The primary purpose of this paper is to provide an overview of the implementation of blockchain technology in the food supply chain by showing its potential to build trust among the stakeholders and to make the food supply chain efficient and cost-effective. A comprehensive literature review covering books, articles, journals, news, and expert opinions has been conducted to address the research questions.
The findings in the thesis lead to the conclusion that blockchain is a promising technology that has the potential to transform the food supply chain. Blockchain is capable of building consumer trust, providing information about the food we consume, and making the food traceability easier. Furthermore, it builds transparency among the stakeholders. Last but not least, it makes the food chain cost-effective by automating most of the transactions and eliminating paperwork and intermediaries. This paper ends with a discussion of some challenges in implementing blockchain due to its early phases of development.
Table of Contents
1 Introduction
2 Foundation of Blockchain Technology
2.1 History and Definition
2.2 Public versus Private Blockchain
2.3 Peer-to-peer (P2P) Network
2.4 Cryptography in Blockchain
2.4.1 Hashing in the blockchain
2.4.2 Public-Private key
2.4.3 Digital Signatures
2.5 Consensus Algorithm
2.5.1 Proof of Work (PoW)
2.5.2 Proof of Stake (PoS)
2.6 Smart Contracts
3 Food Supply chain
3.1 Introduction
3.2 The Actors in a Food Supply Chain
3.3 Current Issues in Food Supply Chains
3.3.1 Food Safety
3.3.2 Food Waste
3.3.3 Growing Regulations
3.3.4 Increasing Supply Chain Costs
3.4 Food Scandals
3.5 Summary
4 Blockchain-based Food Supply Chain
4.1 Traceability in Food Supply Chain
4.1.1 Traceability in the Seafood Industry
4.1.2 Meat and Poultry Traceability
4.2 Transaction Automation with Smart Contracts
4.3 Advantages of Blockchain from the Actor’s Perspective
4.3.1 Producer’s (Farmer) Perspective
4.3.2 Food Processer’s Perspective
4.3.3 Food Trader’s Perspective
4.3.4 Consumer’s Perspective
4.4 Challenges in Implementation
4.4.1 High implementation Cost
4.4.2 Operational Challenges
4.4.3 Sustainability Challenges
4.5 The Case of Walmart
Objective and Research Scope
The primary objective of this thesis is to examine how blockchain technology can improve the food supply chain by establishing trust, increasing transparency, and reducing costs through the elimination of inefficiencies and intermediaries. The research addresses the challenges within current food supply chains, such as lack of traceability and safety concerns, and evaluates the potential of blockchain as a transformative solution.
- Theoretical foundation of blockchain technology and its core mechanisms.
- Identification of critical issues affecting the global food supply chain.
- Investigation of blockchain-based traceability and smart contract applications.
- Analysis of blockchain benefits for various stakeholders including farmers, processors, and consumers.
- Evaluation of implementation challenges and real-world case studies like Walmart.
Excerpt from the Book
4.5 The Case of Walmart
Although the implementation of blockchain technology is challenging, as discussed in the previous chapter, Walmart, an American multinational retail corporation, is already implementing blockchain-based traceability to guarantee food safety. Walmart is also known as a leader in supply chain management. When a foodborne disease occurs, tracing food through hundreds of thousands of documents can be complex and time-consuming. On the other hand, it is not an effective way since the information collected cannot be fully trusted. For these reasons, Walmart adopted blockchain-based food traceability to improve the transparency and efficiency of Walmart's food supply chain (Yiannas, 2018). Frank Yiannas, the former Vice President at Walmart, says,
“I really had an ‘aha’ moment once I deeply understood the technology. I had been hesitant about creating yet another traceability system – the ones we had tried in the past never scaled. Now I understand that was because they were centralized databases. Blockchain, with its decentralized, shared ledger, felt like it was made for the food system!.” (The Linux Foundation, 2019)
Walmart began two Proof of Concepts (POCs) with its technology partner IBM in October 2016, tracing mangos sold in Walmart's US shops and pork sold in China (The Linux Foundation, 2019). Both projects successfully brought more trust, allowing pork authenticity certificates to be uploaded to the blockchain and tracing mangos took just 2.2 seconds, which used to take around seven days in traditional ways (The Linux Foundation, 2019). Walmart's goal is to develop a safer, smarter, and more sustainable food system that benefits both people and the environment (Yiannas, 2018). In September 2018, Walmart wrote a letter to suppliers of fresh, leafy greens asking them to trace their products all the way back to the farm using blockchain technology (Walmart, 2018).
Summary of Chapters
1 Introduction: This chapter highlights the urgency of addressing food safety and supply chain inefficiencies, proposing blockchain as a potential solution to enhance trust and cost-effectiveness.
2 Foundation of Blockchain Technology: This section explains the theoretical and technical dimensions of blockchain, covering decentralized ledgers, consensus mechanisms, and the basics of smart contracts.
3 Food Supply chain: This chapter outlines the actors and current challenges in the food industry, such as food waste, safety incidents, and rising costs, emphasizing the need for improved traceability.
4 Blockchain-based Food Supply Chain: This chapter focuses on applying blockchain to the food industry, discussing practical traceability solutions, the automation of transactions via smart contracts, stakeholder benefits, and implementation hurdles.
Keywords
Blockchain Technology, Food Supply Chain, Food Traceability, Food Safety, Smart Contracts, Supply Chain Transparency, Decentralized Ledger, Farm-to-Fork, Food Scandals, Digital Identity, Logistics Optimization, Stakeholder Trust.
Frequently Asked Questions
What is the primary focus of this thesis?
The thesis focuses on the implementation of blockchain technology within the food supply chain to solve issues related to trust, transparency, and operational inefficiency.
What are the core research themes?
Central themes include blockchain fundamentals, food traceability, the role of smart contracts, stakeholder-specific benefits, and the challenges of large-scale technology adoption.
What is the ultimate goal of the research?
The goal is to determine how blockchain can build consumer trust and make food supply chains more cost-effective and transparent by eliminating intermediaries and excessive paperwork.
Which methodology is applied?
The study relies on a comprehensive literature review, analyzing books, journal articles, news reports, and expert opinions to explain blockchain foundations and current food supply chain dynamics.
What is covered in the main body?
The main body covers the technical basics of blockchain, the structure and challenges of the food supply chain, specific benefits of blockchain for different actors, and the challenges of implementation.
Which keywords characterize this work?
Key terms include Blockchain Technology, Food Supply Chain, Food Traceability, Smart Contracts, and Food Safety.
How do smart contracts change food supply transactions?
Smart contracts enable the automated execution of terms and payments once pre-agreed conditions are met, which reduces the need for third-party intermediaries and minimizes human error.
Why is Walmart's case significant?
Walmart serves as a real-world example of how scaling blockchain-based traceability can drastically reduce the time needed to trace food products from seven days to just seconds during contamination incidents.
What are the primary implementation challenges?
Significant challenges include high infrastructure and deployment costs, the lack of sufficient blockchain specialists, and the massive energy requirements needed for certain consensus mechanisms (mining).
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- Rajiv Tamang (Autor:in), 2022, Blockchain Technology in Food Supply Chain, München, GRIN Verlag, https://www.grin.com/document/1323666
