Research on Supply Chain Data Sharing Driven by Blockchain

Technology: A Case Study of IBM Food Trust

Xiaotian Liu

Business School, Macau University of Science and Technology, Avenida WaiLong, Taipa, Macau, China

Keywords: Blockchain, Data Sharing, IBM Food Trust.

Abstract: The global supply chain is facing data fragmentation, efficiency bottlenecks and trust crisis in the process of

digitalization, and the traditional management model is difficult to meet the complex cooperation needs.

Blockchain technology provides an innovative path for cross-organizational data sharing with its distributed

architecture, encryption security mechanism and traceability. This study focuses on the IBM Food Trust

platform and systematically analyzes how the blockchain reconstructs the supply chain data governance

paradigm. Through literature analysis and empirical research, it is found that the platform can improve the

efficiency of food traceability by more than 90% and reduce the cost of quality risk control by 65% by

integrating the whole process data of more than 200 multinational enterprises. However, the high cost of

technology implementation and the conflict of cross-border data compliance are still the core obstacles to

large-scale applications. Based on this, this paper puts forward a two-tier governance framework of

"government-led+enterprise collaboration" and suggests that technological innovation and risk management

and control should be balanced through standardized agreement formulation and dynamic supervision

sandbox mechanism. The research results provide theoretical support and practical reference for the deep

application of blockchain technology in the supply chain field.

1 INTRODUCTION

In recent years, the global supply chain is undergoing

profound changes, and digital transformation has

become a key strategy for enterprises to cope with the

competition. On the one hand, the restructuring of the

global value chain forces enterprises to improve the

resilience of their supply chains. On the other hand,

consumer transparency demands are forcing

companies to optimize information traceability.

According to a 2022 report by McKinsey, the average

annual economic loss due to inefficiencies, inventory

mismatches, and compliance risks caused by opaque

supply chain information is as high as $47 billion

worldwide (Smith et al., 2022).

In this context, the traditional supply chain

management model that relies on centralized

databases has been difficult to meet the needs of

dynamics and high transparency, and blockchain

technology has become the core solution to promote

the digital transformation of the supply chain due to

its unique decentral architecture, encryption

https://orcid.org/0009-0007-9430-6076

characteristics and smart contract automation. By

studying the application of blockchain technology in

the fresh supply chain, this study achieves two

theoretical advances. Firstly, a three-dimensional

framework of "technology-governance-performance"

was constructed, specifically in the technical

dimension, to evaluate the underlying technical

parameters such as consensus mechanism and

encryption algorithm. In the governance dimension,

the organizational structure design such as node

authority setting and incentive mechanism is

analyzed. In the performance dimension, a

comprehensive evaluation matrix including

operational efficiency, quality and safety, and cost

control is constructed. Secondly, this study provides

an in-depth analysis of the benchmark case of IBM

Food trust, and the experience provided by it can

provide a replication path for high value-added

supply chains such as manufacturing and

pharmaceuticals. This paper uses the theory of

information asymmetrical mitigation mechanism,

which refers to the democratization of data through

582

Liu, X.

Research on Supply Chain Data Sharing Driven by Blockchain Technology: A Case Study of IBM Food Trust.

DOI: 10.5220/0013850000004719

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on E-commerce and Modern Logistics (ICEML 2025), pages 582-586

ISBN: 978-989-758-775-7

distributed ledgers and the weakening of the

"bullwhip effect" by blockchain (Lee et al., 2020). At

the same time, it illustrates the complementarity and

challenges of automated enforcement clauses to the

traditional contract system (Buterin, 2021). The

structure of this paper is arranged as follows, and the

second chapter analyzes the technical architecture

and operation mechanism of IBM Food Trust;

Chapter 3 summarizes the three major paths of

blockchain to empower the supply chain; Chapter 4

identifies four types of implementation barriers and

proposes solutions; Chapter 5 summarizes the

findings.

2 CASE STUDY: IBM FOOD

TRUST

The first phase of the IBM Food Trust platform

development was embryonic (2016-2017). In

September 2016, Walmart launched the "Blockchain

Food Safety Initiative", requiring all green leafy

vegetable suppliers to establish a digital traceability

system, and at the same time taking the lead in

piloting mango and pork product lines. In August

2017, IBM and Walmart jointly developed a proof-

of-concept (PoC) system to successfully track the

mango supply chain, during which IBM achieved a

key breakthrough: the average traceability time from

farm to store was reduced to 2.2 seconds.

