• September 6, 2021
  • Admin

Food supply chain

The procedures that explain how food cultivated on a farm get at the dinner table are referred to as the food supply chain. It covers the production, administration, use, and disposal of food products.

A food stuffs are transported from producer to consumer throughout this project, and the money paid for the item is distributed to people who work at various levels of the chain.

To function, every aspect of this activity necessitates the use of artificial resources or raw materials. Because each stage of the supply chain impacts the others, it's critical to streamline the entire process to avoid high costs or inefficiencies.

The Importance of the Food Supply Chain

The objective of the grocery store and restaurant sectors is to obtain high-quality food at a cheap cost from the supplier so that they may still make a profit and give consumers competitive rates.

It improves consumer satisfaction, brand loyalty, supply chain efficiency, and everyone's happiness. To achieve these goals, the grocery and restaurant sectors must monitor each level of the supply chain.

When food is lost or wasted throughout any phase of the supply chain process, problems develop. Unfortunately, scientists estimate that about 30% of all food produced is thrown away. It has a detrimental influence on food security, the economy, and the environment.

Food loss and waste can reduce the amount of food available on the market, resulting in higher costs and less access to products for low-income people.

Furthermore, if food quality deteriorates to the point that food must be sold at a lesser price or thrown away, it can influence farmers' and producers' well-being and livelihood.

Food loss and waste may be reduced by using food management to coordinate and supervise all aspects of the food supply chain ecosystem. Food management entails overseeing the supply chain to guarantee that all goods offered are of good quality, taste, and safe.

The goal is to ensure that any items supplied to shops comply with the requirements set out by health authorities and government officials.

Food inspectors are in charge of preventing and detecting contamination, leading to food loss, increased costs, and food insecurity. All stages of the food supply chain in Australia may suffer if good food management practices are not implemented.

Food supply chain management 

Proper food supply chain management guarantees regulatory compliance and improves consumer food safety. Higher costs, worse quality goods, and even food illness are consequences of a poorly managed food supply chain tracking.

A company's reputation may be ruined if only one link in the supply chain breaks down.

Problems in the food supply chain 

As technology advances and consumer and government demand for safe and fresh food grow, the food supply chain evolves. Manufacturers, farmers, wholesalers, and grocers/restaurants have all faced new challenges due to these changes.

Increased visibility for everyone in the food supply chain solution may help with cooperation, information exchange, and fast adaption in the event of a disruption. The lack of visibility and information exchange, including:

Consumer Demand for Traceability

The desire of consumers to have insight into the supply chain process and food safety/nutrition information is known as traceability.

Companies who realize the significance of this new demand may profit financially by ensuring product traceability. Unfortunately, guaranteeing the highest food standards and traceability simultaneously comes at a higher expense for restaurants and supermarkets.

However, the return may be worthwhile since this section of food-conscious customers appears to be growing.

Fragmented Supply Chain

When there is a lack of good communication between supply chain actors, it is difficult for grocers/restaurants to give traceability to customers. Even the most basic things employ many people all over the world who have no idea what each other is doing.

To increase traceability and assure food safety, food supply chain approaches stakeholders should prioritize and solve the fragmented nature of the process. It would also allow manufacturers to grasp their products and accept full responsibility for them.

Increased Regulations

Regulations can safeguard food-chain employees and assure a fresh product of high quality, but they can also generate a slew of issues. As rules become more stringent, shipments may be delayed as inspectors take longer to complete their tasks and guarantee compliance.

Food Fraud

Unfortunately, many shady businesses produce counterfeit goods and utilize shipments as a cover to transmit illicit contraband. Though this is primarily a European issue, it has spread to other parts of the global supply chain.

Lack of Honesty

The globalization of food supply systems has gone high to dishonest supply chain players. Many various institutions throughout the world have more latitude to perpetrate fraud and conceal faults. Food illness, a destroyed reputation, or even death can all come from a lack of honesty.

