Blockchain – the same technology that made the cryptocurrency revolution possible, is now being applied across countless industries to make everyday supply chains more reliable, faster, and affordable.
The idea is to facilitate trustworthy transactions between different stakeholders across an entire supply chain using a “single source of truth” – also known as the blockchain ledger. This blockchain ledger can be used to track a product, in real-time, as it moves from one stage in the supply chain to another.
As you can imagine, this will make many middlemen redundant since we have a single source of truth to verify transactions in real-time. This saves time, cuts down on the middle man, and brings unparalleled accountability into the entire process.
Blockchain will prove to be a game-changer for the food industry as a whole and will play a pivotal role in making health care, law, banking, and even real estate more trustworthy.
So how does the blockchain ledger make dairy products more reliable (and affordable) for the end consumer?
From Farm to Fork – A bird’s eye view of the supply chain
Let’s take an oversimplified view of the supply chain for a dairy product that has to be first milked, manufactured into a consumable good, and then transported to the consumer:
- Step 1: First, it has to be milked
- Temperature, humidity, and feedstock data
- Quality of food supplied to livestock using information taken from IoT devices
- Cow health is regularly monitored
- Step 2: The milk has to be processed and manufactured along regulatory guidelines
- Quality control
- Transportation using IoT sensors
- Food safety and data collected during inspection
- Step 3: The finished product is transported to the retailer (and eventually, the consumer)
- Bill data
- Taxes
- Compliance
From the above – frankly oversimplified – chain of events, it is clear that several middlemen are involved in this entire process. Without smart contracts, a lot of the data that is transfered in this supply chain is nearly impossible to validate and requires stakeholders to operate under good faith. This gives rise to accountability issues, regulatory issues, and could put the customer’s at risk due to fraud.
The blockchain ledger changes the way trust is granted, instead of trusting a middle man, trust is placed in the cryptography and P2P architecture of the smart contract.
For food products, it is crucial to manage the supply chain and confirm its origins, quality, and compliance. This is why the blockchain ledger proves to be useful. It does so by creating smart contracts – a virtual representation of a real-world contract – with a set of terms that govern changes.
For it to properly work, the blockchain ledger is distributed or shared across each stakeholder in the dairy product’s supply chain. All parties have a vested interest in making sure that the dairy product arrives safely to the customer. With the help of a digital ledger, each stakeholder in the process can transfer the value authentically without the risk of corrupting trust during each step in the supply chain.
The information is reliable because it is cryptographically immutable since it requires all participants on the ledger to agree that the transaction authentic.
So How Do Smart Contracts Make Dairy Products Safer?
Let’s dive deep into how milk for dairy products is extracted, processed, and transported – all carefully scrutinized with the help of smart contracts.
Dairy farmers Use IoT Sensors to Monitor The Health of Their Cows
Even if they don’t use technological methods, they can store essential data on the ledger with the help of their mobile app, such as:
- Milk quality
- Date when the milk was extracted
- Temperature conditions under which the milk was extracted
The data is captured manually or with the help of IoT sensors and is then logged into the distribution storage platform with addresses stored in the ledger.
Distribution of Milk to Food Processing Companies
Once the milk is extracted, it can be delivered to factories through IoT enabled trucks that track the conditions under which they are stored and transported.
This information will help factories and retailers decide whether the milk delivered is compliant with regrulatory requirements or not. Storing information on the ledger ensures compliance at every step of the dairy food supply chain.
Supply of Processed Dairy Food to Retailers
Once the food items are processed in factories, they can be transported to retailers and wholesalers, once again, in IoT enabled trucks.
Smart contracts make it possible to trace food companies and conduct products recalls or launch investigations effortlessly.
Consumers Can Track the Supply Chain
Because the details of the blockchain are digitally linked, consumers who have access to the ledger can track everything on the supply chain, such as:
- Origins of the milk used
- Transportation details
- Dairy food processing
- Expiration details
- Factory data
- Storage temperature
- And other information
As a result, the blockchain ledger brings added transparency into the dairy food supply chain, making it easier to track when and how the product has been compromised.
Benefits of the Blockchain: Improved Quality Controls and Unparalleled Traceability
Poor quality milk is a prevalent problem faced by milk farmers around the world. To solve this issue, farmers can use IoT devices to monitor factors that could affect their milk.
Consumers expect their food standards to rise every day. They also want to know where their dairy food comes from. A blockchain ledger can solve this problem by giving consumers a bird’s eye view of where their food originated, who processed it, and how fresh it is.
There are no extra steps involved in the food supply chain, with the minor exception that workers will now have to scan the product at each stage in the process to update the ledger with information.
All of this information about dairy products can be easily tracked by scanning the barcode with your smartphone app.
This will have major implications for the quality of food such as:
- Origins of the milk used
- Transportation details
- Dairy food processing
- Expiration details
- Factory data
- Storage temperature
- And other information
Wrapping Up
In food logistics, blockchain has been shown to simplify all the steps in an existing supply chain without disrupting it – from tracing food origins, settling transactions, to creating new products. Given that one day these technologies will become more mainstream in the future, it has become more important than ever before to stay on top of the most recent developments and gain an edge over your competition.
