You have probably heard about food trust by now:
The obvious use cases are about traceability of food products using block chain about where ingredients have been grown, sourced from. In this use case, this information could also be used to work out perishability dates of food products dynamically.
I was at NRF in Jan 2020 where I had a good conversation with regards to provenance (i.e. the knowledge of product origin) and sustainability with Benedikt Furrer (Nordics CTO), Martin Wolfe (Global CTO, Consumer Industry) & Magnus Johansson (Executive Architect, iX) so thought it would make sense to summarise the thinking here.
IBM can already use satellite imagery and sensor data to track ground water reserves . If you combine that with soil sensors for humidity, weather condition data and other external data, you can predict to a great degree of accuracy the duration for which a specific batch of products grown at a particular point in time can remain fresh. Firstly This can be used to influence pricing decisions in many markets i.e. sustainable products can be priced differently which would work very well in markets like say Sweden which ” first in the European Union (EU) in consumption of organic foods, leads the way in recycling drinks cans and bottles, and gets the highest share of its energy from renewable sources”
The second obvious aspect is the reduction of wastage – if we can accurately predict how long specifc products will remain fresh, then we do need to be conservative with reference to expiry dates and products that may have remained unspoiled but were disposed of prematurely may be sold with sufficient data to indicate that the choice still remains healthy to consume.
Moving away from food, another possible application is in industries that use raw material from forests e.g. furniture. An organisation that owns forest land to grow say timber can now provide sustainability information to the consumers who use products from that material, and consumers can now make informed choices – e.g. “That bookshelf is made of wood from timber grown in sustainable conditions vs the other one is not”.
From a retail perspective, individual retailers can offer a differentiated product over the competition on this basis and marketplaces that are looking to tap into this growing trend may be interested in presenting this information as one of the attributes across the various suppliers supplying products along with price and customer feedback.
Provenance is therefore going to be a key differentiator in defining and providing sustainable products. This could provide a variety of information. E.g. where raw materials are grown/manufactured or say as simple as whether assembly was done using child labour or not. In theory block chain should also make it difficult to fake such information due to it’s peer to peer nature and all of this contributes to letting the consumer make the best choices.
Now what does this have to do with order promising and sourcing?
Like most trends in order management, where there is a growing tendency to connect the ends of the supply chain i.e. the visibility of where the product is manufactured until how it is fulfilled to the customer and possibly returned back – provenance fits nicely into understanding more about the specific product in terms of sustainability and should be treated as another factor into fulfilment cost in order to price them in a differentiated manner as well as to offer differing fulfilment options to the customer.
So if i were to scribble a quick diagram describing this, it would look something like the below:
Customer choices can then be recorded as part of fulfilment and fed back and this may help to drive suppliers move to more sustainable choices thanks to the greater transparency across the network that this brings in. This is likely to be disruptive, but I think it is likely to be an interesting journey to walk through.