posted on June 13, 2018 14:17
By Dr. Hans Maurer, New Zealand IFPS Director and chair of the Chain Information Management Committee
The short answer is – neither! Let me explain.
On the technical level, Blockchain is very much a reality. Not only is Blockchain technology being used to underpin the cryptocurrencies we hear so much about but a myriad of mature business sectors are beginning to investigate or even use Blockchain technology in an attempt to solve some of their inherent challenges, such as achieving better traceability. Not surprisingly, the Fresh Produce Industry globally is up to its armpits involved in such pilots, as are notable retailers such as Walmart, Carrefour, and others. Blockchain is, therefore, most certainly not a myth but fast becoming a reality.
Is Blockchain technology the salvation to all the produce industry’s problems relating to traceability?
It most certainly is not, yet Blockchain technology can be an incredibly effective tool for achieving transparency.
This statement deserves to be explored in a little more detail.
Traceability has long been the Nirvana the produce industry has been aiming to achieve in relation to Food Safety, ever since the first accountability focused pieces of consumer protection legislation started to emerge in the late 1980s and early 1990s in various jurisdictions. For traceability to work, supply partners need to develop an openness and willingness to share data that is being reconfirmed at every physical step in the supply chain – and if just one supply chain participant is not convinced that it is in his or her best interest to share data, traceability will end up being compromised.
Traceability is like a powerful torch. When the torch is turned on in the darkness, its beam will illuminate whatever area the torch is being pointed at. Areas not covered by the torch beam will remain in darkness, however, until the beam is shifted towards the next area identified for inspection.
The person holding the torch is determining where the torch beam is pointed at. If the torchbearer omits to point the torch into any given area, that area will not be illuminated and therefore remains dark. As the torchlight shines into the areas selected by the torch bearer in either a random or logical sequence, the bearer may or may not gain a complete picture as he or she will in most cases only see sections of the selected areas illuminated, but rarely the entire area.
Transparency, on the other hand, compares to finishing one’s work in a room where the dimmer lights are installed, and these dimmer lights are coupled to motion sensors. When no motion is detected, the light dims down. Once motion is detected again, the light returns to its full brightness, enabling an instant appreciation of what the room contains, where objects are placed and how the objects are behaving at any given point in time.
Blockchain technology is a smart enabler that can achieve transparency – given favourable conditions.
To get to that point, the way existing business is being conducted will have to be adapted. Information that was previously considered proprietary will have to be shared. Data pipelines that run along produce supply chains must be running at least at the same speed as the product itself and in many cases even faster without data accuracy being compromised. This has consequences for process design and management and signals the need for change.
Change is not something people are always instantly enamoured with. Yet without change, true transparency will continue to evade us.
Mindset, therefore, has to be the starting point. At the technical level, a Blockchain is nothing other than a sophisticated database with additional functionality and perimeters, working across multiple enterprises. As long as the mind continues to be constrained by traditional business methods going back to the days of the Abacus, Blockchain technology cannot contribute to improving and future proofing business models and their supply chains.
Introducing Blockchain technology into the fresh produce industry, therefore, needs to start with the appreciation for a conceptual overhaul of the way in which business is conducted. Knowledge needs to be shared within supply communities in an accurate, timely and holistic way to achieve improved results for the entire supply community and not just individual participants, with the entire rethink needing to be market and consumer-focused rather than production driven. The techies will do the rest, once a clear direction has been achieved.
If, and only if, reconceptualised business models can get underway and are sustainably maintained, Blockchain technology will have a reasonable chance to head into the general direction of where the ‘Salvation’ label might have some application.
Dr. Hans Maurer is the New Zealand IFPS Director and chairs the Chain Information Management Committee