Tag Archives: blockchain

Blockchain, Provenance, Traceability & Chain of Custody

This is an article written by John G. Keogh.

Here are my answers to questions posed over the past few months online and in industry and regulator dialogue. As some of my points can be successfully argued from different angles, this is intended to create the dialogue and not limit it. Your comments and perspectives are valuable and I look forward to this discussion.

Question 1 : Do I need a Blockchain for effective Food Recall? 

No. In a closed supply chain with limited exchange partners you don’t need a blockchain to execute a rapid recall of an unsafe product. Any GS1-standards based technology platform can be used to rapidly trace (backward) and track (forward) a consumer packaged product if the product has a data carrier (barcode) and/or batch/lot # attached. Check out the GS1 global office website or your country GS1 organization as they have a traceability and product recall standard and guidelines on how to execute recall effectively.

In the USA, industry standards body GS1 has partnered with GMA and FMI and has a nationwide, cloud-based Rapid Recall Express platform in operation for almost 10 years. There are similar industry-driven, national recall platforms in place in CanadaAustralia and New Zealand which align to regulations and helps protect consumers and reduces industry risks. GS1 South Korea has a ‘stop-sale’ process in place with multiple government regulators for about 10 years. If any of the regulators determine a product is unsafe, the regulator sends a GS1-centric message to the retailers HQ. Within 30 minutes of receiving the regulators alert, all points of sale (cash registers) in the country are blocked and the ‘stop-sale’ process is enacted. I have seen this in action and it’s amazing. The stop-sale process is quickly followed by the formal recall process. This globally unique process reduces the risk of consumer harm and helps to protect the brand at the same time.

Blockchain is helpful for a recall use case when you have multiple exchange partners across multiple countries and using disparate technologies (see Q2). The opensource and purpose-built blockchain data protocol from OriginTrail is very useful in this scenario because it enables GS1-standards based interoperability between multiple blockchains and legacy. As the below slide from OriginTrail indicates, today we have many data silos and interoperability is crucial to address both traceability, transparency and to execute a rapid recall. Origin Trail will be the first to advise that without first addressing data governance (accurate and standardized data) blockchain will not work as intended.

Disclaimer: I advise the Origin Trail board on industry standards, transparency and trust

Question 2: Are current food regulations driving the need for Blockchains?

Yes. Regulations are generally non-prescriptive and in the food chain they call for a “1-up/1-down” traceability. In complex, multi-party supply chains this is costly, time-consuming and can lead to (preventable) illness and death. In the Walmart Mango use case, it took almost 7 days to execute a mock recall based on 1-up/1-down approach and 2.2 seconds using their specific Blockchain configuration. Blockchain technology is helpful in complex, multi-country, multi-exchange party supply chains that already have good data governance and industry data standards (GS1) in place. A standards-based blockchain enables linkages to be made between the exchange parties and permits sharing of product master data, transactional data and event data – the unhindered flow and visibility of this data is what we call transparency.

I have adapted and use the following diagram to explain the success of the Walmart model in context of theoretical and practical applications of transparency and trust using technology. In this model, the below-the-line RMT indicates regulation mediated transparency. You will note that this is based on mistrust – so are strong contracts that buyers put in place with suppliers. The alternative is what Walmart achieved with voluntary trust-building with strategic transparency and identification based trust enabled by technology – what I call TMT or Technology Mediated Transparency.

Question 3: Can Blockchain guarantee Food Safety and Food Authenticity?

No. Blockchain is oversold as a guarantee of food safety, food authenticity and anti-counterfeit in general. The only legitimate and legal way to guarantee food safety and authenticity is through analytical testing of the product itself – we cannot track the outer package or container and claim the food is safe and authentic. On-pack security features (forensic, covert or overt) help in fraud detection but forensic evidence is required for successful conviction in food fraud cases.

