Implementing a platform for the food-chain ecosystem to provide trust, transparency and provenance
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The document discusses the implementation of a transparent food-chain ecosystem leveraging blockchain technology to enhance trust, traceability, and compliance across the supply chain. Key partnerships, such as between Walmart and IBM, are highlighted in their pilots focusing on food safety and traceability for products like pork and mangoes. It emphasizes the importance of addressing challenges in food safety and regulatory compliance while improving efficiency and accountability in the food industry.
Implementing a platform for the food-chain ecosystem to provide trust, transparency and provenance
- 1. Implementing a platform for the food-chain ecosystem to provide trust, transparency and provenance November 24, 2017 Walter Stiers Industry Architect Walter_Stiers@be.ibm.com
- 2. Disruption has fundamentally changed industries and business economics Fragmentation of traditional value chains Convergence of traditional industries Emergence of new ecosystems New technologies create more transparent value chains that are easier to decompose functionally New competitors are emerging that compete in specific value chain functions across industries, driving accelerated industry convergence New types of ecosystems emerge, displacing traditional industries and underpinning evolution of seamless sophisticated customer experiences R&D Operations Logistics Marketing & sales Consumer experience 58% of global retail executives feel traditional value chains are being replaced 44% of global retail executives feel boundaries between industries are blurring 58% of global retail executives feel competition is coming from new, unexpected sources Global Ecosystem Survey’, IBM Institute for Business Value, 2016, (total sample size n=2156)
- 3. Blockchain creates a new style of network transforming business processes & transactions 3
- 4. Walmart & IBM are working on 2 pilots around food traceability & transparency Pork Traceability/safety Mango Traceability/global trade
- 5. The Most Important Food Project in China • secure documentation of key information on raw materials, machinery (certifications etc.) and processing • create product packages with electronic bar/QR code informational labeling for regulators and consumers • aggregate products into packages • disaggregation of product packages and re-packaging for retail stores • validation of packages to ensure no fraudulent replacements or inducing of counterfeit ones • visibility of product packages across the transport lines ManufacturerBreeder (Farm) Distribution Center Retail Store Consumer Auditor • retrieval of traceability information during checkout: easy to use mobile apps • checkout transactions disabled for expired products (or alarm raised) • customer ratings and preferences with regard to the source of the product R E Q U I R E M E N T S • end-to-end visibility of each product path across the supply chain • check compliance w.r.t. machinery, expiry dates, product quantities, etc. • certify the supply-chain; creation of audit records UNDERLYING BLOCKCHAIN PROVENANCE CAPABILITIES association of labeling with data on Blockchain product data aggregation and disaggregation end-to-end permissioned visibility authentic traceability through immutability information retrieval in a simple manner audit capabilities: handle changing regulations through smart contracts
- 6. • 5 to 8 years for a mango tree to mature and bear fruits • Mangoes grown by small farmers in Central or South America • Shipped to a packing house to get washed and boxed • Shipped to the US by air, sea or land (custom border) • Washed, peeled, sliced and put into containers in a facility center • Shipped to Walmart distribution center to get refrigerated • Transported to store, refrigerated and put on shelves SOURCE: Frank Yiannas and Walmart are the source for this slide content. Walmart & IBM are envisioning a fully transparent 21st century digitized food system
- 7. Key Drivers 7 • Regulatory Requirements 2011’s Food Safety Modernization Act is one example of enhanced record keeping requirements • Foodborne Illness The cost of foodborne illness in the U.S. alone ranges from $55 - $93 B • Food Fraud Food fraud incidents cost the industry $10-15 B annually Lack of trust in ecosystems prevent participants from sharing information and optimizing effectively • Transparency Improved transparency leads to accountably, responsibility, & trust. Consumers are demanding it • Traceability The inability to track & trace results in larger outbreaks and negative implications for safe products • Freshness & Food Waste One-third of all food globally goes to waste. In the U.S., consumers throw away $29 B annually © 2017 IBM Corporation
- 8. © 2017 IBM Corporation 8 Today: Our View of the Industry Data sharing limited to 'one up, one down’ without end-to-end transparency Multiple data formats & sources Lack of trusted, easily auditable records Incomplete information © 2017 IBM Corporation
