Better food safety and insight into sourcing are just two reasons food companies and retailers are looking to blockchain for food traceability in the supply chain. Both were high on the list for Bumble Bee Foods LLC, which turned to SAP blockchain to trace the company's yellowfin tuna product from ocean to table.
Bumble Bee's blockchain implementation enables a consumer in a grocery store to use his smartphone to scan a QR code on the product package and learn more about each step in the fish-to-market journey. A consumer can instantly retrieve information about the fish, including the point of capture and the fishing community that caught it.
Using blockchain for food traceability offers consumers more visibility into where their food came from and helps build trust and grow brand awareness, according to the company's CIO, Tony Costa.
Kicking off the SAP blockchain for food traceability project
Bumble Bee built its blockchain implementation on top of the SAP Cloud Platform Blockchain service. The first project focused on tracing Bumble Bee's Natural Blue by Anova yellowfin tuna product from an Indonesian fishing village to a nearby port city production plant and, finally, to grocery stores in the United States. Costa said the blockchain enables the company to record multiple data touch points on the fish-to-market trek. Bumble Bee is hoping to expand the technology to additional products in the near future.
Getting a blockchain project off the ground requires a lot of moving pieces and a willingness to figure out a new process for automating the flow of data across multiple parties. Costa said Bumble Bee worked with SAP's Digital Business Services team to help work out the details. This also made it easier to add analytics on top of the implementation to offer insight into the business processes and identify potential supply chain problems and trends.
Costa also liked that the SAP blockchain service was offered in the cloud, which made it easier for Bumble Bee to focus on its core business of taking care of its fishermen and consumers.
How the Bumble Bee-SAP blockchain for food traceability works
"All of the data integration with the blockchain has been automated," Costa said.
However, some manual data entry occurs throughout the process, such as the fish type, grade and the gear type of the fishermen, although this data cannot be changed after it is submitted. However, it is possible to amend a record in a way that is visible to all parties if a mistake was made in data entry.
The need for accuracy in this manual collection hints at the many hurdles of blockchain systems in real-world practice.
At the beginning of the process, the ERP system generates a unique ID for the fish. At this point, the ERP system has no information on the product. The record is null, as no product was created, nor was one associated with this unique ID.
Those unique IDs are then assigned unique bar code numbers. The bar codes are then physically given to the fisherman in the form of a tag. The fisherman physically applies the label to the fish and scans the barcode.
At that point, the fisherman manually enters the type of fish and other relevant information is automatically collected, including the time, location and temperature, by a computer, smartphone or intelligent bar code reader connected to the ERP system. Other data about the fisherman's gear type, previously entered into the system by a manager, is also automatically added.
When the fish is cut up and packaged, new bar codes are created by the ERP system and added to the fish parts and to the blockchain, which reflect that this was part of the original fish. Other data, such as the grade of fish, can also be added. For example, this data can include the grade -- manually added by an inspector -- and lab results -- automatically added by lab equipment -- which is reflected on all the packages that contain cuts of that fish.
Bumble Bee's implementation of SAP blockchain captures the minimum required data to keep the tracing processes manageable.
Each loin factory has automated integration into the blockchain through its localized ERP implementation. All the Indonesian fish suppliers use a common system that was developed and installed by MDPI, an Indonesian non-governmental organization.
"This allows us to replicate and integrate additional loin factories very quickly and efficiently," Costa said.
There are currently two loin factories integrated into the Bumble Bee-SAP blockchain system, with a third new loin factory to be integrated in the very near future. One finished goods factory has also been brought into the blockchain, and it packages the tuna into cans with labels. The data contributed by the finished goods factory includes the final batch information used for the consumer QR code on the package and relevant processing dates and shipping information.
The vision is that once the cans have been shipped to stores, consumers can use a smartphone to scan the QR code. Scanning the bar code prompts a query to SAP's cloud to retrieve the raw blockchain data, which is enhanced with more consumer-friendly details about each can. This architecture makes it easy to experiment with different ways of presenting the data to consumers to improve the customer experience.
Benefits of blockchain for food traceability
The food supply chain can be long, vast and, at times, brittle. Existing challenges include combining and transforming the precise origin and physical product information with the end-to-end operating environment into a digitally secure data stream that is accessible to all participants, said Lori Mitchell-Keller, co-president of industries at SAP.
She sees several potential benefits of better traceability through blockchain, including:
- Price sensitivity. Verifying the origin and authenticity of the food or product creates additional value in the product for which customers are willing to pay extra.
- Sustainability promotion. Companies that are acting in an environmentally responsible and sustainable manner should want to share that with their customers. Being environmentally responsible affects demand for the product and amplifies the company's vision and positioning as a sustainable and safe product or service.
- Visibility. Tracking the product journey provides improved visibility into the entire cycle, while also sharing all the data with key stakeholders, resulting in improved quality of the product.
- Compliance support. In industries where regulation is required, using blockchain to track products can significantly simplify and help compliance with current and future regulation guidelines.
- Ability to act. Creating transparency and visibility into the entire supply chain has limited value if it doesn't result in action. In the food industry, there are countless examples of food recalls. Having a blockchain-based traceability of goods can and should help consumers, companies and regulators act more quickly and with more precision in efficiently containing -- and hopefully, in the future, also preventing -- food recalls.
Inside the SAP Cloud Platform Blockchain service
In a blockchain system, a distributed ledger records data across a peer-to-peer network. Every participant can see the data and verify or reject it using consensus algorithms. Approved data is entered into the ledger as a collection of blocks and stored in a chronological chain that cannot be altered.
Gil PerezSenior vice president of products and innovations and head of digital customer initiatives, SAP
SAP views blockchain technology as an enabler that can have a significant impact and business value when used to augment an applicable business process, said Gil Perez, senior vice president of products and innovations and head of digital customer initiatives at SAP. The company has added blockchain as a back-end service on its core cloud platform, S/4HANA, such that blockchain is a seamless part of an enterprise application infrastructure, just like a database is part of an ERP implementation.
Buy-in critical for SAP blockchain for food traceability
Getting the technical infrastructure in place, which can be quite a challenge, is the easy part.
"Getting everyone on the same page can be the hardest part," Perez said. "We've found that challenges are not always technology issues, but rather the definition and agreement on the new business models that blockchain usage requires."
One way of addressing this is to come up with a compelling multiparty rationale that helps each company deal with their concerns. Regulations like the U.S. Drug Supply Chain Security Act passed in 2013 could also pressure supply chain participants to build more robust data sharing agreements. Enterprises will also have to find a way to make explicit the kinds of shortcuts that workers might be using to keep supply chains moving.
In the long run, success using blockchain for food safety and traceability in the supply chain might be driven by consumers demanding more information about what they eat. Blockchain could make it easier for consumers to learn information about the farmers, fishermen and people that process their foods. It can also make it easier to grow trust in concepts like authenticity, quality and sustainability that are just slapped on labels with minimal regulation or standards.
"Consumer demand for such information should inspire other companies to examine their best practices, as well," SAP's Mitchell-Keller said. "I am certain it will be good for the consumer, the industry and, in many ways, also for our planet."