If you don’t already know about this new cooperation between Walmart and IBM, let me give you a quick insight before we dive into blockchain’s benefits for business.
Walmart has been working with IBM for around a year now on testing and preparing the implementation of the blockchain technology. This will operate in their supply chain mechanism and will enable Walmart to track the origin of their products almost instantly.
All suppliers that will be affected by this change, need to enable this technology by 30th Sep. 2019. It will decrease the time needed to obtain information about the source of the particular product (starting with leafy greens). Until now, using physical ledgers, it could take up to 7 days to find out where the product (let’s say spinach — one of the first products that will be tracked using this platform) came from. Now, with the new technology, it can be done in seconds.
Obviously, the end-user result of this shift will be achieving much decreasing the numbers of infected products available for sale. It will enable Walmart to quickly identify and recall products that have been flagged as inappropriate for consumption (one of the biggest drivers being E-Coli in greens).
So what is it, that makes blockchain so suitable for business use?
The shared ledger enables all information to be shared and accessible to all the parties in the business network. They can see the same information and any changes made to the network will be visible to all.
This is the prime enabler of the wide potential blockchain has. It ensures transparency throughout the process and enables Walmart to instantly track any product down the chain with certainty.
All the parties in a business network (in our case suppliers, third parties and Walmart) have a certain degree of anonymity and data protection assured thanks to the blockchain. Every party has defined permissions to view or add entries in the blockchain, depending on their responsibilities.
The concept of cryptography is central to ensuring privacy. It enables the data to be secure, authenticated and verifiable. This is important for Walmart to ensure accurate and fast business operations.
The data in the blockchain is immutable and finale. It means that individual blocks cannot be changed. Any changes or additions made are shown as additional blocks and thus a traceable trail is created.
Transactions are endorsed and verified by relevant participants or by a verifying body. Once a transaction is added and verified, it can be trusted by all members of the business network.
This has the potential to decrease the cost of the audit and regulatory compliance. In the world of infected foods tracing — decreases the amount of time needed to trace down and recall the foods that have been identified as problematic.
Blockchain brings several key benefits for businesses:
1. Saves time (from days to seconds in Walmart’s case)
2. Reduces risk (of potentially wrong trace path that would result in recalls of perfectly fine foods)
3. Creates stronger bonds within the business network (since all the transactions are verified; the suppliers are trusted and can trust Walmart)
4. Decreases costs (the search for infected foods can be costly, mostly if it is long-lasting)
5. Provides real-time access to data (no time delays of records)
This is one of the first and definitely not the last real-life use case of blockchain. Walmart’s bold action to adopt new technology will provide a lot of useful information and data over time and help the development of further utilization of blockchain. Please feel free to share your opinions in the comments section below!