Blockchain: Closing the supply chain trust gap

Why are we talking about blockchain?

Experts agree that there exists a fundamental gap in the supply chain today. That gap is trust. Manufacturers, distributors, importers, exporters, logistics providers, health systems and many other trade partners have had their sights set on compliance as deadlines rapidly approach. Like musicians in an orchestra the industry has been composing their data exchange opus to an accelerating tempo. As each new bar is written a new target is created, ripe for cyberattack where a perpetrator can access valuable supply chain data. I would argue that as regulations come online, serialization data becomes much more interesting to bad actors in the supply chain. The need for a secure, interoperable system becomes all the more critical.

Enter blockchain, a technology which touts values such as immutability, security and trust. A technology which has captured the attention of global companies across all verticals. A technology which promises to change the way business is done. The true impact is yet to be realized, but the sheer volume of brainpower, funding and hype this technology has drawn to it has C-suite execs clamoring for a taste.

The trust gap

Let's get in our time machine and rewind to the mid-1990s—a time of Seinfeld, grunge, dial-up modems and the infamous white bronco chase. A little-known company called Amazon was just starting to sell books online. Little did we know the monumental impact this company would truly have. This time period signified the pendulum swing from brick and mortar to the genesis of online retail.

Fast forward to today... We see more and more companies close their physical doors and expand their online presence. That fundamental shift changed the face of global business and pointed consumers to websites and portals and apps where digital information reigns supreme. Digital shopping carts, digital transactions with digital currency or credit, performed over globally connected smart devices all storing and sharing your information.

Blockchain: NextGen Brand Safety & Protection (Using Cryptocurrency Foundations to Protect Physical Products)

The life sciences supply chain is no different. With the advent of serialization regulations, detailed digital information must accompany physical product as it transverses the global landscape. Hundreds of thousands of businesses transacting billions of products worth trillions of dollars enabling the symphony of the life sciences supply chain. This ecosystem is missing a layer of trust, a layer which will protect that critical data, a layer that will provide an attestation of ownership and integrity.

But how?

Blockchain relies on cryptography, distributed ledgers and consensus to provide trust. All transactions are cryptographically hashed, an irreversible one-way mapping of an arbitrary data set to a fixed set. These transactions are then distributed to all trusted participants creating a decentralized ledger. There is no dispute regarding transactions because all participants agree to the same version of the ledger, thereby achieving consensus. The realization is that there is no longer a single point of failure, there is no longer a master record and there is no longer the need for a central authority.

What emerges is a secure infrastructure for trusted companies to safely exchange data backed by an immutable platform. It's not inconceivable to think this is the next paradigm shift. Will we look back at this period as the time when blockchain revolutionized the way not only businesses, but consumers transacted with each other? As the number of devices and the amount of data continues to outpace people, the problem exponentially increases.

Let's face it, as human beings the main reason we transact with another person is based on the trust we have that the other party will respond as expected. That type of gut instinct trust does not exist in the same manner in the digital world. It must be established in a secure way. Blockchain technologies have the potential to fill that trust gap, with a one caveat.

Connect the physical to the digital for complete trust

If your supply chain challenge demands comprehensive visibility and trust, consider this: connecting the physical product itself with a trusted digital identity, ensuring authenticity when an event is recorded and managing all the transactions by a blockchain network is the closed loop required for complete, absolute trust. This blockchain would likely be private, with known, subscribed entities. When an entity joins the permissioned blockchain network they will be granted a private key, that they control, and it will represent them on the network for posting and unlocking transactions.

This provides an additional barrier for gray market infiltration or diversion, as all the players and assets are known in the blockchain. However, that link between the physical product and digital record is only as strong as the established trust. Serial numbers can be copied and the blockchain would be unaware. Truly linking the physical to the digital and creating that immutable trust requires a different approach, an approach that can uniquely identify two identical items. An approach that absolutely creates that trusted link.

Joe Lipari is the Director of Cloud Products for Systech International and product manager for the UniTrace cloud based traceability and serialization solution. Joe is skilled at communicating complex technical topics to c-level as well as technical listeners. 

Computer Science / Information Systems degreed by education, Joe has worked at Systech International for a career spanning over 15 years. In 2003 he began his tenure installing vision and serialization systems on packaging lines for all major pharma companies. Joe has served in roles spanning engineering and management of global teams in the serialization and supply chain areas. Most currently, in the Director role, is responsible for the go to market strategy and product roadmap for the UniTrace product.

Joe has spoken at many industry events including IQPC, Pack Expo, Interphex, and Systech Uniquity and is published in industry journals such as Pharmaceutical Commerce and the European Pharmaceutical Review.