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How Blockchain Can Improve the Medical Aesthetics Supply Chain

By | May 14, 2018

How Blockchain Can Improve the Medical Aesthetics Supply Chain

Do you know where your medical cosmetic products, supplies and equipment come from? The path from raw materials to your hands isn’t always pretty, and it’s unlikely that anyone working within this sector has a complete and accurate picture of the supply chain. This lack of transparency is a problem for consumers, doctors and brands. Common symptoms include wasted products, delays and shortages, and lower quality products.

Blockchain is a technology that has the potential to revolutionize how supply chains operate in all industries, including medical aesthetics. A blockchain system can provide transparency and cooperation between separate parties with a common goal, matching perfectly the nagging problems of the medical supply chain.

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Supply Chain Issues

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The supply chain is a critical but sometimes overlooked part of our globalized economy. Raw materials are sourced from all over the world and pass through many countries, organizations, and processes before they reach your table. This includes products, pharmaceuticals, and medical equipment and supplies.

The medical cosmetics industry lies at a tricky intersection of regulation and customer demand. One the one hand, pharmaceuticals and medical goods can be perishable, need refrigeration and can come with strict regulations. There can be heavy penalties if safety and performance standards aren’t met. At the same time, cosmetic surgeries are typically elective and products are available over the counter. Demand is seasonal and can be heavily influenced by the media or even high profile social media influencers.

There’s also the problem of cheap substitute materials making their way into the supply chain unnoticed. One frightening example was when over 30,000 women in France received faulty breast implants. In an effort to save costs, Poly Implant Prosthesis (PIP) replaced medical-grade silicon with an Industrial silicone substitute which would otherwise have gone unnoticed. However, as the casing around the implant which was proven to be faulty and was prone to rupture and leakage, when a woman died through involuntary homicide (a charge labeled against the Company in one of over 2,000 legal complaints), the Company closed, and the full enormity of the scandal was unraveled. Imagine the fear that these women went through not knowing whether their practitioner had inserted a faulty implant, as records were not, in the most part kept, of the batch numbers and manufacturers details. Having the integrity of these products immutably recorded on the blockchain would have protected patients and ironically saved the Company from closure and several million pounds of reputational damage and lost business.

These factors mean the supply chain needs to be transparent, auditable, efficient, and responsive at the same time. Something very difficult to achieve with current solutions. These are either fragmented or rely on a centralized point of control. Often these don’t work, as many companies within a given supply chain simply aren’t willing to hand control of their operating data to someone else.

Blockchain: A Different Way of Thinking

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Most people know blockchain as the technology behind Bitcoin. The network for making fast, anonymous online transactions. But, the basic idea has applications beyond just financial networks.

At its core, a blockchain is a tool for collective action. Specifically, one that can be used amongst people that have a common goal, but don’t necessarily trust each other. This makes it perfectly suited for the challenges of supply chain logistics. Each participant in a supply chain has a common goal: to sell as many of the end product as possible. But, nobody wants to hand over the keys to their entire database of company information to a central organiser. Blockchain offers a method for sharing data amongst these parties in a way that’s decentralized, immutable, and secure.

Decentralization means that no single entity has control of the shared data. At each step along the supply chain journey, the participants can update a shared blockchain ledger, but nobody has the ability to edit or delete records. Changes to the way the blockchain works have to be agreed by everyone that uses it. For example, when a shipment is passed from warehouse to distributor, both can update the shared blockchain with relevant information. Anyone with the correct access can update or view the ledger, so those further down the supply chain can see what’s going on and make arrangements.

Immutable means that once something has been recorded on a blockchain, it can’t be modified by anyone. If it was, it would become obvious to everyone using blockchain. The immutability and security have been proven on the Bitcoin network, where millions of dollars are traded every day.

Benefits for the Medical Cosmetics Industry

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This new decentralization, transparency, and security come with a few huge benefits.

On-time product delivery

Effective coordination becomes much easier when all parties can comfortably share important supply chain information with each other. Problems can be communicated, and shortages can be anticipated more effectively. A blockchain system could efficiently take care of much of the paperwork and man manual payment processing without the usual human error.

Lower costs

Transparent processes make it easy to see everyone’s role in the supply chain. Middlemen will have to prove their value and optimize or get out. Also, in a medical industry where it’s better to be overstocked than to run out of something, fragmented supply chain information frequently leads to billions of dollars in wasted inventory. This cost can be slashed with better communication.

Cutting out counterfeit products

Counterfeit goods are damaging to the whole industry. Consumers can be physically harmed, and a brand’s reputation can be damaged. With blockchain, the origin of a product and its parts can be easily traceable. It’s much easier to identify the source of all materials and eradicate them from the supply chain, preventing dangerous situations.

Regulatory compliance

Finally, the tight security guarantees of blockchain can make complying with stiff regulations easy and even automatic. Rather than keeping records and making them available to regulators on demand, a blockchain ledger could be made accessible to the relevant regulatory bodies. Pharmaceutical or product recalls could also be more targeted in a transparent system.

Obstacles to Overcome

Of course, the switch to a blockchain based system can’t happen overnight. Companies, organizations and regulators from many different countries have to come together and agree on any new way of doing things. The success of a new system will rely on its ability to interoperate with the systems currently in place.

The blockchain is also a relatively new technology and still struggles with some technical bottlenecks to mainstream adoption. Each update to a blockchain ledger has to get consensus from the whole network. This can sometimes lead to delayed settlement times. These aspects of the technology need to be optimised for use in the supply chain.

What next?

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Like most industries, medical cosmetics suffers from transparency, trust, and communication problems in its supply chain. The root of the problem lies in the difficulty of balancing transparency with trust in current centralised or fragmented systems. Blockchain offers an ideal a platform for decentralized collaboration between many parties with no trust required.

iConuslt is a UK based, award-winning online patient care system is in the process of implementing a blockchain solution in an effort to overcome some of these problems. By utilizing a blockchain solution to underpin their current business model, the Company hopes to create a much better experience for the patient, practitioner and market as a whole. You can find out more about how they intend on doing that here.

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Higher quality, on-time delivery, lower costs and easier regulatory compliance are some of the immediate benefits for upgrading to a blockchain based supply chain. Those that can transition quickly and smoothly to this new technology will have a big advantage over their competition.

The materials relating to Cosmecoin are not an offer of securities for sale in the United States. The securities to which these materials relate have not been registered under the US Securities Act of 1933, as amended (the “Securities Act”) or the securities laws of any state or jurisdiction of the United States. Accordingly, these securities may not be, sold, pledged, assigned, delivered or otherwise transferred, exercised or redeemed, at any time, within the United States or to, or for the account or benefit of, U.S. Persons. There will be no public offering of the securities in the United States.

2018-06-12T02:25:31+00:00 May 14th, 2018|

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