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4 key blockchain in supply chain use cases and examples

If you've heard the fervor surrounding supply chain blockchain, you're probably wondering how real its potential is. Some companies are trying to find out for themselves.

Blockchain can take care of all your supply chain issues -- or so the hype goes.

In reality, blockchain in supply chain use cases are not quite as dramatic, and there are a few problems associated with the technology. Still, blockchain does show promise. For efforts such as food safety improvement and greater traceability, leading edge organizations are carrying out experiments to see just what it can do.

Here are some real-life examples and use cases of blockchain's application to supply chain management improvement.

Provide tracking info to consumers: Bumble Bee Foods

Bumble Bee Foods uses SAP's Cloud Platform Blockchain service to trace yellowfin tuna's journey from the ocean surrounding the remote islands of Indonesia to local retailers.

Bumble Bee believes blockchain is the safest way to share data between parties due to the technology's reputation for being incorruptible and verifiable. SAP's blockchain technology lets consumers access the origin and history of Bumble Bee Foods' fair-trade-certified Natural Blue by Anova yellowfin tuna using their smartphones to scan QR codes on 12-ounce bags of tuna steaks.

"That will tell them where the tuna was caught, how it was caught, the species that's in the finished good product and whether it's fair trade or not," said Tony Costa, CIO at Bumble Bee.

In addition to using blockchain to offer consumers the ability to track and trace yellowfin tuna, Bumble Bee is in the process of capturing data to provide the same level of visibility to the fishermen and the buyers.

"For the first time that data is being put into a computer system that we can use to go back to the fishermen, for example, so a fisherman can see how many fish he's catching versus other fishermen," Costa said.

Buyers will have access to the SAP Cloud analytics dashboard to see how many fish they bought from each fishing village and from each fisherman, Costa said. The buyers will also see how many fish each fisherman is catching. These capabilities will be a gradual rollout over the rest of 2019, Costa said.

"The analytics and capabilities of leveraging this information is going to be pretty special," he said.

Bumble Bee Foods uses SAP's Cloud Platform Blockchain to track and trace tuna from ocean to table.
Overview of one use case: Bumble Bee Foods uses SAP blockchain to track and trace tuna from ocean to table.

Boost drug safety: Merck and Walmart

Blockchain in supply chain use cases involving drugs are some of the most important.

Merck and Walmart, along with IBM and KPMG, are testing blockchain as part of a program to improve drug safety and security.

The endeavor is part of the U.S. Food and Drug Administration's Drug Supply Chain Security Act (DSCSA) Pilot Project Program. The FDA chose multiple participants, which are testing methods and technologies with potential to create an electronic, interoperable system.

As for Merck, Walmart, IBM and KPMG, each company has a special interest in improving the efficiency of the pharmaceutical supply chain. Merck is a drug manufacturer, Walmart is a leading U.S. pharmacy, IBM sells blockchain technology and KPMG provides consulting services to pharmaceutical companies. 

"The idea is that all drug manufacturers will be responsible for being able to validate that their drugs are authentic from the point of manufacture all the way to the point when they're dispensed to the patient," said Tegan Keele, U.S. blockchain program lead at KPMG.

Currently, drugs are traceable when packed in a box that has a barcode or QR code, but visibility decreases as soon as someone opens and unloads that box because the individual units aren't traceable, she said.

"What blockchain is doing is providing an underpinning augmentative layer across the drug supply chain and enabling that unit-level visibility to be traced as the [drugs] go all the way through," she said.

The idea is to give each drug package a unique identifier that can be tracked on the blockchain from the drugmaker to the pharmacy to the consumer and every other stop along the way.

"That linkage, and being able to see where [a drug] has been and who touched it and when, effectively makes it very, very difficult for bad actors [to introduce] counterfeit drugs," Keele said.

The FDA's pilot project is scheduled to be completed in the fourth quarter of this year and results are expected to be published in an FDA DSCSA program report. At that time, project participants will evaluate next steps, Keele said.

Deliver fresher fruit: Naturipe Farms

Naturipe Farms LLC uses the SAP Cloud Platform Blockchain service to track blueberries from the point of harvesting to the dinner table. Naturipe, based in Salinas, Calif., is a partnership between four fair-trade-certified berry growers across the globe.

After growers pick and pack the blueberries, they place QR codes onto open crates of fruit. Those codes remain on the crates all the way to the store, according to an SAP video. Consumers can then scan the QR codes on the individual packages of blueberries with their smartphones to see where those berries were grown and even learn about the sustainability practices of the farm.

In addition to traceability, SAP's blockchain service helps Naturipe solve another problem -- timeliness.

The typical current process is to track the fruit with handwritten paperwork that accompanies each shipment, said Carol McMillan, director of IT at Naturipe in the same SAP video. That process can cause delays in getting berries clear through customs -- up to four hours for an air shipment and up to two days for a boat shipment. That's not ideal because fresh berries already have a short shelf life.

Many of the berries are produced in Central and South America, so being able to onboard the data captured by the growers is important, said Sathya Narasimhan, senior director of blockchain business development at SAP.

Keep meat cold: Golden State Foods

Golden State Foods (GSF), a food service company based in Irvine, Calif., partnered with IBM on a pilot program that uses radio-frequency identification to track fresh beef's movement, IoT devices to monitor its temperature and blockchain to manage the business rules between supply chain partners.

GSF is part of the IBM Food Trust, a product that uses blockchain to track and trace food as it moves along the chain between wholesalers, suppliers and retailers and provide them with transaction details.

One big value proposition of blockchain is the ability to run trusted business logic on the trusted data, which can help in dispute resolution.
Ramesh GopinathVP of supply chain solutions, IBM

"One big value proposition of blockchain is the ability to run trusted business logic on the trusted data, which can help in dispute resolution," said Ramesh Gopinath, vice president of blockchain solutions at IBM.

Gopinath offered the following scenario: Imagine a supplier of beef patties and a restaurant customer get into a dispute because the restaurant said the beef patties didn't last 14 days.

"So either the supplier messed up or the shipping company messed up, and they didn't manage the cases of beef patties in the right temperature range," he said. "Meanwhile, the trucking company says when it delivered the beef patties everything was fine and puts the blame on the restaurant."

Keeping track of the flow of goods in the supply chain on a system such as Food Trust helps participants track the temperature information and potentially settle any disputes, Gopinath said.

These are early days for blockchain in supply chain use cases and the projects to test them. For now, many companies and naysayers watch as leading-edge players determine blockchain's true value.

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