A Pharma Supply Chain POC (Proof of Concept) is a small-scale demonstration that tests the feasibility and effectiveness of implementing new technologies or processes in the pharmaceutical supply chain, aiming to optimize efficiency, traceability, and compliance.
The startup client aimed to revolutionize the pharmaceutical supply chain industry by
leveraging blockchain technology to address its current challenges.
Their vision was to integrate the various chains within the supply chain, and they
sought to disrupt the industry with a blockchain application.
Their initial focus was on creating a POC application that could accurately determine
user location and facilitate drone delivery, with a tight
six-week deadline for delivery. It was crucial to test the feasibility of the initial
idea and secure intellectual property (IP) protection through legal paperwork.
Recognizing our expertise in blockchain, pharma supply chain and our involvement with the Hyperledger Foundation, the client approached Gyan Consulting to develop the POC for a private blockchain application. They entrusted us with this project based on our proven track record as developers of complex custom solutions.
The pharmaceutical supply chain faces a multitude of challenges and bottlenecks, ranging
from patient safety concerns due to counterfeit drugs to regulatory compliance issues,
product integrity, and the complexities of inventory management, all of which impact the
industry's efficiency and effectiveness.
While reviewing the pharmaceutical supply chain industry with our client, we have identified several prominent challenges that are affecting its efficiency and performance.
Counterfeit drugs: This poses a significant risk to patient safety and the industry's reputation, and their infiltration is difficult to trace and prevent due to the complex and global nature of the pharmaceutical supply chain.
Meeting regulatory compliance requirements: Such as Good Manufacturing Practices (GMP), product labeling, and documentation, can be challenging and time-consuming for pharmaceutical companies due to the strict regulations imposed by different countries and regulatory bodies.
Product integrity and temperature control: Ensuring product integrity and temperature control throughout the supply chain is essential, particularly for biologics and vaccines, but it can be challenging due to the risk of temperature excursions and equipment failures in the cold chain logistics of storage, transportation, and monitoring.
Supply chain visibility and transparency: Lack of visibility and transparency across the pharmaceutical supply chain can lead to inefficiencies, delays, and increased costs. Limited visibility makes it difficult to track the movement of drugs, anticipate demand, and respond effectively to supply chain disruptions or product recalls.
Inventory management and stockouts: Pharmaceutical companies face the challenge of maintaining optimal inventory levels while avoiding excess stock or stockouts. Balancing demand forecasting, production lead times, expiration dates, and market demand fluctuations is critical to prevent shortages or wastage.
Fragmented and complex supply chain: The pharmaceutical supply chain involves multiple stakeholders, including manufacturers, distributors, wholesalers, retailers, and healthcare providers. The fragmentation and complexity of the supply chain can lead to communication gaps, information silos, and coordination challenges.
Global supply chain disruptions: Global events such as natural disasters, political instability, trade disputes, or pandemics can significantly disrupt the pharmaceutical supply chain. Disruptions in raw material sourcing, manufacturing, transportation, or customs clearance can impact the availability and affordability of essential medications.
Product recalls and quality
Quality control is paramount in the pharmaceutical industry. Any quality issues,
such as contamination, labeling errors, or adverse reactions, can result in
legal liabilities, and damage to brand reputation. Ensuring consistent quality
throughout the supply chain is crucial but can be challenging due to various
locations and suppliers.
Our client recognizes the pressing need to address these challenges within the pharmaceutical supply chain and firmly believes that implementing a blockchain application will provide the necessary transparency, security, and efficiency to overcome these obstacles and ensure the safe and reliable delivery of medications.
We presented the initial analysis to our client and agreed to split up the Digital Transformation Programme into 3 separate projects, so further analysis could be carried out and the right level of focus could be given to each area:
Design and Architecture: The architecture was based on the Hyperledger Fabric framework, which provided the necessary tools and features to build a robust and secure premissioned decentralized network The network consisted of four organizations, each representing a crucial entity in the supply chain: manufacturing, distributor, wholesaler, and pharmacy. These organizations were carefully defined to align with their respective roles and responsibilities in the pharmaceutical ecosystem.
