How Blockchain Helps the Grocery Industry

blockchain

As commerce moves inexorably online, earning and retaining consumer trust has become more complex than ever. With an immense range of choices at their fingertips, consumers have begun to expect full transparency on the products they buy. Is this item really what it says on the tin? Has that one been kept properly refrigerated throughout its journey to the store? Was it really organically produced?

If they can’t answer questions like these, brands and retailers risk losing their customers’ trust. And that often means losing their business. Accenture research shows that almost half the customers that switch brands do so because they’ve lost trust in the company.

Right now, this is a big challenge. Without a single version of the truth, tracking and tracing products across complex cross-border supplier networks is slow, expensive and error-prone. The lack of transparency is frustrating for consumers. It raises the risk of safety issues. And it prevents companies from identifying value opportunities in their supply chains.

The solution? An intelligent supply chain capability that seamlessly connects parties across the ecosystem. Increasingly connected digital operations make this possible. Using blockchain (and other distributed ledger technologies), parties can, for the first time, work together to manage product information, from growing and manufacturing right through to distribution and retail.

Blockchain is revolutionary because it enables every party to write, read, share, and use the same information – securely and in real-time. Because the data on a blockchain is distributed among all participants, there’s a shared source of information. While it’s transparent, everyone involved can still control who sees what.

Consumer Packaged Goods (CPG) companies have been among the first to take advantage (our research shows they’re using blockchain in areas like warehouse management, sourcing, and procurement). But the technology’s about to have a big impact on retail too.

Over the next three years, more than half of the retailers in a recent Accenture survey expect blockchain to transform last-mile delivery. A similar number think it will play a key role in their ability to deliver hyper-personalized experiences.

Blockchain will introduce radical transparency to the consumer goods and retail industries. From food safety to anti-counterfeiting, and from international shipping to ethical manufacturing, brands and retailers will be able to solve some of their biggest pain points.

Blockchain is a key architectural element of the intelligent supply chain infrastructure that will help revolutionize the future of customer transparency and trust. 

Scoping the blockchain opportunity

Here are a few examples. Instead of spending weeks or months retrospectively tracing a product’s origins and current location, with blockchain, companies would always have instant access to accurate information. That would be transformational for product safety: Contaminated or faulty products could be pinpointed in just a few seconds and removed from sale.

That’s not all. By combining blockchain with the Internet of Things (IoT – networks of internet-connected smart devices/sensors), companies could avert product safety issues before they even occur. Blockchain-connected sensors embedded along the supply chain would continuously check for the right environmental conditions and instantly identify tampering.

Providing product authenticity will be transformed too. Today, consumers take the provenance of food products on trust. If they have confidence in a brand, they’ll believe what it says on the label.

Counterfeiters seek to exploit that trust, and they’re getting more sophisticated all the time. With blockchain, however, the $1.2 trillion global counterfeiting industry would take a real hit. By tagging each product with an RFID chip, manufacturers could trace exactly where their products end up. And with the simple swipe of a smartphone app, consumers and B2B buyers could check the product journey from end to end.

Sustainability provides another opportunity. Today’s consumers pay closer attention than ever to the environmental and societal impacts of the products they consume (According to Nielsen, 75 percent of Millennials say they’d be likely to change consumption habits to reduce their impact on the environment).

Guaranteeing ethical and sustainable production – and communicating that to customers – is becoming essential. But it’s incredibly resource-intensive. Up to now, companies have struggled to connect directly with small-scale suppliers at the start of the supply chain and incentivize them to adopt sustainable practices. Blockchain empathetically changes that. Completely tamper-proof, the technology enables every step in the growing and manufacturing process to be tracked, providing an audit trail of exactly how, where and from what each product was made.

That’s what chocolate brand Chocolonely did. The company used blockchain to combat predatory labor practices in the cocoa industry. During the pilot, it tracked more than 900,000 kilograms of beans and verified them as being 100 percent free from slave labor.