Example 1. WINE bottle recycling

There is a known underground industry that trades in used wine bottles. A hotel or restaurant worker may be incentivized to collect and sell empty vintage wine bottles for hundreds of dollars each. They are re-filled and re-sold for thousands of $, often with fake security features. According to a 2017 Forbes article, an estimated 30,000 bottles of fake imported wine are sold in China every hour. Solution providers are making technology advances and offering security features that create obstacles on the bottle itself including tamper-evident features and fraud alerts for multiple scans of the serialized identifier. Despite the technology improvements and their utility, the only way to legally guarantee the wine is genuine is through forensic testing of the wine bottle contents against the reference samples taken from the harvested crop, or the final blended mix. The storage of reference samples by harvested batch may be a regulatory requirement in some regions.

Example 2. Commingling of fresh fruit and vegetables

Colorful vegetables for sale at the Central Market of Hoi An, Vietnam

Fresh fruits and vegetables may be commingled with products from multiple, geographically dispersed suppliers which increases the risks related to quality, safety, authenticity and provenance. For example, a product may claim to be organic but might have 50% non-organic mixed in to complete the order. The role of blockchain and other technologies in this scenario is limited because human behaviour is the variable. Risk reduction strategies will vary and depend on the context and culture. They can draw on combinations of 1) incentivized behaviour to reduce cheating 2) training on a food safety culture 3) effective food safety practices 4) farm and supply chain auditing 5) industry supply chain standards 6) technology solutions and 7) analytical science. The latter, analytical science being the most critical for evidence.

Question 4: Can Blockchain deliver a guarantee of Food Provenance?

European flags on minced meat. International meat trade

No. This is confusing I know. Provenance refers to geographic source or origin and is determined by forensic science not software, GPS or hardware (see below traceability). Let me share a hypothetical example; lets say we have potatoes and carrots in Vietnam that go to market as ‘product of Vietnam’. In one possible scenario, bad actors could roll the veggies in dampened local dirt to enhance the illusion of being a local product. When the product is forensically tested, both the veggie species, and their carbon fingerprint proves they are indigenous to, and were grown in a particular region of China. This is food fraud and classified as an economically motivated adulteration where a cheaper product is sold as a more expensive premium local product. Blockchain, IoT, stickers/logos or barcodes on bundles of products will not solve this because human behaviour is the variable.

Analytical laboratories can address these issues as part of a regular audit of suppliers and supply chains. Similarly, forensic testing can determine if fish were wild caught or farmed. Companies doing exceptionally well at this today include Perth-based Source Certain and New Zealand-based Oritain, to name a few.

Question 5: What’s the difference between provenance, traceability and chain of custody?

Even the experts get these confused. Let me explain how I see it. Provenance is defined above as geographic source or origin and it is guaranteed only through the results of forensic testing of it’s carbon fingerprint. You will hear experts or software companies say they ‘track provenance’. In many cases what they really mean is classic supply chain traceability or in some cases, chain of custody. Classic traceability includes the source of the materials and is best interpreted as the ‘business or logistics source’. In my opinion, we should not call it tracking provenance as we are not necessarily tracking the true geographic source or origin per-se, we are tracking physical ‘movement’ from a business or logistics source through the supply chain. This draws an important distinction between classic product traceability and forensic product traceability of the geographic source or origin as defined by forensic testing of the products carbon fingerprint.

To help the discussion and align on terminology, see below definitions of food traceability extracted from Olsen and Borit (2013).

CODEX: Traceability is defined in the Codex Alimentarius Commission Procedural Manual (FAO/WHO, 1997) as “the ability to follow the movement of a food through specified stage(s) of production, processing and distribution ”.

ISO: Traceability defined in ISO 9000 and ISO 22005. ISO 9000 (ISO, 2000) as “The ability to trace the history, application or location of that which is under consideration”

The ISO 22005 (ISO, 2005 ) definition is word for word the same as the ISO 9000 definition, but ISO 9000 is a standard for quality management systems in general whereas ISO 22005 is a specific standard for traceability in the food and feed chain. ISO 22005 adds that “Terms such as document traceability, computer traceability, or commercial traceability should be avoided. ”

For all these ISO definitions (ISO 8402, ISO 9000, ISO 22005), there is an additional clause which states that when relating to products, traceability specifically entails “the origin of materials and parts, the processing history, and the distribution and location of the product after delivery”.

