Blockchain to transform restaurant supply chains

The blockchain has something to offer for every industry, especially for restaurant supply chain management.

One need only consider the many romaine lettuce e-coli outbreaks to realize that restaurants need a way to trace their food from farm to fork in order to avoid sickened customers and lawsuits. Blockchain can help answer this need with supply chain management.

"Blockchain has many potential use cases that can be applied for supply chain management," Julie McGill, FoodLogiQ's Director of Implementation and Strategic Accountsat FoodLoqiQ, said in an email interview. "The most prevalent has been traceability. This holds tremendous promise on its potential for transparency across the entire food supply chain."

Walmart has already used blockchain to track its food products. The retailer teamed with IBM to craft a supply chain management platform. In addition, Kroger and Nestle partnered with Walmart last year to develop a blockchain platform that would be, "the equivalent of FedEx tracking for food," according to Frank Yiannes, vice president of food safety at Walmart.

Why bother?

Some restaurants might view blockchain solutions as too complex or expensive to implement, but they need to consider the customer's expectations on food safety. Customers have lost confidence in several restaurant brands due to outbreaks.

"Results from a study conduced by FoodLogiQ show consumers expect a recall to be executed within 24 to 48 hours once a company is aware of a food safety issue," McGill said. "But in reality, it sometimes takes weeks to pull a product from store shelves or to remove it from dining establishments."

One reason for this delay is that notifications across the supply chain might be scattered or might not have all the right information. This means that some employees might not be aware of an infection until it's too late.

Another issue is that many companies still run supply chains in the "dark ages," according to Cahill Puil, a blockchain expert and host of Know Your ICO Show.

"As a quick example, you’ve got a paper-based system that still requires stamps of approval, literal pieces of paper, signatures, and verification — all while tracking and regular updates are still hard to get," Puil said.  "There are different parties that deal with shipping from factory to ship, from port to port, and then from port to warehouse."

How can blockchain help?

Technology such as blockchain can eliminate delay and confusion by providing real-time notifications to every participant in the supply chain, so a problem can be identified and addressed before it becomes a disaster.

Subway recently partnered with LogiQ to track shipments from manufacturing plants to their restaurants to help reduce the risk of an outbreak.

"We know that being proactive and prepared can make all the difference in successfully managing a quality incident," Lucelena Angarita, director of supply chain traceability for Independent Purchasing Cooperative Inc., the purchasing cooperative for Subway franchisees, said in a statement. "Using FoodLogiQ Connect's Track and Trace, together with GS1 U.S. Foodservice Standards, our supply chain partners can manage and track their shipments from the manufacturing plants all the way to the restaurant. That supply chain visibility mitigates risk, which is extremely valuable when consumer safety is at stake."

Of course, it can still be a challenge to integrate blockchain into a supply chain, unless restaurants have a few details down.

How does it scale?

In order to properly scale a blockchain solution, McGill said restaurants need to organize their data in a standardized format through item identification and standardization, data submission and analysis.

It's important that everyone in the supply chain is speaking the same language with regard to a product's identification and location information so that data can be exchanged and understood. FoodLogiQ Connect accomplishes this by using a global trade identification number to uniquely identify items, as well as a global location number to identify facilities, McGill said.

For data submission, every member of the supply chain needs to be able to share critical tracking event data with ease. If the team doesn't know how to make the most of the blockchain supply chain solution, it won't benefit anyone.

"In order to achieve full chain traceability, all partners across the supply chain will have to implement processes to address the capture and exchange of transactional supply chain information," McGill said. "Companies must be disciplined in their efforts, as data accuracy and data quality are paramount for these programs."

Finally, restaurant supply chain managers need to be able to take the information from the platform and analyze it so they can make intelligent decisions based on the information.

"True visibility into your company’s supply chain occurs when users are empowered to evaluate that data and make intelligent decisions based on analysis," McGill said.

Photo credit: iStock.com

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