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IBM & Walmart Launching Blockchain Food Safety Alliance In China With Fortune 500's JD.com

This article is more than 6 years old.

In further move to apply Blockchain technology for food traceability to support offline and online consumers, IBM, Walmart and Nasdaq-listed Chinese retailer JD.com together with Tsinghua University National Engineering Laboratory for E-Commerce Technologies have announced a Blockchain Food Safety Alliance collaboration to improve food tracking and safety in China.

By collaborating with one of China's largest retailers, JD.com, a member of the NASDAQ-100 and a Fortune Global 500 company, and their suppliers, the latest effort is touted as helping to bring a safer food supply to China, and an extension of the work initiated by Walmart and IBM earlier this year in August in the US.

Through the latter initiative, ten food suppliers and retailers - Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods, Unilever and Walmart - signalled their intention to collaborate. And, Walmart's food safety solution has been working with IBM and its Blockchain Platform.

That initiative is designed to bring the requisite efficiency, transparency and authenticity to food supply chains around the world. The solution from ‘Big Blue’ is global - reflecting the global nature of supply chains.

Food Safety Issues

Who would deny the importance of food safety. It’s a no brainer. Just take the fruit displayed on the shelves in your local supermarket that might look inviting and succulent. Are you actually able to tell if it is safe to consume?

Moreover, each year one in 10 people fall ill globally as a result of food borne diseases and of those around 420,000 die. Clearly food companies, distributors and retailers addressing these issues globally and at scale is not without its challenges.

Some hope the answer lies in applying distributed ledger technology (DLT) - aka Blockchain. And, if retailers and distributors could see and validate with certainty where that fruit was grown, handled, stored and inspected, plus each and every stop made en route to the store, the details could be shared via DLT.

During a pilot program conducted with Walmart, testing found that by applying blockchain to trace food cut the time it took to trace a package of mangoes from the farm to the store to just two seconds - from days or weeks. And, highlighting matters just today over 100,000 mangoes from a Queensland supplier in northern Australia were recalled by Biosecurity SA after fruit fly larvae was discovered in a mango in the Adelaide foothills.

It is understood that the four organizations in this latest collaboration plan to work together to create a “standards-based method” of collecting data about the origin, safety and authenticity of food, using blockchain technology to provide real-time traceability throughout the supply chain.

Brigid McDermott, vice president, food safety, IBM, commenting on how to the parties will collaborate said: “IBM, Walmart, JD.com and Tsinghua University will work together closely, maintaining collaboration and communication, to ensure that JD’s solution and IBM’s solution have standards necessary for Wal-Mart and JD customers to have a consistent user experience when accessing the food safety and traceability information.”

The parties intend to work with food supply chain providers and regulators to develop the standards, solutions and partnerships to enable a broad-based food safety ecosystem in China.

She added: “Specifically, Walmart, JD, Tsinghua and IBM will develop standard requirements and engage with the ecosystem to define usage standards for the food safety solution. Tsinghua University will help facilitate the engagement between the China Food Safety Alliance and China regulators and government entities.”

It is envisaged that this will encourage accountability and provide suppliers, regulators and consumers “greater insight and transparency” into how food is handled - from the farm to the fork. Traditionally this has been challenging due to complex and fragmented data sharing systems that are often paper-based and can be error-prone.

JD.com, which is both the largest e-commerce company in China and the country’s largest retailer by revenue, boasts the largest fulfilment infrastructure of any e-commerce company in China. So not exactly small fry. A major competitor to Alibaba-run Tmall, as of September 2017 JD.com’s platform had 266.3 million active users and it operated seven fulfilment centers and 335 warehouses across the nation.

Blockchain Platform

For its part, IBM will provide its Blockchain Platform and expertise, while Tsinghua University will act as a technical advisor sharing its expertise in the key technologies and the China food safety ecosystem. IBM and Tsinghua will collaborate with Walmart and JD to develop, optimize and roll out the technology to suppliers and retailers who join the alliance.