EU General Food Law (EU, 2002) defines traceability as “The ability to trace and follow a food, feed, food producing animal or substance intended to be, or expected to be incorporated into a food or feed, through all stages of production, processing and distribution ”.

 

The net-net, traceability includes the material origin. A brief note: within a supply chain, physical products are tracked-forward but traced-backwards and this bi-directional capability is generally referred to as traceability. The chart below is unpublished and from my academic research. It shows the nuances of information, product and assurance flows.

 

Chain of Custody (CoC)

CoC or cumulative tracking was an active discussion in pharmaceuticals in the early to mid 2000’s but seems to have lost some favour. CoC is critically and legally important in highly regulated sectors. For example in weapons, explosives, transport of bulk money, works of art etc. where exact time stamps of the product physical movement, locations and details of all transactions including the parties in physical custody must be tracked and registered. This is similar to a FedEx package delivery where very detailed information is available and signatures are required for acceptance from one party to another. This accumulation of data along the supply chain is sometimes referred to as similar to a ‘Russian doll’.

Example: Pharmaceuticals and Tobacco

Pharmaceuticals and tobacco are two sectors that are highly regulated to protect against many issues including illicit trade, counterfeit, human health and safety etc. What this means is that every dispensing unit of a drug and every pack of cigarettes must be globally and uniquely identified with a serial number and tracked at every stage in it’s supply chain (to the point of dispensing for drugs and to the last point before purchase for tobacco. Note, drugs are tracked to prescriptions and patients, tobacco is not tracked to smokers).

In the (old) chart below from GS1, CoC is represented by cumulative tracking in comparison to 1-up/1-downcentralized database control for closed networks and distributed databases; which we noted more than 15 years ago and is now similar to the current blockchain dialogue. The latest version of the various traceability models can be found in the GS1 Global Traceability Standard (2017).

Disclaimer: I was previously a senior vice president at GS1 Canada and Director of Product & Consumer Safety at GS1 Global office.

Food is regulated of course but not to the extent above that it requires serial number specificity (lot size 1). Generally, food is tracked by lot, batch or date code and a can of soda will have the same global trade item number (GTIN) as the same soda product next to it. The GTIN, while globally unique and aligned to the brand is not a serial number and is referred to as a product family or class code. With the increase in food fraud, there is now growing momentum to add a second data carrier to a food product with a serialized identifier and links to a product web page or product authentication tools. Note, date carrier is a ‘family name’ for all barcodes and RFID tags. Regulations may suggest the ‘data to be carried’ and the brand owner will then select the appropriate data carrier.

To visualize how a GTIN works in a food chain today, see the chart below from GS1 which can be found in the 2017 version of the Global Traceability Standard

BREAKING NEWS

On August 13th 2018, GS1 released a new standard called the GS1 Digital Linkstandard which will enable connections to all types of B2B and B2C information. This new standard is the foundational bridge between physical products and their digital twins.

That’s it for this post – your comments, feedback and opinions are highly valued and very important. Keep an eye out for upcoming posts on topics related to transparency, trust, credence, anti-counterfeit, traceability, product recall, blockchain, provenance and many more.

About the Author:

John G. Keogh is a sought-after speaker, advisor and researcher. Operating at the intersection of the Public + Private sectors globally, he provides confidential advisory, research & interventions across policy, operations, strategy and technology.

John holds a PG Dip. and an MBA in General Mgmt. He has an MSc (distinction) in Business and Management Research into Supply Chain Transparency and Consumer Trust. He is currently a part-time, associate researcher at Henley Business School, undertaking doctoral (DBA) research into food chain transparency and consumer trust. John plans to publish an ebook “Food Chain Transparency – what executives need to know” in 2018.

Photo by Martin Adams on Unsplash

#YouAreWhatYouEat

In many countries, especially here in Denmark and EU, we don´t have to worry about when we get the next meal. Many of us have the possibility to pick and chose what we want to eat, and when. So in the age of self-realization, we can now use tech to make sure that we eat healthy, or least try to.

