COVID-19 Exposes Fragility of Global Supply Chains but Blockchain Could Be Missing Link in Building Resilience, Says GlobalData
The COVID-19 pandemic has disrupted nearly every part of supply chains within the healthcare industry, once again exposing the vulnerabilities of many organizations, especially those that have a high dependence on markets such as India and China to meet their raw materials or finished products’ needs. The COVID-19 outbreak is likely to result in healthcare companies reshaping supply chains to strengthen the risk management process and resilience, says GlobalData, a leading data and analytics company.
Urte Jakimaviciute, MSc, Senior Director of Market Research at GlobalData, comments: “Pharmaceutical and medical device supply chains are extremely complex, with number of purchasing, manufacturing, testing and distribution activities taking place simultaneously. Lack of supply chain efficiency, transparency and authenticity has been an ongoing issue and the root of many challenges faced by the healthcare companies. While most organizations have supply chain risk management strategies in place, the current outbreak is not a typical event. The COVID-19 crisis is a huge stress test for the industry once again reiterating the need for change.”
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Preventing faulty and counterfeit products from entering markets is a crucial step to assure an effective fight against the COVD-19 outbreak. EU countries such as the Netherlands and Spain have already flagged issues with faulty China-produced protective masks and testing kits, and the Australian Border Force has reportedly seized consignments of personal protective equipment (PPE) that was counterfeit or defective. In addition, the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) has disabled nine domain names and social media accounts that were selling fake or unauthorized COVID-19 products.
Jakimaviciute adds: “Without transparency at all points in the supply chain, it is difficult to identify the source of the transgression or verify the authenticity of the product. Blockchain-based systems could provide an open, tamper-proof, distributed record of transactions and, in turn, increase accuracy and efficiency. Healthcare organizations, from manufacturers to distributors, could trace products through supply chains ensuring authenticity or flagging any potentially issues, such as signs of tampering or inadequate handling.
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“Blockchain has broad implications for the healthcare industry. More cases have recently emerged due to the need to simplify and improve security and accuracy for cumbersome, inefficient supply chain processes. While it may be too late to incorporate any sizable blockchain-related solutions to manage impact of the coronavirus on supply chains, as the technology is still in a proof-of-concept stage, blockchain remains as one of the most promising solutions to facilitate data sharing, improve regulatory compliance and adherence with serialization regulations.”