​When it comes to POCs of blockchain technology for supply chain applications, one specific platform is getting a lot of attention. Called Ethereum, it’s often referred to as a “world computer” for its ability to run computer programs known as smart contracts.

Like the Bitcoin blockchain, Ethereum is – right now, at least – a public blockchain that anyone can make use of, and where data (and computer code) within it can be viewed by everyone. Unlike Bitcoin, the platform is not just for transmitting money from Alice to Bob, but allows Alice or Bob to run smart contract code that facilitates some kind of transaction, such as transferring ownership of some asset.
 
Assets could be money or a financial instrument, but they could also be digital intellectual property, a registration of a vote, or a token/legal document that represents ownership of physical property, such as a car or a house, or indeed some commodity or quantity of goods passing along a supply chain.

Smart contracts can be written in a number of programming languages, and can include “IF … THEN … ELSE” logic so that code segments are only executed if certain conditions are met. Also, data can be pulled from external sources in order to feed decisions, allowing business rules to be encoded. For example, in a supply chain, a payment might be initiated only when a shipment of goods has been confirmed as moving from seller to buyer.
 
Since its launch in July 2015 – it’s still officially in beta – Ethereum has become popular because it is both flexible and freely available for use or modification (as it is open source). That has led major corporations, including the likes of J.P. Morgan, Microsoft and Thomson Reuters, to work with it, while encouraging a large number of startups to base business applications on it.

Last year, J.P. Morgan released (also as open source) Quorum, a version of Ethereum with access and privacy controls that is more suitable for private blockchain use. Since then, the investment bank has become a key player in a consortium called the Enterprise Ethereum Alliance, which is working on standards for an ‘official’ version of Ethereum for private blockchains. The consortium currently boasts around 150 members, including major companies as well as many startups. Many more are currently being onboarded says the EEA, which also recently announced the formation of a working group focused on determining common issues to be addressed in the supply chain space.

Given its major corporate backing, engaged startup ecosystem and a technology roadmap to support both private and public blockchains, and to improve performance, it’s not that surprising that companies involved in the supply chain space are embracing it. Here are a few of them …

​Restaurant chain Chipotle is making the wrong kind of news again, with reports that the company temporarily closed a restaurant in Virginia after 13 customers became ill with symptoms that are consistent with food poisoning.
 
Can blockchain technology address the food safety issues that have eroded Chipotle’s brand and reflect wider industry concerns?
 
A new research brief from Chain Business Insights LLC titled Blockchain and the Future of Food: Driving Efficiency, Transparency and Trust in Food Supply Chains suggests that the answer is yes – with some important caveats.
 
Wider problems
 
Chipotle has been trying to recover from food poisoning scandals since 2015. It has instituted more stringent food safety procedures after a detailed examination of its supply chain. This latest setback is a reminder that despite the company’s best efforts, its supply chain is still vulnerable to product spoilage. Shares dropped 4% immediately after the incident in Virginia.

​Every supply chain has its own set of issues to address and goals to meet. Possibly the most challenging of all supply chains is concerned with delivery fresh food from farm to table.

Fresh food needs to be selected and handled with care, processed with precision so that it is attractive (in both looks and taste) to consumers and delivered to customers, all within a tight timeframe. Moreover, when something does go wrong – as it did in Germany in 2011 with a deadly E. Coli outbreak affecting sprouts –detecting the source of the problem and shutting it down quickly is essential to avoid a broad and lengthy shutdown of the entire supply chain.

These are some of the issues discussed in the debut episode of CHAIN REACTIONS, our new educational podcast. We talk with John McGuire of Lineage Logistics, who is an expert practitioner in the fresh food supply chain business. John is also an advocate for blockchain and has a few ideas regarding how the technology, combined with industry standards, could make a positive difference.

Listen to Chain Reactions here.

Also, stay tuned for deeper research into the food supply chain in our next research brief, and say hello to the Chain Business Insights team in person at the Distributed: Trade conference, taking place in St. Louis on July 24th, where we are presenting some of our findings on the subject and moderating a panel.