Improving Supply Chain with Blockchain

Netta Korin
Netta Korin

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6 months ago

blog

(https://www.youtube.com/watch?v=_jOy17fuzy8&t=2670s)_”_.  I was asked to discuss the value add that blockchain could provide for supply chains during the pandemic.  An apt topic for discussion, as during the last year corona has jarred many supply chains to their core.

If you think about it, the COVID-19 vaccine makes for an excellent use case for a blockchain-based supply chain, since this is really the first time on a global level we have an incentive for transparent supply chain and coordination.  Every country wants to enable proper vaccine distribution to their population - down to the last eligible human - in order to prevent further death and economic damage.

The main problem with existing supply chains is that each manufacturer deploys its own separate solution. Participants along the chain who wish to work with that manufacturer must integrate their platforms to the manufacturer’s one. Needless to say that no two manufacturers use the same platform, meaning that each distributor and hospital need to duplicate the process with every new agent they work with, increasing the overall complexity of the entire system.  Moreover, there is also no room in a normal supply chain for oversight by authorities.  It is just not possible to connect to every single system and receive visibility.  You can see an image of what this looks like here:

This opens up a gap for multiple discrepancies, as each platform documents data separately and they do not sync in real-time. For instance, If a shipment of 50k Vials left the factory, but only 30k arrived at the hospital, then how can it be determined where the missing 20k went, and who would be responsible for the loss? Each actor could blame the other party for not doing their job tracking the goods properly. The platforms only integrate, rather than utilizing the same platform, thus each actor cannot prove they did their job properly. Only in the rare cases where everything goes flawlessly, everybody agrees. Unfortunately, that’s not always the case. And because everybody is already using their own solution, there is no point in migrating to a new system as it will require re-integration with all other platforms...unless it was to a platform which everybody agreed upon and already had everybody on-board.

Now it has only been a few months since the vaccines have been available on the market, and we can see there are mishaps and issues: The US government was manually trying to track twenty million vaccines that it sent to states, scammers are attempting to sell fake vaccines, and we can even find entries for vaccines being bought and sold online. As we all know with more time, the sophistication of nefarious actors trying to profit from inefficiencies in supply chains will only increase, and so one can assume that what we are seeing is just the beginning of the issues that are to come. In March of 2021, China local police arrested eighty people involved in a network of fake vaccines and seized three thousand counterfeit vials. The writing is on the wall.

The fact that blockchain provides an option for a shared database - unowned - is key. It can provide one network owned by all, that everyone can use. Politically this is very important, as one can imagine the hurdles of trying to convince a large manufacturer to use its competitor’s system, but an unowned system is an easier pill to swallow (or in our case, an injection to take). Blockchain is also transparent, and provides inclusive governance and control. The system is fully open sourced - so that everyone who wants to see how the system operates and verify whether all transactions are legit and confirmed can actually do so. Below is an image of what a blockchain-based supply chain would look like:

As you can see the blockchain provides a highway of information  Everyone connects to it -  it is one single infrastructure that allows everyone on it to be connected in some way to everyone else.  All relevant authorities can see this data - which in normal supply chains, as explained above, can not actually happen due to the plethora of systems on the market.

With a blockchain-based supply chain, every box of vaccines leaving our COVID-19 vaccine manufacturer would get scanned with its unique temperature sensitive QR code, and that tracking would be available down to the very last vial. And importantly, regulators could have access to this data. They could get a holistic view of what regions or states are efficiently functioning or where there is a problem, for instance vaccines that weren't handled properly, were not stored correctly, were lost on the way to their destination - and who would then be responsible for the loss of goods.

Blockchain shifts the scale on so many supply chain related issues:  Counterfeit identification, grey market imports, stolen goods prevention - all of these aspects are important when it comes to covid vaccines, but there are other added value propositions for blockchain that can assist all industries - for example inventory, brand management, spoilage recall, waste management, and proof of purchase. Because blockchain provides manufacturers, distributors and suppliers with one source of truth for all their data, they can analyze and utilize it to their benefit.

Today, it is quite well known that a significant amount of medical supplies delivered to hospitals are never used simply because the hospital loses track of them. They don’t know they have them. In this day and age, there is no reason for this kind of waste.  The pandemic wreaked havoc on our world, but perhaps it will also inspire us to become more efficient and more transparent on a global level.  Now is the time to prepare for the next pandemic, and blockchain can lead the way to reduce such inefficiencies and increase coordination and transparency.

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Netta Korin is a cofounder of Orbs.  Prior to Orbs Netta worked for many years on Wall Street as a hedge fund manager.  She later held senior positions in the Israeli government, including Senior Advisor in the Israeli Ministry of Defense to General Yoav (Poly) Mordechai, Head of CoGAT, and Senior Advisor to Deputy Minister Dr. Michael Oren in the Prime Minister’s Office in Israel, focusing on Palestinian issues. Netta has held board positions in several non-profit foundations in both Israel and the United States.  She also founded The Hexa Foundation with the aim of promoting blockchain for social impact and harnessing the mind power of the Orbs ecosystem and network to help solve the region’s and the world’s most pressing humanitarian problems.

For more information please contact Netta Korin (netta@orbs.com)

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