3.2 Digitalisation of the Supply Chain Using Blockchain

Click the video to watch how blockchain can be implemented into the agricultural supply chain

BLOCKCHAIN AND SUPPLY CHAIN MANAGEMENT

• Problems in existing supply chains:
  • Large number of globally distributed stakeholders
  • Lack of shared information
  • Low levels of trust - need for third-party intermediaries, resulting in additional costs and delays
  • Low levels of digitalisation - most compliance data and information stored on paper or in a centralised database
  • Human error
  • Data manipulation
  • Inefficient, costly

• Blockchain as a potential solution to many of these problems within the agrifood supply chain
• Key: Blockchain as a distributed, decentralised ledger
  • Everyone on the Blockchain (nodes) receives an identical, synchronised copy of the information on the Blockchain
  • Data entered into the Blockchain must be verified and validated by all participants (consensus)
  • Data entered into the Blockchain is immutable

Let’s take a look at the kind of stakeholders and information that should be included in a Blockchain-supported agri-food supply chain

*See Module 2 for more information on nodes, consensus, and the other building blocks of blockchain

• Advantages of a Blockchain-supported agrifood supply chain:
  • Quicker, more accurate flow of information between supply chain stakeholders
  • Disintermediation - a distributed, decentralised ledger where information is verified by all stakeholders removes the need for third-party intermediaries to perform this task, thus cutting out the ‘middleman’
  • Less room for human error, data manipulation or miscommunication
  • Increased transparency
  • Increased efficiency
  • Reduced costs

• Increased transparency and traceability thanks to Blockchain can help to reduce the chances of human error and related food waste, but it cannot eliminate all risk of contamination
• However, even in instances where Blockchain cannot prevent contamination in the supply chain, it can still help minimize the negative impact
• Detailed information about a product’s provenance and journey through the supply-chain can help retailers to identify exactly which products were contaminated, when, and where, in order to conduct a swift and targeted product recall
• By increasing supply-chain traceability, Blockchain can help improve food safety and reduce food waste