Blockchain for Pharmaceutical Procurement Supply Chain
IBM and Sichuan Hejia Co., Ltd. have announced the launch of a blockchain-based, supply chain financial services platform for pharmaceutical procurement. Designed to help improve efficiency, transparency and operation of supply chain finance, the Yijian Blockchain Technology Application System is a permissioned blockchain platform that uses Hyperledger Fabric.
The platform is in production with Hejia, a pharmaceutical retailer, a hospital and a bank running business transactions. In July, Hejia plans to expand the platform to include multiple pharmaceutical retailers, hospitals and banks. The system is aimed at eliminating some of the financing challenges in the pharmaceutical industry.
Small and medium-sized pharmaceutical retailers in China can find it difficult to raise funds as a result of an underdeveloped credit system and a lack of established credit evaluation and risk control. It can take pharmaceutical retailers up to 90 days to recover payment after delivering medicine to hospitals. Without strong credit records and collateral to meet financing standards, retailers can find it difficult to get loans from traditional financial institutions.
Working with IBM, Hejia has established a blockchain-based business network among these supply chain participants. By tracking drugs through the supply chain and encrypting trading records, the transparency of the blockchain can help establish the authenticity of the transaction which may help lower the credit risk profiled by financing institutions, allowing the payment period to be shortened to as little as one day.
Leng Tianhui, Board Chairman of Hejia, said: “The launch of the supply chain financial services platform marks a milestone for the cooperation between Hejia and IBM on the innovative application of blockchain technology. In the future, the platform will expand to include more industries to provide participating companies and financial institutions with transparent and efficient financing services built on blockchain-based innovation in a business model that will contribute to China’s economic development.”
Director of IBM Research for China and CTO of IBM Greater China Group, Dr.Shen Xiaowei remarked: “Blockchain can fundamentally transform businesses by eliminating inefficiencies, speeding up transactions and enabling innovative new business models. The Yijian Blockchain Technology Application System we’ve built with Hejia is a great showcase of this capability. We look forward to continued collaboration with Hejia to apply this technology to other industry use cases.”
Gregor Pillen, Managing Partner of IBM Greater China Group Global Business Services, stated: “IBM offers an enterprise-grade blockchain platform built on the Hyperledger Fabric that helps clients define and develop new industry use cases. We have a deep understanding of various industries and leading technologies that we use to help resolve enterprise clients’ business challenges while finding growth opportunities so that they can help contribute to China’s economic transformation.”