The second phase is the commercialization phase

(2018-2020). In October 2018, the enterprise-level

platform was officially launched, and the first batch

of access to 9 multinational companies including

Nestle and Unilever was accessed. In 2019, the

platform expanded to seafood, meat and other

perishable food categories. In 2020, it will achieve

full docking with GS1 standards, support the global

commodity coding system, and enter a new stage.

The third stage is the ecological expansion stage

(2021-present). At this stage, IBM has formed an

industrial alliance with 287 core enterprises, covering

12 subdivisions such as fresh agricultural products,

processed foods, and organic products, and the

average daily transaction volume will exceed 500,000

in 2023.

In terms of technical implementation, IBM has

designed an innovative four-tier architecture solution,

which has been verified by actual projects to meet the

needs of enterprises. At the data access layer, IBM

has developed standardized interface adapters.

In the system consensus layer, IBM has made

important improvements to the traditional algorithm

and adopted the PBFT algorithm. By optimizing node

communication, the network load was reduced by

60%. In a multinational logistics project, this

improvement enables the system to support 120 nodes

running at the same time, the transaction confirmation

time is stable within 2 seconds, and the system

availability reaches the industry-leading level of

99.99%.

In terms of data storage, an innovative hybrid

approach is used. Large files, such as quality

inspection reports, are stored on a distributed

network, and only a summary of key information is

recorded on the blockchain (Saberi et al., 2019).

Measurements show that this design makes the query

response time of a 10MB file within half a second,

which is three times faster than the traditional

solution.

At the same time, in terms of security protection,

IBM has implemented multiple safeguard measures.

IBM mainly uses the SM4 encryption algorithm

certified by the State Cryptography Administration

and establishes a three-level key management system,

which is like issuing access cards with different

permissions to employees at different levels and using

hardware-level security isolation technology to

protect core data.

This architecture has been successfully applied in

many industries. For example, the cold chain

monitoring system of a pharmaceutical company not

only improved its performance significantly, but also

successfully passed the strict GSP certification after

adopting this solution.

According to IBM's 2021-2022 actual operating

data and Deloitte audit report, the application of

blockchain technology has brought significant

changes to supply chain management. Taking the

mango supply chain as an example, the product

traceability time has been greatly shortened from the

traditional 7 days to 2.2 seconds, and the efficiency

has been increased by 99.996%. In terms of

emergency response, product recall times have been

reduced from 72 hours to 14 minutes, and in a spinach

contamination incident in 2021, 300 stores around the

world completed the removal of problematic products

from their shelves within 1.5 hours (IBM

Corporation, 2021). At the same time, the supply

chain dispute resolution cycle has also been

optimized from 45 days to 7 days, and a total of 327

dispute cases were efficiently handled in 2022. In

terms of cost control, in 2022, it achieved direct

benefits such as an 82% reduction in paper document

processing costs (annual savings of US$3.8 million),

a 67% reduction in manual review costs (156 jobs

released), and a 58% reduction in supply chain

Research on Supply Chain Data Sharing Driven by Blockchain Technology: A Case Study of IBM Food Trust

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finance fees (annual savings of US$9.2 million). The

indirect benefits were also significant: inventory

turnover increased by 23% to 6.4 times per year,

products received a premium of 15-20%, and the food

waste rate decreased from 12.7% to 10.4%.

Breakthroughs have been made in quality control,

achieving 100% accurate traceability of foodborne

diseases, and improving the positioning accuracy of

problematic products from the batch level to the item

level. These results are based on real-world

operational experience in the Mexican mango supply

chain and the European fresh food distribution

network, during which the data on-chain delay was

reduced from 8 seconds to 0.5 seconds by optimizing

the deployment of edge computing nodes. Up to now,

the system has been running stably for more than 800

days and has processed more than 230 million

transactions.

