The supply chain transformation sweeping the business world is making inroads in humanitarian logistics as well. Now blockchain has entered the picture, underpinning a public-private partnership to deliver medicines and health goods throughout Nigeria. You can imagine the supply chain challenges in that nation, Africa’s largest, with an area of more than 350,000 square miles and 190 million people.
The pillars of the initiative are the United States Agency for International Development (USAID) Global Health Supply Chain Program Procurement and Supply Management project; the Global Fund Nigeria Supply Chain Integration and Nigeria Warehousing and Distribution Services project; and the development consulting firm Chemonics.
The medicines and goods are needed to alleviate HIV-AIDS and malaria, control infectious diseases, and support reproductive health and maternal and child health. Under the auspices of USAID, Chemonics will use a “real-time value network” to build a blockchain-enabled “control tower” for better supply chain visibility, chain of custody authentication, and improved on-time delivery and order replenishment.
Blockchain provides a way to track transactions, goods and events via a common digital ledger, with mechanisms for consensus, verification and permissions. In a typical value chain, the parties record and maintain their own information. With blockchain, each transaction entry is linked via encryption and the decentralized ledger is shared across the chain, reducing time spent chasing down the data.
That’s critical for the USAID project, which delivers healthcare goods across the entire chain to the end destination, the individual clinics. Chemonics’ solution will capture data from 17 warehouses and distribution centers, and 19,000 health facilities, along an international-donor-supported chain. This will enable real-time tracking across supply, transport, and distribution networks—all the way to the health facilities for in-patient treatment. Projected savings are $2 million a year.
These kinds of public-private partnerships are growing. For example, Quintiq, part of Dassault Systèmes, is using mathematical and constraint programming and path optimization algorithms to help the World Food Programme (WFP) create a strategy for global sourcing and delivery to increase its supply chain efficiency. Visibility and rapid optimization are crucial in humanitarian supply chains—lives are on the line, and changes must be broadcast quickly across the system to adapt to conditions on the ground.
Deloitte, in a report titled, Will blockchain transform the public sector?, said that blockchain strengths like security, efficiency and speed fit this mission. “From almost none three years ago, agencies in more than a dozen countries—including Canada, the United Kingdom, China, and India—are running pilots, tests, and trials examining both the architecture’s broad utility as a basis for government service provision and procurement and developing individual blockchain-based applications for internal use.”
Chemonics, which operates in more than 70 countries worldwide, plans to use lessons learned in Nigeria to provide planning and optimization services in other countries, with the same goal—to boost efficiency, accountability and verifiable supply chain information for trading partners and aid recipients.