Blockchain: A Revolutionary Technology — With Complications.

By Lisa Lupo

If we could select only a single word to describe the current discussions, debates, and deliberations on the future of traceability technology, that word would be blockchain. But what do we really understand about this cryptocurrency? Is it truly the future for traceability and transparency? Or is it simply another cog in the vast, ever-turning supply-chain wheel?

To draw on the insights of a range of industry experts, we asked members of the QA Advisory Board three questions:

1. Do you feel you have an understanding of blockchain and its use in the food supply chain?
2. If yes, do you believe blockchain is the future for tracing the food supply chain? Why/Why not?
3. What factors are most important for a successful industry-wide traceability initiative or standard?

BLOCKCHAIN INSIGHTS. Following are their responses:

David Acheson

President & CEO, The Acheson Group

Yes. Blockchain is a technology that allows for almost instant connectivity up and down the supply chain. As such it has potential to enhance traceability but is by no means the answer to traceability issues.

Fundamentally traceability is about data (lot codes, date codes, etc.) and the data still has to be entered into the system – whether it is blockchain or some other system. Failure to enter data accurately or in a timely way is still fundamental – so blockchain needs lots of user actions. So blockchain is a tool, not “the future” for tracing.

Important to its succes is:

• Identification of the key data elements – lot code, date code, key identifiers on the product.
• Rapid and accurate data entry.
• Keeping the data current.
• Having a system that operates up and down the supply chain that is useable from farm to table.
   

Neil Marshall

Global Director of Quality and Food Safety, The Coca-Cola Company

Adoption by major players will be needed in order to get the supply chain actors to all add information and drive adoption. Clearly identify the problem and business case it can resolve, not use it as a potential panacea cure all.

Yves Rey

Senior Advisor to Danone and the United Nations Office for Project Services

Yes. Digitalized transaction workflow through a highly secured, shared, and distributed ledger is the future. But...life without competition is life without progress; the IBM blockchain platform cannot be the only option on the market. Do you guess that China will use it? Certainly not; China is developing its (own) blockchain platform. The challenge will be to make them communicate with each other.

Any information system is only as good as the quality of its data; data quality issues undercut the efficiency and integrity of global systems. How can we address and manage garbage-in, garbage-out questions? That’s the big challenge to be addressed.

Moreover, because blockchain is seen as a reliable and accurate tool by food stakeholders, fraudsters have sniffed that out and are developing sophisticated methods that help them use it with the aim of avoiding being caught and punished....The reliability, integrity, and compatibility of blockchain platforms are still the main challenges to be addressed before setting it up as the industry-wide traceability standard.

Temple Grandin

Animal Handling Facility Designer and Professor, Colorado State University

I have some understanding of blockchain. It is more secure than many systems, and hacking it will be difficult with today’s computer systems. When quantum computing becomes available, blockchain will be hackable; but quantum computing is still in the research laboratory and nobody has it yet.

Tools, such as blockchain, can be used to help improve traceability. It is not a magic bullet. People are always looking for a single magic bullet to solve all their problems. In the past, major supply failures occurred when corporate buyers failed to get out of the office and visit suppliers — blockchain will never replace the need to get out of the office to visit suppliers.

For many years, I have worked with many corporations on animal welfare standards. To ensure supply chain integrity, there are three legs on a tripod:

1. Independent third-party audits.
2. Second-party corporate buyer audits.
3. Supplier internal audits. Blockchain could be part of this leg.

The main thing that will drive industry-wide traceability is when the majority of buyers insist on it. For years, I have had this saying, “Heat softens steel, and then I can bend it into pretty grillwork.” There are two drivers of change and innovation:

1. Problems, such as recalls, often motivate sudden improvements.
2. The second motivators are visionaries who start new ways of doing things. This type of change occurs more slowly because it is the little guys who innovate.
   

Bruce Ferree

Owner, Insight Food Safety Consulting; Independent Consultant/Trainer-Eurofins Laboratories

I am not very familiar with blockchain. I’ve heard descriptions but have reservations as to whether it will work or not. My worry is that it tracks transactions. Tracking transactions is not the same as tracking food movement, and I’m not sure of the best ways to track each and every piece of food (for example, an apple or orange from the farm to the user). Blockchain has been touted as able to do all that but I am not sure how it will. And I have not taken the time to investigate it further.

