The future of reforming food supply chain with blockchain technology
In CollaboGate Tokyo Division, we held open research meetup to discuss how blockchain technology would approach and solve the various industrial issues with industry leaders.
In this session, we invited OSA DC who develops and provides supply chain management tool behind blockchain and AI technologies and industry leaders in food manufacture; KIRIN and Morinaga in order to share the reality of food supply chain issues and discuss how we can address ourself to them with cutting-edge technologies.
Session Contents
First, Mr. Ishikura (Executive Officer of KIRIN Company, Ltd. and leads developing, executing and promoting R&D strategies for KIRIN) shared the basic structure of food supply chain and gave us example of issues entitled as “The Reality of Food Supply Chain”.
After sharing entire structure of the value chain including farm and recycle process, he took the concrete examples with the three keywords; Global Procurement, Quality Assurance, Traceability.
The case of canned Chu-Hai “Hyoketsu Halloween Orange” was very impressive. Hyoketsu brand features straight fruit juice (100% fruit juice without concentrate and reduce). When they reinspected the materials they bought, they confirmed that the raw materials contained water and they stopped selling it.
Not limited to this case, there are various factors in specifying the cause of failure, such as when an upstream trading company reports fraud, when there is an error in the inspection process itself, when inspection standards are not shared.
Next a panel session was held with three keywords presented by Mr. Ishikura as the axis of discussion.
- Global Procurement
- Quality Assurance
- Traceability
Mr.Harada, procurement manager at Kirin/Mr. Tsuda, quality assurance department at Kirin/Mr. Watanabe, R&D department at Morinaga facilitated by Mr.Hioki who is CEO at LeapsIn, Inc.
Impressive topics here:
- Global Procurement: It is difficult to conduct quality assurance in a centralized way for thousands of stakeholders. There is no way to see through wrong or fraud reports from upstream. A case of imported mineral water; there was contamination with bacteria that had no influence on the human body, but caused a malodor. Although it is not regarded as a recognition/issue in origin, but Japanese consumers are very sensitive for quality. The gap of these criteria and culture is also a problem.
- Re-examination: It is practically impossible to re-examine all raw materials and products at various angles. Can we efficiently utilize the data of raw materials and results of inspection of the vendors as a source of judgement whether or not to perform a re-examination.
- Proof of Origin: In order to prove origin, we have to contact multiple departments within the company, multiple trading companies, so it generally takes a lot of time. If the blockchain always give a certificate of origin, we can develop products more efficiently and reduce the cost.
- Recall: For example, you discover the use of degraded oil on the production line and you want to collect only certain products via the line. Since the production line and distribution system are not linked, it is impossible to trace exactly where the products are distributed. It increases the collection cost and loses speed.
Next, OSA DC introduced their supply chain management system utilizing blockchain and explanation of the way of dealing with the issues in this industry.
OSA DC provides supply chain management services utilizing blockchain and AI. Maximilian, who is in charge of strategic lead of OSA DC, presented the OSA DC solutions and the possibility of building new supply chain eco-system including the final consumer. He is also an executive director of the consortium on the supply chain called Efficient Consumer Response(ECR) Russia. According to his experience, he mentioned it is very important that we will work together on solving these issues with a new way of thinking.
Lastly, second panel session was held with Mr.Ishikura, Mr. Watanabe, Mr.Maximilian about the industrial implementation of blockchain based on participants’ questions facilitated by Mitsui at CollaboGate.
Impressive topics here:
- Confidentiality: There are data that can not be disclosed to competitors such as suppliers and sales data. Considering thousands of stakeholders, the solution is required to have the scalability and the flexibility to design scope of disclosure for protecting confidentiality at the same time.
- Implementation process and cost: When inducing a new management tool, in addition to the viewpoint as a manufacture, the solution side must also consider the stakeholder viewpoint on each channels. It is necessary to thoroughly verify the merits and operation methods.
- Data selection and acquisition method: we have to think about what kind of information we have to deal with on blockchain, how to get them correctly.
- Other technologies: It seems to be good to distinguish various IF to input/output data such as IoT devices, RFID and QR code and so on from blockchain itself. It is generally expected to utilize tokens for the reliability of input data.
I had impression that when we break down the issues concretely like “how we can utilize blockchain to provide the certification of origin smoothly for R&D department of food manufactures”, we can conduct more specific study including system architecture, token economics, scope of disclosure and UI/UX for the real operations.
Lastly, thank you for all to organize the exciting open meetup.
(Mr. Hioki LeapsIn, Inc. as co-organizer, Morinaga Village who provided us a wonderful venue, SEE THE SUN Co., Ltd. who provide the excellent catering, KIRIN Company, Ltd. who provided all drinks, OSA DC who gave us great presentation and insights)
At CollaboGate in Tokyo division, we would like to continue open discussing the possibilities of blockchain against industry issues. If you are interested in open discussion with JP industry leaders, please contact to Masa or Kohei.
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