Through our expertise and technical capabilities, we designed a system that
empowered manufacturers to efficiently handle product identification and shipping
Our solution allowed manufacturers to input crucial data such as serial numbers,
GTIN, SKUs, lot numbers, lot amounts, and expiration dates, ensuring accurate
and traceability of pharmaceutical products. By automating these processes and
providing a user-friendly interface, we enabled manufacturers to comply with
standards, streamline inventory management, and enhance overall operational
efficiency, ultimately ensuring the safe and efficient delivery of pharmaceutical
products to the market.
The distributor organization ensured seamless product transfer using the blockchain solution, maintaining transparency and accountability. The wholesaler organization acted as an intermediary, validating product information for authenticity and quality. The pharmacy organization relied on the blockchain to verify product validity, using unique identifiers to authenticate and dispense pharmaceuticals safely.
Hyperledger Fabric Setup: Set up the Hyperledger Fabric network and configure the necessary components, such as peers, ordering service, and channels. Establish the network connections between the organizations to enable secure and permissioned access to the blockchain.
Smart Contract Development: Develop smart contracts using Chaincode in Hyperledger Fabric. Define the logic and rules for creating and transferring assets within the supply chain. Implement the necessary validations and compliance checks to ensure regulatory requirements are met.
Asset Creation and Transfer: Enable the manufacturing organization to create products with all the necessary regulations, including lot number, SKU, and expiration date. When a product is ready for shipment, the asset is transferred to the distributor, who adds shipping information to the blockchain. This process continues as the product moves through the supply chain, with each organization updating the relevant information.
Privacy and Confidentiality: Utilize the private data feature in Hyperledger Fabric to protect sensitive information such as pricing, transportation carriers, and internal details. Ensure that the visibility of data is controlled, allowing participants to access the necessary information while keeping private data secure.
Integration with ERP Systems: Integrate Hyperledger Fabric with the organizations' existing ERP systems to enable seamless data synchronization. This integration allows real-time visibility into current stock levels, expiration dates, and product validity. If a product's expiration date has passed, the organization in possession is prevented from transferring it to the next chain
Validation and Verification:
Utilize the unique serial numbers and lot numbers assigned to each product to
validate its authenticity and expiration date. By checking the ledger,
participants can verify the product's validity,
ensuring that counterfeit drugs are detected and prevented from entering the
Testing and Deployment: Conduct rigorous testing to ensure the functionality, security, and performance of the blockchain application. Once testing is successful, deploy the Hyperledger Fabric-based solution across the four organizations in the pharmaceutical supply chain.
The implementation of the Hyperledger Fabric-based blockchain application in the
pharmaceutical supply chain yielded significant results,
leveraging cutting-edge technology to address industry-specific challenges. Firstly, it
revolutionized transparency by establishing a decentralized ledger,
enabling immutable and auditable records of product transactions, serialization, and
regulatory compliance. This enhanced visibility and traceability empowered
stakeholders to verify the authenticity and integrity of pharmaceutical products,
mitigating the risks associated with counterfeit drugs and ensuring adherence
to stringent regulatory frameworks such as Good Manufacturing Practices (GMP) and
product labeling requirements.
The integration of the blockchain application with the organizations' enterprise resource planning (ERP) systems brought about transformative improvements in inventory management and supply chain coordination. Real-time synchronization of data facilitated optimized inventory levels, expiration date tracking, and efficient product recall processes. Leveraging smart contracts and consensus mechanisms, the blockchain solution automated asset creation, transfer, and verification, streamlining operations, and reducing manual errors. This led to increased operational efficiency and cost savings for all participants involved in the pharmaceutical supply chain.
In terms of data security and privacy, the use of Hyperledger Fabric and its private data feature ensured the confidentiality of sensitive information such as pricing, transportation details, and proprietary data. Access to this privileged data was restricted to authorized participants, enhancing data integrity and safeguarding competitive advantages within the supply chain ecosystem
The business is continuing their digital transformation journey by engaging with some of their top clients to explore connecting directly with their customers systems using EDI and other options.
The successful completion of the proof of concept demonstrated the technical viability and potential impact of blockchain technology in the pharmaceutical industry. By validating the feasibility of leveraging Hyperledger Fabric and distributed ledger technology, this implementation paved the way for future scalability, collaboration, and innovation within the pharmaceutical supply chain. It showcased the transformative potential of blockchain in addressing key pain points such as counterfeiting, regulatory compliance, inventory management, and data security, ultimately enhancing operational efficiency, patient safety, and trust in the pharmaceutical ecosystem.