Food and beverage supply chain 

The fast speed of technological advancement in today's world adds to the daily supply chain complexity that food and beverage firms must deal with, combined with global visibility and volatility.

It's useful to categorize firms by where they lie on the farm-to-table spectrum to provide relevant advice on making the greatest bets in new technology investments. This aids in the classification of some of the technological alternatives available to each sector.

A web strategy is a relevant tech area where all supply chain management in food and beverage organizations should invest, from farming operations to retail chains. It makes it easier to capture the customer's voice, create brand loyalty, and track consumer trends and viral themes, which might indicate sudden shifts in product demand, either up or down.

Multiple sides of the value chain are putting pressure on food and beverage producers. The continuous change in the industry's power balance from producers to retailers is perhaps the most significant pressure source. The ongoing consolidation of grocery and other retail channels is concentrating more and more market share and influence in fewer retail chains, giving them more ability to negotiate with their food and beverage suppliers on pricing, service, and supply chain technology conditions.

Food and beverage firms are vigorously vying for growth, market share, and profit while confronting this pressure from their retail customers. Companies are still vying for tiny gains in market share, typically at the expense of effective marketing and new product development costs.

It's no surprise. Therefore, food and beverage executives regard supply chain management as a critical business strategy for surviving in this tough climate. Supply chain initiatives may save firms tens or hundreds of millions of dollars and provide them a competitive edge. While sustainable food supply chain has several components, food and beverage executives are looking for considerable benefit from execution-based supply chain management.

Sustainable food supply chain 

As the population grows, the need for more food grows too, which necessitates a greater supply of high-quality raw materials for the food sector. However, there is worry on the supply side about how the sector will respond to rising demand in terms of quality and yield improvements, which are influenced by climate change, water scarcity, land use, and reduced returns for agricultural farmers.

Food supply chains are complicated because they involve several players at various levels, from those who produce and to those who add value to the product (processing) and those who sell to the next level (wholesale and retail). Complexities arise when there are many various crops and food kinds, each with its own separate and sometimes dispersed supply chain. Furthermore, customers are becoming increasingly concerned about where their food originates from. They are paying close attention to whether it is produced ethically from farm to fork, both in terms of social justice and food safety.

Food supply chains originating in or originating in developing nations are more complicated because they frequently involve smallholder farmers with less than two hectares, limited access to information and markets, and long travel distances. These difficulties need a high level of intermediation, which raises prices, jeopardizes quality, increases food losses and waste, and, as a result, lowers producer earnings, all of which have a direct influence on food supply.

Food firms are urged to engage in sustainable farming methods in their supply chains. It may help maintain a consistent food supply while also opening up new options such as brand enhancement and fulfilling new market demand. Many food corporations believe that affecting primary production, such as investing in improving farmer conditions and involvement, has the greatest influence.

Food supply chain management software 

Food distributors don't simply utilize one sort of back-office program; they employ a variety of them. As a result, the phrase "food distribution software" refers to a wide range of programs that help with anything from ingredient costs (for food distributors who also manufacture) to dynamic expiry date estimates based on data from sensors put in refrigerated vehicles.

The majority of software solutions for food distributors are classified as supply chain management (SCM) software. Food distributors can buy stand-alone apps for diverse supply chain needs or invest in an Enterprise Resource Planning (ERP) system that incorporates several SCM applications. 

Food distributors, in particular, should think about investing in a distribution ERP system. ERP providers have tailored their products to specific industry verticals, such as manufacturing and retail. Distribution ERP systems are stripped-down solutions that remove modules that distributors won't utilize while increasing flexibility in order management and warehouse management.

Furthermore, food distributors in sectors that deal with fresh and perishable goods should look at ERP systems that focus on food traceability or tracking inventory as it moves from one supply chain link to the next.

The food supply chain solutions ensure that your inventory can be monitored upstream, back to your own suppliers, and all the way down to the merchants' shelves. In the event of a recall, the FDA requires that you be able to track inventory one link up or down the chain, but end-to-end traceability may boost customer trust and aid with damage management in a disaster.

