Today in class, Joshua Pucci’s lecture discussing his role in Supply Chain Integration as a Transportation Finance & Analytics advisor at Owens & Minor helped frame a lot of the concepts we have learned in class in a real-life setting. I was particularly interested in the idea of blockchain, and its potential to increase the efficiency of supply chain integration.
One example of this is the pharmaceutical industry. As the industry has continued to grow, it has faced some problems managing its complex supply chain. These have included lost ingredients in the supply chain, wrongly prescribed medicines from faulty computer systems, and counterfeit medicines from security breaches.
Blockchain offers a chronological ledger that securely records transactions in a chronological order between several parties. In the pharmaceutical industry supply chain, products change ownership from suppliers, manufacturers, and distributors. They are then repacked and sent to wholesalers before reaching the final customer. As a result, the authenticity of any product from start to finish is hard to verify. This can cause severe damage to the customer relationship process, and even worse, could cause actual harm.
Using blockchain, companies can increase transparency across business units, allowing each unit to track products throughout the supply chain. Optimized blockchain security would allow only trusted parties to grant access to add information to the blockchain. It would show activities in real time, and instantly notify when illegitimate drugs or unauthorized edits are found. The blockchain would have a customized identification tag for each unit of medicine, allowing an efficient transfer of ownership between business units all the way from suppliers to consumers. As each unit records information on the blockchain, all parties in the supply chain process can scan the barcode to see the path and history of the product.
Blockchain’s potential to improve the industry is tremendous. It will allow for end-to-end transparency, regulatory compliance, and data security. It will increase profit margins and create higher on-shelf availability of products. This will not be an easy task, however, as Mr. Pucci described today. Implementing a global operation will require significant investment and time.
There are other examples of blockchain’s technology already being put to use in other industries. ShipChain Inc., a blockchain technology company recently signed a partnership deal with CaseStack, a supplier of supply chain management services. They will launch a pilot program this summer to integrate tracking and tracing using ShipChain’s blockchain based platform. CaseStack works with some of the world’s largest retailers- Target, Duracell, and Amazon. This integration program will allow ShipChain to implement their tracking platform and driver rewards program with the more than one million loads CaseStack transports every year to major retailers.
Blockchain’s presence in supply chain integration will undoubtedly become more prevalent. It will be interesting to see not only how quickly that will happen, but how successful and how “disrupting” the technology will be to the industry.