By Pete Harris, Co-Founder and Research Principal
It’s been a busy year for blockchain in supply chain. In this latest Chain Business Insights’ Blockchain/Supply Chain Management Vendor Focus we highlight some end-of-year initiatives that we’ll likely hear more of in 2019 as they roll out.Our next Vendor Focus will be in March, when we’ll begin a regular end-of-quarter schedule.
This time, we’re covering the latest from IBM/Walmart, Oracle, ScanTrust, FR8 Network, Samsung, TE-FOOD, TradeLens and Voltron. So let’s get stuck in.
IBM Gets Boost from FDA and Walmart; Picks Up Carrefour
IBM’s Food Trust system, which is currently focused on track/trace and recall capabilities, got a major boost in the past couple of months from a U.S. Food & Drug Administration (FDA) memo, and a related directive from retail giant Walmart.
Reacting to recent (and deadly) E. coli outbreaks, the FDA’s November 1 memo encouraged leafy greens industry participants to “adopt traceability best practices and state-of-the-art technology to assure quick and easy access to key data elements from farm to fork when leafy greens are involved in a potential recall or outbreak.”
The FDA’s memo followed a directive from Walmart that its leafy greens supply chain participants adopt Food Trust. IBM developed Food Trust in partnership with Walmart, and formed a consortium including supply chain participants and even its competitors in order to accelerate adoption of it.
Food Trust, which runs on a cloud-delivered IBM Blockchain platform, provides authorized users with immediate access to actionable food supply chain data, from farm to store and ultimately the consumer. The complete history and current location of any individual food item, as well as accompanying information such as certifications, test data and temperature data, are readily available in seconds once it is uploaded onto the blockchain.
Interestingly, the FDA is about to get some expert help when it comes to blockchain and food supply chains. It has hired Walmart’s VP of Food Safety Frank Yiannas to fill the new role of Deputy Commissioner for Food Policy and Response. In his new role, Yiannas – who led Walmart’s own testing and adoption of Food Trust – will be responsible for dealing with food contamination outbreaks.
As if the FDA and Walmart actions were not enough good news for IBM, international grocery giant Carrefour also announced that it would adopt Food Trust after successfully implementing its own blockchain-based platform for tracking chickens, tomatoes and eggs.
Our take: Working with the biggest retailer in the world is paying off for IBM. That’s partially because Walmart has learned the hard way (don’t mention RFID) that it needs to work with others, including suppliers and even competitors, to address food safety as an industry challenge. Blockchain’s decentralized approach lends itself to consortia models, while also providing a shared and immutable database of supply chain data points.
That said, IBM now has it all to lose – if it screws up these initial rollouts at Walmart and Carrefour. If that happens, then IBM’s place in the world of blockchain, and blockchain’s place in the world of food supply chains could be damaged forever.
More at https://www.ibm.com/blockchain/solutions/food-trust.
Oracle Leverages Supply Chain Strengths for its Blockchain Push
Having launched its Oracle Blockchain Cloud Service earlier this year, Oracle is now turning its attention to how to leverage it, and supply chain management applications are in its future.
By way of some background, Oracle’s cloud credentials are not that notable. It’s not in the top five of global cloud providers, with perhaps around a 10% market share of enterprise usage. Its blockchain offering is also somewhat me-too, being based on a Hyperledger Fabric, just as services from IBM and SAP are.
What Oracle does have going for it is strong positioning in enterprise business applications, for Enterprise Resource Planning (ERP – think purchasing and inventory) and especially for supply chain management, and these apps are also cloud hosted. Its direction then is to add blockchain functionality to its business suites in order to leverage functionality such as immutability. Usefully, it has already developed capabilities to hook into IoT sensor devices.
Oracle’s blockchain for supply chain applications include:
* Intelligent Track and Trace – Enables end-to-end traceability of goods and transactions in supply chains to reduce delays and automate record keeping
* Lot Lineage andProvenance – Supports product genealogy, serialization, and provenance by managing the lifecycle of hierarchical serial numbers, recording origin and authenticity of product components, and tracking all transformations of the product
* Intelligent Cold Chain – Helps monitor and track a temperature-controlled supply chain, creating recommendations to optimize processes and ensure the quality and safety of refrigerated products in pharmaceutical and food and beverage industries
* Warranty and Usage Tracking – Removes paper-based processes and automates usage tracking for high-value assets
One customer of Oracle’s Intelligent Track and Trace application is Alpha Acid Brewery in Belmont, CA. “We can now track materials and premium ingredients from our suppliers and analyze sensor data from the production process for each batch. Oracle Intelligent Track and Trace blockchain application helps ensure that we are getting the highest quality hops, malt, and yeast, and enables us to create a strong narrative around our products for customers,” says Kyle Bozicevic, the brewery’s owner.
Shipper CargoSmart is another company using the platform. “We are using Oracle Blockchain as our digital platform for shipment documentation, which helps us easily track and trace shipping transactions,” says Lionel Louie, chief commercial officer, CargoSmart. “Our goal is to help bring more trust and transparency into the industry. In fact, we expect a 65 percent reduction in the amount of time required to collect, consolidate, and confirm data from multiple parties.”