 

How Algorand’s approach to solving the Blockchain Trilemma adds value to Authentium’s vision of decentralizing the agriculture supply chain globally

 

28th August 2021 - Harman Puri

 

Back in 2019 when Authentium founder Phil Talbot and Algorand founder Silvio Micali met at a blockchain conference in Australia, little did they know that their individual visions would become one of the greatest synergies - revolutionizing the global agriculture supply chain.

While Algoran’s focus was to be a sustainable Blockchain platform that aspires to truly decentralize the world, Phil’s vision for Authentium focussed on the real financial pain of farmers by introducing innovative decentralization business models that will transform the agriculture industry.

However, Phil’s vision was facing the same barriers that have restricted the farming industry to leverage advanced technologies for years now, a sustainable, simple-to-use viable platform.

Even though Authentium knew the appropriateness of Blockchain, concerns such as providing a decentralized solution without sacrificing security or throughput were a major challenge. In essence, the agriculture supply chain requires a solution that is highly scalable to accommodate the high volume of interactions, highly decentralized to make it fair for all stakeholders, and highly secured to ensure that the network is not manipulated.

If we take a close look at the features of the Algorand Blockchain platform, Algorand becomes a natural fit for Authentium.

Phil Talbot (Left) and Silvio Micali (Right) - Sept 2019

What you see in this picture is a paradigm shift, that can impact our lives no matter what we do. For a farmer, it will introduce a fair ecosystem with more opportunities and financial freedom, for everyone else, it will ensure that there is always the right amount of food and the right quality of food on their tables.

Let us understand why Blockchain in the agriculture supply chain is such a hype and how Authentium and Algorand together achieve this revolution.

Need of Blockchain in Agriculture supply chain industry

Almost a third of all food produced in the world is wasted in the food supply chain. While underdeveloped countries face issues in delivering high-quality graded products, developed countries, such as the United States, are dominating the race in terms of food losses and waste.

Nevertheless, food losses and waste, climate change, and drought aren't the only issues preventing the agriculture supply chain and farmers from achieving the necessary justice.

When it comes to the sufferings of farmers, they mostly remain unreported due to widespread corruption among middlemen, as well as a lack of transparency and accountability. The COVID-19 pandemic has severely weakened global food supply chains, necessitating solutions to strengthen the resilience of global food supply chains through increased efficiency in produce production, consumption, and delivery.

In comes Blockchain Technology!

Startups from around the world, Fortune 500 organizations, and governments have all begun experimenting with this intriguing technology in their respective industries. Blockchain has proven to be the missing piece of the puzzle for these industries to taste the true power of digitalization and decentralization.

Specific to the supply chain industry, the usage of blockchain has greatly enhanced transparency and traceability while also lowering administrative expenses.

In terms of the potential benefits for agriculture, blockchain allows peer-to-peer transactions in the agriculture space to take place transparently and without the use of middlemen. Furthermore, blockchain promotes the acquisition of valuable data by enabling transparency among all involved parties and recording every step in the product's value chain as an entry in the immutable ledger.

The result? farming becomes smarter, enhanced, unbiased, global, and less vulnerable.

Authentium - Answer to the concerns in the farming industry

The world's first decentralized open-source community, Authentium, intends to transform agriculture by decentralizing the global food supply networks.

Developed on the Algorand Blockchain, it allows producers, consumers, and other entities involved in the farmed product lifecycle to construct their own digital ecosystem for smooth communication, transfers, and agreements. It not only gives farmers more visibility but also builds a trustless network that makes transitions seamless.

However, concerns have often been raised over Blockchain’s limitations, raising questions on its sustainability. After all, the farming space needs more than a momentary solution.

More specifically, the concept of Blockchain trilemma has a significant role to play as a barrier to Blockchain’s adoption in the agriculture supply chain industry.

It begins with the question, “Is it possible to have decentralization, scalability, and security all at the same time with blockchain?”

