How blockchain provides solutions for new coronavirus medical supply chain

The coronavirus crisis has brought unprecedented pressure on the global supply chain of each product, but the most serious is the pressure on key medical supplies.

Companies in the United States are transforming the supply chain into manufacturing critical supplies such as personal protective equipment, coronavirus test kits and ventilators. The new open source movement is being strengthened globally to try to address the growing shortage of ventilators.

Internationally, as the number of confirmed coronavirus infections in China declines, factories are slowly recovering, and at the same time, worldwide demand for critical supplies is beginning to soar.

Multi-million dollar contracts need to be signed within hours, and traditionally, these contracts usually require months of negotiation. The key issues are demand and the lack of trust between supply and financing institutions.

Broken medical supply chain

Governments and health systems around the world have specific requirements for each system (for example, a messy set of EU standards, US FDA standards, non-EU standards). These standards are updated almost weekly to bring more supplies online to meet projected demand.

Governments around the world are struggling to overcome traditional procurement systems that cannot move at the pace required by the crisis. This means that countries around the world lack supply because they are unable to establish financial mechanisms in a timely manner (within hours instead of weeks).

Many suppliers around the world insist on cash payments first as they try to distinguish reliable buyers from brokers and intermediary distributors.

Reports of fraudulent production and fraudulent claims are widespread in the medical and personal protective equipment supply chain. As a result, the device may reach the wrong specifications at the right place at the right time.

Essentially, there is a breakdown of trust between global medical supply chains.

5 trust challenges facing the medical supply chain

1. Product requirements: Sanitary systems and national / regional standards vary, which creates confusion in what each factory should produce.

2. Supplier reputation: There is uncertainty about which supplier can produce equipment at the right time, with the correct output and the right quality.

3. Financial payments: Factories and shipping companies require financial payments to be made in advance, as their workers gradually return online and they themselves try to prioritize trusted purchase requests.

4. Customs certificate: In view of the strict supervision of medical equipment, it is necessary to quickly verify the customs certificate to allow the equipment to be transported internationally quickly.

5. Transportation tracking: The transportation method needs to be verified to ensure that the correct goods can be transported from the factory to the airport and then to the distribution center and the world under the correct conditions (for example, temperature control of drugs). Health centers around.

How does blockchain work?

Currently, there is no centralized procurement system managed by a central agency (because the central bank centrally manages the financial system).

In this context, demand for critical supplies around the world has surged, these healthcare systems cannot verify which products have reliable production capabilities, traditional supply chains have been disrupted globally, and new suppliers appear to be facing credibility challenges , suppliers attempt to distinguish reliable buyers, or ensure that their production will purchase inventory.

The traditional tools of Excel and Google Sheets are currently being used to manage supply, legal contracts, and at the same time, individuals are unable to fly to verify the capabilities of factories and the trust in traditional payment mechanisms for trade finance and letters of credit has broken.

Lack of trust is the biggest bottleneck that prevents the market from growing faster, and speed is critical in the coming weeks. Specifically, blockchain can play the following roles.

1. Product requirements: Provide a sanitary system mechanism to continuously update the latest product requirements and specifications of the factory, just like product auctions.

2. Supplier credibility: Provide a method for sanitation systems to reliably assess which plants have high-quality controls and meet the required specifications and output.

3. Financial payment: Act as a trade financing mechanism to ensure that the factory supports payment in advance of the blockchain, and then release it as working capital when planning and supplying in the pre-agreed production to the next step of the supply chain.

4. Customs certification: Customs certification based on the blockchain has been used to regulate the export of many products from the trade of wild animals and plants to medicines, which can be applied here.

5. Transportation tracking: The supply needs to be tracked securely on a global scale to ensure transparency in the supply chain, which may occur in blockchain-based traceability.

In the future, we will see the blockchain play a huge advantage in the medical supply chain.

Source: Blockchain Knight / Coin World.

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