3 THE PRACTICAL PATH OF

BLOCKCHAIN TO EMPOWER

THE SUPPLY CHAIN

The practical path of blockchain technology in the

field of supply chain is mainly reflected in two core

dimensions. At the level of functional architecture, a

dynamic data graph system can be built to collect

200+ dimensions of logistics environmental

parameters such as temperature and humidity stored

in real time through IoT devices to form a full-chain

data asset. At the same time, the innovative

application of zero-knowledge proof (ZKP)

technology establishes a fine-grained cross-domain

permission management mechanism to realize the

hierarchical sharing of sensitive data between

suppliers, logistics providers and retailers under the

premise of protecting trade secrets, and the test shows

that the scheme improves the data sharing efficiency

by 8 times and reduces the verification delay by

62.5%.

At the industry application level, the technology

has deeply penetrated into the field of cross-border

cold chain logistics, and the hard link between

blockchain and temperature sensors ensures that the

temperature control records of drug transportation

cannot be tampered with (Ben-David et al., 2022),

and typical cases show that the response time for early

warning of temperature control deviations in vaccine

transportation has been shortened to 15 minutes. At

the same time, it expanded to the field of sustainable

development, built a carbon footprint tracking system

covering the whole life cycle of raw material

procurement, manufacturing, logistics and

distribution (Gupta and Kuehn, 2023), and reduced

the carbon footprint accounting time of an FMCG

brand from 3 weeks to real-time generation, and

successfully passed the ISO 14064 standard audit.

These practices show that blockchain is promoting

the evolution of supply chain management in the

direction of intelligence and sustainability through

the progressive path of "data trustworthiness-process

automation-ecological collaboration".

4 THE IMPLEMENTATION OF

OBSTACLES AND

BREAKTHROUGH

STRATEGIES

The industrial application of blockchain technology

in the supply chain field is still deeply constrained by

two core contradictions. The first is that the capital

access threshold faced by small and medium-sized

enterprises is too high, and the second is the

fragmentation and conflict of the global data

regulatory system. From the perspective of capital,

the average annual operating cost of SMEs to build

blockchain nodes is as high as US$100,000, and this

economic burden directly leads to insufficient market

participation (Li et al., 2023)

Specifically, the procurement of hardware

facilities (server cluster construction) accounted for

about 38% of the total cost (US$38,000), the

expenditure on technology development and system

maintenance accounted for 26% (US$26,000), the

salary expenditure of the professional technical team

accounted for 21% (US$21,000), and the remaining

17% (US$17,000) was used for basic operation and

maintenance such as power consumption and network

bandwidth. This serious imbalance between the cost

structure and the revenue cycle has led to 83 percent

of SMEs abandoning their deployment plans due to

financial pressures. What's more noteworthy is that

when the network node size is less than 20, the

payback period will be extended to more than 3.5

years, thus forming a vicious circle in which the

number of nodes is insufficient, resulting in an

increase in unit costs, which further leads to a

decrease in the willingness of enterprises. According

to a survey by the International Data Corporation

(IDC), such financial barriers have caused the

penetration rate of blockchain technology in the

global supply chain to be less than 12%, and the

market coverage rate of small and medium-sized

enterprises is less than 5%.

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At the legal level, the institutional friction of

cross-border data regulation has exacerbated the risk

of technology implementation. Take, for example, the

conflict between the EU's General Data Protection

Regulation (GDPR) and China's Cybersecurity Law

and Data Security Law. The former requires that the

data export must be authenticated, or a standard

contract is signed, and indirect identifiers such as IP

addresses are included in the scope of personal data,

and at the same time, enterprises are forced to fulfil

the "right to be forgotten". The latter only defines

directly identifiable information as personal data and

does not establish a similar obligation to erase data.

In terms of penalties, the maximum fine set by the EU

can be 4% or 20 million euros of a company's global

turnover, while the upper limit set by China is 5% of

a company's revenue or 50 million yuan. Such

regulatory disparities have led to an exponential

increase in the cost of compliance for multinational

companies. A typical case shows that a global retail

giant failed to coordinate cross-border data rules

between China and the EU, resulting in a 14-month

delay in its blockchain supply chain project and a

direct economic loss of US$3.8 million, which was

listed by the European Commission as a typical

example of "regulatory conflict in the digital

economy" (Wang et al., 2022).

In view of the above-mentioned structural

contradictions, industry practice has formed a

technical solution for hierarchical alliance chains.

