By Angel Versetti, CEO at Ambrosus
Food safety standards within supply chains can be said to be at an impasse. While we’ve seen a rise in product counterfeiting and fraud, new regulations, traceability requirements, and health standards are now being introduced across Europe and North America. We have seen this narrative before, with legislation such as the Food Safety Modernization Act from 2011 in the United States, or the European Commission’s recent guidelines on ‘Good Distribution Practice of Medicinal Products for Human Use’. On the other hand, most supply chain records are still being kept on paper, from product identification numbers and proof of regulatory compliance to product batch information, which can make it difficult to organize and share with third parties.
It is at this juncture that blockchain and the Internet of Things (IoT) — two of the most innovative technologies of the fourth industrial revolution — are able to merge with one another in order to revolutionize traceability practices within supply chains and radically improve food safety standards. In context, both blockchain technology and IoT solutions focus on collecting and managing data, which includes bits of information extracted from physical or biological materials. Similarly, both technologies enable information to be digitized on a platform where multiple parties can access and share such information in a secure and transparent manner.
Specifically, IoT refers to the vast array of intelligent devices that are able to bridge the gap between the physical and the digital world: environmental, biological, and chemically-based sensors can be attached to any particular process or product (i.e. a tree on a farm). These devices then collect information about the product they are attached to and transmit the real-time conditions to either another device or a central gateway connected to a larger network. To compliment IoT, a blockchain functions as a distributed ledger that is capable of receiving information from these devices. This information is then publicly verified in a manner that ensures that no data can be modified; it stores and eventually displays this information for a third party or the end consumer.
The inherent value of IoT to blockchain is that it could provide a means of storing data in a trustless manner: once uploaded, data cannot be easily modified or altered. When applied together, blockchain and IoT are able to ensure the secure, end-to-end collection, transmission, validation, and storage of data about products in the physical world.
When applied to supply chains, particularly those that transport high-value or easily spoiled goods, blockchain and IoT are technologies that could redefine food health standards, while also providing consumers with an additional layer of transparency and trust in the quality of their product. In cold chain logistics, for example, meat and other foods are always required to be stored and transported at a specific temperature. Using blockchain and IoT, sensors can be used to transmit information about the real-time conditions of such foods as they travel from one point of a supply chain to another. The data can then be stored on the blockchain and connected to a mobile or web application, where a consumer can verify with their smartphone that the product is of good quality.
Looking beyond the consumer, governments and other legal authorities are slowly becoming aware of the benefits that blockchain and IoT can provide in terms of managing food safety standards within a legal jurisdiction. For the first time, blockchain and IoT provides a means by which product information about a particular food or beverage can be managed in such a way where its origin and journey across a supply chain can be securely integrated into a single data flow. Beyond traceability, the data transmitted from an IoT device (for example pertaining to the origin and health conditions of a shipment of fish) can also be used for insurance, tax, and regulatory compliance purposes once it is safely secured on a blockchain.
In general, blockchain and IoT provide an integrated solution for managing data about products as they travel throughout the supply chain. With IoT, a number of external variables (temperature, location, acceleration) and internal variables (pH levels, enzyme testing, purity of products) surrounding a product become digitized for the first time. With blockchain, the possibility of securely and transparently storing and sharing data about supply chain products equally becomes a reality. In the future, as the two technologies continue to develop, consumers stand to become more aware of the quality of their products, while widespread reforms to food safety promise to prevent fraud and allow only the best products to be sold on the market.