- 9. Key Challenges 9 • Logistics • Grower • Processors/Suppliers The Food Safety Solution targets pain points of all global ecosystem participants – creating shared value • Regulator• Retailers • Consumer • Manual, paper-based processes • Lack of real-rime information • Onerous administrative process • Onerous regulatory record keeping • Manual, paper-based processes • Onerous administrative process • Manual, paper-based processes • Increasing food waste • Evolving compliance needs • Manual, paper-based processes • Onerous administrative process • Increasing fines for violations in ecosystem • Inability to quickly identify source of contaminated food • Lack of easy visibility to food safety certificates and audit reports • Authenticity concerns • Unnecessary testing • Inability to view and/or trust food claims and origins • Lack of timely and accurate information during food recalls © 2017 IBM Corporation
- 10. Food Safety Solution Overview 10 • Providing end-to-end global traceability to improve transparency and efficiency • Creating trusted connection with shared value for all ecosystem participants – including strong consumer focus • Leveraging existing standards (e.g., GS1) and offering connectors for interoperability https://www.ibm.com/blockchain/foodsafety/ © 2017 IBM Corporation
- 11. How Blockchain Helps The entire ecosystem shares a single trusted source of information on the food system Retailers Regulators Customers Growers 570M Food Suppliers 1M Processors 126K 33K Logistics 1.9M 600 2.7B Millions of participants will view their permissioned section of the same information in a trusted, scalable network TX © 2017 IBM Corporation
- 12. © 2017 IBM Corporation 12 Scaling the Food Safety Ecosystem Increased Impact Social Media increases the impact of any issue Regulations Increase in regulations on safety & fraud globally (e.g., FSMA) Device Proliferation Even very small growers can afford a smartphone Participation Adoption by leaders: Early adoption by key influencers and innovators Timeline Shared Value: Value proposition/pricing resonate for all ecosystem participants (retailers, regulators, consumers, growers, logistics companies, processors, suppliers, etc.) Amplified Value: Analytic tools dramatically raise the value of the more complete data setUser Experience: Easy to onboard and use system Enterprise Ready: Built for business usage with security, scalability, reliability, etc. Adoption by ecosystem Industry Trends
- 14. Data challenges in the shipping industry have at least 3 key root causes A complex system where actors are communicating back and forth and data is stored locally at each actor’s site 1. Multiple data formats 2. Too many peer-to-peer interactions 3. Absence of messaging standard Incomplete/ inconsistent information Border delays Error-prone information Lack of shipment visibility DATA CHALLENGES ROOT CAUSES Producer Consignor Forwarder Carrier Consignee Declarant Dispatcher Liner AgentTerminal Authority 1 Authority 2 Authority 4 Authority NAuthority 3 View of the Global Supply Chain
- 15. An open, extensible platform for sharing shipping events, messages, and documents across all the actors and systems in the supply chain ecosystem. Important principles • Detailed information remains under the control of the owner • Neutral • Fault Tolerant • Everyone can work in their own systems Provider of interface: value-add partners Event publishers & subscribers GTD Platform Customs Dashboard Logistic actors internal systems Supply Chain Visibility systems Port community systems Transportation management. Shippers Authorities Trade Associations Carriers Supply Chain Actors Terminals Supply Chain Management
- 16. 16 With GTD, the entire supply chain ecosystem shares a single trusted view of shipping events and documentation filings Global Trade Digitization Paperless Trade Blockchain Network Export Inland Transportation Port / Terminal Customs Authorities 3PL Service Provider Packing List Export Declaration Bill of Lading Inspection Certificate Commercial Invoice Exporter / BCO Import 3PL Service Providers Importer / Consignee Inland Transportation Customs Authorities Port / Terminal Shipping Information Pipeline Certificate of Origin Dangerous Goods Declaration ISF Not exhaustive list of Events tracked by GTD Not exhaustive set of documents processed by GTD Customs Declaration Customs Clearance Phytosanitary Certificate Emptycontainer pickedup Startcontainer tracking ETAEmpty containeratinland location VGMfilled Fullcontainer pickedupfrom stuffingsite Estimatedgatein gateinfullfor export ETDcontainerfrom terminal Fullcontainer loaded Emptycontainer picked-up ATAcontainerat terminal Containerdischarge estimated Estimatedgateout Gateoutfullfor import ETAfullcontainerat inlandlocation ATAfullcontainerat inlandlocation Sealedremoved Containerde- stuffed Emptycontainer readyforpick-up Emptycontainer arrivedatempty depot Containertracking ended ETAEmpty containeratinland location Containerstuffed Containersealed ATDcontainerfrom terminal ETAcontainerat terminal Temperatureread Exportdeclaration cleared Fullcontainer discharged Importdeclaration cleared Containerselected forinspection MRNnumber issued Container Arrival Notice EUR 1 Available