The food supply chain refers to all such processes that are carried out from the sourcing of raw materials to the product reaching the consumer. It includes procurement, processing, distribution, and transportation. In an industry as huge as the food industry, there are various models of supply chain and its players, depending on the organization and the type of product.
With an increase in volume, technology helps to access, store and process colossal amounts of data with which effective decisions can be taken throughout the supply chain. Organizations are analyzing data, getting insights, and applying analytics in operations with the help of data collected.
Structure of Food Supply chain
Any trade or exchange between two parties is determined as a basic supply chain. A relationship or agreement to purchase and sale of products which includes the sale of raw material, processing services, manufacturing, distribution and transportation of products until it reaches the final consumer is determined as the Structure of a Supply Chain.
These supply chains differ from organization to organization, level of business operations, and degree of collaboration between players. Various factors depending on consumer behavior, global trade, economic imbalances, advancement in technology, and competitiveness have led to the development and restructuring of a supply chain. These changes can be both forced and deliberate, post-COVID-19 many organizations had to restructure their supply chain to meet economic and environmental changes.
The four stages in the food value chain are inputs, production, processing, and delivery. Stage 1 inputs include the chemicals, fertilizers, seeds, animal health, animal breeding, and farming machinery. Production involves all the activities in the production of raw food products like crops and livestock which serve as inputs to the manufacturing industry.
The manufacturing company processes the raw materials into branded products and are packaged and transported for distribution to retail. The retail further caters to the end consumers which could be end consumers, food distributors, and foodservice.
There is value creation at each stage with differentiating value drivers.
Need for reforming Food value chains
Globally, there are numerous food-related issues like food insecurity, food wastage, lack of biodiversity, and health hazards. To meet the demand for food due to the growing population, farmers would need to enhance crop yield through sustainable and good agriculture practices.
This also needs to factor in the environmental and climatic impacts of land usage, agro-forestry, and livestock management. Consumer awareness of the healthy and sustainable sourcing of food has mandated the need for transparency and traceability in the food supply chain.
Tracking and tracing food is imperative for the producers, processors, regulators, and consumers to deliver an authentic and sustainable product.
All components of the food system must be sustainable, resilient, and efficient to provide nutritional security to the planet as a whole.
Digital and smart supply chains harness the power of technologies like Blockchain, IoT, AI, ML, and Big Data to eliminate these problems.
Blockchain in the Food Supply Chain
Blockchain Technology has been the quantum leap in terms of safety and transparency. Blockchain technology has been implemented in the Food supply chain for quite some years now. Since then, there has been a betterment in the flow of products and trust among players in the Food supply chain.
Blockchain is a ledger management system that helps to record data at specific points within the supply chain which can be viewed by all payers in the supply chain. It has a decentralized system where data isn’t managed by a specific authority, any changes or tampering of data will be notified to all players. The tracking and traceability feature helps trace products through the supply chain and initiate any recall if necessary.
Adaptation of Blockchain technology in the food supply chain benefits both the organizational and the customer end. It ensures a smooth flow of products within the supply chain with the help of digitization of data, transparency, traceability, and immutability.
A major part of security, fraud, and safety of products can be mitigated which in turn helps earn customer trust and builds brand image.
Hence, the implementation of Blockchain technology in the food supply chain has enhanced productivity, safety, and efficiency in the supply chain.
Check how traceability is the essence of food supply chains. The Traceability feature in the food supply chain has showcased and developed its effectiveness, a few of its benefits are listed below.
Traceability in Agriculture
One of the important features of Blockchain technology is the ability to trace a product in its journey through the supply chain. Traceability is the process wherein the movement of the product is followed through different stages in the supply chain. This tool helps in providing food safety, quality and product authenticity. Traceability is achieved through different technological tools, of which a few are listed below
Bar codes/QR Codes, RFID (Radio-frequency Identification), Wireless sensor networks (WSN), DNA bar-coding, and tracing through Blockchain.
Data management occurs at every stage of a good supply chain. Entry of data at every collection and dispatch points are crucial in maintaining data and track of products. The procurement of raw materials with every detail relating to such purchase and details regarding the same have to be captured. Responsible sourcing practices are vital to prove the authenticity of the product. The automated procurement process, procurement model, transparency, a centralized data hub, multi-sourcing strategies, and optimization of inventory are a few of them. Every such sourcing of raw materials has to be linked with the product during its processing and manufacturing stages to source it back to its origin when the need arises.
The key aspect of a supply chain is the link between players in the supply chain. The transition and transport of products have to take place systematically to maintain a good relationship between these players. Therefore, material inspection has to take place at both collections and drop-off points. Every process that a product goes through is linked to the raw material that has been used in the specific product.
As it is an important stage in the supply chain, it is a responsibility to adhere to safety and quality using various tools like machine checking, automated transfer process, and QR code generators.
Proof of Origin
The present market scenario and consumer behavior require organizations to showcase information about the product they produce. The customer has every right to know about the product that they consume, information like the origin of the product, raw material sourcing, processing information, and the quality attributes.
In a huge supply chain, recording such data becomes difficult. Hence, an adaptation of technology is vital. Digitization of data and an automatic procurement process will help reduce cost, time, and energy and increase safety
A product has to move through different stages and different players in the supply chain to reach its final destination, hence relationships between these players are vital in a smooth flow and in increasing the efficiency of the product.
The journey of a raw material turning into a finished product is meticulously tracked and linked back to the original raw material used in the product. This allows an organization to facilitate the recall of the product at any given stage of the supply chain in real-time. This can only be achieved with digitization, shared inventory, and proper agreements between the parties.
Impact of food traceability on Supply chain
The food ecosystem runs on a complex global supply chain. Traceability plays a critical role in many ways
- It is vital in preventing food contamination, food adulteration, and fraudulence
- It helps achieve consumer trust.
- It builds greater agility and responsiveness to food security situations.
- It is a risk mitigation tool for businesses, lowering the impact of recalls and liability costs.
- It is a driver for compliance and sustainability
Blockchain-powered traceability solutions build resilience and transparency in food supply chains. FOODSIGN, a flagship platform of TraceX is a traceability solution that brings visibility, efficiency, trust, and transparency to agriculture value chains. Check how TraceX solutions are helping the agriculture value chains.