With initially a silo operation and the search for an optimum for each distinct service, logistics has been transformed under the influence of marketing constraints to integrate different functions within the company. From the 90s, it became a fully-fledged business sector and today appears as a genuinely competitive lever, allowing the management of physical, information and financial flows under the best possible conditions of cost and quality of service. The case of Amazon, which has put logistics excellence at the heart of its customer value proposition underlines this all too well.
In the agri-food system, major distributors are constantly changing to meet ultra-mutualization, the fast development of convenience stores and the highly competitive environment in which they operate:
However, this is not enough. Modern supply chains are confronting with an explosion of complexity and must face multiple parameters: multiplication of supplies, consumer requirements or actors. However, the challenge is to simplify decision-making to favour continuous management of the entire process. This must include more collaboration and sharing between actors with transparent information and higher added-value services (monitoring of product quality, real-time cold chain monitoring, etc.) to achieve sustainable performance.
Agri-food logistics must evolve into a dynamic and interconnected structure to meet demand and build efficient differentiation strategies.
An in-depth transformation is necessary because the current obstacles are multiple (regulations, technologies, maturity, etc.).
As the agri-food production chains are increasingly complex, it is sometimes necessary to cross-check information from ten or so actors in different countries to trace the product’s route.
Paradoxally, demand for more transparency has never been stronger, partly explained by the different health scandals that have impacted this industry and led to an end-consumer’s mistrust.
The global food system is also faced with recurring issues that reveal a lack of traceability and data reliability across the entire supply chain:
With it distributed and decentralized management mode, the blockchain makes transparent, secure and immutable information available for all actors, from the producer to the consumer.
Products information at all stages of the supply chain is stored digitally (data on the product’s origin, treatments received, expiry data, etc.). We can also monitor the storage and transport conditions and thus ensure the best practices of each actor. The data set makes it possible to authenticate a product, avoiding fraud and thus increasing consumer confidence.
Blockchain technology would make tremendous progress in food safety management: as soon as anomalies are detected, withdrawal and recall of products could be made faster. Henceforth, this technology brings significant benefits for each of the three stakeholder groups:
Nonetheless, the paradigm shift proposed by blockchain still raises many questions:
In the agri-food sector, changing of supply sources caused by globalization has created new risks and amplified the consequences of food health problems and related scandals: in terms of public health or brand’s image. The various recent crises have led to consumers mistrust, more aware of possible food health risks.
Securing supply channels is therefore a crucial point for companies. One of the main needs to achieve it is the transmission of reliable data for the entire supply chain.
By placing products quality and information at the heart of their concerns, companies will not only be able to satisfy their consumers needs but also ensure a high added-value positioning.
More reliable food monitoring will enable real-time detection of poor operational practices, possible contamination or optimizing overall process.
All aspects on which brands could communicate on as guarantee of their quality. However, this implies a real change of mind set because it requires collaboration of all stakeholders and more transparency.
*This figure does not include organic products
Beyond a few rare of use that are aimed primarily at creating an innovative image, blockchain technology in the food industry is still quite experimental.
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