3 Ways Blockchain Technology Can Improve Food Traceability
/For many years food and beverage manufacturers have searched for ways to incorporate more accurate ledger technologies into their supply chains. More recently all eyes have fallen on blockchain technology as a means by which improve traceability protocols. Blockchain can trace and record all transactions in a supply chain, which strengthens food management, safety and quality. And today a vast array of leading manufacturers are leveraging the power of blockchain.
First, What is Blockchain?
A blockchain is a digital ledger that is stored securely and records transactions simultaneously across all of the computers in a given network. Importantly, these records are extremely difficult to change or tamper with, so it’s easy to understand why food and beverage manufacturers are excited by the benefits of the technology when it comes to having a completely accurate picture in terms of the traceability of their supply chain.
According to a recent Gartner press release, “through 2022, 80% of supply chain blockchain initiatives will remain at a proof-of-concept (POC) or pilot stage. One of the main reasons for this development is that early blockchain pilots for supply chain pursued technology-oriented models that have been successful in other sectors, such as banking and insurance. However, successful blockchain use cases for supply chain require a different approach.” But looking ahead to when blockchain matures and becomes the go-to technology for the food and beverage industry, in what ways could the technology improve food traceability?
1. Automation
Many companies use Excel to store track and trace information, but this is often disorganised and inefficient. And remember, Excel isn’t a traceability system, it’s a spreadsheet. Today blockchain technology can automate traceability, and granular data can be captured in real time, relating to lots, serial numbers, country of origin etc. Instead of relying on labour-intensive spreadsheets of the past, today automated traceability software can automatically record every transaction in your ERP software (Enterprise Resource Planning).
2. It Meets All Regulations
The food and beverage industry is subject to more regularity control than ever before. Organizations such as EPA, FDA, FTC, and OSHA are regularly prescribing new laws regarding food labelling, safety and traceability protocols. In 2020 the FDA issued the new FSMA Proposed Rule for Food Traceability, increasing its track and trace requirements for food manufacturers. And this is where blockchain technology can step in. It provides an immutable platform to track and trace across the whole supply chain, meaning its users can meet all regulatory demands.
3. It Reduces Costs and Recalls
Recent research by Juniper predicts that food industry compliance costs will be reduced by 30% by 2024, as blockchain technology moves front and center. The money saved by adopting a traceability technology far outweighs the cost of investing in the software. According to the ITC, traceability solutions can help reduce the scope of food and beverage recalls by up to 95%. This can potentially save manufacturers millions of dollars.
By 2024 it’s predicted that the global food industry could save $31 million if companies invest in blockchain technology to monitor their supply chains. If you’re looking to digitize your supply chain, get in touch with the team at Cashmere today!
