In the third and final part of this series, we’ll explore actual use cases of how Blockchain Technology can and is being used to ensure supply chain sustainability.
This report by Accenture highlights blockchain use cases in food supply chains and offers insights on how the technology can be deployed to increase transparency and traceability:
Contributing to 17% of the world’s tuna supply, Indonesia is one of the largest supply market in the world. As with any natural resource, overexploitation leads to such resources being exhausted, which poses real economic consequences for the livelihoods of those who rely on it as a source of income. Thus, combatting illegal fishing as a way to reduce overexploitation has become a priority for Indonesia.
In this environment, over exploitation is not the only concern. Mishandling / mislabeling of products, lack of adherence to food standards and poor cold chain management are also exacerbated by low supply chain transparency, and blockchain could help mitigate all these issues.
Here’s how it could work:
Throughout all points in the supply chain, from fishing vessels to grocery stores, product data such as origin, current location, temperature and others would be stored in a data system powered by blockchain. The data capturing could be done through, for example, RFID tagging technology. This would allow businesses to monitor the performance of supply chain actors, reduce operational gaps and inefficiencies, and would also allow regulators to verify origin and compliance.
Such a solution would also empower the end consumer to verify that the tuna they are being was indeed sourced responsibly.
In New Zealand, the WWF is already applying the technology with a similar goal:
Blockchain enabling sustainable procurement of palm oil.
Palm oil is a know driver of both environmental and social concerns in its supply chain. According to the RSPO (Roundtable on Sustainable Palm Oil), oil palm cultivation has caused and continues to cause deforestation, loss of biodiversity, workers right violations and other malpractices.
Palm oil is still, however, widely used in multiple industries, which is why the responsible sourcing of palm oil is of concern to consumers and industries alike.
Procuring sustainable palm oil also faces the challenge of mass-balancing: raw materials like palm oil are often mixed with physically identical raw material from verified and nonverified sources, which makes it virtually impossible for buyers to be certain that the palm oil they are procuring is indeed coming from sustainable operations.
This is a challenge that Blockchain Technology is well suited for. In a pilot in Indonesia, Unilever applied the technology to source 188 thousand tons of oil palm fruit, allowing the company to capture data linked to the raw material’s origin. By tracking, verifying and reporting in almost real time the origin and journey through the supply chain, blockchain allows buyers to tell what percentage of palm oil is coming from a sustainable origin.
This type of measurement is essential for a more accurate and transparent tracking of environmental and social impact goals.
In this decade of action, companies must strive to decarbonize and reduce social risks in their supply chain, and that cannot be achieved without understanding and visualizing the very links that make them. Achieving transparency in complex supply chains that were not designed to be transparent is challenging by definition, and technology has the promise of being a vital enabler. As discussed in this series of articles, Blockchain Technology has the qualities to successfully enable organizations and procurement professionals achieve the level of transparency and traceability needed to drive sustainable change.