“One quarter of what you eat keeps you alive. The other three-quarters keeps your doctor alive” – Source unkown

Eating healthy starts with understanding what you’re eating on a frequent basis, but we all know that tracking what you eat, and trying to determine the nutritional information of certain meals requires a significant amount of effort. And a lot of data handling. So companies are developing apps and new tech, to let you monitor our own health. Many of these products are still in their infancy, so the data collected have to be taken with a grain of salt, but they offer an important glimpse into the future of self-regulation and personal health management.

Why is this important in the light of transparency?

If we can monitor what our body, with precision, consumes of sugar, pesticides, non-organic etc, it will have a reverse effect. When Millennials adopt health apps, that will make them much more interested in knowing the source of their food. With a never growing population of consumers with food allergies, they are demanding a clear information about reliable information. And with the growing interest in sustainable, organic, and local food, there is a pressure from consumers that value eating organic and/or sustainable, on the industry, to ensure that it really is organic, or sustainable.

“If everything is known, if it is known what is inside a product and its health effect on the body, that will really be a big change in the industry as we know it” – Nard Clabbers, Senior Business Developer at TNO

One of the companies trying to deliver precise transparent meal nutritional content is AVA. AVA uses artificial intelligence to allow users to take a photo, with their smartphone, of their meal to get instant information about the meal´s nutritional content. This is just one example, with other tech companies and startups applying blockchain, machine learning (ML), big data, argumented reality (AR) and virtual reality (VR).

Next week, you can read more about AVA and the tech companies and startups that are paving the way for more transparency of the food we eat. It might not be the companies business models, but it will be great side-effect with the focus on personal nutrition.

Sources:

https://medium.com/@sirianbrady/introducing-ava-and-intelligent-eating-224b0f9be826

Book: Our Food Our Future – Eat better, waste less, share more; (2017) Alan Watkins & Matt Simister.

Photo by Dan Gold on Unsplash

Farm animal welfare & transparency. So call me blockchain? Maybe

This article is written by Dan McGlynn:

Sustainability & animal welfare – the power of transparency, technology & collaboration – so call me blockchain, maybe?

Farm Animal Welfare – it’s now seen as a strategic opportunity by many global companies.

The benchmark…

I was fortunate enough to attend the launch of the 6th BBFAW report evaluating the performance of 110 large food institutions. The headline was ‘good progress but still a long way to go’.

Thank you to Nicky Amos for inviting me, one of the best events I have ever attended.

The venue was the London Stock Exchange – strange setting you may possibly think? Not so, it became very evident when David Harris, Head of sustainable investment at FTSE Russell opened the event by talking about how investors are closely linking sustainability and animal welfare metrics with share performance and valuation.

All business should take note – as the consumer becomes more aware and demands greater transparency on the goods that they are buying, companies that are transparent with their performance in dealing with ethical, sustainability and animal welfare issues will outperform those that are not.

Steve McIvor – chief executive of World Animal Protection made some great comments : ‘Consumers are showing that they increasingly care about the welfare of animals when they are deciding where to eat’.

The Foodservice industry still has ‘a lot more work to do’ providing transparency of animal welfare in their supply chains according to the new report. Despite making some progress (JD Wetherspoons rose 3 places) in the Business Benchmark on Farm Animal Welfare, pub & restaurant chains lag behind retailers and manufacturers and still need to make improvements.

No hospitality company achieved the ‘tier one’ status in the ranking but McDonald’s & our very own Greggs placed towards the top of tier two after making farm animal welfare a part of their business strategies.

The likes of KFC, Pizza Hut and Starbucks managed tier five, defined as showing limited evidence of implementation, while Subway and Burger King both ranked in tier four, and were defined as making progress. Waitrose, Marks & Spencer and The Co-operative Group all achieved tier one ranking.

The stats are staggering. Globally, 50 billion chickens are slaughtered every year (that’s 7500 every 10 seconds) – a large proportion of those live in unacceptable conditions. A lot of work is being done with the emerging markets of countries such as China, Brazil and Thailand.

 

Did you know that the largest dairy industry in the world is in India? China produces 700 million pigs per year – the UK produces 10 million. Big numbers, lots of animals.

