Walmart, IBM and Tsinghua University use Hyperledger technology to build a blockchain pilot project to secure the supply chain of China's pork market

Walmart has developed a blockchain pilot project for China's massive pork industry supply chain.

The project was created by Walmart in partnership with IBM and Tsinghua University in Beijing, and is part of two separate and parallel efforts by the Chinese government and Walmart to make supply chain data more accurate and secure.

Paul Chang, head of IBM's global supply chain solutions, explained that the pilot project, once implemented, will also allow Walmart to share in the profits of China's lucrative pork market.

Chang told CoinDesk:

"This is important not only for China, but also for Walmart to be truly successful in the Chinese market. Pork is the most consumed meat in the world's most populous country."

China is expected to consume 54.6 million tons of pork this year, according to the USDA, a slight decrease from previous forecasts due to rising pork prices.

For example, according to a Wharton report last year, pork prices in China are directly linked to food safety issues — something that Walmart's program is targeting.

The pilot was announced today as Walmart launched its new Walmart Food Safety Collaboration Center in Beijing, which aims to increase transparency in China’s food system, including blockchain.

Rags to Riches

To create the pilot project, a Walmart team comprised of supply chain employees, logistics and food safety experts in China partnered with Tsinghua University’s National Engineering Laboratory for E-Commerce Technology.

The project, which uses technology from the Hyperledger blockchain project, is being pitched as a way to ensure the accuracy of agricultural production details, batch numbers, factory and processing data, expiration dates, storage temperatures and shipping details.

Initially, the pilot will run on three nodes, one managed by IBM, one by Walmart and one by a supplier Chang said he didn’t want to name. But to give an idea of ​​how big those suppliers could get, the 15-year supply chain traceability veteran said the industry could save “billions of dollars” when the program scales to 10 nodes.

That’s because by then, every food product sold in Walmart stores will be authenticated and a transparent and secure record will be created using this blockchain system.

Records created on a distributed ledger could also help retailers better manage when products are on the shelf in each store, according to the statement.

A more secure supply chain

Following several reports on contamination in China's food and drug industry, the China Food and Drug Administration proposed earlier this year to adopt measures to improve product traceability.

Although in today's announcement the Chinese government described its push for tighter supply chain controls as a 'critical step' to eliminate pollution, increased regulation is often accompanied by higher prices. In May, a report in the South China Morning Post said that China's regulation of infant formula was seen as increasing competition and reducing incomes.

With estimates that $1 trillion could be saved by moving global supply chains to blockchain, Walmart aims not only to help China create a safer food market but also to cut costs.

Tracking Mango Shipments

However, Chang said IBM is making good progress on another effort to apply lessons learned from the Wal-Mart project to an entirely different industry.

He described an ongoing, yet unannounced project to transport mangoes on a 'small scale' but 'very extensive in terms of the number of organisations involved'.

Chang said:

"We are already planning to launch a multinational program to track mangoes from South America to the United States."

He expects IBM and its competitors in the blockchain supply chain space to be able to move from one commodity to another.

He concluded:

“That’s the missing link that I think will ultimately encourage the industry to adopt this technology for the benefit of consumers and transaction efficiency.”