Walter Stiers from IBM on Implementing a platform for the food-chain ecosystem to provide trust, transparency and provenance. Joint Workshop on Food Risk Assessment Research & Practice 24th November 2017, Wageningen University & Research, Netherlands

1. Implementing a platform for the
food-chain ecosystem to provide
trust, transparency and provenance
November 24, 2017
Walter Stiers
Industry Architect
Walter_Stiers@be.ibm.com

2. Disruption has fundamentally changed
industries and business economics
Fragmentation of traditional value chains
Convergence of traditional industries
Emergence of new ecosystems
New technologies create more transparent value
chains that are easier to decompose functionally
New competitors are emerging that compete in
specific value chain functions across industries,
driving accelerated industry convergence
New types of ecosystems emerge, displacing
traditional industries and underpinning evolution
of seamless sophisticated customer experiences
R&D Operations Logistics Marketing
& sales
Consumer
experience
58%
of global retail executives
feel traditional value chains
are being replaced
44%
of global retail executives
feel boundaries between
industries are blurring
58%
of global retail executives
feel competition is coming
from new, unexpected
sources
Global Ecosystem Survey’,
IBM Institute for Business Value, 2016,
(total sample size n=2156)

3. Blockchain
creates a new style of network
transforming business processes & transactions
3

4. Walmart & IBM are working on 2 pilots around
food traceability & transparency
Pork
Traceability/safety
Mango
Traceability/global trade

5. The Most Important Food Project in China
• secure documentation of key
information on raw materials,
machinery (certifications etc.)
and processing
• create product packages with
electronic bar/QR code
informational labeling for
regulators and consumers
• aggregate products into
packages
• disaggregation of product
packages and re-packaging
for retail stores
• validation of packages to
ensure no fraudulent
replacements or inducing
of counterfeit ones
• visibility of product
packages across the
transport lines
ManufacturerBreeder
(Farm)
Distribution
Center
Retail Store Consumer Auditor
• retrieval of traceability
information during
checkout: easy to use
mobile apps
• checkout transactions
disabled for expired
products (or alarm raised)
• customer ratings and
preferences with regard to
the source of the product
R
E
Q
U
I
R
E
M
E
N
T
S
• end-to-end visibility of
each product path across
the supply chain
• check compliance w.r.t.
machinery, expiry dates,
product quantities, etc.
• certify the supply-chain;
creation of audit records
UNDERLYING
BLOCKCHAIN
PROVENANCE
CAPABILITIES
association of
labeling with
data on Blockchain
product data
aggregation and
disaggregation
end-to-end
permissioned
visibility
authentic
traceability
through
immutability
information
retrieval
in a simple
manner
audit capabilities:
handle changing
regulations through
smart contracts

6. • 5 to 8 years for a mango tree to
mature and bear fruits
• Mangoes grown by small farmers
in Central or South America
• Shipped to a packing house to
get washed and boxed
• Shipped to the US by air, sea or
land (custom border)
• Washed, peeled, sliced and put
into containers in a facility center
• Shipped to Walmart
distribution center
to get refrigerated
• Transported to store,
refrigerated
and put on shelves
SOURCE: Frank Yiannas and Walmart are the source for this slide content.
Walmart & IBM are envisioning a
fully transparent 21st century digitized food system

7. Key Drivers
7
• Regulatory
Requirements
2011’s Food Safety
Modernization Act is one
example of enhanced record
keeping requirements
• Foodborne Illness
The cost of foodborne illness in
the U.S. alone ranges from $55
- $93 B
• Food Fraud
Food fraud incidents cost the
industry $10-15 B annually
Lack of trust in ecosystems prevent participants from sharing information and optimizing effectively
• Transparency
Improved transparency leads
to accountably, responsibility,
& trust. Consumers are
demanding it
• Traceability
The inability to track & trace
results in larger outbreaks and
negative implications for safe
products
• Freshness &
Food Waste
One-third of all food globally
goes to waste. In the U.S.,
consumers throw away $29 B
annually
© 2017 IBM Corporation

8. © 2017 IBM Corporation 8
Today: Our View of the Industry
Data sharing limited to 'one up, one down’
without end-to-end transparency
Multiple data formats & sources
Lack of trusted, easily auditable records
Incomplete
information
© 2017 IBM Corporation

9. Key Challenges
9
• Logistics
• Grower • Processors/Suppliers
The Food Safety Solution targets pain points of all global ecosystem participants – creating shared value
• Regulator• Retailers
• Consumer
• Manual, paper-based processes
• Lack of real-rime information
• Onerous administrative process
• Onerous regulatory record keeping
• Manual, paper-based processes
• Onerous administrative process
• Manual, paper-based processes
• Increasing food waste
• Evolving compliance needs
• Manual, paper-based processes
• Onerous administrative process
• Increasing fines for violations in
ecosystem
• Inability to quickly identify source of
contaminated food
• Lack of easy visibility to food safety
certificates and audit reports
• Authenticity concerns
• Unnecessary testing
• Inability to view and/or trust
food claims and origins
• Lack of timely and accurate
information during food recalls
© 2017 IBM Corporation

