When a barista pours a cup of coffee, that act is the end result of a long and complicated supply chain. The coffee supply chain is an incredibly complex global network that could be on the verge of disruption. This article will examine how Blockchain technology can revolutionize the supply chain behind your daily latte.
How the Blockchain works
When most people think of the Blockchain, they think of Bitcoin and other crypto-currencies. The Blockchain is actually the technology underlying crypto-currencies and can be difficult to comprehend.
The simplest definition of the Blockchain is a distributed digital ledger that is publicly accessible. A Blockchain ledger records economic transactions that are continually reconciled by members of the network. This means far greater accountability and security because there is no central authority that can control the ledger or be compromised by hackers.
While most people think of “economic transactions” involving crypto-currencies, those transactions can be real estate transaction, foreign aid transfers, or supply chain movements.
How the Blockchain can improve the supply chain
Depending on the product, the supply chain can require many transfers of raw materials across different countries. Those transfers also require the circulation of invoices and other paperwork among intermediaries and there can be limited transparency for the end consumer. The Blockchain can solve these problems by introducing greater efficiency and transparency to the modern supply chain.
Blockchain technology can create ledgers to record the movements of every batch of coffee beans and determine the exact point of origin. Wal-Mart already uses the Blockchain to support its inventory optimization software and determine where each cut of pork sold was sourced, processed, and stored on its journey to a store.
Unilever is currently exploring how the technology can support the supply chain planning software in its tea business. Better inventory management will allow managers to create more accurate supply forecasts and more closely meet demand. Greater accuracy means lower costs and less waste throughout the supply chain.
Starbucks and the Blockchain
The Bean to Cup pilot program will allow Starbucks to add greater transparency to its supply chain. Working with farmers in Costa Rica, Colombia, and Rwanda, Starbucks hopes to develop a ledger to log and share data throughout its supply chain.
Both the firm and farmers would have access to this ledger, and Starbucks hopes the program, which will roll out over the next two years, will give farmers greater financial independence.
Starbucks believes that if successful, the Bean to Cup program will bring “traceability and trust to the next level.” This program will also allow for more comprehensive inventory management and more accurate forecasting since raw materials can be tracked in real time.
The Blockchain is an incredibly powerful technology that has exciting potential for a variety of different fields. The retail supply chain software of the future will be more secure, transparent, and accountable. If the pilot program is successful, Starbucks and other coffee companies will be able to create much more accurate and iterative supply chain models.
Bitcoin may attract a lot of attention, but the most incredible Blockchain-powered advances are yet to come. With advancements happening every day, expect to see more from this industry very soon. Vanguard Software prides ourselves to keep up with the latest advancements in supply chain and blockchain.
If you want to learn more about blockchain, feel free to contact us today.