As a powerful trust tool, blockchain allows parties to exchange data and services or make payments with a high level of trust. Trust and transparency are essential for the proper functioning of the food market and building trusted supply chains.
Recent studies suggest that the level of market distrust correlates with the level of well-being. Building a trusting relationship is crucial both to maintain the business connection and reputation of the company and to make the lives of the customers better
Contemporary food supply chains are complex networks of connections affecting dozens of companies in different countries and regions. Due to differences in regulations and management, and even the notion of transparency, supply chains lack traceability. The opacity of supply chains questions the quality of food and its real value
and leads to distrust among the partners within the supply chain and doubts among end consumers. Opacity and distrust cause serious problems with food falsification and product safety in the supply chain, which causes problems with the quality of the final products. Even if one component in the supply chain raises questions, the entire chain is devoid of trust. This endangers end consumers and harms the reputation of all the companies in the supply chain.
Trust is a prerequisite for transparency, and truthful and honest transparency can further build trust. The more companies invest in their B2B relationships, the more they rise to a relationship and collaborative trust. The more information companies share, the more transparent their strategic relationships are. There are different levels of maturity in supply chains, and it takes time to develop them. Companies open some information immediately and reveal more sensitive information later. It is basic data, information about transactions and orders, internal information about movements, the state of warehouses, up to confidential internal data. There are three types of 10 times more effective
in reducing transaction costs over time. Managers seeking to improve the efficiency of their IOR can succeed if they work competently
, but they can do even better by building transparency and honesty. It forces companies to improve data management and look for technologies to enhancing transparency and trust.
Trust is one of the things we can expect from blockchain implementation. Real trust arises when numerous independent participants keep their copies of important information. And distributed blockchain systems are created for that. Parties involved in the transaction can see the data and make changes. The data of all transactions is always stored in the ledger, which means that no one will be able to edit or deny any event.
In other words, blockchain excludes the possibility of fraud since all data is open to participants. The management is essentially distributed among the participants, so the risk is minimized. This is the perfect definition of trust. These opportunities allow companies to rethink the entire business system, as many contractual obligations are fulfilled through software code. Due to credible options in the registry, the cost of vetting potential partners will be drastically reduced, many disputes will cease to arise, and the range of participants in the economic process will increase dramatically.
However, so far, there have been few successful implementations of blockchain technology
in the supply chain. Still, there is not enough data on the obstacles in inter-organization settings of the supply chain.
On the one hand, blockchain improves the transparency and security of information, sharing and credibility of the data, and performance. Both people and companies need constant supplies of safe, affordable nutritious products to meet their everyday needs, protection from fraud and terrorism.
On the other hand, there are barriers such as uncertainty about the need and maturity of technology, regulatory and privacy issues, and there is still an umbilical cord between cryptocurrency and blockchains, and we need to separate them to move forward.
Optimism in the face of novelty and uncertainty about new technologies is not a new phenomenon, but it does affect the economy. Most companies need more use cases that would prove and demonstrate the effectiveness of blockchain. It is necessary to have patience because its implementation can take decades, but the implementation itself will lead to unprecedented social changes.
Blockchain reduces costs, reduces risks, promotes new business models, and improves transaction efficiency. Food market needs a transparent technological environment for collaboration, where the responsibility and work of each participant will be visible. Thus, food supply chains will become trustworthy and secure. Blockchain will significantly increase access to the international market for new entrants and make inter-organizational relationships stronger and easier for building.