The report scores companies on 4 areas:

·      Management policy & commitment

·      Governance & management

·      Leadership & innovation

·      Performance reporting & impact – increasingly becoming more important

Similar to the Modern Slavery act 2015, it’s not good enough just to have a policy in place. The company needs to have the commitments as part of their culture and strategy and more importantly, measure and report on their performance.

Only 11% of companies report on animal welfare outcomes – that’s 12 out of 110 global businesses. The answer is data and technology.

Can blockchain fill this void? Possibly. There are more and more commentators on this subject, very few are experts and it’s unproven in food. Watch this space and I aim to provide more insight on this subject soon.

There is existing technology that maps supply chains and is able to harvest sustainability & animal welfare KPIs from any part of that chain – look at my linked in profile and you will find out who they are!

Transparency will be king – do not underestimate the power of transparency. Technology will be the vehicle for this much need transparency.

If any of the above has resonated and you would like to discuss this subject further, lets connect and get in touch. I am heading up a project to drive collaboration in the foodservice industry focusing on compliance, ethical and animal welfare performance. All fingers point towards integrity.

Don’t get me started on integrity (doing the right thing even when nobody is looking). That subject is for another day.

I also love feedback – good, bad and ugly, it’s how we all grow so please let me know your thoughts.

Have a great day

Dan McGlynn

Authenticate IS

Original posted here:

https://www.linkedin.com/pulse/farm-animal-welfare-transparency-so-call-me-maybe-dan-mcglynn/

Interview – Founder of bext360, Daniel Jones

I have looked so much forward to this interview.  Ever since I first read about bext360, and their use of blockchain, I have impatiently been waiting to see their work in action. So, if you are a coffee addict, and want to be sure that the coffee you drink everyday, in fact is the quality of what it is suppose to be, bext360 will have you covered. Lets get started!

Can you start with telling us a little about yourself and Bext360?I’m (Daniel Jones) a US and Africa based entrepreneur with over 17 years of experience living and working in emerging and frontier markets including China, the Democratic Republic of Congo (DRC), and India. I have professional roots in technology, applied mathematics, electronic commerce, and emerging economies. In 1991, I was with the Defense Intelligence Agency, where I was a key architect and topology designer of the Joint Worldwide Intelligence Communications Systems (JWICS), the first and now largest TCP/IP system to transfer voice, video, and data across Top Secret networks.

After that, I spent the last five years living in Kinshasa, DRC, where I evaluated supply chains and structured/funded companies as CEO and founder of Pioneer Management. In the DRC, I founded RAMIKA, the first US-owned company to successfully export conflict-free minerals from the DRC to the US in compliance with supply chain and traceability requirements under the Dodd-Frank Act. In addition, I structured the first private port facility constructed in the DRC.

I launched bext360 in April 2017. bext360 is company that develops technologies to streamline critical supply chains in emerging economies. Although our technology can be used across industries for different commodities, we are focused on the coffee industry first. Our bext-to-brew” platform aims to revolutionize the coffee supply chain with IoT, blockchain, machine vision and artificial intelligence (more on this below), while bringing consumers and farming communities together to improve product quality, community livelihoods and the consumer coffee experience. A guiding principle of bext360 is to build community by enabling buyers and other organizations with direct paths to improve the quality of both the product and the communities that provide the coffee.

Great, but how did you first get involved with coffee supply chains?I got involved with coffee supply chain after working for years in the Democratic Republic of Congo exporting conflict-free minerals, where security necessitated by large cash transactions represented a significant expense. I saw that most were entirely inefficient and lacked so much transparency. At around the same time, I started learning about blockchain technology and I became fascinated with the idea that it could potentially transform the supply chain for many industries. I landed on coffee because it is one of the most valued commodities in the world and its supply chain is completely antiquated.

Why is there a need for better traceability and transparency of coffee supply chains?

