Disrupting product life cycle management
Back in 2008, the National Institute of Standards and Technology (NIST) wrote that “A key strategy for a manufacturer seeking competitive advantage is to ensure all stakeholders rely on sharing a common product description throughout the product’s lifecycle. Detailed product information cannot be kept isolated within any single entity of the extended networked enterprise but must be shared in a collaborative and secure manner across the global enterprise and its extended value chain.“
At that time of writing, there was no blockchain technology yet (the first bitcoin transaction was in January 2009). Blockchain technology can provide the “source of trusted information” infrastructure for the whole value chain and in this blog post we will show you how.
A blockchain project in healthcare
In a project for a leading manufacturer of medical devices, we implemented our QUASAR blockchain technology not only to share information but also to achieve a better insight in costs and revenues that are achieved for every individual product.
Supply chains, especially in healthcare, increasingly have to deal with regulation. Quasar holds the complete provenance details of each component of the product and is accessible by all involved parties, including authorities. This increases the transparency for the clients (hospitals).
Thanks to the immutability and auditability of QUASAR, it also enables a full traceability of components and products in case of quality issues. Moreover, with the help of big data analysis on the ledger, it is possible to determine which individual product needs repairs or maintenance.
Generic Life Cycle of Products
In this project, we looked at three of the five phases of the Generic Life Cycle of Products as defined by the NIST, namely manufacturing, transportation and utilization.
At the beginning of the manufacturing process, a digital wallet is assigned to a product by using the serial number as the wallet’s identifier. This wallet is funded by the corporate treasurer, enabling the product to pay for components, machine usage and labor workforce during the manufacturing.
Information about each production step (i.e. which materials and components were used and what were the results of a test) is saved in documents. These documents are stored on the QUASAR blockchain ledger and are immutable. Access to this information is granted via the product’s wallet.
The results at the end of the manufacturing process are:
- Immutable and auditable “bills of material” for each individual product. This information increases the transparency for the end users and is an important step to fulfill compliance and regulation.
- Insight in production costs for each product for every step in the manufacturing process.
The advantages of the blockchain in supply chains were already described in several publications about cooperations between Quantoz and BASF. In Supply Chain Quarterly, BASF stated “And because blockchain provides a transparent and immutable record of transactions that can be shared by a wide range of supply chain partners such as suppliers, customers, banks, and customs authorities, BASF also believes that the technology will improve business models and processes such as vendor-managed inventory, automatic customs clearance, and pay per use“.
All the information about the product is in the product’s wallet and is available for customs, distributors and authorities. Like in manufacturing, the product can pay the logistic services, warehouses etc. from it’s wallet.
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During the utilization phase, the product generates revenue. Business- or exploitation models can vary; from selling, renting or leasing the product to pay per use models. The digital wallet of the product enables full flexibility with regards to the deployment of new business models.
Because it is known which components are installed in which product over the whole life cycle, traceability in case of a safety issue or a production error can be done within minutes instead of days or weeks. A so-called push message to the product(s) in which the component is installed, immediately informs the possessor.
Costs for maintenance, materials, spare parts and product audits are still being paid by the product. At the end of the product life cycle, the treasurer defunds the wallet.
Using blockchain technology for the life cycle management of healthcare devices has clear advantages:
- Products get a digital identity. This identity can be used for communication purposes, such as the exchange of information or a payment.
- Secure data storage of components and usage are stored on the “shared source of truth” (i.e. the blockchain). There is no need for a trusted authority.
- The wallet with all the information collected during the product’s life cycle can also prove if a product was used in accordance with regulation and prevent that a product is (illegally) used after it has reached the end of the life cycle.