10. Food Safety Solution
Overview
10
• Providing end-to-end global
traceability to improve
transparency and efficiency
• Creating trusted connection with
shared value for all ecosystem
participants – including strong
consumer focus
• Leveraging existing standards
(e.g., GS1) and offering connectors
for interoperability
https://www.ibm.com/blockchain/foodsafety/
© 2017 IBM Corporation

11. How Blockchain Helps
The entire ecosystem shares a single trusted source of information on the food system
Retailers
Regulators
Customers
Growers
570M
Food Suppliers
1M
Processors
126K
33K
Logistics
1.9M
600
2.7B
Millions of participants
will view their
permissioned section
of the same
information in a
trusted, scalable
network
TX
© 2017 IBM Corporation

12. © 2017 IBM Corporation 12
Scaling the Food Safety Ecosystem
Increased Impact
Social Media increases the
impact of any issue
Regulations
Increase in regulations on safety &
fraud globally (e.g., FSMA)
Device Proliferation
Even very small growers can
afford a smartphone
Participation
Adoption by leaders:
Early adoption by key
influencers and innovators
Timeline
Shared Value: Value proposition/pricing
resonate for all ecosystem participants
(retailers, regulators, consumers,
growers, logistics companies,
processors, suppliers, etc.) Amplified Value: Analytic tools
dramatically raise the value of the
more complete data setUser Experience: Easy to
onboard and use system
Enterprise Ready: Built for
business usage with security,
scalability, reliability, etc.
Adoption by ecosystem
Industry Trends

13. Global Trade
Digitalization

14. Data challenges in the shipping industry have at least 3 key root causes
A complex system where actors are communicating back and forth and data is stored locally at each actor’s site
1. Multiple data formats
2. Too many peer-to-peer interactions
3. Absence of messaging standard
Incomplete/ inconsistent information
Border delays
Error-prone information
Lack of shipment visibility
DATA CHALLENGES ROOT CAUSES
Producer Consignor Forwarder Carrier Consignee
Declarant Dispatcher Liner AgentTerminal
Authority 1 Authority 2 Authority 4 Authority NAuthority 3
View of the Global Supply Chain

15. An open, extensible
platform for sharing
shipping events,
messages, and
documents across all the
actors and systems in the
supply chain ecosystem.
Important principles
• Detailed information remains
under the control of the owner
• Neutral
• Fault Tolerant
• Everyone can work in their own
systems
Provider of interface:
value-add partners
Event publishers
& subscribers
GTD
Platform
Customs
Dashboard
Logistic actors
internal
systems
Supply Chain
Visibility
systems
Port community
systems
Transportation
management.
Shippers
Authorities
Trade Associations
Carriers
Supply Chain Actors
Terminals
Supply Chain
Management

16. 16
With GTD, the entire supply chain ecosystem shares
a single trusted view of shipping events and
documentation filings
Global Trade Digitization
Paperless Trade Blockchain Network
Export
Inland
Transportation
Port / Terminal
Customs
Authorities
3PL Service
Provider
Packing
List
Export
Declaration
Bill of
Lading
Inspection
Certificate
Commercial
Invoice
Exporter / BCO
Import
3PL Service
Providers
Importer /
Consignee
Inland
Transportation
Customs
Authorities
Port / Terminal
Shipping Information Pipeline
Certificate of
Origin
Dangerous Goods
Declaration
ISF
Not exhaustive list of Events tracked by GTD
Not exhaustive set of documents processed by GTD
Customs
Declaration
Customs
Clearance
Phytosanitary
Certificate
Emptycontainer
pickedup
Startcontainer
tracking
ETAEmpty
containeratinland
location
VGMfilled
Fullcontainer
pickedupfrom
stuffingsite
Estimatedgatein
gateinfullfor
export
ETDcontainerfrom
terminal
Fullcontainer
loaded
Emptycontainer
picked-up
ATAcontainerat
terminal
Containerdischarge
estimated
Estimatedgateout
Gateoutfullfor
import
ETAfullcontainerat
inlandlocation
ATAfullcontainerat
inlandlocation
Sealedremoved
Containerde-
stuffed
Emptycontainer
readyforpick-up
Emptycontainer
arrivedatempty
depot
Containertracking
ended
ETAEmpty
containeratinland
location
Containerstuffed
Containersealed
ATDcontainerfrom
terminal
ETAcontainerat
terminal
Temperatureread
Exportdeclaration
cleared
Fullcontainer
discharged
Importdeclaration
cleared
Containerselected
forinspection
MRNnumber
issued
Container
Arrival
Notice
EUR 1
Available