Walmart (NYSE:WMT) will work with Tsinghua University and IBM (NYSE:IBM) to track the supply chain of pork in China. The retail giant will be using the open ledger technology Blockchain, which originated with bitcoin. Many financial institutions and consumer tech companies have since then embraced this technology. It helps keep records more efficiently. This is the first time Walmart will be using blockchain.
The Chinese government too wants to make the supply chain data more accurate, thereby making the country’s pork safer. Food safety in China is a priority for Walmart as well.
Walmart has developed this blockchain pilot with the Tsinghua Univeristy and IBM.
Paul Chang, who heads the global supply chain solutions of Walmart says that if this pilot is a success, then the business will get a bigger chunk of China’s lucrative pork industry. Speaking to reporters, he said, “It’s not just important for China, but for Walmart to really succeed in China. It is the most consumed meat of the most populous country in the world”.
Pork is Big Business in China
China is the world’s biggest pork market, and it is growing. The Wall Street Journal has reported that the country is importing more than 70 percent of its requirement. In another separate report of the USDA, it was mentioned that 54.6 million tons of pork is likely to be consumed in the country this year, in spite of rising prices. However, there are food safety concerns, and this is where the IBM- Walmart association can help.
The eventual goal of blockchain goes beyond just pork, though. If the pilot on pork supplies succeeds, then it will be used to track other commodities as well.
The Blockchain Pilot
The pilot project in China will work on three nodes. Walmart (NYSE:WMT) will manage one, IBM the second, and the third node will be managed by a supplier that had not been named. Eventually, business will be able to save billions of dollars once the system runs on ten nodes, which is the long-term plan.
For now, Tsinghua University will conduct the academic research, IBM will provide the all-important technology, and Walmart will allow its pork supplies to be accessed so that the meat, as it moves from suppliers to their shelves, can be tracked efficiently.
Walmart says that there are too many steps in the food supply chain in China. So tracking and recording aren’t easy. Blockchain should help.