How Walmart Uses Blockchain in Supply chain to dominate retail | Supply chain Management Case study

Summary

In 2017, Walmart, in collaboration with IBM, explored blockchain technology to improve its supply chain transparency and food safety. Pilot projects tracking pork in China and mangoes revealed significant benefits, including faster traceability and enhanced trust with customers. Despite skepticism and challenges related to supplier adoption and transparency risks, the initiative demonstrated that blockchain could streamline operations, reduce recall times, and establish Walmart as a leader in retail technology. With a commitment to innovation, Walmart’s blockchain adoption set new standards for efficiency and trust in the retail industry.

Takeaways

• 😀 Walmart has been a leader in supply chain management but faced challenges in implementing blockchain technology for transparency and efficiency.
• 😀 In 2017, Walmart's director of food safety, Frederck Derti, was excited but cautious about the potential of blockchain to improve food safety and traceability.
• 😀 Initial pilot projects using blockchain included tracing pork and imported animal protein in China, and monitoring Walmart’s sliced mango supply chain, which showed promising results.
• 😀 Key concerns about blockchain included hardware limitations, connectivity issues in rural areas, and the need for advanced software to ensure accurate data collection.
• 😀 Transparency was a major concern; while blockchain could enhance trust with customers and suppliers, revealing sensitive information could harm Walmart's reputation.
• 😀 Walmart’s growth as the largest food retailer in the U.S. required the company to address food safety concerns, particularly after several high-profile foodborne illness outbreaks.
• 😀 Blockchain’s decentralized, tamper-proof ledger offered a solution to Walmart’s supply chain challenges, providing a secure way to trace food products from farm to store shelf.
• 😀 Walmart partnered with IBM in 2016 to explore blockchain for supply chain management, with the aim to reduce supply chain risks and improve food safety.
• 😀 The pilot projects demonstrated blockchain’s ability to trace the origin of mangoes in 2.2 seconds, compared to 7 days without it, highlighting potential for rapid response during food recalls.
• 😀 Despite successes in the pilots, Walmart faced challenges in scaling blockchain technology across its vast supplier network, requiring widespread adoption from suppliers.
• 😀 The implementation of blockchain has positioned Walmart as a leader in retail technology, improving supply chain efficiency, reducing recall times, and building trust with customers and regulators.

Q & A

What was Walmart's primary motivation for adopting blockchain technology in its supply chain?

Walmart adopted blockchain technology primarily to improve supply chain transparency, reduce foodborne illness risks, speed up traceability during recalls, and build greater trust with customers and regulators.

What were the main concerns about blockchain technology within Walmart’s team?

The main concerns were the complexity of the technology, hardware and connectivity issues in rural areas, the need for high data quality, and the potential risks associated with transparency, such as revealing sensitive supplier information.

What were the two pilot projects Walmart launched to test blockchain in its supply chain?

Walmart’s two pilot projects involved tracing pork products in China to address credibility issues, and tracking the origin of sliced mangoes to reduce contamination risks and improve traceability.

How did blockchain reduce the time it took to trace product origins in Walmart’s mango supply chain?

Initially, it took Walmart 7 days to trace the origin of mangoes. After implementing blockchain, the time was reduced to just 2.2 seconds, significantly improving traceability and response times during food safety incidents.

What role did IBM play in Walmart’s blockchain adoption?

IBM partnered with Walmart to provide expertise and support for implementing blockchain technology at scale. IBM’s experience with enterprise blockchain solutions helped Walmart overcome the challenges of adoption and integration.

What were the key benefits of implementing blockchain for Walmart’s supply chain?

Key benefits included faster traceability, improved transparency and trust, operational efficiencies, better coordination across distribution centers, optimized delivery routes, and reduced costs associated with foodborne illness recalls.

Why was blockchain technology seen as a good solution for the fragmented global food system?

Blockchain was seen as an ideal solution because it can digitally record every event in the food supply chain, reducing fragmentation, ensuring data accuracy, and making the supply chain more transparent and efficient.

What challenges did Walmart face in convincing suppliers to adopt blockchain technology?

Walmart faced challenges in persuading all its suppliers, particularly those in rural areas with unreliable internet connectivity, to adopt blockchain. Additionally, suppliers needed to meet high data quality standards and integrate new software capabilities.

How did blockchain technology help Walmart address food safety concerns in China’s pork industry?

Blockchain helped Walmart address food safety issues by ensuring that all pork products were verifiable and traceable, thus eliminating mislabeling and authenticity problems within the Chinese pork supply chain.

What concerns did Walmart have about the transparency blockchain would provide in its supply chain?

Walmart was concerned that increased transparency could expose sensitive business practices or issues with suppliers, potentially harming the company’s reputation, especially in relation to human rights abuses or unethical labor practices.