Efficient supply chain management is built on the resilient nature of the supply chains. Resilience comes from handling supply chain exceptions with real-time visibility across the entire supply chain. As supply chains operate on a global level, it has become increasingly difficult to collaborate with all stakeholders and build trust to conduct business seamlessly.
Supply chains are complex in nature and are particularly critical in the pharmaceutical industry as they directly impact patients' safety. The pharmaceutical supply chain consists of manufacturing medicines and then moving them across stakeholders such as distributors, wholesalers, pharmacies, and hospitals to finally reach the end customer—the patient. The goal of the entire process is to deliver authentic and high-quality medicines to the patients within the expiry date. Although supply chains across industries have several touchpoints with multiple stakeholders, pharmaceutical supply chains are bound by strict storage conditions and regulatory oversights every step of the way. The present disparate systems architecture across stakeholders following different data standards often poses a big problem in sharing and consolidating medicine-related information. Such information is essential to take meaningful actions regarding medicine expiry or quality issues, including counterfeits.
As we understand, end-to-end visibility of medicines is a key problem to be solved in the pharmaceutical supply chains. Information gaps within the supply chain result in the introduction of dangerous counterfeits from a patient's health perspective.
Present solutions across pharmaceutical companies include Serialization, Bar codes, EDI, RFID, or ATTP (Advanced Track and Trace for Pharma). However, these solutions remain within silos and mostly operate within the manufacturer’s domain. They have limited impact across the pharmaceutical supply chain since they mainly focus on the manufacturer’s. Also, the centralized nature of such technology solutions results in issues around scalability, auditing, and immutability.
Here is when decentralized distributed ledger technologies such as blockchain come into the scenario. They offer solutions to the problems typically associated with centralized systems. Being flexible in nature, decentralized distributed ledger technologies offer easy scalability while transferring the ‘Physical trust-centric model’ to the ‘Immutable digital trust-centric’ model.
Why blockchain?
Based on our assessment, we find that distributed ledger technologies fit well in the scenarios where multiple parties are involved in establishing trust. Transactions involve frequent handovers and often need to establish a ‘single source of truth’ along each supply chain step. As discussed above, we find that pharmaceutical supply chains can be transformed with the blockchain-enabled applications. As they can transfer physical trust to digital trust based on cryptography and digital signature, it is easier to arrive at a single source of truth driven by consensus amongst transacting parties.
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