While blockchain is undoubtedly the technology of the century, every coin has two sides. Bitcoin, for example, has scalability issues and hefty transaction fees. Ethereum, on the other hand, jeopardizes decentralization by giving wealthy node operators more control over the network.

For the agriculture supply chain, Blockchain platforms like Ethereum become a temporary solution. For instance, due to the high gas fees and low transaction throughput on Ethereum, many applications are shifting to layer two solutions. However, what they fail to realize is that layer two has its own disadvantages such as lesser security or efficiency.

This creates a problem known as the "Blockchain Trilemma," in which the three primary goals of blockchain - security, scalability, and decentralization - can't all be met without surrendering one of them or maybe even two in many cases.

As previously stated, the objectives of Authentium could call into doubt the legitimacy of the blockchain principles and therefore, the blockchain trilemma dilemma into question.

However, this is where Authentium’s underlying technology comes into play!

While Algorand has a plethora of significant features, it is Algorand’s approach to Blockchain Trilemma that adds value to Authentium’s vision of decentralizing the agriculture supply chain globally. 

How does Algorand solve the problem of Blockchain Trilemma?

Both the PoW and PoS consensus mechanisms provide widespread solutions, but they each have their own set of issues. PoW consumes a tremendous amount of electricity and is not that scalable while PoS is not that decentralized and hence not secure.

Since entities in the digital space engage with each other at a rapid pace, scalability is one of the most critical criteria to meet in this fast-paced environment. The purpose of the blockchain, however, is to ensure that the process is not just rapid but also visible, verifiable, and shared.

Algorand addresses these issues by concentrating on the validators, who are tasked with adding new transactions in exchange for a commission.

This is accomplished by picking validators at random from a pool of token holders.

After a single token is chosen in phase one, the network's algorithm automatically selects the next group of nodes who are eligible to validate the block presented by the single token in phase one.

This is just the building block of the Pure Proof of Stake Algorithm, developed by Silvio Micali, which acts as the foundation of Algorand.

Despite the fact that token holders have the option to choose themselves at random, they cannot increase their chances of winning the opportunity to choose themselves at random, which is 50-50.

In simpler words, Algorand works on the principle where the security of the whole ecosystem is linked with the honestly of the majority in the ecosystem, making it impossible for the minority in the ecosystem to manipulate the network.

This is how Algorand is capable of preserving the three principles of Blockchain:

  • Decentralization

Since token holders are given the opportunity to choose themselves at random through a cryptographical lottery, each token holder will have an equal chance of earning a position on the block validation committee. Furthermore, the committee is not permanent and is changed on a regular basis. This additional randomization makes it even more decentralized.

  • Scalability

As it takes only one microsecond to run the lottery and nodes don’t need to wait for other nodes to finish doing something first, Algorand provides scalable blockchain solutions. Furthermore, the whole random selection and validation of transactions take just a few seconds.

  • Security

Only the lottery winners have access to information on the other committee members, and even if they are powerful adversaries, they will be unable to propagate the remainder of the network owing to time constraints.

Algorand’s Impact on Agriculture Supply Chain with Authentium

Farmers in traditional farming must wait 90 days or according to the seasons to collect their due payments. Furthermore, because there are so many intermediaries to validate the transactions, it causes even more delays not to mention the unjustified commissions.

Authentium will ensure that farmers not only receive their due value for their produce but also that payments are made on time. Cross-border payments and a seamless financial system will take on new life with the addition of Authentium's native coin. Creating a decentralized ecosystem inside Authentium and having their own coin can make the whole process even more streamlined.

Final Words

Farming is a living organism that evolves over time, not a static entity. While the decisions farmers must make on the farm are more complex than simply solving a technical problem, solutions to cooperative problems can help farmers grow together.

The basic objectives that Authentium is attempting to tackle are addressed in some of the ways that farmers have acquired over time to solve their difficulties.

Building trusting connections with all parties engaged in farm products, organizing vital financial records, and managing money to confront ups and downs, practices like these, along with the most promising technology, can do wonders for people who were once considered the economy's backbone.