In today’s world, Blockchain is a revolutionary technology offering trust along with data integrity in the food industry across complex supply chains. Recording every step, a food item takes from farm to fork, making it easier to track contamination, also verifying claims like organic and recalling tainted products quickly [1].
The globalization of food supply chains (FSCs) has significantly increased the movement of products and information worldwide. Traditional FSCs characterized by strong vertical integration and coordination, are now facing pressure to enhance and ensure transparency, trusted information exchange and proper end-to-end traceability from farms to retailers. The need for traceability was needed due to scandals like the horsemeat and melamine incidents, leading to regulations mandating the traceability of every food product ingredient.
Some of the new-age technological solutions like radio-frequency identification (RFID) and cloud computing have been implemented to address these above-mentioned challenges. But still, some problems persist. So, the new technology Blockchain is now being explored as a revolutionary solution to transform FSCs by providing extended visibility and traceability. As discussed, Blockchain is nothing but a sort of digital, decentralized and distributed ledger that creates permanent and tamper-proof records. The main purpose behind the blockchain’s popularity in the food supply chain and logistics community stems from its ability to increase transparency, ensure transaction immutability, and build trust among stakeholders.
Blockchain is being applied to compile digital product information, such as farm details, batch numbers, and processing data, providing consumers with comprehensive information by scanning QR codes on packaging. Likewise, Alibaba in collaboration with Blackmores and other food producers, aims to prevent counterfeit food items in China through blockchain technology [1]. But, despite all these initiatives, a comprehensive roadmap for blockchain implementation in Food Supply Chains (FSCs) is lacking and adoption is slower than expected due to various challenges. This article provides a background of blockchain technology to help researchers position their work in different fields and identifies gaps in current research, highlighting the areas for further investigation.
POTENTIALS OF BLOCKCHAIN TECHNOLOGY IN THE FSC: –
(1) Food Traceability
Food traceability facilitated by blockchain is seen as foundational for sophisticated, industrialized and globalized food value chains.
Blockchain ensures food safety and quality, meeting consumer expectations and demands.
Enhances consumer confidence by providing transparent and traceable information about products.
Regulatory compliance meets the demands for traceability, especially in the wake of food scandals globally.
Value addition adds substantial value to food businesses by allowing traceability at every point in the FSC.
(2) Food Supply Chain (FSC) Collaboration:
Supply chain collaboration improves collaboration and resource sharing among FSC partners, fostering trust and potentially leading to quality improvements and innovation.
Blockchain platforms can utilize GS1 standards to address interoperability issues among different parties in the FSC.
Facilitates flexible information sharing, leading to better coordination, market focus, and risk mitigation.
(3) Food Supply Chain (FSC) efficiencies:
Efficient Food Supply Chain provides a competitive advantage, and blockchain aids in optimizing planning decisions and increasing inventory visibility.
Automation enables process and role automation, reducing inefficiencies related to paperwork and bureaucratic procedures.
Visibility and Transparency improve visibility and transparency in supply chain inventory and processes, leading to faster deliveries and reduced stock levels.
(4) Food Trading:
Economic importance recognizes food as a unique commodity with significant economic importance globally.
Blockchain facilitates automated trading mechanisms, providing a trusted method for participants to share data and ensuring visibility in transactions.
Globe trade opportunities reduce logistics costs, streamline transportation processes, and create new market opportunities for global FSC trading partners.
CHALLENGES OF BLOCKCHAIN TECHNOLOGY IN FSCs:
(1) Technical Challenges:
Blockchain may become inefficient with an increasing number of FSC transactions which may lead to Scalability Issues.
The validation process may limit efficiency, especially in situations with high transaction throughput.
Limited capacity to handle and store massive amounts of data, which is crucial for multi-tier supply chain networks.
(2) Organizational Challenges:
Blockchain’s technological immaturity and the novelty of the technology pose challenges for adoption.
Significant capital investments might be required for implementing blockchain, posing financial challenges, especially for small-scale enterprises.
Organizations need to invest in developing skills and technical understanding for effective implementation.
(3) Regulatory Challenges:
Lack of Standards: The absence of industry standards for blockchain technology makes it challenging to integrate FSC exchange partners into a unified regulatory framework.
Regulatory Compliance: Ensuring compliance with regional, national, and international policies is crucial for sustainable blockchain-enabled FSCs.
Misconceptions: Addressing misconceptions about blockchain technology to avoid regulatory and legal restrictions.
In conclusion, Blockchain technology stands as a revolutionary force, instigating a paradigm shift in the intricate web of the food industry’s supply chains. Offering an unprecedented amalgamation of trust and data integrity, Blockchain’s role extends beyond a mere digital ledger, becoming the cornerstone for enhanced traceability and transparency across the complex global food supply chains [1]. As the world witnesses an unprecedented movement of products and information, the traditional supply chain structures face mounting pressure to evolve, emphasizing transparency, trusted information exchange, and end-to-end traceability.
The scars left by scandals like the horsemeat and melamine incidents necessitated regulatory interventions, propelling the exploration of cutting-edge solutions like radio-frequency identification (RFID) and cloud computing. While these technologies addressed some challenges, persistent issues prompted the exploration of Blockchain as a revolutionary remedy, offering extended visibility and traceability. Its digital, decentralized, and distributed ledger architecture not only ensures transparency but also guarantees transaction immutability, fostering trust among stakeholders.
Looking into the potential, Blockchain’s impact on food traceability is foundational, meeting consumer expectations, ensuring safety, and adding substantial value to businesses. Collaborative platforms within the Food Supply Chain (FSC) can harness Blockchain to foster trust, address interoperability concerns, and enhance information sharing, leading to better coordination and risk mitigation. The efficiency gains of a Blockchain-enabled FSC are immense, providing a competitive advantage through optimized planning, automation, and improved visibility.
Recognizing food as a globally significant commodity, Blockchain unlocks economic opportunities by facilitating automated trading mechanisms and reducing logistics costs. However, these potentials are juxtaposed with a myriad of challenges, including technical inefficiencies with increasing transactions, organizational barriers due to technological immaturity, and the necessity for substantial capital investments, particularly for smaller enterprises. Regulatory challenges, encompassing the lack of standards, compliance issues, and the need to dispel misconceptions, further impede Blockchain’s seamless integration into FSCs.
Reference:
[1] Rejeb A, Keogh JG, Zailani S, Treiblmaier H, Rejeb K. Blockchain Technology in the Food Industry: A Review of Potentials, Challenges and Future Research Directions. Logistics. 2020; 4(4):27. https://doi.org/10.3390/logistics4040027
Author’s Bio
Kushagra Agrawal
Computer Science Engineering Scholar
School of Computer Engineering,
KIIT(Deemed to be University), Bhubaneswar – Odisha
Email: kush4409@gmail.com
Nisharg Nargund
Computer Science Engineering Scholar
School of Computer Engineering,
KIIT(Deemed to be University), Bhubaneswar – Odisha
