- Category: Bockchain for Supply Chain
The supply chain ecosystem has become extremely complex with an ever-increasing number of players involved in developing, manufacturing, marketing, and distribution of products. One of the most indispensable links of the supply chain that concerns the transport, as well as storage of temperature-controlled logistics (food and pharmaceutical) is the cold chain. Over the years, the cold supply chain landscape has undergone major changes, with 90 % of nearly all shipments making up for controlled room temperature products (CRT). However, managing the Cold-Chain integrity for perishable food items and biopharmaceuticals such as vaccines has become challenging with half of the products being lost in transit leading to escalating costs and low accessibility.
Research report revealed by World Health Organization claim that every year, around 400,000 people across the globe die from foodborne illness, with every 1 in 10 people suffering from illnesses from food contamination. Furthermore, pharmaceutical companies are facing increased regulatory pressure to ensure the quality and potency of medicines in transit or in storage as nearly half of them either get lost or contaminated as a result of exposure to unsafe temperature ranges.
These statistics speak volumes about the grim realities of the food and pharma supply chain ecosystem. Moreover, the inefficiency of the current track and trace system has led to severe financial, as well as reputational damage for FMCG and pharma companies. Furthermore, being time and temperature sensitive safe delivery of these products become extremely crucial. This creates an urgent need to bring in place an intelligent supply chain solution that could provide better supply chain visibility by tracking the journey of a product from beginning till the end.
Blockchain – a decentralized and distributed ledger technology could help reconcile the complexities of the cold supply chain ecosystem by speeding up logistics, reducing discrepancies, increasing cost-savings, streamlining processes and increasing visibility of products while moving through the supply chain. Here’s how Blockchain brings advantages for every stakeholder in the food and pharma cold supply chain. Let’s discuss each one of them individually:
For the Food Cold Chain, Blockchain brings the following benefits:
Improved Traceability and Visibility:
Since, tokenization of assets using Blockchain enables traceability of products in the supply chain, it can be used to immediately identify the point where food has been tampered with so that contaminated food is removed before it reaches to the store shelves. This alleviates the need for expensive batch recalls while curbing the instances of illnesses and deaths caused as a result of contaminated food.
The complex food supply chain with multiple actors is vulnerable to errors that are usually motivated by fraudulent intentions. Being a decentralized platform, Blockchain can bring an end to these activities by tracking and recording any action done in bad faith by individual participants. Since, data or transaction once uploaded on Blockchain is immutable, immediate and necessary action can be undertaken.
Increased Brand Loyalty and Customer Safety:
Since, Blockchain offers supply chain transparency, consumers can be assured of the safety of food they are consuming. This happens because Blockchain has the potential to offer customers with information regarding the journey of product (food) right from farm till fork. For instance, customers can retrieve full history of a food item by scanning the smartcode printed on a food package.
Since, Blockchain does away with the need for intermediaries, cost savings increases. Furthermore, due to automated functionality offered by smart contracts over Blockchain, ready availability of validated data is possible, which in turn ensures quicker and proper payments to stakeholders involved in the food supply chain.
The Pharmaceutical Cold Chain, Blockchain brings the following benefits:
Improved Traceability of Drugs:
Since, the pharmaceutical industry is a highly regulated industry, Blockchain helps achieve compliance by offering serialization authentication along with tracking capabilities. Besides preventing counterfeiting and tampering of drugs, Blockchain ensures continual flow of vital drugs to ensure that patients receive proper and timely treatment.
Improved Inventory Management:
Blockchain provides an efficient way of filling up the gaps created by legacy systems that were used for inventory management. By anticipating stock shortages, improving data integrity and distribution, this technology can help businesses manage and control their inventory efficiently.
Supply Chain Integrity:
The smart contract functionality of Blockchain could be leveraged for streamlining supply chain processes thereby ensuring supply chain integrity. Since, Smart contracts defines terms and condition of an agreement, it can help mitigate fraud while lower costs by eliminating intermediaries involved in payment and other transactions.
The Way Ahead:
Blockchain is poised to transform the cold supply chain ecosystem. When applied to the cold chain, blockchain can securely document the storage temperatures of a product throughout its journey in a supply chain. This helps stakeholders anticipate and identify potential sources of contamination thereby helping them avoid costly recalls while ensuring customer safety.