Data standards are fundamental for blockchain implementation
Will blockchain live up to its envisioned potential in real-world use cases? Today, industry is mostly undecided. Comparisons are being drawn to industry’s understanding of the Internet in the 1990s — as an embryonic technology that might revolutionize business in the future. Experts agree blockchain’s usefulness won’t be known for at least 3-5 years, during which time it will be modeled and evaluated by companies hoping to find transformative value in it.
The promise of faster food recalls and enhanced supply chain transparency makes blockchain particularly tantalizing to food manufacturers and their trading partners.
Proponents believe that by creating an immutable ledger of product events and transactions, blockchain will enable supply chains to modernize, move away from paper-based systems, and provide complete, end-to-end product traceability and transparency that consumers demand. A number of companies have been piloting blockchain initiatives to evaluate its benefits, but lately, some are pulling back.
Gartner researchers predict that an absence of suitable use cases will cause 90 percent of blockchain-based supply chain initiatives to suffer ‘blockchain fatigue’ by 2023. What is clouding progress in establishing these use cases, and confidence in the technology’s promise?
Interoperable data sharing is fundamental to blockchain, and a lack of standardization is obstructing successful implementation. A blockchain is composed of “blocks” of data stored on a “chain.” Each point in the supply chain has to be capable of reading and contributing to the data record. A universal data language is essential to ensure that the right information is stored and communicated further down the chain.
Standards lay the foundation
Still, many companies, including several in the meat and poultry industry, maintain high hopes for blockchain. Industry leaders like Cargill and Tyson have publicly discussed their blockchain explorations and concluded that for use cases like food traceability, product information transparency, and reducing waste, blockchain is a valuable tool to create efficiencies that ultimately benefit consumers.
A common difference between companies expanding their blockchain implementations and those retreating is the essential foundation for data quality and systems interoperability enabled through proper standards.
The proper system of standards provides the necessary common language and data elements that are key building blocks for blockchain, including:
Global Trade Item Numbers (GTINs) — GTINs are unique product identifiers that are retained throughout the supply chain regardless of location, which supports end-to-end traceability.
Global Location Numbers (GLN) — GLNs uniquely identify locations — a farm, processing plant, warehouse, restaurant, retailer, even a store shelf. According to members of the GS1 US Blockchain Discussion Group, farms and other upstream supply chain locations commonly lack GLNs. This creates a challenge for most blockchain use cases in the food industry, as they typically revolve around supply chain visibility specifically focused on locations and origins.
If blockchain takes off the way the Internet has, companies that aren’t ready will miss out on early opportunities to optimize their supply chains and compete in markets where the need for immutable traceability is a paramount concern, as it is for perishables like meat, poultry and produce.
The jury is still out on blockchain’s future. Implementing the proper standards system throughout the supply chain will enhance transparency with or without blockchain, while also laying a solid foundation to take it to the next level. NP