Day after day, headline after headline, blockchain is referenced as a solution for an array of complex challenges facing businesses today. The technology is still scratching the surface in pharmaceuticals but there are opportunities to be gained in embedding blockchain in serialization operations.
With all that’s been written and delivered on blockchain, the applications of the tech still seem somewhat out of reach. If you’re anything like me, blockchain was a daunting concept to even generally understand – let alone understand how it could apply to my job as a supply chain consultant in the pharmaceutical industry.
For those just learning about it, blockchain is a secure, distributed, immutable ledger that records digital transactions utilizing a crytptographic storage and hashing mechanism on a peer-to-peer network. We have that understanding but what does it actually mean? Let’s break it down:
- A ledger is simply a record of transactions.
- Distributed means that it does not live within one system, or within the walls of a company. It is accessible by all authorized organizations / entities.
- Immutable means that it cannot be changed. Records can be added but not deleted and when changes are made, all parties involved need to approve.
- Crytptographic storage means that data is encrypted and cannot be decrypted without appropriate access authority.
Broken down into these simple terms, those headlines about the transformative power of blockchain seem a bit more reasonable. Extracting that out further, we can see how blockchain can start to drive true value specifically in the pharmaceutical industry, particularly in the supply chain.
Currently, pharmaceutical companies are building complex technical solutions to allow the transmission of specific, required data to downstream supply chain partners. These initiatives were kicked off several years ago as a requirement of the Drug Supply Chain Security Act, which the FDA will begin to enforce on November 28th, 2018 after last year’s enforcement delay.
In the simplest logistical scenario, there are at least six notifications sent between the pharmaceutical manufacturer, 3PL, wholesaler, and pharmacy in current supply chain operations. That means there are six opportunities for the process to breakdown. In this basic scenario, blockchain could standardize serialization, and the corresponding data, even further. In a blockchain-enabled world, all supply chain partners will capture data on one single record. Even with the most basic application, blockchain creates countless opportunities for improvements in how pharmaceutical products are tracked and traced across the global supply chain. But where are the true opportunities for value with blockchain in serialization?
Reduce the Number of Connections
The scenario above speaks to one product originating from one pharmaceutical company but imagine every pharmaceutical company is sending data to their downstream partners. This creates tens of thousands of point-to-point connections. With blockchain, all partners would post their transactions to one central repository, greatly reducing the number of connections (and opportunities for failure) that IT organizations must continuously maintain.
With one central repository, and the requirement that all parties need to approve an amendment to the ledger, all entities are effectively forced to record inputs using a standard approach. Cleaner data enables manufacturers to more easily report and drive value via advanced analytics. With clean data at the center, decision-making via objective, analytics-driven insights allows for trending, forecasting, and understanding of your global supply chain network at a more precise level.
Additional Data Capture
In addition to the physical shipment data that is captured with serialization, additional elements in the ledger can be captured to increase both the robustness of your data and your quality oversight. Choosing to track temperature controls and storage parameters, for example, would insure product integrity and allow you to pinpoint the where, when, and why should your product be compromised.
Full, Real-Time Visibility
Perhaps the greatest benefit to be gained with blockchain is the full visibility into the movement of the product for stakeholders across the entire supply chain. This improves forecasting and demand planning with endless opportunities for collecting other key performance indicators to enhance business value both in the supply chain and the organization at large.
As we continue to explore the adoption of blockchain in the pharmaceutical industry, many of these advancements likely won’t happen next year but in 5-10 years, this is the reality supply chain and business leaders can expect. It’s never too early – supply chain leaders should keep abreast of advancements in blockchain technology. Start building a business case to see if switching to blockchain is the right solution for your supply chain operations. Outside of the technological transformation, carefully consider the impacts to current business processes and how blockchain will affect day-to-day operations.
To learn more about how Clarkston can help your organization navigate and adopt blockchain to your business, subscribe to our insights below or contact us today.