As the world gears up for the biggest vaccine roll-out, the pros of a blockchain-based supply chain come to the fore
A factor in StaTwig’s favour is that a lot of the vaccine makers are in Hyderabad where the startup is based
When Sid Chakravarthy founded StaTwig in Hyderabad four years ago, he had no clue that he would one day be in the epicentre of the biggest roll-out of vaccines in history. Hyderabad is one of the world’s top hubs for vaccine production. Research institutes there spawned pharmaceutical and biotech companies that became a manufacturing base for MNCs.
Now, StaTwig has brought in a blockchain-based supply chain platform, connecting manufacturers and buyers of vaccines to improve the efficiency and traceability of their distribution. Smart contracts and immutable records in the blockchain deal with problems like the degradation of vaccines during their supply, as temperatures fluctuate in the cold chain. As much as 30% of vaccines are wasted because of this, says Chakravarthy.
Even more serious is the surge of expired and fake products in the market as counterfeiters try to take advantage of covid panic. A blockchain system that assigns identities to products at the manufacturing plant and tracks them at every touchpoint on their journey can mitigate this.
StaTwig got support in developing and deploying its solution from the innovation fund of Unicef, which is the world’s largest distributor of vaccines. The startup graduated from the Unicef innovation programme in March 2020. That was the month when covid was declared a pandemic. At first, the focus was on slowing the spread of covid and accelerating the development of vaccines. But now, attention is shifting to the complexities of delivering these vaccines to billions of people around the world, quickly and equitably.
Unicef estimates that it will be distributing 850 tonnes of covid vaccines a month as they become available. “There’s never been a product in history that has been delivered to so many people in so short a time. It’s an enormous distribution challenge. We need all sorts of data to make this happen efficiently," says Chakravarthy.
Data is where StaTwig’s VaccineLedger becomes crucial. The global vaccine rollout involves varied entities from multiple countries and requires a level of visibility and trust that’s unprecedented. Thus, a blockchain and distributed ledger system of records that are openly verifiable and consensus-based, with no single source of control, is the need of the hour.
Of course, the biggest entry barrier for such a system is adoption, because it requires multiple stakeholders to sign on to the platform. This is where Unicef’s support has been vital for StaTwig, which also has backing from Gavi (Global Vaccine Alliance). Gavi has committed to making donor-funded vaccines available to low- and middle-income countries so that access is not based solely on the capacity to pay.
The value proposition of a blockchain system for organizations like Unicef and Gavi is the visibility they get of the vaccine supply chain as well as the assurance of quality and safety of what’s being delivered. On the other side are vaccine makers who are equally interested in such a solution, says Chakravarthy.
“Right now, after they ship the product, they have no visibility on where it is changing hands and how long it will take to reach the beneficiaries. That info is valuable because they want to ensure that their products are safe and not getting sold in the black market after being stolen or replaced. They also get a better understanding of how their products are getting distributed in different countries, so that they can manage their production and inventories better."
A factor in StaTwig’s favour is that a lot of the vaccine manufacturers are in Hyderabad where the startup is based. “It makes it easier for us to onboard them and work with them locally," says Chakravarthy.
A lot of stars have to align for a supply chain solution to work on the ground. Earlier attempts faced a barrier in adoption because they were too costly, says Chakravarthy. “Mobile tech has made it possible to build a solution without much hardware or additional processes. That’s what is making blockchain a favourite for supply chain tech. It’s a new trend and luckily we were involved in it right from the start."
Every vial counts
The crux of the blockchain solution is a unique identifier for each vial of vaccine. Here, StaTwig got the benefit of a regulatory requirement for serial numbers for every vaccine vial. Earlier, manufacturers would only print the batch number on the label, which meant all the 10,000 to 100,000 vials in a particular batch would have the same number. Serialization gave each vial a serial number in addition to its batch number. This helps in tracing it.
A batch of vaccines gets unboxed and repackaged at several points as it travels from manufacturers to distribution centres and hospitals, until a single vial gets administered to a person. The combination of serial number and batch number gives a unique ID to each vial which StaTwig’s software system tracks. Once the initial QR code or barcode of a batch is captured, the system can trace where each vial is going. All it requires is a mobile device to scan the barcode on the box of vials, and voila.
At every subsequent touchpoint, like airports, warehouses and hospitals, transactions are recorded on StaTwig’s mobile app along with a scan of the QR code. So, now a receiver of the vaccine as well as the sender will know exactly where it has been and for how long. IoT sensors placed in the boxes by manufacturers capture the temperature at every point, so there’s also visibility on whether the vaccines were maintained in good condition.
Such a shared tracking of data gives rise to privacy concerns as well as potential for hacking with malicious intent. StaTwig uses a hybrid model to strike a balance between the efficiency of a private blockchain and the decentralization and trust of a public blockchain. Essentially, the aim is for privacy preservation to be coded into the system.
Digitization, IoT, privacy architecture, a lot of pieces have to be in sync for adoption. But there’s a brains trust working on conjoining all the pieces. The startup got selected late last year in a cohort of 11 for the Supply Chain Labs programme of global investment firm Lumis Partners. This gives access to mentorship for bullet-proofing its system. “They bring in lots of operational and growth wisdom, which is very useful for us because our team is young. We also need to learn fast how to grow this rapidly," says Chakravarthy.
Rohit Bhayana, co-founder and managing partner of Lumis Partners, sees enormous potential. “Everyone talks about blockchain, (but) I have never seen it used as well as I’m seeing it used in supply chain. And that is because the whole basis of a value chain is authentication and ownership. Can I authenticate this is indeed what the tag says it is and can I say it has come from the person who said he’s giving it?"
The distribution of covid vaccines this year presents the mother of all use cases for demonstrating that value proposition.
Malavika Velayanikal is a consulting editor with Mint. She tweets @vmalu