Walmart Adoption Nudges Blockchain EDI into the Mainstream
In September of 2019, Walmart will require more than 100 farms that supply leafy green vegetables to put detailed information about their food into a blockchain database developed by IBM. Walmart hopes to use the so-called IBM Food Trust blockchain to track this produce as it moves through the supply chain. At each step from farm to store, people handling this produce will make an entry on the blockchain, signing off when they receive it and when they move it to the next company on the chain.
The Walmart announcement is significant because any technology requires a champion to achieve critical mass. And advocates don't get much bigger or more influential than Walmart, who also championed the use of AS2 and helped lead to its mass adoption. Walmart's stamp of approval brings blockchain technology much closer to mainstream use — and indicates how blockchain may ultimately transform both EDI and the supply chain.
What is Blockchain?
Invented by a person or group using the pseudonym Satoshi Nakamoto in 2008, blockchain was first used as the public transaction ledger for the Bitcoin cryptocurrency.
Blockchain works this way. Imagine a Google Sheet. This Google Sheet is duplicated across a network of computers, or nodes, and shared by a large number of users. Whenever one user makes an addition to the spreadsheet, the change must be validated by the entire network of nodes and is updated across the entire network for all to see every 10 minutes.
Any system that shares data needs to authenticate and authorize users to keep the data secure. Blockchain technology uses private key cryptology for authentication. When it comes to authorizing transactions, the entire community of users controls how the record of information should be amended and updated.
As you can see, blockchain is notable in that no one person or entity controls the information. The data is available across the entire blockchain network, and there's no single point of failure. Moreover, data is incorruptible; altering any unit of information on the blockchain would require overriding it across the entire network. By nature, blockchain provides sophisticated security.
Blockchain's Impact on EDI
Today, large organizations such as Walmart exchange information through EDI, which uses multiple one-to-one hubs to exchange data between business partners. For example, a farmer can connect to a distributor via EDI, and that distributor separately shares information with Walmart — also using EDI. In this scenario, Walmart has no visibility into data exchange between the farmer and the distributor.
With blockchain, every partner in the chain — farmer, distributor, and Walmart — has visibility across the entire chain from initial shipment to final receipt. This capability makes it easier for the farmer to share information about products with the retailer. For example, a small farmer might want to communicate that they use organic methods even though the produce is not certified as organic.
All partners also gain transparency and visibility into what happened to the product across the supply chain. For example, for "cold chain" logistics, where products must be kept at a specified temperature, all parties along the supply chain can have confidence that the proper temperature was maintained throughout the shipping process and that the produce is safe and of high quality.
Blockchain also has the potential to simplify the process of onboarding supply chain partners. B2B integration today requires that two parties establish a relationship before implementing EDI. But blockchain does not require a pre-existing relationship. This means B2B integration will have more agility. Blockchain can potentially cost less to implement than EDI, furthering adoption in various industries.
How Walmart Will Benefit from Blockchain
Once Walmart has its IBM Food Trust blockchain up and running, Walmart will be able to track food from start to finish — from the field through washing and cutting facilities to the warehouse and all the way to the store. It will even be possible to pinpoint the exact part of the field where the vegetables are grown and point in time when they are picked.
The enhanced visibility is particularly important in managing the leafy green vegetable supply chain because such produce is prone to E. coli contamination. The use of blockchain will make it far easier to rapidly pinpoint the source of any contamination. Walmart will be able to trace the source of their leafy greens in seconds and will only have to discard food that was actually at risk, reducing waste.
While blockchain has been around for 10 years, the Walmart announcement means this technology is coming to the mainstream. It's here to stay — and it will make its presence felt on the EDI supply chain.
CData Arc & Blockchain
CData Arc provides a bridge between the applications, data, and processes that power organizations today, and the technologies that will transform business tomorrow. Like other emerging technologies, blockchain needs connectivity to impact business. We are partnering with some of the leading technology providers, such as IBM Food Trust, to simplify connectivity between their blockchain platforms and the greater ecosystem of accounting, ERP, CRM, logistics, and supply chain applications.
Interested in Blockchain EDI? Let's Talk.