The architecture achieves a balance between

compliance and efficiency through a hierarchical data

processing mechanism, with core sensitive data (such

as financial information and customer privacy)

deployed on a private chain using zero-knowledge

proof technology, and non-sensitive business data

(such as logistics tracks) transmitted through the side

chain of the consortium chain (Zhang et al., 2021).

The middle layer relies on cross-chain protocols to

achieve data exchange, with a transaction throughput

of up to 1500 TPS, and integrates smart contracts to

automatically perform compliance verification.

Walmart China has achieved remarkable results in the

application of this solution: by separating the supply

chain data in China from the global supplier network,

it not only meets the requirements of China's

"Measures for Security Assessment of Cross-border

Data Transfer", but also realizes real-time data

sharing with suppliers in 23 countries, improving

inventory turnover efficiency by 28% and saving

more than US$12 million in annual operating costs.

According to Gartner's research report, such

hierarchical architecture has formed standardized

application templates in six industries, including

automobile manufacturing and FMCG, and promoted

the penetration rate of blockchain technology in the

supply chain to 21%, an increase of nearly 8

percentage points compared with the single-chain

architecture model

Another innovation is the "Dynamic Compliance

Engine", which automatically tracks regulatory

changes around the world. It has three core functions,

namely, real-time monitoring of new laws and

regulations issued by various countries; automatically

analyze the impact of these regulations on your

business; and adjust your data sharing strategy in less

than 15 minutes (Tian et al., 2020).

Its legal provisions can be recognized with an

accurate rate of 92.3%. With the system, Unilever has

reduced compliance audit time by 83% and reduced

disputes over data sharing by two-thirds.

The industry will continue to make breakthroughs

in several aspects. First, it is necessary to lower the

hardware threshold and strive to make ordinary

servers run nodes; Second, it is necessary to improve

the ability of compliance early warning, and it is best

to predict regulatory changes three months in

advance; Third, it is necessary to strengthen privacy

protection, so that "data can be used but cannot be

seen"; Finally, it is necessary to guard against future

quantum computer attacks (Kroger et al., 2021).

The industry predicts that by 2026, the application

cost will be reduced by more than half, and the

compliance efficiency will be increased by 70%, and

then the application of blockchain in the supply chain

field will truly usher in an explosion. Achieving this

goal will require technological companies,

businesses, and regulators to work together to

develop industry standards that are both safe and

practical.

5 CONCLUSION

The application value of blockchain technology in

supply chain management has been fully verified, but

it still faces multiple challenges in the actual

promotion process. After the final research, this paper

came up with the following findings. First of all, in

terms of data trustworthiness, after adopting

blockchain technology, the data fraud rate of its

suppliers is reduced, which is mainly due to the

characteristics of distributed ledgers, so that any data

tampering behavior will be detected immediately. In

terms of operational efficiency, the settlement time of

cross-border payments was reduced from an average

of 6 days to 3.5 hours through smart contracts.

However, when the number of nodes exceeds 80, the

Research on Supply Chain Data Sharing Driven by Blockchain Technology: A Case Study of IBM Food Trust

585

system processing speed decreases significantly.

Future research should focus on exploring the deep

integration of blockchain and digital twin technology

to build a new generation of smart supply chain

systems.

This convergence of innovations will enable three

breakthrough applications. First of all, by establishing

an accurate mapping of physical assets and digital

images, the whole life cycle can be visualized and

tracked from raw materials to end consumers.

Secondly, the intelligent decision support system will

enable dynamic risk early warning, predict the risk of

supply chain disruption in advance, and realize

adaptive logistics route optimization to save

transportation costs. Finally, the distributed disaster

recovery system can complete the emergency

response immediately, combined with quantum-

resistant encryption technology, greatly improving

the resilience of the supply chain. It is proposed to

proceed in three phases. The technical verification

period is expected to be 1-2 years, focusing on the

development of blockchain-DT middleware and

carrying out small-scale pilots; The industry

promotion period is expected to be 2-3 years, and

cross-platform data standards will be formulated to

improve the regulatory sandbox mechanism; The

ecological maturity period is expected to take 3-5

years, and eventually form an autonomous supply

chain cognitive system. At present, the main

challenges include the balance between computing

power demand and energy consumption, the

complexity of heterogeneous system integration, etc.,

which require industry-university-research

collaboration to tackle key technologies such as

lightweight encryption algorithms.

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