There is a problem with food and drug supply chains. In the last few years, numerous recalls have occurred following the identification of cancer-causing chemicals in medications, and foodborne illness outbreaks, including the E. Coli Romaine lettuce recall of Thanksgiving. These recalls make one thing clear: there needs to be better traceability in the supply chain.
The recent Gold Medal Unbleached Flour recall is driving supply chain leaders to reconsider their current visibility issues. According to Derrick Broze of CryptoGlobe, these risks to the public have engaged the FDA. In fact, the FDA is considering better track-and-trace methods and this includes the use of blockchain technology to reduce risk. Blockchain is well-suited to handle recall management in several ways, and eventually, will prevent recalls from occurring in the first place.
Blockchain Provides a Way to Determine Risk Origin
The biggest problem evident from the recent recalls was an inability to isolate exact locations producing the contaminated foods and drugs. The only reason the affected lettuce was recognized to be from the Southern California region was due to harvesting time. If such an outbreak had occurred earlier in the season, it would have resulted in multiple regions that could have been the culprit. This, in turn, would have contributed to huge amounts of food wasted as all romaine lettuce across the country would have had to be thrown out in order to minimize risk.
Blockchain could have been used in this case to identify the exact farms producing contaminated lettuce. Serialization of lots and blockchain-enabled logistics could have dramatically reduced the impact on retailers and food markets across the country, lowering outbreaks and saving lives, says Catherine Lamb via the Spoon.
Any company shipping temperature-controlled goods or needing better visibility, including pharmaceutical supply chains, could benefit from the Track and Trace platform.
Recalls Have Stark Costs That Can Be Controlled Through Blockchain
The cost of a recall varies by industry. In food supply chains, a typical recall may cost up to $10 million. This is in addition to lost sales and profits, as well as untold damage to the brand reputation, explains Veridian.
Recognizing the impact of recalls and their costs should encourage supply chains to increase visibility. Companies with large and complex supply chains, as well as those involving overseas’ trade, can turn to blockchain to gain true end-to-end visibility. In addition, the use of blockchain allows for continuous validation of issues by all blockchain users through shared data. If a recall does occur, blockchain will minimize the impact by isolating all problems immediately and allowing for swift action to take place.
The application of blockchain for recalls can help companies with large, and owner-operator fleets achieve end-to-end visibility and reduce the costs from recalls.
Recalls Involving High-Theft or High-Fraud Industries May Also Leverage Blockchain
The electronics and pharmaceutical industries have the highest rates of counterfeit products. As per HealthcareITNews, counterfeit drugs cost the pharmaceutical industry more than $200 billion annually and increase the risk of poor patient outcomes. According to Radio-Electronics, the annual cost of counterfeit electronics exceeds $20 billion annually. These are huge amounts of money wasted on preventable culprits.
Industries with a high rate of theft and counterfeit need a way to ensure products are what they claim to be. Blockchain’s application in pharmaceuticals can be used to identify counterfeit drugs and durable medical equipment. The issue also has potential solutions in using blockchain to track drugs manufactured overseas, which may have used counterfeit or poor-quality ingredients.
In electronics, tracking all aspects of manufacturing and shipping reduces the risk of companies purchasing counterfeit products for resell in the U.S. With more companies becoming third-party marketplace resellers (think Amazon and Walmart), the need to ensure product authenticity has never been higher.
Using blockchain in industries with high counterfeit risk provides consumers and business-to-business confidence in making purchases, and reduces the rate of recalls due to poor manufacturing.
Blockchain Applies to Trucking Regardless of Average Freight Volume
One of the problems involving recalls goes back to accountability in shipping. Even among genuine products, failure to track and manage each shipping stage could result in damage to a shipment. In the food industry, it is known as bacterial contamination. In electronics, it’s called manufacturing or shipping damage. Although the risk differs by industry, it has the same result—fewer profits and higher costs to manage recalls.
Trucking companies will increasingly turn to blockchain to reduce risk associated with shipping processes. If a truck’s temperature falls below set standards, automated notifications in blockchain can prevent shipments from going out to the public. Truckers could use blockchain to enhance recordkeeping processes. This will go a long way to reducing the risk of future recalls.
Any-size trucking company can use blockchain to increase visibility in transit, sharing information with supply chain partners and reducing the risk of recalls.
Blockchain Will Reduce Risk of Recalls Across the Board.
A recall in any industry destroys profit margins and tarnishes brand value. While no company wants to sell products that put consumers at risk, it is, unfortunately, a fairly common occurrence. Blockchain provides a tangible solution to ensure consumers and business-to-business purchasers get what they expect. If a recall is necessary, it eliminates uncertainty by knowing exactly which products are affected so that proactive steps can be implemented to reduce its impact. Blockchain’s use in trucking further enhances capability, empowering supply chains with high-quality shipping management and reducing overall stress in the industry. Improvements in visibility reduce costs, bolstering the return on investment in blockchain-based solutions.
If you are thinking about adding blockchain to your supply chain, be sure to get in touch with us to get a demo of our Full Visibility platform today!