Recently in class we discussed the concept of making supply chains more transparent in an effort to cut costs and improve consumer expectations and levels of satisfaction. In particular we talked about “Blockchain Technology” and its effects that it could have on global transactions and logistics. This has been a buzzword recently in the news that seems to have little meaning and is often associated with extremely volatile cryptocurrency.However the computer code and technology behind it shows real promise in order to remove middle men such as banks from transactions and can keep a digital bill of sale attached to a good to follow it through its life. I decided to pursue if any companies were actually implementing this in their businesses today as the ideas behind the technology seemed several years ahead of where we were today. Several companies around the U.S. and the globe are actively trying to integrate this into their business models.
In particular, Denver’s Coda Coffee Co. has already fully incorporated this technology into all their products they sell in order to prove their grinds and beans are both fair trade and organic from seed to store. This helps to reinforce their business model which is responsible global coffee that doesn’t take advantage of either the environment or the coffee plant’s farmers. This is done through a simple QR code that allows you to see all the steps in the journey that particular bag of beans underwent. As a result Coda Coffee Co does have higher prices than many of their competitors but many consumers still choose to purchase their coffee there as they are attracted to the ethics and quality of their goods. Starbucks has also come out recently declaring a two month pilot program of a similar nature in order to keep the origins of their coffee transparent.
The food industry in particular is one that is quickly moving to embrace the blockchain technology as food fraud and health concerns have led many industry professionals to determine this is the answer. 60 minutes recently did a piece on food fraud, in particular on olive oil and how the mafia throughout Italy would repackage low quality olive oil with the brand “extra virgin” which has been estimated to amount to a 16 billion dollar a year enterprise through criminal misrepresentation and up-charging. Blockchain technology could prevent much of this criminal wrongdoing from happening and protect consumers from purchasing unethical or subpar products without their knowledge. This could be a simple fix that would eliminate health and safety concerns, as well as criminal activity and provide transparency for the entire supply chain.
While the food industry is one of the first to quickly embrace blockchain technology I can see how it may become more and more pervasive throughout our economy when it begins to take hold in several key industries. I believe currently it would be too costly to implement and the technology has to catch up to the ideas behind it in order to be widely successful but has vast potential. Here are some questions you can think on to consider the Blockchain technology and whether or not it has a place in our economy today.
Are there any industries in particular that you could see Blockchain having a sweeping effect on such as the Food Industry? Do you believe Blockchain technology is even the answer to a lot of our problems or is there a better solution out there? Should Blockchain technology even been implemented at all because of the high costs to many suppliers, distributors and retailers now that the consumer knows the costs of all of the goods?