IBM’s McDermott remarking on aspects of the technology said: “IBM’s Food Safety solution is built on our IBM Blockchain Platform, which already leverages the Linux Foundation’s Hyperledger standard. This is a key standard in the blockchain community and one that the Alliance supports.”

As regards areas that might require any bespoking for the Chinese market the executive added: “Obviously with all technologies there is the potential for some localization needs and one of the things the Alliance will do is work to understand whether there are China-specific needs for Hyperledger and how the Alliance can be supportive of this.”

As a global advocate for enhanced food safety, Walmart works closely with suppliers, regulators, industry partners and the research community around the world.

In China, the company invests heavily in food safety research through the Walmart Food Safety and Collaboration Center and has promoted food safety, through its own supplier network as well as working with JD, which has what is described as “rich omni-channel” food supply chain management experience.

The two have been able to leverage JD’s expertise in the application of artificial intelligence (AI), blockchain, big data and other new technologies to protect consumers. Wal-Mart has developed a significant online grocery delivery business in China, which is capable of transporting fresh produce from its shelves to homes within an hour.

Frank Yiannas, vice president, food safety and health at Walmart, commenting in the wake of the latest announcement said: “Through collaboration, standardization, and adoption of new and innovative technologies, we can effectively improve traceability and transparency and help ensure the global food system remains safe for all.”

From the Chinese side, Yongli Yu, President of JD Y, JD.com’s supply chain research unit, posited: “Partnering with IBM, Tsinghua University and Walmart, all global leaders in traceability, gives our customers and partner brands unparalleled accountability. Throughout the world, and particularly in China, consumers increasingly want to know how their food is sourced, and JD is dedicated to using technology to promote complete transparency.”

Bridget van Kralingen, senior vice president, IBM Industry Platforms, an IBM business created in August 2016, asserted: “Blockchain holds incredible promise in delivering the transparency that is needed to help promote food safety across the whole supply chain. This is a fundamental reason why IBM believes so strongly in the impact this technology will have on business models.”

The executive, who holds a Masters of Commerce degree from the University of South Africa, added: “By expanding our food safety work with Walmart and Tsinghua University in China and adding new collaborators like JD.com, the technology brings traceability and transparency to a broader network of food supply chain participants.”

University Involvement

Professor Yueting Chai from the National Engineering Laboratory for E-Commerce Technologies at Tsinghua University, said: “Tsinghua University is committed to in-depth research into food safety - one of the most important areas for improving quality of life in China and also around the world.”

The university, located in Beijing which was established in 1911 and and a member of the C9 League of Chinese universities, has already been working with IBM and Walmart to create a new model for food traceability, using blockchain to support supply chain transparency and auditability. “We see this new cooperation as an important next step in this endeavour,” the Professor said. Use of Blockchain to trace food items by the parties has been piloted, including pork in China.

The collaboration is further said to be designed to help ensure brand owners’ data privacy, while helping them integrate their online and offline traceability for food safety and quality management channels.

Companies who join the alliance will be able to share information using blockchain technology, and plans include them being able to choose the standards-based traceability solution, which best suits their needs and legacy systems. This, it is claimed, will in turn bring greater transparency to the supply chain and “introduce new technologies” to the retail sector designed to create a safer food environment and enhance the consumer experience.

Insights gained from the work being undertaken in China will shed light on how blockchain technology can help improve processes such as recalls and verifications as well as enhance consumer confidence due to greater transparency in China and around the globe.

As to the project’s timetable going forward, IBM’s McDermott revealed when canvassed: “We work with a sense of urgency. IBM and its collaborators in this effort believe that blockchain can accelerate extremely quickly. As we continue to develop the solution, we will expand the scale of the networks involved by focusing ensuring that each stakeholder sees value in participating.”

She added: “Blockchain adds the most value when you have the largest ecosystem. As such we will seek to build out the ecosystem by collaborating with other stakeholders, including farmers, suppliers and retailers.” No financial details on the project were disclosed by the parties.

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