Taking advantage

Blockchain is a key architectural element of the intelligent supply chain infrastructure that will help revolutionize the future of customer transparency and trust. It enables new ways for companies to engage with customers and consumers, support new ways of working and creates new ways to deliver on brand purpose. So how can your business take advantage?

Start thinking about your blockchain strategy now. Consider how this technology will disrupt your ecosystem, whether you choose to adopt it. Remember that blockchain is not a tool, not a solution in its own right. It can only deliver real value when it’s pointed at the right problems. Test it out with trusted partners across your supply chain. Also, don’t forget to move fast: select pilot use cases, test, iterate, and scale.

If you are looking for a partner to help you pinpoint problems within your business operations, as well as offer advice and guidance on the best solution to help grow with your company, contact allonline365 on  info@allonline365.com or  +27 (21) 205 3650

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Resource Credit | Progressive Grocer

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Top 5 blockchain challenges businesses face

blockchain

While blockchain technology can offer great opportunities, the hype surrounding it often leads to unrealistic expectations, according to the World Economic Forum

Blockchain technologies have the potential to improve organizational operating models and security for enterprises. However, many executives still struggle to figure out how to successfully use and find value in the distributed technology, according to Building Value with Blockchain Technology: How to Evaluate Blockchain’s Benefits report from the World Economic Forum and Accenture.

Based on a survey of 550 people across 13 industries, CEO interviews, and analysis of 79 blockchain projects, the report identified the following five top obstacles and challenges to adopting blockchain:

1. The hype circle

While blockchain is often as a transformative technology for businesses, many still unrealistic expectations for what it can actually do, the report noted. While survey respondents on average said they expected a 24% return on investment (ROI) on their early blockchain projects, they only saw a 10% return on average.

“It is important for organizations to carefully consider whether there are other technologies or approaches to digitization that may deliver on their objectives more effectively or efficiently”, the report stated.

2. Stakeholder buy-in

Proof of concept blockchain projects are typically led by its biggest supporters, then developed in R&D, always operating in controlled environments. Moving to production requires stakeholder buy-in, which can be challenging, the report noted.

Helping stakeholders to understand the technology and its benefits “is an ongoing process and it’s proven to be hugely valuable”, Peter Hiom, deputy chief executive officer of Australian Securities Exchange, said in the report. “It’s enabled us to better understand the needs of our customers and ensure we develop functionality that will make their lives easier.”

3. Capturing ecosystem value

Working with others is key for successful blockchain implementation, the report said. “The whole point of doing blockchain is it’s a team sport”, Christopher G. McDaniel, president of The Institutes RiskBlock Alliance, said in the report. “If you’re trying to do it on your own, maybe that’s OK from a proof-of-concept standpoint, but if you ever want to get real production value, you have to join with others. Otherwise, there’s no point.”

To ensure that proof of concepts, standards, and solutions are adopted at an industrial scale, organizations must work together to create an environment of shared values, and partner together to solve challenges that arise, the report said.

4. Complex legacy systems and technical debt

Some 87% of those surveyed said it was more challenging to implement a blockchain solution as part of an existing digital transformation project, particularly when a substantial amount of money had already been spent on legacy technology, the report found.

“Alternative digital solutions may offer faster returns and be more strategic in the short term, but organizations should evaluate whether blockchain provides additional benefits in the longer term”, it stated.

5. Uncertainty

Because blockchain is a relatively new technology, prior to starting a blockchain project, 59% of respondents said they had no confidence that the project would deliver a positive ROI. Many also still lack certainty about whether the technology is production-ready, due to its limitations and scalability issues.

“Though many technologists and service providers classify the technology as v1.0 and ready for production, scepticism remails”, the report said. “It is important to keep in mind that blockchain is in its early stages and there are limitations as a result. Challenges exist in fully addressing security, speed and efficiency, given the nascency of the technology.”

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Resource Credit | TechRepublic 

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