What is Blockchain?

IBM Food Trust

Overview

2

The challenge – visibility across the supply chain

Wholesaler

records

CPG / Supplier

recordsDistributor

records

Consumer

Demand Drivers

Retailer

records

Producer’s

records

3

… with consensus, provenance, immutability and finality

Blockchain provides the shared, replicated, permissioned

ledger …

Wholesaler

records

CPG / Supplier

recordsDistributor

records

Consumer

Demand Drivers

Retailer

records

Producer’s

records

Blockchain

4

Is Blockchain the same as Bitcoin?

– The first blockchain application

– Defines an unregulated shadow-currency

– Resource intensive

≠Blockchain

is an example of an

unpermissioned, public ledger:

• Blockchains for business are

generally permissioned and

private, and prioritize:

– Identity over anonymity

– Selective endorsement

over proof of work

– Assets over

cryptocurrency

5

Trade Finance Pre and Post Trade Complex Risk Coverage Commercial Real Estate

Identity/ Know your customer (KYC) Unlisted Securities / Private Equity Funds Loyalty Program Mgt. Distributed Energy & Grid Mgt.

Medical Health Data Exchange Anti-Fraud & Port Mgt. Carbon Credit Mgt. Asset Tracking

Supply Chain & Logistics Food Safety Audit Digital Rights & Copyright Mgt.

IBM is making Blockchain real for business with diverse

engagements delivered across industries

6

Where are we on the IBM Food Trust journey?

PorkTraceability /

safety

MangoTraceability /

global trade

Onboarding agriculture, ingredient

suppliers, retailers, CPGs, QSRs

and others to provide bi-directional

flow of information

2017 2018

Additional partners joined the IBM

Food Trust™ network, with growing

food data transactionsconducts traceability pilots

2016

7

The IBM Food Trust solution is a set of modules built for the

industry

Future IBM ModulesFuture 3rd Party

Modules / Capabilities

▪ Manage Recalls

▪ Recall Post-Analysis

▪ Trace-forward & back

▪ Recall Simulator

Trace & Recall

▪ Version Control

▪ Authenticity

▪ Automated lifecycle

management

▪ Real-time Sharing

Certificate Management

IBM Blockchain Platform

Hyperledger Fabric

▪ Permissioned Data Access & Entry

▪ IBM Blockchain Provenance Engine

▪ Secure Document Storage

▪ API Integration

Data Entry & Access

IBM Food Trust

Solution Core

8

IBM Food Trust is a modular solution that will continue

to grow in functionality

• IBM Food Trust provides a blockchain platform for the food industry as well as a variety of modules targeting real business needs for all players in the ecosystem

• We are working with 3rd party providers to further increase value by providing them the ability to build and distribute modules

Data Entry & Access Certifications

Freshness* Consumer*

Trace

. . .

Coming soon

IBM Module

3rd Party Module

9

Case Studies with IBM Food Trust

Nestle’s Gerber Foods Strawberries from farm to store Leafy green certifications

Tracking foods, including multi-ingredient products, back to

source with blockchain

Capturing data on berries as they move through the supply chain

via serialized cases and PTI labels

Capture, manage, and optimize on large data collected during

audits and certifications

10

Nestle’s Gerber Foods: tracing back to source across supplier tiers, countries, and ingredients

Problem

Solution

Implications

Food contamination causes 1 in 6 people to get sick each year and food recalls cost companies massive losses in sales and in consumer confidence. However, conducting faster and more precise recalls is not possible because of how large, complex, and disconnected the food supply ecosystem is. The large majority of products include multiple ingredients which complicates the ability to trace to source during a recall.

Nestlé has partnered with IBM Food Trust to test tracing for its Gerber Baby Food products. This includes tracing multiple ingredients back to their source, including across borders. In the process Nestlé is figuring out how to connect different logistics operations, software systems, data sets.

• Faster, more precise recalls • Stronger brand and decreased revenue losses during a recall• Leaner, more efficient food supply chain processes as a result of blockchain

integration

11

Strawberries from farm to store: getting the right level of data on blockchain

Problem

Solution

Implications

Food supply chain data needs to be tracked at the right level for particular insights (e.g. surgical recalls or understanding how agricultural practices affect quality requires being able to track data by lot or even by item). Also the easier it is for data to be uploaded onto blockchain, the less costly it is to derive value from it. However, today many companies do not have processes in place to easily record data at the right level.

IBM Food Trust and one of its partners worked together to implement a large process change that leverages serialized cases and PTI labels to move strawberries from farm to store. This allows the partner to track data at the right level of granularity and with ease, enabling it to get the most of blockchain-enabled visibility and insights.

• Demonstrated ability to share CSE-level store data back to farm/supplier • Streamlined operations produces additional efficiencies that generate value • Once data is easily captured at a highly granular level at every step in the food

supply chain, the number and quality of data insights grows exponentially

12

Leafy green certifications: optimizing on audit and certification data

Problem

Solution

Implications

Today when a grower undergoes a certification audit, large amounts of data are collected but only a paper certificate is issued to document that the grower is certified. Although valuable data is gathered during the audit, it cannot be put to use because it is not documented and shared.

Centricity, a grower-owned company, and IBM Food Trust have partnered to connect audit data to the blockchain via the Trellis Framework, an on open-source food industry standard for organizing agronomic and compliance data, using existing formats and processes. This enables compliance data to be digitized, secured, permissioned, and shared via blockchain.

• Leveraging existing audit process to generate more value, without adding significant costs

• Conducting analytics and deriving insights to optimize growing / manufacturing practices based on data

• Sharing audit data easier, faster, and in a secure, permissioned manner

13

Dynamic Freshness/Expiration Management

CONVERGENCE OF TECHNOLOGIES: Blockchain + IoT + Analytics

14

Platform for Data Capture and Data Sharing

Manufacturing Shipping

ReceivedIssued to

Production

Formed &

CasedPalletized

Exit

QA Storage

Loaded

onto Truck

Arrived

At DC

Enter

Zone 4

Exit

Zone 4

Shipped to

Restaurant

Arrived at

RestaurantConsumed

EP

CIS

Eve

nt

Commission Transformation Transformation Payload Observation Observation Observation Observation Observation Observation Observation Decommission

Te

mp

Typ

e

Product Ambient Product N/A Ambient AmbientAmbient +

productAmbient Ambient Ambient Ambient Ambient

RF

ID V

en

do

r Io

TV

en

do

rs

N/A Digi Digi N/A Digi Digi JDE iMonnit iMonnit iBright Coris N/A

ShippingDistribution Restaurants

We will capture ERP, RFID, and IoT temperature data, map to GS1 events and formats, and send to Blockchain

+N/A N/A

PPP

= “proactive” temp monitoring

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