Why is blockchain exciting? Data Sharing.

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2 Blockchain Basics 2

3 Why is blockchain exciting? Data Sharing. Most of the excitement about blockchain is really just excitement about the possibility of sharing data across company lines For some entire industries, this is an unfamiliar concept. For industries where data sharing is familiar and interesting, blockchain presents a sexy way to talk about it and to raise awareness of the need for data sharing across organizational silos. 3

4 Relevant parts of a public blockchain Blockchains are shared databases of records that can never be changed afterwards (immutable) They commonly use distributed ledger technology They are decentralized and replicated (not merely distributed) No one organization controls governance of the data or the process of validation Validation of the data is commonly resolved through consensus or proof of work They may have stored procedures to enforce validation rules for data and for transactions These are also known as smart contracts and are independently verifiable by any participant They can support a cryptocurrency This is the most widely used implementation of a blockchain today This might be useful if database transactions involve payment, but isn t as relevant for supply chain applications They may offer reward systems Often referred to as mining 4

5 Centralized vs. Distributed vs. Centralized Decentralized One database, one owner Not resilient to organizational failure Not resilient to technical failure Distributed One Owner - Many database copies, one owner Router Master Slave Slave - Resilient to technical failure - Not resilient to organizational failure Decentralized - Many database copies, many owners, no one master Owner 1 Owner 2 Owner 3 Owner 4 Node Node Node Node - Resilient to technical failure - Resilient to organizational failure 5

6 Enterprise Value of Blockchain A blockchain is just a unique ledger of transactions that prevents users from changing data or deleting data An enterprise blockchain is generally an index that references off-chain data that will be maintained in traditional data stores Helps keep the size of the ledger reasonable Enables fast sharing of a common truth about events and contracts Data that is familiar to supply chain business applications could be shared in an enterprise blockchain ledger Event data, transactional data, and even master data Pointers to data (or hashes of that data) may also be shared in an enterprise blockchain ledger The ledger is also able to prove through pointers and hashes that the off-chain data wasn t tampered with 6

7 Blockchains and traditional data stores Owner 1 Owner 2 Owner 3 Owner 4 Node Node Node Node EPCIS Event Rep. Data Store EPCIS Event Rep. Data Store Enterprise Blockchain ledger - Access and permission control layers - Pointers to off-chain data and hashes of offchain data - Some relevant pieces of data needed for validation and business processes and smart contracts - Identifiers based on GS1 keys (party, location, things, etc) likely obfuscated - Data stored in accordance with GS1 standard data structures Off-chain resources - Access and permission control layers - Event, transaction and master data stored in accordance with GS1 standard data structures (such as EPCIS Event Data Repositories) - Identifiers based on GS1 keys (party, location, things, etc) - Other data resources that may be needed (documents, images, files, etc) 7

8 a New Era of Food Transparency Powered by Blockchain Walmart Tejas Bhatt Sr. Director Food Safety Innovations 8

9 Food System is Changing 50,000 15, s 2000s 2020s 9

10 Spinach Outbreak 199 Cases, 31 HUS, 3 Deaths, 26 States E. coli

11 Why a digital, transparent food system matters? f o o d b o r n e i l l n e s s The cost of foodborne illness in the U.S. alone ranges from $55 - $93 B t r a c e a b i l i t y Inability to track & trace results in larger outbreaks & implicates safe products f o o d f r a u d Food fraud incidents cost the industry $10-15 B annually r e g u l a t o r y r e q u i r e m e n t s Food Safety Modernization Act & enhanced record keeping requirements f r e s h n e s s & f o o d w a s t e One -third of all food goes to waste. In the U.S., consumers throw away $29 B annually t r a n s p a r e n c y Leads to accountably, responsibility, & TRUST. Consumers are demanding it. Source: WHO, Ohio State Study, Markets & Markets, Forbes 11

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13 Farm to Store 13

14 Walmart IBM 14

15 2.2 Seconds instead of 7 Days 15

16 Beyond Traceability - Transparency 16

17 Transparency Anonymity 17

18 FOCUS on the CUSTOMER 18

19 SCALING TRUST in the food system with blockchain 10 MAJOR BRANDS 1.1M FOOD PACKAGES TRACKED 20 FOOD SKU S TRACKED 43K TRACEABILITY EVENTS Feb

20 safe, affordable, & sustainable food, so people can live better. Walmart 20

21 Pam Erb Vice President Supply Chain 21

22 Blockchain Learnings & Benefits Blockchain allows for quickly connecting data across trade partners but Data must be available, consistent and good quality (GS1 standards) Traceability is at the pallet-level; not case or unit Internal business processes must align to industry standards Efforts to collect, standardize and improve our data to enable blockchain are required for other future initiatives and to drive efficiencies (digital, e-commerce, IoT, etc ) 22

23 Wegmans Current State: Farm to Consumer Blockchain Example Grower Supplier DC Store Consumer Location Commodity Source Date Time PO # GTIN Quantity Pallet Barcode Pallet Details Location Lot/Batch EDI 850 EDI 856 PO # Wegmans Item # Quantity Pallet Barcode Lot/Batch Receipt Event Stocked Sold Purchase Date Location SKU Data Currently Available Data Incomplete Data Lacking EDI

24 Wegmans Roadmap GS1 Item & Data Sync WMS Standards & Compliance: CAO/SPF Projects EDI & Labeling Vendor Guide Vendor Portal Data Quality: MDM/PIM Project Item Data Management & Accuracy Governance Quality & Efficiency: WMS Updates & QA System Lot/Batch/Quality data & tracking Pre

25 Standards and Interoperability 25

26 Standards are an important foundation 26

27 Key Takeaways Companies your education on blockchain technology and how it may help lead to improvements in efficiency and security in the food supply chain Focus on implementing the necessary core fundamentals for traceability, including product and logistics identification, as well as physical event data sharing to lay the groundwork for exciting technologies like blockchain Participate in industry discussions on interoperability. The evolution of blockchain to a fit-for-purpose, scalable supply chain solution will require industry to come together to develop requirements for management, governance and implementation roadmaps. 27

28 Thank you! 28