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Blockchain in times of crisis

Author: Frey Eric

The current pandemic has shed further light on the use of blockchain in supply chain management, and has accelerated the adoption of the technology in various industries. One  such industry is the healthcare industry. The shock to the supply chain which the coronavirus caused was felt across the world. For many countries it revealed an over reliance on others for healthcare materials as supply chains for the latter were not able to meet global demand. However, it also showed how it is possible to overcome this over reliance on other countries, by using technology which would allow supply chains to operate efficiently, as we will see later in the article. A proper blockchain adoption would allow the healthcare supply chain to decrease the spread of counterfeit healthcare materials, as well as increasing competition in the supply chain.

One of the main benefits of adopting blockchain in the healthcare supply chain is that Drugs and Masks can be equipped with barcodes, which when they are scanned, they keep their records on secure blocks. In this way, it is possible for the involved parties to verify shipments in real time, and ensure that the supply chain is not compromised with fraudulent behavior. An example of this is well represented by FFP2 mask counterfeiting, masks that were eventually delivered to both governments and private retailers. FFP2 masks are medical grade masks used by healthcare workers across the globe, an indispensable tool for the healthcare sector (especially in this situation). These counterfeit masks didn’t provide the necessary protection. This posed a health risk, and led to uncertainty in being able to verify the authenticity of other shipments. It is evident that the adoption of blockchain to keep a record of medication and other healthcare materials would ensure the authenticity of those, allowing healthcare risks to be mitigated. By keeping a record of the healthcare materials on the blockchain one could further reduce consequential damage which could both save money and time. 

Another benefit arising from adoption of blockchain in the supply chain is that of increased inclusion in the market. By securing and automating payments across the supply chain, blockchain could allow smaller parties to operate, overcoming financial issues they faced from not benefiting from economies of scale. This is especially beneficial for instance during a pandemic. If you just consider covid-19, this saw large pharmaceutical companies coming to their limits with supplying the necessary healthcare materials. A further adoption would include small retailers, thereby relieving large retailers from the burden of not being able to supply the necessary amount of healthcare material. The lack of medical grade masks in Europe at the start of the pandemic saw governments scrambling to secure a sufficient supply of masks. Adopting blockchain to support the medical equipment provision within the supply chain could have allowed smaller retailers to deliver masks to the governments faster, thereby reducing the dangers of not having enough masks, as well as keeping prices from skyrocketing due a lack of supply. 

Verifying the authenticity of healthcare materials reduces consequence cost, thereby diminishing healthcare threats, while being more cost-effective. Additionally, the inclusion of smaller retailers into the global market would allow a faster response to epidemics and pandemics. As with other uses of blockchain, it is once again not the technology which prevents the widespread use of blockchain in management of the global healthcare supply chain, but regulatory and operational frameworks which are currently in place. The Covid-19 Pandemic is far from over, and it is seen that it has already accelerated the adoption of the blockchain technology.

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