Although coffee is the second-largest traded commodity in the world (a $150 billion market worldwide), its supply chain remains antiquated and opaque. While global demand for coffee continues to grow, farming communities in developing countries must accept low prices and delayed payments for their harvested goods (women are responsible for 70 percent of growing and harvesting). However, millennials and coffee connoisseurs are now demanding transparency for sourcing and origin – indicating a shift in consumer preference and their willingness to pay for supply chain transparency.

And in relation to that, how do Bext360 technology tackle the problem?

bext360 is helping to eliminate many of the inefficiencies of the coffee supply chain while simultaneously providing transparency at each step of the process. Using machine vision, AI and IoT along with blockchain technology, we evaluate and sort coffee cherries and parchment (a phase of coffee been processing) based on quality. Farmers are then able to use a mobile app to view payments based on coffee quality, and may offer or reject the proposed payment. They are effectively increasing compensation for higher quality cherries. Powered by Stellar’s blockchain, the application immediately pays the farmer for her product upon acceptance of the offer. The application may also connect to the farmer’s other accounts for transactions such as loan repayments, local taxes and other financial commitments. Each evaluation and transaction relating to the coffee – including farmer identification, quality, purchasers and payouts – is recorded on the blockchain providing visibility to end consumers.

The certification process in supply chains is extremely costly. Currently, inspectors must physically examine each product at every point of the supply chain to verify that the product is what it purports to be. For coffee, every batch requires certification papers to move along the supply chain from one port to the next. bext360 is moving this data to the blockchain, providing transparency and immutability, which eliminates today’s costly and sometimes unreliable paper trail.

Using blockchain technology, the bext360 platform also creates crypto tokens based on the analyzed quality of the coffee to more accurately reflect the value of this commodity. As the commodity progresses through the supply chain, new tokens are automatically created to represent the increased value of the product until it becomes the roasted coffee we know and love.

For example, when a coffee cherry enters the supply chain, a token is created to represent its quality at the first level. As it continues through the supply chain and is processed to become “green coffee”, a new token will be created at this supply chain node and exchanged with the older token to represent the commodity in its new form. This tokenization technology can be used to represent other products, such as cocoa, nuts, spices, seafood products and pharmaceuticals.

The ability to create tokens representative of commodity value is groundbreaking in many ways. All stakeholders across the supply chain can own tokens, which hold real value for financial institutions. Banks, suppliers, business owners and the machines themselves can own, pay and collect from each other seamlessly. Commodity financing, plays a significant role in the portfolios of certain financial institutions. Rabobank has welcomed the use of tokens to reduce risk, while fundamentally changing how companies interface with the bank itself. Tokenization technology drastically reduces the transaction cost of global commodities and may also be applied to inventory valuation and the development of smart contracts.

Additionally, by providing the data recorded on the blockchain to banks and microfinancing institutions, it makes financials easier to audit and assess lending risk and therefore, reduces the risk to make individual loans. On the bext360 platform record includes: how much each farmer has sold, the quality of her cherries, and how many coffee cherry trees she owns. Based on this information and her unique history, the bank may borrow against the value reflected on her blockchain record. It is an innovative solution to address ongoing limitations for the under-banked – something other startups like Tala are trying to address with alternative credit scores.

Blockchain technology can also bring consumers and farming communities together. Using the bext360 platform, eventually, consumers may tip coffee farmers directly for coffee purchased at their neighborhood coffee shop. Payments to the farmer could be made instantaneously and tracked through the blockchain’s immutable ledger to assure consumers that tips were allocated appropriately.

If someone was interested in learning more about the work you do, where can the find more?

They can visit our website, or also read about us on Fast Company and Fortune. There is also a short documentary video about our company and technology that was created by Freethink Media for their Coded Series that was sponsored by Facebook.

I believe that this combination, blockchain and on-site quality control, will help ensure transparency from start to finish, and as Dan says, bring consumers and farmers closer together.

® 2018 MyFoodTrust

By

Kristoffer Just

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

Interview – “Mr. RFID”, Henrik Granau (Part 2)

Welcome to Part 2 of my interview with Henrik Granau, or more correctly, Mr. RFID. If you haven’t read Part 1, I urge you to do that, to get a good understanding of Henrik, RFID and its challenges. Simply click here!

