Walmart is testing blockchain technology in an attempt to improve both food safety and the retail giant’s supply chain efficiency. In a limited trial, the company is testing the distributed ledger technology to monitor pork products in China and an undisclosed packaged produce item in the United States. Blockchain offers a promising way to better monitor products and to take corrective action in the event of foodborne illness outbreaks.
Foodborne illness is a common and costly problem that is compounded by the global scale of today’s food supply networks. The Centers for Disease Control estimates that each year roughly 48 million people gets sick from a foodborne illness, 128,000 are hospitalized, and 3,000 die. As a result of the complexity of supply networks, retailers are often slow to respond to outbreaks and recall more products than necessary due to uncertainty about the source of contamination.
Currently, Walmart must search through a multitude of databases and servers in order to find vital product information, including the location of origin, vendor, inspector, and time of shipment, following an outbreak of illnesses from a contaminated product. By using the blockchain, Walmart will be able to quickly determine this crucial information from a single digital receipt. As Marshal Cohen, an analyst at market researcher NPD Group Inc, notes,
“It gives them an ability to have an accounting from origin to completion. If there’s an issue with an outbreak of E. coli, this gives them an ability to immediately find where it came from. That’s the difference between days and minutes.”
In addition to bolstering customer safety, blockchain could help the retail giant’s bottom line. Through its decentralized structure, the blockchain database can hold significantly more data than traditional means and do so securely, providing retailers with more information to analyze and to make informed decisions. The enhanced traceability could yield a more efficient supply chain by allowing Walmart to identify safety issues and delays. This could help Walmart reduce spoilage and waste. Also, it could allow the company to keep more products on sale during an outbreak by allowing it to pinpoint the problem goods and make more strategic removals.
Walmart is using technology co-developed by IBM, and also announced a collaboration with the tech company and Tsinghua University to improve how food is tracked, traced, and sold to Chinese consumers. If these tests are successful, Walmart will expand the blockchain to more food items in both the United States and China. If Walmart, which serves nearly 260 million customers a week, adopts the technology worldwide, it would be one of the largest implementations of the blockchain to date.