3x founder, 1 exit. I write a bunch about Security Tokens, venture capital & Startup community
It was a Friday night, 20th July & Zhi Ruo world came crashing down. She was alerted to an article that was spreading like wild fire on Weibo by her friend. Her friend made sure that she read the article immediately by calling her mobile & asking her to check the article right away. She didn’t give any more details.
As she opened the link, her heart sank. She became increasingly numb as she read each word. ‘Please!’ She kept murmuring. ‘Not my child! Please! No!’ as she recalls the horror that unfolded in her life over the past week.
She began to frantically search her daughter’s medical records. As she retrieved her file & cross referred the DPT vaccine serial number with the batch numbers on Weibo, she found that her infant was adminstered a defective DPT vaccine. She called her husband who can only spend time with them on alternative weekends as he works in Shanghai, 5 hours train ride away. He rushed back home to Zhi Ruo & his daughter vowing action against the company.
Anger is the over riding emotion amongst all parents across Shandong province, China.
Outrage spread over the Chinese social media as regulators & the government tried to contain the fallout over information that once of the countries largest vaccine manufacturers was making & distributing defective infant vaccines. Both the Prime Minister & the President of China made public comments that they will not tolerate this occurence & that punishments will be handed out to those who violated the safety standards.
Some posts on social media appeared to be removed.
According to a project run by the Journalism and Media Studies Centre at the University of Hong Kong, which monitors censorship on Weibo, China’s Twitter-like service, the Chinese word for “vaccine” was one of the most restricted on Sunday and Monday.
Fu King-wa, an assistant professor who heads the project, known as Weiboscope, said also that the rate at which posts related to the scandal were being screened peaked on Sunday. For every 10,000 posts made across the 120,000 accounts monitored, an average of 63 were blocked, he said.
Changsheng Biotechnology is owned by Chinese billionaire Gao Junfang. Last week shares for Changsheng, listed in Shenzhen, dropped 10%, the maximum amount they are allowed to fall. On Monday, trading of its shares was temporarily halted. The company has since lost 40% of its share value last week, when the case has become public.
Shandong is a coastal province & located nicely halfway between Beijing & Shanghai. The modernisation that swept China from the 1970s served well to modernise the coastal provinces including Shandong. Living standards grew rapidly. Luxuries, modern appliances & gadgets appeared. The western way of life was adapted to the Chinese culture to create a new way of life. But substandard practices are rife. This applies to both Manufacturing & Services.
China’ s vaccination system is a nightmare. It has been affected by corruption, staff shortages & weak regulations/enforcement. According to the Jilin Food and Drug Administration, where Changsheng Bio-technology is based, the company sold about 252,600 substandard DPT vaccines to the Shandong Centre for Disease Control and Prevention, the agency in charge of public health in a province of about 100 million people. The drugs were administered to children as young as three months old.
What stunned many parents & the society is that this is not the first instance of such an incident.
In March 2016, a similar incident in the same province led to 37 people getting arrested.
in November 2017, Changsheng Bio-technology & another company failed to meet the national standards for 2 batches of DPT vaccine. The official watchdog reported that though the vaccines were ineffective at immunisation, there would be no danger to human health from administering them.
On July 15th 2018, a surprise inspection by the official watchdog led to the uncovering of forged data related to the defective vaccines. The manufacturerer’s license was immediately revoked. The company recalled the defective vaccines the next day. Fines were announced a couple of days later & the story got out to social media spreading like wildfire.
As a consumer, Trust is built within the intermeshed framework of standards, regulation, enforcement, quality control, supply chain, brand reputation & feedback systems
In the early days of any industry or service, regulators play a guiding role in establishing dependability from manufacturing to consumption. As a critical support function, supply chain is automatically regulated as part of the process. Quality checks are established at several points of the supply chain to test for variance from the standard. Bad samples are weeded out. Depending on the seriousness of the product, this could mean an entire batch being recalled. For example, Passenger Car Brakes or Air Bags cause recalls on a massive scale.
Such instances are not uncommon during the initial days of establishing consumer trust. But with feedback loops, regulatory policing & tighter quality control, recall frequency decreases & consumer trust increases over time.
In this case, despite the presence of several checks & balances, Quality Controls were bypassed & records were forged. Public trust had been misused.
What if there was a mechanism that can do the following?
Well, this is possible when we implement a Blockchain solution that leverages IoT data. This debacle in China could have been averted. Faking of records could have been impossible had there been a blockchain solution in place to record & track the supply chain
Blockchain is one of the better technology solutions that are currently available for supply chains
Though Blockchain was originally intended for financial transactions, businesses of all kinds are getting creative with the blockchain ledger, as it can be used to record information, track, and verify trades of virtually anything that holds value.
Depending on the product, the supply chain can span over tens or even hundreds of stages, multiple geographical locations, a large number of invoices and payments, have several individuals and companies involved, and stretch over months / years of time from start to end.
Since every transaction is captured & recorded on a block and across multiple copies of the ledger that are distributed over many nodes, it is highly transparent & easily accessible to anyone with an internet access.
It is also highly secure since every block is linked to the one before it and after it. Since every node has a copy of the entire blockchain from the very first block to the most recent one, it is highly improbable for any tampering to occur after the data has been written on the block.
There is not one central authority over the blockchain, though certain permissioned types of blockchain have some elements of the legacy spoke & hub design.
Supply Chains, even complex ones have taken to Blockchain like ducks to water.
Walmart uses blockchain to keep track of the pork it sources from China. The blockchain records where each piece of meat came from, processed, stored, its temperature and its sell-by-date
Blockverify.io & Everledger.io have Blockchain Solutions for Diamond supply chains. Though, De Beers takes the limelight in implementing a blockchain solution for ensuring that blood diamonds are not traded in their value chain.
Dole, Nestle, Unilever, Driscoll’s, Golden State Foods, Kroger, Wegmans are all leveraging the Blockchain for their perishable produce supply chains.
Blockchain has been touted as the counterfeiter’s worst nightmare
Public health & safety are 2 ideas that can never or should be compromised. Blockchain allows tracability, Proof of custody & transparency as its core properties.
Impact Areas in the Supply Chain
Circling back to the story at heart of this article, Changsheng Biotechnology would have found forgery of its records impossible had there been a Blockchain based solution. Of course, the past cannot be undone but the course of future remains firmly in our hands. We have a duty of care towards our next generation & blockchain can help us deliver it.
If you are wondering what is Blockchain’s best use case, there is none better than improving Public Health & Safety by using Blockchains in Supply Chains