COVID-19: Under the Coronavirus Strain, Will Blockchain be the New Supply Chain?

C. Dunlap
C. Dunlap

Summary Bullets:

• Coronavirus demands illustrate the brokenness of traditional supply chain

• Blockchain methods emphasize trust and data strengths, but innovations are in early stages

The latest examples of the brokenness of the current state of the supply chain market are illustrated by the global pandemic.

COVID-19 has exposed the inability to access and mange adequate supplies of ventilators and PPEs, including proper visibility into the quality of expired and damaged goods unknowingly being sent to hospital workers. The issue demonstrates the need for an evaluation of how current supply chain systems supply, track, and manage goods and services. At the same time, the momentum behind blockchain as the answer for serving as a modern day supply chain alternative should be considered, but won’t be entirely straightforward, considering its recent emergence.

Blockchain’s key value chain under a supply chain use case is based on two primary attributes: trust in an efficient business processes structure and trust in shared access to reliable data. Problematic of current supply chain systems is their inability to respond quickly in times of crisis, nor do they support the idea of trust in the lifecycle management of data for tracking and monitoring, and providing crucial visibility into the history and status of goods. As an example, it takes approximately one month to add a new vendor to traditional supply chain systems’ list of partners. A blockchain system can immediately add and validate a trusted manufacturer to a buyer/supplier vendor network. Consider what this means in the case of being able to add an unconventional supplier of ventilators to the lengthy list of desperate buyers.

This week Jason Kelley, GM for IBM Blockchain Services confirmed with GlobalData that new custom solutions being developed for enterprises as part of IBM GBS will result in hardened products. Coronavirus has stepped up the importance of an efficiently run supply chain methodology, which will likely include blockchain.

Blockchain in-and-of-itself will not solve the problems of distribution in a pandemic. IBM’s and its rivals’ solutions in the form of AI and machine learning, cloud, and other DevOps technologies such as automation all represent key components of new business processes within digital transformations. Additionally, progress needs to be made among blockchain participants in terms of better collaboration in order to speed the adoption and interoperability of digital ledger innovations.

A good starting point is last week’s announcement of MiPasa, an initiative launched by Oracle, IBM and others to integrate COVID-19 data from WHO and CDC. Start-up HACERA formed the blockchain platform whose objective of aggregating and reconciling data from various sources helps integrate data at scale for researchers and scientists. The platform is based on the popular Hyperledger fabric technology and involves multiple groups of healthcare professionals and application developers. Ideally such a project could be coupled with intelligent data management and integration platforms by technology providers. Most importantly at this critical juncture of a global pandemic, blockchain technology can provide researchers with a strong and reliable data platform in the form of a shared ledger establishing an autonomous and decentralized peer-to-peer network.

IBM represents one of the industry’s leading blockchain platforms providers, having the ability to leverage its global professional services arm (GBS) and breadth of integration and platforms solutions including Sterling order management system. Competitors are also poised to support new COVID-19 and non-coronavirus use cases with their own supply chain solutions as part of their blockchain platform initiatives.

Summary of blockchain platforms leaders’ supply chain initiatives in recent months:

• IBM Food Trust is a blockchain-based cloud platform that is designed to make food supply chains more transparent and efficient, with intended benefits including enhanced food integrity, improved product freshness and waste reduction.

• Microsoft announced plans to help shore up a blockchain project whereby Starbucks will provide customers with coffee bean tracking data via a real-time traceability supply chain.

• The majority of Oracle’s blockchain use cases involve identity management and the supply chain sectors (including ethical sourcing). Its most high-profile use case involves the International Maritime community in which Oracle is teaming up with CargoSmart to contribute to the Global Shipping Business Network (GSBN) blockchain consortium.

• Alibaba is using blockchain technology to improve traceability and transparency within retail supply chains, with the goal of improving consumer trust and minimizing fraud. Alibaba has partnered with PricewaterhouseCoopers (PwC), health supplements company, Blackmores, dairy products supplier, Fonterra, New Zealand Post, and Australia Post to establish the Food Trust Framework.

• AWS and Accenture formalized a blockchain partnership under a circular supply chain initiative, combining blockchain and AI to address the arduous demands of complex processes within this emerging space.

For more details on these and other recent blockchain initiatives (Please see Blockchain Watch: State of the Market (Part II); Key Case Studies on Eight Blockchain Leaders , December 12, 2019.

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