Blockchain could have rescued Europe from looming butter crisis

A number of new sources have recently reported on the threatening shortage of butter occurring across Europe. The price of butter is rising due to an increase in global demand and reduction in production and stockpiles in Europe. Asia relies on Europe for almost all of its dairy and the U.S. expects foreign milk consumption to rise 38% /1/. Technology for the improvement of supply chain management could have likely prevented this looming threat.

What is causing the butter shortage?

A number of factors have influenced the increase in demand including lower health concerns surrounding butter and higher consumption of butter in China. Until recently, butter consumption in China was limited as it was widely believed to cause heart disease /2/. A 2014 Russian embargo on European food products drove the price of milk products down and put many dairy farms out of business, leaving Europe unequipped to tackle the recent rise in demand.

Supply chains increasingly complex with globalisation

It can be seen that the butter crisis has close ties to the growing complexity of supply chains with increased globalisation. Supply chain includes the planning and sourcing of raw material, manufacture of products, as well as packaging and logistic operations for transport to consumers. Supply chain management tracks the process of goods reaching consumers through supply, manufacturing, and delivery. This is to make products traceable, in turn minimising inventory, reducing costs, and improving efficiency.

Supply chains are becoming difficult to manage because modern production and supply processes are geographically dispersed, complicated, and divided into many independent operations.

How Blockchain could help

If individual manufacturers of butter began implementing Blockchain in their supply chain management, the cumulative effect could be the prevention of such a shortage. Blockchain, when paired with tracking and monitoring devices, makes possible the instant recall of information on transport and transport conditions, delivery routes, supply sources, and more. It is possible to record measured values (for example temperature, humidity, and vibrations) and write them into a Blockchain. This makes the entire supply chain process transparent.

These data can be used in risk management to generate reliable forecasts and better control of production planning. To read more about faizod’s vision for a Global Supply Chain for the improved use of resources, click here.

Sources
/1/ http://money.cnn.com/2017/08/09/news/economy/butter-shortage-europe/index.html
/2/ http://www.nydailynews.com/news/world/butter-shortage-major-crisis-europe-article-1.3397156

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