Case Study: Blockchain

This case looks at blockchain application Illustrating the Canadlan beef industry. As you read through

the case, think about its focus: product traceability and documentation throughout the supply chain.

The Canadlan Beef Industry

Riley Hudson has been a Beef farmer for over $25$ years. Rlley is a member of$,$ and sits on the executive

board of$,$ the Canadian Cattlemen's Association. Riley runs one of over $59,000$ Canadian farms and

ranches with beef cattle. The average beef cow herd size in Canada is $69.$ Riley currently has $62$ cattle

in the operation. Farms with between $47$ and $122$ cows represent $23\%$ of beef farmers in Canada. They

are all considered to be medium size producers. As such, Riley cannot afford any losses or disruptions

to the business operation. Even the smallest delay or interruption to the operation could result in

significant cost ramifications for the business.

Beef Production and Exports

In $2018$ Canada produced $3\mathrm{.}08$ billion pounds of beef. This equates to $2018$ cash receipts of $$9\mathrm{.}07$

billion dollars. Of that, $$2\mathrm{.}75$ billion or $30$ percent, was generated from beef exports. Most of the cattle

from Canadlan producers are exported to the United States. This market accounts for $74\%$ of all

Canadian beef exports. Canadian beef is also exported off shore. China represents a growing market

for Canadian beef. In $2019$ exports of beef to China exceeded $$60$ million. Demand for Canadian beef

exports to China was projected to grow substantially over the next several years. This export growth,

and the overall projected growth of the industry, was indeed good news for Riley and Canadian beef

producers.

Enterprlse Management Systems

As a commercial Canadian beef producer Riley was required to provide documentation relating to each

and every cow in the operation. This ongoing documentation was a requirement of the Canadian Meat

Council. All information relating to each and every cow needed to be entered and tracked in a central

data base. Statistics relating to date of birth, type and quantity of feed consumed, medical history,

vaccinations and even growth rate in kilos was required. The system used for this is the Canadian

Livestock Tracking System $($CLTS$).$ This enterprise management system provides critically important

information on the input and transformation components of the business. It was the output side of the

business where visibility and traceability was lacking. There were checks and documentation

requirements as cattle were shipped. However, the potential for illness, injury and livestock loss in

transit was great.

Technology and Traceability

Riley Hudson realized that the lack of current, real time information and documentation once cattle

were shipped from a farm or ranch was placing the Canadian beef industry in jeopardy. Primarily it was

the export market that had beef producers, the Canadian Meat Council and the Canadian Cattlemen's

Assoclation concerned. Thelr concern proved to be tanglble$.$ In $2019C\frac{h}{n}$a put a halt to all Canadlan

beef imports. Chinese inspectors discovered the falsification of veterinary health certificates and also

the detected, in a batch of Canadian pork products, residue from a feed additive that is restricted in

China. Upon this discovery China placed a ban on all Canadian imports of pork and beef. Would the

U$.$S$.$ follow suit and also ban the import of Canadian beef? As a sitting member of the Canadian

Cattlemen's Association Riley was called to an emergency meeting. The meeting also includedmembers of the Canadian Meat Council. Their focus was on how to provide authentic, seamless, real

time traceability and visibility throughout the Canadian cattle industry and subsequent supply chain.

Blockchain Technology

Everyone at the meeting was in agreement. Implementation of a more robust and transparent

technology was required throughout the industry. The general consensus around the room was to

explore the implementation and use of blockchain technology in the beef industry.

A blockchain expert, Jordan Easton was contacted. One week later the meeting attendees all

reconvened to find out what Jordan had to say about blockchain.

What they discovered was that blockchain was basically a digital trail or distributed ledger used to track

and document operational, $($cattle farming and production$)$ activity. How it works is data points

$($activities$)$ along the supply chain or beef farming and production process are documented and

collected. Each time information is added to this system, it is encrypted and becomes a new "block" of

data added to the "chain" of records. Encryption is in the form of a hash which turns the original data

into a series of numbers and letters. An undisputable trail of operational data is formed. Each partner

involved in a blockchain has a copy of this data