If you already have read Part 1, I love that you did, then you know that this part is going to focus on the opportunities with RFID within food traceability/transparency. No more small talk, let’s dive into it!

And then turning from the challenges, what are the general opportunities with RFID?

There are a lot of application areas and certain Industries where there are still obvious opportunities, but in general I believe it is in the combination with other technologies we see the huge potential;

By using RFID you create a transparency on how goods, assets etc. are flowing through your operation and if you add to this detailed information on how the workflow is actually being performed, you have established the foundation of making better decisions in your organization.

When combining these operational data with other data (‘Big Data’) and Software Robots (Artificial Intelligence), you can create new services and business models (‘disruption’).

Almost everything within the area of ‘Internet of Things’ involve wireless communication with a device which has to be uniquely identified to make sense – hence “RFID” will be ‘pervasive’.   

Building on that, from your knowledge, what are the potential of RFID tags to create greater traceability of food products and why?

Internationally we already have a number of good cases in food traceability (Fish, livestock, vegetables) with RFID and combined with temperature sensors, we have established better cold-chain management. I believe that traceability within the supply chain can still be improved, but in general the technology is in place and we have the good cases with documented results.

The challenge is that we want the consumers to be able to have the complete history of each item available on their smartphone with one scan. If it’s RFID (NFC) or 2D barcode doesn’t matter so much – the challenge is to capture all the information during the product’s lifetime automatically which is achieved by using RFID on the transportation unit. For this to work, the unique item numbers which are packed has to be associated with the unique identifier of the transportation unit, and in some areas you will then have to add some evidence that the goods hasn’t been tampered with during transportation.

So creating greater traceability is possible with RFID, but you have other issues depending on the objectives; 1) for manufacturers to issue effective recalls, 2) for consumers to check the goods before consumption, 3) for protecting against fraud, etc.  

What potential do you see in a RFID/Blockchain combination to create greater traceability of food products, from your knowledge?

I am not a blockchain specialist, but I understand that what blockchain can add is a bulletproof distributed verification mechanism. So, when the issue is to have verification that a specific organization is guaranteeing that their part of the traceability data are valid, then you could use blockchain to lock a certain ‘hand-over’ transaction with some associated data. If RFID is used then this process could be done automatically at choke points. As an anti-counterfeit method.

I believe I can learn more about the potential with RFID/Blockchain by being kept updated on your progress.

If someone was interested in RFID, what would be a few things you would suggest to investigate further?

I will start with recommending to vist www.rfididk.org. This is RFID I Danmark’s website where we have tried to give a good introduction to RFID – especially through cases and slides from presentations held at our conferences.

As a special service the RFID I Danmark Association is offering that anyone for free can contact me with initial questions. You can mail me at henrik@rfididk.dk or you can call me at +45 21 832 835.

Thank you to Henrik, for his great insights into RFID and the opportunities. From this and what I learned from the RFID in Denmark conference, I see great potential for a RFID/Blockchain solution in supply chains. RFID will secure correct data inputs, which can’t be tampered or adulterated, which then are data inputs for the immutable blocks in the blockchain application.

One of the key takeaways from the conference, was the lack of adoption and their one-sided focus on RFID being a inventory solution, and not grasping a more holistic picture of what the tech can do. And I feel that, that is a general thing when investigating new technologies, that it is very one-sided and not trying to connect all the dots.

Thank you reading, have a great day!

© 2017 Kristoffer Just Petersen

What is Blockchain? And how does it work?

The Genesis

The blockchain technology was invented by a person under the alias Satoshi Nakamoto, to support the cryptocurrency Bitcoin (Nakamoto 2007). For the first time it was possible for many users to trade values with each other over the Internet without the need for a third party or intermediary – typically a bank – to verify the transaction. A blockchain is a ledger of facts, replicated across several computers assembled in a distributed peer-to-peer network. Or put simply, a chain of blocks (Beck 2017). Anyone participating in a blockchain can review the entries in it; users can update the blockchain only by consensus of a majority of participants. Once entered into a blockchain, information can never be erased (Nakamoto 2007: 2).

