Although it doesn’t show up on a balance sheet, a company’s brand is perhaps its most valuable asset. When a customer purchases a favorite brand, it doesn’t matter if the product is made around the corner or around the world — they know what to expect, every time. Successful manufacturers know this, and they understand that it’s not just the quality of the raw materials that make up their product, it’s also the reliability of their supply chain.
And the supply chain is only getting more complex. With increasing globalization, manufacturers already struggle to manage working with vendors in different time zones, speaking different languages and dealing with different global regulations. As manufacturers increasingly rely on digitization and automation, we’re certain to see the combination of blockchain and smart contracts playing a significant role in protecting trade secrets and ensuring quality and uniformity throughout the entire ecosystem.
Blockchain is the technology that upholds digital currency like Bitcoin, and it enables digital information to be distributed but not copied. Smart contracts are self-executing contracts where agreement terms between the buyer and seller are written directly into lines of code. This article will highlight select features of both blockchain and smart contracts and how they could work in a food manufacturing environment to protect trade secrets, brand attributes and ensure quality during production.
A Bar Is Born
It doesn’t matter if you buy your favorite candy bar (let’s call it JubilationBar) at a movie theater or the grocery store; it tastes incredible. Sure, you could try to make one at home. It can’t be too hard — the ingredients are right there on the label.
But it’s not that easy. That’s why it’s a trade secret.
There’s a lot more that goes into that candy bar than just raw materials: the quality and quantity of ingredients, the order in which they’re combined, the temperatures for the various steps, the cooling processes — you get the picture. Perfecting the Jubilation Bar recipe took a lot of trial and error. And that was just to create one bar. Ensuring that it gets manufactured consistently in co-manufacturing environments across the globe is tricky. It’s also crucial to the future of the company. If a Jubilation Bar isn’t exactly right, the manufacturer doesn’t want their label on it. They’ve spent a lot of money building that brand — it’s a promise of quality and consistency (and, well, jubilation).
Blockchain and smart contracts can help.
Let’s add to the picture that a large part of JubilationBar’s brand promise revolves around being environmentally conscious — their customers love it. To keep their corporate promise, the company’s corporate responsibility office has worked in tandem with the SVP of supply chain and the chief revenue officer to ensure that the production of the sugar that goes into every bar is harvested ecologically and that wetlands are protected. In order to ensure best practices are met, they’ve partnered with Wetlands International and purchase wetland credits to offset any adverse effects of each harvest. These credits are bought on a wetlands credits marketplace that is built on the blockchain. Because of the trusted, transparent distributed ledger of the blockchain, certified wetlands credits can be added to the marketplace where they are subsequently purchased, assigned and retired. JubilationBar’s promise of corporate environmental stewardship is kept and the ecology of the supply chain is supported for continued growth.
“It’s gotta be the nougat.” JubilationBar aficionados have tried to recreate the magic of the bar’s nougat in kitchens across the globe, but to no avail. That’s because the secret to JubiliationBar’s nougat is the precise mixture of almonds, egg whites, roasted vanilla beans, cardamom and orange zest. To keep their trade secret a secret, all vendors are on a need-to-know basis. Each work on their own part with no knowledge of the others involved. Because multiple vendors are employed, the timing of delivery is crucial, as ingredients must be fresh every step of the way. That’s why every shipment is tracked and monitored in real time on a blockchain built to coordinate deliveries to arrive at the same time. Data from the shipping manifest starts the chain on each leg of the journey. Every truck’s GPS is recorded at regular intervals, and proof of delivery is registered on an immutable ledger. Once written, the data cannot be changed. If a supplier is late, there’s a verifiable record of it.
Every bean that goes into a JubilationBar is roasted to perfection. The key word there is perfection. To achieve that world-famous taste, 30 kg of beans need to be roasted at 175° C for 8 minutes and 23 seconds. The beans must then be immediately cooled on a chaff collector tray and cooled with a fan strong enough to bring the beans to 23° C in no less than 7 minutes.
Jubilation’s team has written code for a smart contract that tracks the process (time, temperatures, weight) to ensure uniformity regardless of the location of the roaster. The roasting process for a JubilationBar is only allowed when agreed upon pre-determined parameters are met. Each of the key data points is written on the blockchain directly from the roasting machine’s USB interface. If specifications aren’t met, the offending batch is scrapped (and used for other purposes). This creative use of smart contracts ensures that the vendor only gets paid for the perfect roast.
Look For The Friction Points
The best predictor of where new technology will be deployed is where there is friction. Anywhere time is lost, energy is wasted and resources are spoiled is ripe for innovative disruption. The best technology doesn’t simply make products faster or more efficiently, it also makes products better for consumers, for the manufacturer and for the planet. Blockchain and smart contracts introduce another wave of innovation that brings long-term potential to formula-based products.