Walmart Launches Blockchain Pilot to Track Supply Chain Issues

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sourcing_supply_chainTracking issues in the supply chain is about to get easier. At least that’s the goal of a pilot program by the nation’s largest retailer.

Walmart is set to launch a 4-month test of its new blockchain online ledger system early next year. The system is designed to track the pork supply chain in China and produce in the United States.

Blockchain, which originated in the financial services industry, is deemed tamperproof since the database timestamps each player and action along the chain. The technology is designed to minimize errors and identify possible bottlenecks, making for a safer, more efficient process.

“Most supply chains are fairly lengthy so it’s is easy to introduce cheating because not everyone knows all the other players in the chain,” Paul Chang, global supply chain expert at IBM, told the Wall Street Journal. “[Blockchain] reduces the opportunity for fraud or any inaccuracy.”

Walmart has teamed with International Business Machines Corp. and Tsinghua University in Beijing to develop, monitor and evaluate its system. And other major players are considering tests of their own, including Toyota Motor Corp.

A recent survey by Deloitte indicates more companies could follow suit. The consultancy surveyed more than 300 executives with $500 million or more in annual revenue. Of those in the consumer products and manufacturing sectors, 42 percent are planning an investment of $5 million or more in the technology in the coming calendar year.

With more widespread adoption, blockchain could be a valuable tool in settling lawsuits and determining the culprits behind controversies like the fake Egyptian cotton allegations leveled against Walmart last month. In that case, Welspun, the manufacturer of the products in question, has appointed professional services firm Ernst & Young to review its supply chain, a process that could have been facilitated if blockchain technology had been in use.

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