Blockchain: The potential to increase traceability and transparency along the supply chain while meeting the demands of future consumers

By: Wesley Malcorps with contributions from André Lopes

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Blockchain is a form of distributed ledger technology (DLT), which is still in its early stage. A practical application of this technology is the well-known cryptocurrency Bitcoin, however, less known to the public are the applications beyond cryptocurrencies. This technology also shows potential to improve traceability and transparency in supply chains and could therefore change stakeholders and consumers perspectives towards commodities, practices and products.

This is due to the essence of blockchain technology, which consists of a chain of data packed “blocks” that records and verifies transactions that take place across a peer-to-peer network. The data in these blocks is secured with a cryptographic signature, called a hash, which should be identical in the next block in order to verify that the data is not manipulated. This mechanism provides security and guarantees that the data is immutable.

So far, retailers have been focusing in ways to improve trust in their own supply chains while simplifying problem solving. Consumers on the other hand are becoming increasingly aware of sustainability and social issues: a trend that is expected to be the standard in the future. However, supply chains are often complex networks of (international) stakeholders with their own practices and perspectives towards sustainability.

Currently a large proportion of these stakeholders use paperwork or traditional computer systems to keep track of commodities and products and most of these systems do not interact directly across the supply chain. This results in a lack of traceability and transparency throughout the supply chain all the way up to the consumer. However, the ability of a blockchain to securely verify and store up-to-date data across a commonly shared network could provide a more accurate insight into stakeholder practices along the supply chain.

The accessibility to the layers of data depends on the type of blockchain (public or private) and could differ between stakeholder depending on their authorization level. This could mean that e.g. consumers could access sustainability data about a product through an app, while other stakeholders could access information about certain ingredients, origin and waste hotspots.

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This technology shows potential to improve the traceability and transparency of supply chains, by feeding the blockchain with manual input of data or by combining this technology with Internet of Things (IoT), such as GPS trackers, light, temperature, humidity, oxygen and movement sensors. This provides the stakeholders along the supply chain and the final consumer not only with information about the previous product conditions, but also about the specific stakeholders handling their commodities and products. This information alone or combined with other available information (e.g. license and certification) provides a transparent insight in the ‘social and environmental conscience’ along the supply chain, sharing business practices and attitudes of stakeholders towards sustainability.

Additionally, advanced sensors, modelling tools and apps could provide the consumer with a wider range of information about commodities or products, such as environmental footprints (water, land, carbon and energy). On the other side, producers could have access to information highlighting energy hotspots, waste streams and by-products, leading to better decision making. This could decrease waste production and the loss of valuable ingredients and resources, supporting circular economy principles.

Consumer demand for safe seafood is another present-day concern that will tend to have more relevance in future generations eating habits. Technologies that enable fish consumers to better ‘fact-check’ the origin, fish species, movements or condition of their food, with easy-to-use traceability and transparency tools can have a role to play.

Still, as with any new technology or innovation, there are issues that must be solved, and others that are yet to surface. The drivers and barriers of blockchain technology for consumers, small and large scale fish farmers and other stakeholders along the supply chain is relatively unknown. There are certainly many challenges that need to be addressed in converting real life into the blockchain.

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