Improving Transparency and Traceability in Supply Chains

Feb 13, 2019 · 4 min read

Many projects are underway using Blockchain technology to improve supply chain transparency and monitor provenance. These initiatives amass data about how goods are made, where they come from, and how they are managed; this information is stored in the Blockchain-based system. This means that the data becomes permanent and easily shared, giving supply chain players more comprehensive track-and-trace capabilities than ever before.

Companies can use this information to provide proof of legitimacy for products in pharmaceutical shipments, for example, and proof of authenticity for luxury goods. These initiatives also deliver consumer benefits — people can find out more about the products they are buying, for example, whether a product has been ethically sourced, is an original item, and has been preserved in the correct conditions.

One key application is the use of Blockchain technology to combat a major challenge in the world today: the counterfeiting of drugs and false medication. According to Interpol, around 1 million people each year die from counterfeit drugs, 50% of pharmaceutical products sold through rogue websites are considered fake, and up to 30% of pharmaceutical products sold in emerging markets are counterfeit. To answer this challenge, DHL and Accenture are driving Blockchain-based serialization project providing sophisticated track-and-trace capabilities to the pharmaceutical industry.

Pharmaceutical serialization is the process of assigning a unique identity (e.g., a serial number) to each sealable unit, which is then linked to critical information about the product’s origin, batch number, and expiration date. Serialization effectively enables a unit to be tracked at virtually any moment and traced to its location at any stage of its lifecycle. A key serialization challenge is maintaining traceability and transparency especially when these units are repackaged or aggregated from unit to case to a pallet for logistics purposes and then disaggregated back down to unit level for consumption.

The DHL/Accenture proof-of-concept was established to overcome this and other challenges by demonstrating the effectiveness of Blockchain technology in product verification. The aim is to show that pharmaceutical products have come from legitimate manufacturers, are not counterfeit, and have been correctly handled throughout their journey from origin to consumer. Most importantly, this initiative proves how end customers can verify the legitimacy and integrity of pharmaceutical products, especially compliance with handling requirements. This not only reassures the end customer at the point of purchase that their medicines are genuine and in perfect condition but has potentially life-saving implications.

To achieve this, the partners have established Blockchain-based track-and-trace serialization prototype comprising a global network of nodes across six geographies. The system comprehensively documents each step that a pharmaceutical product takes on its way to the store shelf and eventually the consumer. The prototype was a lab performance simulation that demonstrated how Blockchain technology could handle volumes of more than 7 billion unique pharmaceutical serial numbers and over 1,500 transactions per second.

The project illustrated how Blockchain can be used to capture all logistics activities relating to an item of medication — from production to purchase — and ensure this information is made secure, transparent, and immediately available.

“Our proof of concept demonstrated the opportunities blockchain presents in the fight against counterfeit pharmaceutical goods. Together with our partners we are actively refining the solution as well as working with key industry stakeholders to operationalize the concept” states Keith Turner, CIO Chief Development Office at DHL Supply Chain.

In the consumer goods and retail industry, companies like Unilever and Walmart are exploring the use of Blockchain technology to improve supply chain transparency and to track provenance. Walmart is focusing specifically on food tracking, traceability, and safety.

Together with partners, Walmart has conducted Blockchain test designed to trace the origin and care of food products such as pork from China and mangoes from Mexico. To begin with, this initiative documented the producer of each specified food product so that Walmart can easily address any case of contamination, should this arise. Secondly, the test put mechanisms in place to identify and rectify the improper care of food throughout the journey from farm to store. For example, since meat shipments must not rise above a certain temperature, the test took temperature data from sensors attached to the food products and committed this data to the Blockchain-based system. From there, automated quality assurance processes notified relevant parties in the event of suboptimal transport conditions. Since launching this test, Walmart has also announced the creation of Blockchain Food Safety Alliance, an extensive partnership to apply tracking, traceability, and safety benefits to food supply chains in China.

Moving forward, a key requirement for track-and-trace applications will be to adopt more secure and intelligent forms of digital identity for each physical product — moving from the provision of a passive barcode or serial number to, for example, enabling interactivity with the use of Internet of Things (IoT) sensors. Smart devices can be securely tied to or embedded in the physical product to autonomously record and transmit data about item condition including temperature variation, to ensure product integrity, as well as any evidence of product tampering.


Where Blockchain and Finance Meet

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store