The “giant” Walmart apply Blockchain technology to digital transformation
Digital transformation to adapt to the technology 4.0 era is not an easy task but extremely vital for any business, including the largest corporations in the world. Recognizing the importance of digital transformation, the retail giant Walmart has started the revolutionize process since 2011 with a series of comprehensive transformation strategies, especially the innovative step to incorporate the Blockchain technology to food traceability system, which eventually came out with amazing results.
Walmart transforms to become a high-tech “giant”
In order to transform itself from a traditional retail business to an innovative corporation, Walmart acquired a Chinese e-commerce company called Yihaodian in 2015. Walmart continued to made a series of acquisitions of other e-commerce sites, such as Jet.com (worth $3 billion), Shoes.com, Moosejaw, Bonobos, Eloquii, Bare N Needities (Fashion), Parcel (Delivery), Cornerstone (Delivery) and Flipkart.
Not only that, Walmart invested $11.7 billion in digital transformation in 2018, which made it one of the three corporations that invest the most in technology at that time, only behind Amazon and Alphabet. The retail giant also recruited 1700 technology staff in the same year and planned to recruit 2000 more by 2019.
Walmart’s digital transformation strategy changed the entire business process, from upgrading the supply chain, inventory management, to maximizing the customer experience in shopping online and delivery. In which, the application of Blockchain technology to supply chain management and food traceability are the most adventurous and remarkable transformation.
Food traceability challenges
In 2018, there were at least 18 outbreaks of food-borne illnesses in the United States, with a typical example of the E.Coli infections in Romaine lettuce that led to diarrhea in children. Food sold in supermarkets is usually safe and hygienic, but nothing is absolute.
When food poisoning or food-borne illnesses occur, it can take days or even weeks to investigate the cause. Therefore, an advanced and transparent traceability system are extremely important to ensure food safety for consumers, allowing businesses to react and resolve problems quickly while protecting the livelihoods of farmers.
Understanding this, Walmart has been focusing on the transparency of the food traceability system. The leading retail group has approached many solutions through years, but none has met the expectation, until Blockchain technology was mentioned.
“Creating a (traceability) system for the entire food supply ecosystem has been a challenge for years, and no one had figured it out. We thought that blockchain technology might be a good fit for this problem, because of its focus on trust, immutability, and transparency.”Karl Bedwell, Senior Director at Walmart Technology.
Blockchain’s potential to transform the entire supply chain
Walmart considered several Blockchain technologies before deciding to partner with IBM and using Hyperledger Fabric. Because the food traceability system will be use by multiple parties, including Walmart’s suppliers and its competitors, the Walmart Technology team opted for the open source Hyperledger platform.
To experiment the system, Walmart implemented two projects: One to trace the origin of mango sold at Walmart stores in the US, and the other is the pork traceability in China.
Both projects have achieved remarkable results. The pork traceability system in China allows uploading verification of origin and certification information on the Blockchain platform. As for the mango in the US stores, the traceability time significantly reduced from 7 days to 2.2 seconds.
The food ecosystem on Blockchain technology
Recognizing the potential of the food traceability system, Walmart planned to expand its goal into developing a food ecosystem for every business in the industry to participate. The retail group has cooperated with IBM and launched the IBM Food Trust, a traceability application on Blockchain, with the participation of a few “giants” in the food industry such as Nestle and Unilever. IBM Food Trust’s objective is to strengthen the ability of resolving problems related to food-borne illnesses of enterprises, as well as ensuring transparency and accuracy of the traceability system.
By the end of 2018, Walmart has officially brought 25 products from 5 different countries to the Blockchain-based traceability system. Walmart’s food ecosystem will constantly grow in the future and connect with more partners.
Lina Network is a pioneer in providing Blockchain-based traceability solutions in Vietnam, with the specific platform called Lina FarmTrust. Contact us to discuss your enterprise problems to find the best solution.