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IBM pilot to enable blockchain, IoT for supply chain management

An IBM executive explains why the supply chain sector is embracing blockchain and Internet of Things technology.

Having spent much of her career on digital transformation initiatives in the financial services sector, IBM vice president of blockchain Brigid McDermott is familiar with how rapidly that sector adopts so-called bleeding-edge technologies. And it’s a proclivity that is proving true as it relates to financial services’ willingness to pilot and adopt blockchain-related technologies.

But another industry, arguably more cautious in its approach, is eager to latch on to blockchain technologies early in their development as well — global supply chains.

“The pain that exists is so well suited to the problem that blockchain solves, they don’t want to wait and see what financial services does,” said McDermott. She noted that she has never seen a physical base adopt technology as early on as she has with supply chain and blockchain. “This is what they’ve been waiting for.”

Blockchain solves a missing piece of the supply-chain automation puzzle that has long hindered end-to-end visibility — providing a trusted way for competitors to share data, according to McDermott. With the ability to set different permissions and ownership rights for sharing data, IBM enterprise blockchain technology aims to help erode that hesitancy.

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That’s important not only to enable better traceability across the supply chain, but because in providing a trusted way to share data, blockchain lays the groundwork for organizations to share more of it — paving the way for interesting things to happen with IoT data, McDermott said.

To that end, IBM recently embarked on the next leg of a blockchain technology pilot that aims to provide better visibility into the global food supply chain. The aim is to help distributors identify the sources of food-borne illnesses in seconds, not in days or months as it currently takes. Off the heels of a successful pilot with Walmart, IBM will work with Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Co., Nestle, Tyson Foods, Unilever and Walmart to identify new areas where the global supply chain can benefit from blockchain. By having a trusted ledger to track data, and combine data from different sources, suppliers and distributors can better analyze information to ensure safer food, while driving down the high costs of product recalls, which sit on average around $10 million, according to an estimate from the Food Marketing Institute and Grocery Manufacturers Association. 

The project is a good example of how blockchain and IoT “mutually reinforce” one another, as McDermott put it. When there is a trusted system of record, those involved want as much data as possible, and want to be able to get insight from that data. The proliferation of IoT devices adds another source of data. 

“(Blockchain) is not a panacea. It doesn’t do what IoT does. It doesn’t do what analytics does. What it solves is this problem that has been such an issue — how do we get people to contribute data to do the analytics?,” McDermott said.

Customers can expect IBM to develop more industry-specific and vertical solutions on its blockchain platform, McDermott said, while driving a focus on ensuring that the technology proliferates by focusing on standards and interoperability.

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