows, and are trying to deliver out-of-season food all year long. It takes a lot of resources to ship non-local goods around the world, which from a sustainability stance, is very damaging.

3. Traceability – With more companies outsourcing for raw materials and distribution, having end-to-end visibility in a supply chain is an absolute necessity in order to ensure public safety, as well as brand protection. The information and data is an integral part of the product quality, so this information needs to provide an accurate picture of where your products are at any given time in your supply chain. A food traceability system is only effective if it can track and trace every component of every product, which the current system can’t.

4. Certifications – On the face of it, certifications on everything from fish to timber can be seen as progress, with a promise of better standards and the pursuit of sustainability. But what purpose are the certification labels actually serving? Can we assume that they are beneficial to producers? Do consumers understand what’s behind a certification label, as there seems to arise new certifications all the time? Today, the industry is more aware that certification alone isn’t addressing problems of low productivity, poor infrastructure and child labour, which continue to destabilise the supply chain. An example is Fairtrade, which is not that fair at all.

5. Transparency – With the requirement of only knowing one step back, and one step forth, actors in food supply chains have very little transparency of where their products come from. This, and other factors, leads to scandals like horse meat in cow meat, harmful pesticides in bananas, Chinese terrified of eating processed food and fraud with extra virgin olive oil.

References:

https://www.theguardian.com/sustainable-business/2016/mar/10/fairtrade-labels-certification-rainforest-alliance

https://www.businesswire.com/news/home/20120511005906/en/trace-Lack-traceability-product-integrity-%E2%80%93-profits

Blockchain as a food supply chain

How to improve trust in supply chains – by blockchain

Introduction 
The main purpose of this blog post is to state how Blockchain Technology influence the role of trust and how it might solve the challenges in tracking and tracing products throughout its supply chain, by identification of opportunities with blockchain as a platform of traceability, information and documentation sharing regarding Extra Virgin Olive Oil (EVOO). The case partner was COOP Trading. This blog post is an executive summary of a master thesis on the matter.

We know surprisingly very little about most of the products we eat every day. Before even reaching the end consumer, products travel through an often-vast process flow of retailers, distributors, transporters, storage facilities, and suppliers, yet in almost every case these journeys remain unseen. This can lead to fraud of adulteration and tampering with the products we consume everyday. Which the The Danish Veterinary and Food Administration action team found, by adulterated EVOOs at Dagrofa and Dansk Supermarked. Out of the 35 tested bottles, only 6 could be classified as EVOO.

Challenges
The identified challenges from the gathered data, were the difficulty to qualify trust as it’s very ambiguous of what it entails, but is key to have an effective supply chain. Regarding the actual process of EVOO, the law requirement of only knowing “one step back, one step forth” of where the product came from, the lack of interoperability of systems along the supply chain, formats rangning from paper slips, oral communication to large ERP systems. The low traceability and documentation sharing hinders an effective supply chain, especially when fraudulent behaviour seems a great concern.

Results
One of the outcomes where what kinds of trust might be influenced by blockchain. Contract trust, predictability and dependability was chosen from 21 different kinds (Seppänen 2005). After a workshop with COOP Trading employee’s, they deemed contract trust as a central aspect of trust in a supplier out of the 21. It was found that blockchain and smart contracts inherent qualities that might qualify the technology to accomplish a form of digital trust, by managing one of the approaches to measure trust, contract trust.
The outcome for COOP Trading was conceptual UML blockchain design, illustrating the possibilities of enhanced traceability, information, documentation sharing along the supply chain of EVOO. The challenges depicted was information quality, legal implications and digital trust.

  • With information quality, is the issue with garbage in, garbage out as data transferred to the blockchain needs to be truthful and of high quality for the blockchain platform to work. This might be solved by RFID tags to get quality data.
  • Legal implications is the current legislation challenging greater traceability and information sharing, due to contractual bindings between buyer/supplier (FPA), and on blockchain application legislation as it is highly unregulated.
  • With digital trust would be a form of calculative trust, that one can place trust in a technology to handle what is to be expected of it, and thereby handle aspects of trust.

The takeaway
Blockchain have great opportunities to influence the role of trust, by developing a form of digital trust, and be a platform for greater traceability, product information and documentation sharing among supply chain participants. With any new technological improvements it should sprout internally, teaching management of the possibilities, internal meetings and identify other areas where the technology can be applied in the future. Take time to do a simple test, gain knowledge and grow from there.

If this has your interest, raised some questions or just got you curious for more, please contact me. I have a 12 page summary that gives a lot more detail, and of course the 109 page long full thesis on the matter, if you´re really into it.

Looking forward to hear from you.

Kristoffer Just

Below is the illustrations made, first the current supply chain of EVOO and then with blockchain as a platform.

Current


Blockchain supply chain

© 2018 Kristoffer Just Petersen