Revamping the Global Food Supply Chain with IoT and Blockchain

Today, people are increasingly discriminating about the food items they consume. They are concerned about making their eating choices healthy. Hence, regulators are rightly concerned at the growing incidence of product adulteration in the food supply and the time it consumes to detect the source of outbreaks and respond effectively.

Although today's global food supply chain made it possible to bring food across the globe, the biggest challenge for the food industry is to make sure food safety, lower food fraud and at the same time keeping low operating cost.

In reality, the food people consume and buy from the market is highly insecure than it could be imagined. Food fraud is projected to be a US$40 billion a year problem and there are some incidents of fraud that often take place in the food supply. For instance, wood shavings discovered in parmesan to the 2013 or Horsemeat scandal in the UK and Chipotle's E.coli outbreak in 2015. There are a lot of such examples that proved that the food supply chain is not that secure and it directly impacts consumer health and food companies an oversized law suit.

World Health Organisation projects that one in 10 people fall sick every year from eating contaminated food. The Centre for Disease Control estimates that around 48 million Americans become ill from contaminated food each year.

Because of recalls or sales loses, their financial impacts can top US$100 million. Despite that, preventing scandals and huge fines, making supply chain information more trustworthy is becoming a challenge for the industry.

Supply Chain Challenges

Modern supply chains have become rapidly sophisticated, and their effect on the competitiveness of most companies is a crucial factor to take into account. Risks involved in a supply chain are associated with its interlinked nature.

2013's survey on Global Supply Chain Risk by Deloitte unveiled the direct impacts and causes of the risks and challenges.

• Ineffective supply chain risk management

• Margin erosion and sudden demand

• Insufficient end-to-end visibility

• Ripple effect because of extended value chain

• Obsolescent technologies

There's no silver bullet to the food industry-related problems. But, the potent combination of blockchain and internet of things (IoT) technology could tackle the root causes. It's essential to understand these technologies' strengths and limitations before figuring out how these technologies can work together.

Continuity of Information

Sharing information effectively between the different stakeholders associated with the global supply chain will be critical to make sure traceability and minimise inherent risks.

Fraud Detection and Code of Conduct Violations

The requirement to ensure human rights and codes of conduct are respected along the chain is necessary to reduce reputation risk. Effective fraud detection processes backed by appropriate technologies will be increasingly important to minimize business risks. Transparent and auditable features of blockchain can enable them.

Transforming the Food Industry with IoT and Blockchain

Combining these two technologies can potentially save the food industry more than US$31 billion over the next five years. It is primarily targeted to save from combating food fraud (i.e. improperly selling chicken as Animal Welfare Approved), but there are other advantages.

Better sensors would minimize food wastage, expanding the total amount of food that hits store shelves. Fewer, smaller, and cheaper recalls could also generate savings. Although blockchain/ IoT technologies are still in its infancy, numerous ways can be implemented.

Accessing Information

Fast and transparent blockchains will offer the necessary access to information in the future to leverage the vast amount of data produced along the supply chain effectively.

The growth of the global food supply chain is likely to bring more complexity and challenges, along with great opportunities. If firms can proactively implement stringent safety measures, embrace technologies such as Blockchain and IoT that enable clear visibility, track and trace, and integrate more closely with their partners, it can massively benefit the entire industry.