Blockchain Mends Medical Supply Chain to Counter COVID-19 Challenges

Published at: April 28, 2020

Shortages of personal protective equipment, or PPE, used by health care professionals are posing a tremendous challenge to the United States health care system as a result of the coronavirus pandemic.

According to the Centers for Disease Control and Prevention, PPE helps protect health care personnel from potentially infectious patients and materials. The CDC recently released a guide on strategies to optimize supplies of PPE. In addition to these guidelines, technology solutions are being implemented to enable more trustworthy information and accelerated discovery, resilience and adaptation to meet current medical supply demands.

For example, technology giant IBM launched its Rapid Supplier Connect solution on April 27, which leverages blockchain to help government agencies and health care organizations identify new, non-traditional suppliers that have pivoted to address the shortage of equipment, devices and supplies needed for COVID-19 relief efforts.

Built upon the IBM Blockchain network powered by Hyperledger Fabric, Rapid Supplier Connect is intended to link buyers with non-traditional suppliers such as apparel or home goods companies that are now making masks, gowns and other items for health care facilities and personnel.

IBM’s global blockchain lead for health care and life sciences, Mark Treshock, told Cointelegraph that Rapid Supplier Connect was designed just three weeks ago to address the challenges of connecting health care facilities in need of equipment with companies that are now manufacturing these products. He added:

“The mission of Rapid Supplier Connect is to bring two parties together, reducing the friction and time it normally takes to conduct business. Blockchain is applied here to enable companies to move forward fast and efficiently.”

According to Treshock, Rapid Supplier Connect is available at no cost until Aug. 31, 2020 to qualified buyers and suppliers located in the U.S and Canada.

Suppliers and buyers currently joining the network include hospitals and other organizations such as Northwell Health — New York’s largest health care provider — and The Worldwide Supply Chain Federation, which is onboarding more than 200 American suppliers from its 3,000 global community members. Media conglomerate Thomson Reuters is also part of the network and will provide access to its Clear customer due diligence tool to offer buyers real-time and comprehensive data to vet suppliers and identify potential fraud risks.

Solving supply chain challenges with blockchain

The Rapid Supplier Connect platform also addresses the challenges of identifying new suppliers, efficiently onboarding them, and evaluating their inventory availability in real time. Once this information has been sorted, buyers such as hospitals and pharmacies can begin purchasing items at scale from non-traditional suppliers.

According to Treshock, Rapid Supplier Connect leverages both the IBM blockchain network and Chainyard’s Trust Your Supplier identity platform. Combined, these two systems work to validate and confirm information about suppliers:

“Rapid Supplier Connect focuses on validating and confirming information about suppliers, like whether or not the company is trustworthy and if a buyer would want to transact with them. Trust is built into every transaction, as everything is recorded on the IBM Blockchain, which is a private, permissioned network.”

Treshock explained that a supplier wanting to join the Rapid Supplier Connect network would first need to create a profile that resembles a digital passport or wallet, including financial information, FDA certifications and other documents and identity points. Once the profile has been created and validated by the Trust Your Supplier system, all the information is loaded onto IBM’s immutable blockchain network. Treshock added:

“Immutability is what we leverage here. As identity points are validated, confidence is gained in suppliers. A buyer can then come onto our platform, search for suppliers that make masks for instance, and get a series of suppliers to connect with.”

Suppliers can also upload their inventory directly onto the network, allowing interested buyers access to request that information. “Identity documents are not open to anyone on the platform, everything must be requested first,” Treshock pointed out.

What about crypto for payments?

Treshock further noted that while buyers and suppliers are intended to connect on the Rapid Supplier Connect platform, financial transactions are not a feature. He mentioned that there is no cryptocurrency element and that Rapid Supplier Connect complements existing supply chain networks and their payment systems.

While this may be the case, buyers have the option to use the services of a third-party paymaster for a fee, such as Cdax, which will secure funds on behalf of buyers in a custody and settlement account, holding goods ordered contractually from the supplier under a consignment arrangement until the buyer verifies acceptance of the order and releases funds to the seller.

Project N95, which is serving as a clearinghouse for information on COVID-related suppliers, will also help with supplier vetting. In addition, Dun & Bradstreet is contributing its identity resolution and firmographic data, while KYC SiteScan will provide “Know Your Business” due diligence report access.

How useful is this solution?

The World Economic Forum released a highly detailed “how to” resource on April 28 intended to guide small-to-medium-sized enterprises and business leaders on how blockchain should be deployed within a number of scenarios. The free, open-source toolkit draws value from over 200 experts in public and private sector organizations to help SMBs improve future pandemic preparedness and accelerate an economic rebound post-COVID-19.

Nadia Hewett, the World Economic Forum’s project lead for blockchain and distributed ledger technology, told Cointelegraph that the toolkit took 18 months to develop, but was launched at an accelerated speed due to the impact of COVID-19.

Hewett explained that while the toolkit can be applied as an educational resource for many different areas of blockchain deployment such as governance, legal and regulatory instances as well as technical analysis, more than 40 use cases focused on supply chain management using blockchain were tested by the World Economic Forum when developing the toolkit. He added:

“Within supply chain management, there is a need for verification of suppliers. This isn’t unique to COVID19 medical supply chains, but it certainly applies. In this instance, buyers need to find suppliers quickly that can help supply masks and other medical equipment for hospitals. Verifying credentials of those suppliers and making sure companies are doing business with trustworthy suppliers is needed, which is why blockchain is useful.”

Echoing Treshock, Hewett explained that by leveraging blockchain, organizations are able to tap into the credentials and verifications of other companies, determining who are trusted suppliers. “This use case is something we are seeing much focus on now,” she said.

Hewett further noted that blockchain can help with claim dispute resolutions in supply chains, adding, “Blockchain is a distributed ledger, meaning there is always a shared, single version of the truth.”

Challenges to overcome before mainstream adoption

While blockchain can help increase efficiencies for supply chains, Hewett revealed that she has noticed larger organizations describing blockchain to their upstream partners, yet in many instances, upstream supply chains are not empowered to participate in meaningful ways.

According to Hewett, many organizations are not educated when it comes to deploying blockchain solutions and lack in-house expertise — both pain points that the toolkit can help solve. She also pointed out that for many supply chains, upstream partners are located in the parts of the world with less developed industrial and technology bases. Regulations are also a challenge that need to be solved in order for blockchain to make a difference when it comes to ensuring the authenticity of PPE supplies.

As reported previously, Real Items Company is leveraging VeChain’s public blockchain to ensure authentic KN95 masks are being produced by Tricol Group, an Asia-based microfiber manufacturer. David Menard, the CEO and founder of Real Items, told Cointelegraph that he is currently speaking with more non-traditional PPE suppliers to put in-demand protective equipment on the VeChain blockchain to verify authenticity. However, regulations have been an issue recently, as Menard said:

“The biggest challenge has been the constant fluctuation of rules and regulation from different countries. However, since our starting point is 100% transparency of origin, we feel like we are working towards each other. The dynamic of international commerce is being iterated on with larger observation, which is making things more effective in quality control. The Chinese government now requires documentation on each product in order to export. They will check every box, which slows down the lead times but ensures a higher quality standard.”

Another interesting challenge Menard pointed out is that oftentimes buyers don’t have a direct connection back to suppliers, leading to counterfeited ISO, FDA, CE or other rubber-stamped documents on products. He added, “For supply-chains that want to get ahead of the curve, full transparency is becoming the fastest route through customs.”