Separately, Oracle in Europe announced a partnership with Slovenia-based OriginTrail, which has developed its own Ethereum blockchain-based supply chain management platform, dubbed Vostok. The two companies intend to connect their blockchain platforms to allow Oracle applications, such as ERP, to seamlessly work with OriginTrail’s customers.
Our take: Oracle’s move is a no-brainer. Given its late entry into both the cloud and blockchain spaces, it was never going to compete effectively in the general cloud-based blockchain marketplace. But it has leveraged its supply chain position to offer blockchain services to that marketplace, which keeps the company current in terms of technology offerings. The OriginTrail news is interesting, but we’ll have to wait to see whether it delivers anything notable.
More at https://www.oracle.com/cloud/blockchain/.
ScanTrust Taps Hyperledger Sawtooth for Internet-of-Packaging Solution
Building on its roots of providing ‘Internet-of-Packaging’ solutions (think specially-designed copy-proof QR codes) for product authenticity, Swiss-based ScanTrust has now extended its offering to include a blockchain component based on Hyperledger Sawtooth.
The company, which was founded in 2014 and has recently raised $4.2 million in funding, has been testing its blockchain-enabled solution with Cambio Coffee, an organic coffee producer with a focus on sustainable sourcing. It buys its coffee direct from farmers and farmer cooperatives based in China and Peru.
Cambio tracks coffee from harvest through shipping, roasting and packaging. When a customer scans a QR code, they can determine that the product is authentic but also get information about the ingredients and the journey they and the package took to get to the retail store.
While Sawtooth is a fully launched open source project administered by the Linux Foundation’s Hyperledger initiative, it is not nearly as well-known as a competing blockchain platform known as Fabric, which has the support of IBM, SAP and Oracle.
Sawtooth was initially developed by Intel, and has just released its 1.1 version. It is considered by some to be more decentralized and scalable than Fabric, which perhaps gives it more in common with public blockchains. Through a development led by blockchain specialist Monax Industries, it also supports a virtual machine called Seth, which is able to run Ethereum smart contracts. This means it can support cryptocurrency coins created according to ERC20 and other standards. That said, Sawtooth does not require a payment mechanism/cryptocurrency in order to operate.
ScanTrust is also a founding member of The GoodChain Foundation along with blockchain database provider BigchainDB. The foundation is looking to create a loyalty token-based open track/trace platform where both brands and consumers will be rewarded for using it.
Our take: ScanTrust’s offering is similar in some respects to what UK-based Provenance provides, although the blockchain technology behind it is a little different and ScanTrust’s QR code technology is proprietary. Its work with GoodChain indicates that the company is not wedded to any single blockchain technology, but rather is focusing on the end solution. Given the infancy of blockchain technology, that’s a good decision.
More at https://www.scantrust.com.
Also worth noting:
FR8 Network– FR8 Network, which is creating an open track/trace network and protocol for freight logistics, is partnering with Roambee Corp., which has developed IoT sensors that monitor location, temperature and other variables and can transmit that information directly to cloud-based applications.
Samsung– Samsung’s enterprise technology arm is working with the Port of Rotterdam and ABN Amro Bank on a blockchain trial focused on container logistics. The trial’s goal is to produce “a complete, paperless integration of physical, administrative and financial streams within international distribution chains,” according to a statement.
TE-FOOD– France-based retailer Auchan, with some 2,000 stores worldwide, is rolling out a blockchain-based platform for food traceability in France, Italy, Spain, Portugal and Senegal.It is tapping technology from Germany’s TE-FOOD for its platform, having already tested it in Vietnam.
TradeLens– TradeLens, a blockchain-based platform for shipping that is owned by IBM and Maersk, is off to a sluggish start. Press articles note that the partnership has thus far signed up just a single customer, and quote insiders as admitting that more are needed for the service to be viable. The key sticking point is that the platform is part owned by Maersk, which many prospective customers see as a major competitor.
Voltron– Trade finance consortium Voltron, which is operated by eight banks, is set to begin live production next year, according to Bain & Co., which is managing the project. Running a blockchain platform based on R3’s Corda, the consortia is initially focusing on managing letters of credit. Earlier this year, two participant banks – HSBC and ING – announced they had completed a pilot transaction relating to a soybean shipment between two different global units of Cargill.
Our end take:
IBM’s different fortunes with Food Trust vs. TradeLens are notable. With Food Trust as implemented by Walmart and friends, the platform is owned by a consortium of players with skin in the game. With TradeLens, the platform is owned by Maersk and IBM, and Maersk is of course a huge player in shipping in its own right.
Prospective users seemingly prefer the more democratic approach to ownership, which of course is a model that blockchain lends itself to. We suspect that consortium ownership of permissioned blockchains will be the way that most supply chain applications get implemented, at least until permissionless blockchain, and associated cryptocurrencies, get better understood, and perform well enough.