Walmart’s Foray Into Blockchain, How Is the Technology Used?

Walmart is currently making use of blockchain technology to create a food traceability system based on the Linux Foundation’s Hyperledger Fabric. Along with IBM, the retail giant has already tested two proof-of-concept projects to examine its envisioned system. 

The first project deals actively with tracing the origins of the mangoes being sold across Walmart’s stores in the United States, while the other seeks to trace the pork meat being sold via the company’s different Chinese outlets. From an efficiency perspective, the research team at Walmart claims that by making use of this new system, the time needed to trace the firm’s provenance has dropped from seven days to just 2.2 seconds.

So, why all that effort? Well, around a decade back, the world bore witness to one of the world’s most hazardous food safety scandals, which saw massive quantities of milk and infant formula (across China) adulterated with melamine, a white solid that is derived from cyanamide and has fire retardant properties. 

As a result of drinking this contaminated milk, over 300,000 people were severely affected both physically and mentally — with six babies perishing from kidney stones and internal organ damage (with another 54,000 children being hospitalized with associated symptoms).

The point of highlighting this information is that any time an outbreak of this magnitude occurs, it usually takes authorities days (or even weeks) to find the source of the problem. However, enhanced traceability — that can be obtained through the use of blockchain-based ledgers — can save a lot of lives by allowing health care professionals to act more swiftly and protect the livelihoods of farmers by discarding the limited produce that may have come from affected pieces of farmland.

Now, the company claims that because of Walmart’s Hyperledger Fabric-powered blockchain system, the firm has the ability to trace the origins of over 25 products from five different suppliers. In this regard, the firm has even announced that it will soon be requiring all of its vegetable suppliers to adopt this new system so as to enhance operational transparency as well as internal accountability. Additionally, Karl Bedwell, a senior director at Walmart Technology, pointed out:

“Creating a (traceability) system for the entire food supply ecosystem has been a challenge for years, and no one had figured it out. We thought that blockchain technology might be a good fit for this problem, because of its focus on trust, immutability, and transparency.”

Walmart is exploring the Chinese supply chain market

A few months back, on June 25, Walmart China — in conjunction with the CCFA (China Chain-Store & Franchise Association), PwC, Inner Mongolia Kerchin Co. Ltd., and VeChain — created a traceability platform atop the VeChainThor blockchain. 

The announcement was made during the 2019 China Products Safety Publicity Week Traceability System Construction Seminar. In this regard, the platform’s introduction came at a time when Walmart China had already unveiled its first batch of 23 products, which have thus far been tested and launched.

In the coming five to six months, the platform is expected to increase its scalability and encompass an additional 10 product categories — including fresh meat product, rice, mushrooms and cooking oil. On the aforementioned subject, researchers at Walmart believe that its new food traceability system will see traceable fresh meat account for 50% of the firm’s total fresh meat sales and traceable vegetables account for 40% of Walmart’s total sales of packaged vegetables.

From a purely technical standpoint, VeChain's blockchain technology will allow Walmart to seamlessly deploy its traceability strategy and allow for the large-scale use of this decentralized technology. By simply scanning a product, customers will be able to acquire a host of niche data related to their items, including their source (i.e., the original geographic location), logistics processes, product inspection reports as well as other data points of interest.

Walmart seeks to set new industry standards

Around the summer of 2018, Walmart along with nine other big-name companies entered into a partnership with IBM in order to devise an brand-new blockchain ecosystem for tracking its respective food supplies across the globe via the use of a unified decentralized platform called the Food Trust Blockchain. 

Some of the prominent firms currently part of this collective include Nestlé SA, Dole Food Co., Driscoll’s Inc., Golden State Foods, Kroger Co. and Unilever NV. The goal of the Food Trust is to eventually enhance all of the involved companies’ ability to identify issues related to food recalls (especially viral outbreaks).

Related: Blockchain for Food, How the Industry Makes Use of the Technology

In the past, Walmart’s ex-VP of food safety, Frank Yiannas, referred to the aforementioned Food Trust blockchain as being the food equivalent of FedEx’s package tracking system. While many of the parties involved with the Food Trust are competitors, Chris Tyas of Nestlé believes that the firms are working together in order to ”ensure the trust of their consumers.” IBM, meanwhile, has pointed out that the Food Trust has the capacity to store data associated with more than 1 million items — including everyday products like canned pumpkin, chicken thighs, etc.

Lastly, back in 2018 a consignment of E.coli-contaminated romaine lettuce was able to make its way onto the shelves of many grocery stores located across five different states within the U.S. — thereby causing nearly 200 people to be infected with the virus. 

In the opinion of many experts, such a scenario could have been avoided entirely if a tracking system could have been used to pinpoint the source of the infected greens within hours of the outbreak. On the subject, Yiannas pointed out that even if it takes years for the global food market to integrate blockchain tech solutions into their existing frameworks, even small-scale adoption of such platforms can prevent the outbreak of such issues.

Other initiatives

Drug distribution: A few months back, IBM and Walmart announced their decision to partner with KPMG and Merck in order to build a drug supply chain blockchain pilot. Of the aforementioned firms, KPMG was assigned the role of tackling any compliance-related issues while Merck and Walmart will be taking care of all drug distribution-related matters.

To be a bit more technical, with this new system, each drug package can be traced (using a unique identifier key) anywhere within the manufacturer’s supply chain. Not only that, there will also exist an individual record of each transaction related to the various consignments being moved along the supply chain — thereby allowing income tax personnel (as well as other relevant authorities) to gain access to an easy audit trail.

Blockchain-based drone communication system: In August 2018, Walmart filed a patent with the U.S. Patent and Trademark Office in relation to a new drone-based system that encrypts and stores the operational parameters of each of its aerial devices. This information can then be passed on to another drone — which can decrypt, read and configure itself to the newly delivered parameters. Simply put, the patent blueprint lays the foundations for a complex vehicle-to-vehicle communication system for unmanned drones.

Lastly, it is also worth recalling that back in 2017, the retail giant had filed for a patent regarding the creation of a blockchain system that sought to allow unmanned aerial deliveries to take place within the U.S. in a highly systematic manner. 

Walmart is not the first mover

Over the course of the last few years, a number of high-profile companies — such as Anheuser Busch InBev and Alibaba — have begun to make use of blockchain-based systems to streamline their day-to-day operations. 

For example, Budweiser’s parent firm — AB InBev — recently entered into a partnership with U.S. fintech startup BanQu in order to help African farmers accurately track their agricultural produce sales using blockchain technology. The new system allows interested farmers to be directly employed by AB InBev, as a result of which they can gain a more holistic view of their barley, sorghum and cassava sales as well as receive their payments using a simple mobile application.