Mike Burness

Head of Global Quality and Regulatory Affairs, Godiva Chocolatier

We understand its basis, execution, and functionality as it relates to the food industry as a whole. We believe blockchain is the short-term future for traceability in the food supply chain (and many other industries). That said, there are a few thoughts on its long-term capability and effectiveness:

1. With the pace of technology, it is likely that another technological platform may become more effective than blockchain. A potential example is genome sequencing and/or CRISPR technology. Once the ability to easily identify a genetic sequence becomes commercially available, that may be a good substitute for blockchain. I have no idea when that may occur, but looking into the future, I think it is certainly feasible (among other technologies).
2. Blockchain is effective when whole-item traceability is being considered. There might be some bigger challenges, both economically as well as functionally, to utilize blockchain to the same degree in mixed use and/or amalgamated commodities (e.g., cocoa beans being sold on the open market and co-mingled with millions of other beans from different farms). This obviously holds true in numerous commodity-driven ingredients and products, and I’m not sure how blockchain will be effectively managed in those scenarios — as many, many lots can be co-mingled before a finished product is made, vastly expanding the scope of blockchain and that of a traceability exercise.
3. Blockchain (as with any other technology platform) will, at some point in time, likely become “hackable.” While this may be more common in high-priced commodities (e.g., platinum, gold), there is the obvious risk that the entirety of the platform can become corrupted/hacked. It’s not a new issue, and it is one that is likely being aggressively addressed in the technical community.

We think there are a couple key elements for successful industry- wide traceability — accuracy and speed — both of which need to be essentially perfect for industry-wide success. Blockchain certainly addresses both, yet internal traceability systems in companies will likely be where the rubber hits the road. I am not sure if this is being developed, but a standardized approach to industry traceability (perhaps like a Global Trade Item Number [GTIN]) would certainly go a long way toward ensuring speed and accuracy across the entire industry and its products.

Additionally, while blockchain is a very effective tool for tracing product, we need to remember that when we need it to get product off the shelf, something has already gone wrong. We do, in the midst of all the other improvements being made — need to continue to focus on preventing potential food safety issues from happening in the first place.

We do believe there are numerous approaches being made to address that too, so look forward to being part of the merging of the two to further minimize food safety issues across the industry.

Darin Detwiler

Assistant Dean, College of Professional Studies, Northeastern University

Yes, I understand blockchain; Yes and no as to whether it’s the future of tracing. I believe that momentum towards some kind of eLedger, decentralized, cloud-based system is the right thing to do and will force many in the industry to move away from a paper-based system. Personally, I believe that the cost and effort to do blockchain right will be too much for many in the industry and serve as a barrier to market.

The factors I see as most important for success are that it would be digital, authenticated, and driven by retail. I believe that strong leadership and the use of predictive analytics will be a must.

Personally, blockchain makes sense. I am teaching about it at the graduate level for students in regulatory affairs, as this is in high demand. I have moderated many panels and talked about this extensively here and abroad. So many gaps in understanding exist throughout the industry.

Jorge Hernandez

Chief Food Safety Officer, Wholesome International

Yes. I have a transactional understanding of the technology and its applications. I’m not certain if it’s the future. While I agree with the potential for the use of blockchain technology to improve traceability and transparency in the food-supply chain, there are, in my opinion, many barriers to its implementation and realizing the perceived value.

Let’s keep in mind that the use of this technology is still in the developmental stage and the perceived value has not yet been proven to my knowledge (although there are several pilots in place to do so). That said, I believe that the technology itself will open new doors on how we do traceability and improve transparency, and that will lead to better, faster, more accurate, more reliable information across the supply chain.

Complications include the vast number of food products; types of products and derivatives; complexity of the supply chain; different permutations of business and trade practices, legacy systems, and processes in place; cost; requirement to collaborate across (the supply chain) by all (blockchain’s strict logic doesn’t allow redesign which leads to the need for business changes so they can be acceptable to blockchain). Additionally, implementation of the technology is not easy; there are difficulties updating and eliminating errors; and there are several more technical, practical, and business reasons.

 All the same, I believe blockchain is a revolutionary technology with the potential to restructure many business models and, thus, provide a new way of tracing food and provide transparency over the long run. However, as the technology evolves, it’s most likely to be a permutation of the current one that will deliver on some or most of the value we seek on food traceability and transparency.

The important factors for success would be an initiative or standard that is global, from and for the food industry; ease of understanding and implementation; low cost; and applicability to the vast number of food products, types of products, and derivatives. 

It would need to be an initiative or standard that makes sense for all actors in the supply chain, from the very large to the very small, and one that works with current business and trade practices, legacy systems, and processes in place (or with minimum disruption). I know, it’s not easy, and thus the reason we don’t have one in place yet.

The author is Editor of QA magazine. She can be reached at llupo@gie.net.