Blockchain: Practical Solutions for the Pharmaceutical Supply Chain (Part I)

This blog series is a shorted version of our latest report Blockchain 2020: A Practical Guide to Blockchain Solutions for the Pharmaceutical Supply Chain and seeks to provide the reader with the technical foundation for a grounded discourse around the validity and practical applications of blockchain technology in the supply chain.

The full report can be downloaded here.

SUPPLY CHAINS ARE IN NEED OF INNOVATION

Supply Chains are struggling with fragmentation, lack of transparency and overly complicated processes. Ever more demanding customers and regulators are forcing companies to rethink their structures if they want to stay profitable and competitive. According to the Global Alliance for Trade Facilitation the cost of operating supply chains makes up two-thirds of the final cost of traded goods, while 7% of the global value of trade is absorbed in documentation costs alone.[1]

Current challenges revolve around:

  • Fragmentation
  • Traceability of Goods
  • Overcomplicated Documentation Processes
  • Information Asymmetry
  • Counterfeiting
  • Lack of Transparency

BLOCKCHAIN PROMISES TO RESHAPE THE PHARMACEUTICAL SUPPLY CHAIN

Since the beginning of the digital era, organisations have been looking for improvements over their existing business structure through modernisation. Artificial Intelligence, Internet of Things, Machine Learning and 5G are but some of the emerging technologies that will greatly enhance connectivity, transparency and automatization along the supply chain, but the challenge remains to create a standardised framework and to connect all these technologies in a meaningful way.

Blockchain, an emerging information technology, promises to be the missing link, the underlying framework, for the new technological revolution that provides the necessary connectivity, security and transparency to make the vision of a holistic supply chain come true.

However, blockchain language is complex and hard to understand. Current discussions are ranging from scepticism to fanatism and make it difficult for decision-makers to evaluate whether there is a real business case behind the promise or not.

The complex nature of blockchain can make it difficult for decision-makers to evaluate whether there is a valid business case behind the promises or not. [2]

– WORLD ECONOMIC FORUM –

In order to do so, it is paramount to understand the characteristics of this new technology and what the resulting implications are.

The next part will explain how blockchain functions at its core, why it is different from existing database solutions, and how this can transform the way we interact with data on a fundamental level.

[1] http://documents.worldbank.org/curated/en/585671507179758957/pdf/120260-BRI-PUBLIC-EM-Compass-Note-45-final.pdf
[2] Building Value with Blockchain Technology, (Accenture, World Economic Forum, 2019), https://www.weforum.org/reports/building-value-with-blockchain-technology-how-to-evaluate-blockchains-benefits

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