When Walmart Met Blockchain

How a multinational business was able to become even more productive.

By Stephan Boissonneault

When Louden Owen, CEO of DLT Labs in Toronto, was in a bar in Germany, the bartender asked him what he did for work.

“I’m in something called blockchain,” Owen replied casually, but the bartender responded and “Oh, that’s the future of manufacturing.”

While blockchain is still a developing technology, it’s being used in all sorts of applications around the world, most notably for cryptocurrency. “It’s unchangeable, transparent records or transactions of information,” Owen says. “It allows you to collect, aggregate, and synchronize this information on a highly cost effective basis. You have a perpetual history of what’s occurred and that history is always growing.”

It’s no wonder that this promising technology has caught the eyes of businesses large and small—including Walmart.

Even before DLT Labs integrated blockchain—a technologically advanced way of processing and storing information—into Walmart’s delivery system, Walmart already had a refined way of cataloging its data.

“Walmart is an extremely sophisticated IT company and people tend to think of it as a massive football field with a roof where you grab something off the shelf and pay at the front,” says CEO of DLT Labs, Louden Owen. ”It may not look like it, but behind [one of] the largest companies in the world is an incredibly innovative IT group.”

Yet they still ran into the same problem that many companies are: reconciling countless invoices. Owen says it used to cost companies across the world $140 billion dollars a day.

“Walmart wanted to be a great partner of these delivery carriers and avoid mistakes and keep the cost low as possible, but meanwhile it would take weeks or months for the carrier to get paid.”

The reason it can take months for a carrier to get paid—which ultimately costs Walmart more money—is because of factors beyond human intervention like fuel rate, weather changes, and road closures.

“With the way the industry evolved, they were up to 170 additional charges for every delivery,” Owen says.

Before blockchain, all of these additional charges were reconciled over phone and through paper trails which obviously took a lot of time. 

“Think of DLT Labs as Oracle for blockchain: we have a suite of products and we can integrate pretty quickly through application program interfaces (APIs),” Owen says. “We built a shared ledger that all parties [Walmart and the carriers] can access in real time. That’s where the automation happens with all of the calculations.”

Blockchain technologies are also known to be hacker-proof, as a hacker would have to change the information of every corresponding block in order to obtain any information.

“It’s an organic technology so if you want to hack it, you have to go back and change everything, but while you’re doing that it’s continuing to change so you have to change the loop,” Owen says. “You have that infinite loop where you have to change every single block and keep the plate spinning in the air so to speak.”

The Walmart blockchain is also private, while other forms of blockchain are public for applications like Bitcoin. This keeps it even more secure.

“With public blockchain you have people doing mining and melting the planet, but that doesn’t exist with private,” Owen says. “Public blockchain is a party that you don’t have to be invited to. Private is a VIP party with a bouncer at the door.”

Owen and DLT Labs have already been “inundated” by inbound inquiries from other companies to integrate blockchain into their systems. By February 2020, every carrier Walmart deals with will be integrated to the blockchain system.

“We can demonstrate within sometimes 30, 60, or 90 days how we can improve the operation of the business process and reduce costs,” Owen says. “The second layer is yet to come and we think that as soon as these cases, like Walmart’s, become more shared and publicized, it will be clear that this is a competitive requirement for all businesses to have, and this type of technology will start to go viral.”