Supply chain firms want to keep track of all products they make their way around the world. They are also particularly interested in the whereabouts of pharmaceutical drugs. Fraudulent or faulty products could potentially put consumers’ lives at risk – far more so than counterfeit branded goods.
Drug and product serialization is all about maintaining the integrity of supplies before they reach consumers and patients. Placing unique identifiers on packages is supposed to enable supply chain firms to track every point the drugs have been through since their origin.
Designers of such systems hope that they will allow patients and pharmacists to know with certainty where drugs came from and that their contents are the real thing. Expectations from the system are, therefore, high.
Expectations Of Drug And Product Serialization
Proponents of serialization want a world in which every drug or product in the system receives a scannable barcode. Supply chain operatives could then scan this barcode and upload information to a central server in the cloud.
For example, a pallet of bar-coded drug boxes might arrive at a depot with operatives then scanning and uploading information that the product has arrived safely and intact. Records are then shared with others in the supply chain.
The drive towards serialization began in California with the Drug Quality and Safety Act of 2013. It included a compliance timeline that set out what supply chain companies had to do, and by when. Full compliance must be achieved by 2023.
Under the rules, every unit of a drug requires a displayed 2D barcode that integrates with an end-to-end tracking system. The hope is that this will allow operatives to trace drugs all the way back to their source.
Why serialize products? There are three main reasons:
- Comply with regulations. Supply chain companies need to aspire to the highest regulatory standards worldwide to quickly and easily ship their products around the globe. Those that don’t may lose competitiveness.
- Counterfeit detection. Serialization is meant to make it harder for nefarious operators both within and outside of the supply chain to counterfeit goods. Preventing fraud protects consumers from low-quality, ineffective or hazardous drugs or products, and prevents brand damage.
- Secure delivery: Serialization allows suppliers to track products at the unit level, not just the pallet level. This granular approach improves monitoring and allows those at the consumer-facing end of the supply chain to see precisely where the goods originated.
Reality Of Drug And Product Serialization
However, the reality of drug serialization is not what many of the original designers imagined. While the basic concept – tracking all shipments through the supply chain – was a good one, in practice it hasn’t worked as well as many hoped.
Firstly, there are practical difficulties. Supply chain operators are having to make a lot of changes to their product handling processes, including investing in new equipment and retraining staff.
They’re also having to make alterations to their plant and equipment, often retrofitting facilities to make them suitable for barcode scanning.
Second, barcode scanning has a fatal weakness: it’s easily defrauded. Fraudsters in the supply chain can simply remove drugs and products from their original packaging and replace them with fake items. It is incredibly simple to do with almost no setup costs involved.
Another issue has to do with the way that current serialization systems store information. Most keep it on their own servers and then voluntarily share these with other firms in the supply chain via the cloud. Because of this, there is nothing to stop an individual firm from manipulating data to favor them.
Combined, these flaws mean that counterfeiting and low-quality goods are still a serious problem in the drug and product supply chain. Fake COVID-19 vaccines, for example, are very real.
So what’s the solution? A company called Authena.io might have the answer. The key, it says, is to use advanced trustless technologies.
How does it work? It’s actually very simple. Instead of using easily-to-replicate barcodes, Authena recommends that supply chain firms use considerably more secure tamper-proof NFC tags instead. And if the value of the single product is particularly high it could be worth it to equip single units with activity trackers.
NFC – or near-field communication – tags are small trinkets that you place either on product packaging or inside products themselves. When they come in a range of an operative’s reader, they emit a signal conveying information about the product (such as what it is, where it is from, and so on).
Critically, NFC tags are tamper-proof. If there is any evidence of tampering, they will deactivate, invalidating the consignment. Companies further down the supply chain receiving invalidated goods will not accept them.
Furthermore, Authena says that you can make such a system even more secure by combining it with blockchain technology.
When operatives read NFC tags, they send the information to a blockchain network. The network then creates an immutable record of where the product has been and what it is. Thus, no individual company in the supply chain can change it.
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We’re still a long way from rolling out such impressive technologies in the supply chain more broadly but, promisingly, they do exist. For consumers, these developments are wonderful news. It means that they will have more confidence that the drugs and products that they receive are genuine articles.
It also massively helps brands – especially at the retail and production stages. Retailers benefit from being able to sell or provide genuine merchandise and medicine, while producers protect their intellectual property.
As Authena points out, supply chains will be able to work more trustlessly in the future. There won’t be the same need as before to carefully and painstakingly build relationships with logistics firms, suppliers, and distributors as there was in the past. Technology will become a perfect substitute.