Blocks are an order of facts in a network of non-trusted peers, similar to how Uber’s technology intermediates between suppliers and consumers of transportation. Facts are grouped in blocks, and there is only a single chain of blocks, which then is replicated in the entire network. Each block has a reference to the previous block, through the hashing cryptography that links the blocks. Some of the nodes in the chain create a new block with pending facts. They, in the case of bitcoin miners, compete to see if their local block is going to become the next block in the chain for the entire network, called proof of work. Then this block is sent to all other nodes in the network. All nodes run a check on that to see if the block is correct, then add it to their copy of the chain, and try to build a new block with new pending facts (Nakamoto 2007: 3).

But it has gradually become clear that the technique has much broader applications than just acting as the backbone of Bitcoin. One of the key elements is the ledger, which is a database of the content of the blockchain – whether it is bitcoin transactions, intelligent smart contracts, or something else (Boye 2016).

Blockchain is a type of electronic ledger created to ensure that once a party transfers a digital asset, he cannot transfer it to anyone else, prevent double spending. Unlike other ledgers, blockchain is owned by its participants, and decisions about what it records are subject to participant consensus.

Recording accuracy is ensured by duplication: every participant has a copy of the ledger. Discrepancy-resolution mechanisms ensure that all copies reflect an identical history. Though permissions can be managed with a fair degree of control, by default any permitted participant can view all transactions. Thus together with immutability, notarization and assured provenance, transparency is a core blockchain attribute (1).

There are many ways of applying a blockchain technology, in short, either as a public blockchain, a private blockchain, or as a consortium blockchain. A public blockchain is a blockchain that anyone in the world can read, through which anyone in the world can send transactions, and include transactions if they are valid, i.e. Bitcoin (Buterin 2015). A fully private blockchain is a blockchain where write permissions are kept “centralized” to one or few institutions, i.e. banks (Buterin 2015). A consortium blockchain is a blockchain where the consensus process is controlled by a pre-selected set of nodes. An example, is a consortium of 15 financial institutions, each of which operates a node and of which 10 must sign every block in order for the block to be valid. A consortium blockchain can be altered to fit the need of the one using it, ex that the R3 consortium want different “rules”, than the Hyperledger consortium or Ethereum Alliance (Buterin 2015; R3; Hyperledger).  

Public blockchains can offer advantages that a private blockchain and consortium simply cannot, and vice versa. The take-away with the different ways of adopting blockchain technology, in relation to COOP Trading, is what they want to gain from a blockchain solution, who should be a part of it, who should have read and write permissions and what data can’t be shared. One must have a high due diligence in order to research the possibilities and challenges with a blockchain solution.     

Factbox:

“A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database. Each time a block gets completed, a new block is generated. There is a countless number of such blocks in the blockchain. The blocks are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block.” (Investopedia)

Finally, blockchain isn’t simply a secure collective database. In addition to transactions, it also records and executes simple programs.

The idea of pre-programed conditions, interfaced between users, and then broadcasted to everyone, is called a smart contract. A contract is a promise that signing parties agree to make legally-enforceable. Proponents of smart contracts claim that many kinds of contractual clauses can be partially or fully self-executing, even self-enforcing, or both. The aim of smart contracts is to provide security, which is superior to traditional contract law and to reduce other transaction costs associated with contracting (Tapscott 2016: 105-108). Buterin explains it as: “(…) then we can cut costs to near-zero with a smart contract.” (Parker 2016).

Blockchain smart contracts may also influence, or be influenced by, product movements. For instance, a positive QA test indication can release a part for assembly. However, today that role is played by ERP systems. Blockchain technology doesn’t necessarily add value in such traditional operations management tasks (1).

Factbox:

“An asset or currency is transferred into a program and the program runs this code and at some point it automatically validates a condition and it automatically determines whether the asset should go to one person or back to the other person, or whether it should be immediately refunded to the person who sent it or some combination thereof.” (BlockGeeks)

  1. http://www.sdcexec.com/article/12247812/supply-chain-finance-on-the-blockchain-enables-network-collaboration

© 2018 Kristoffer Just Petersen