Tag: blockchain

OM in the News: Blockchain and High Health Care Costs

Blockchain could eventually be used to provide a secure and accurate medical history for every individual patient.

In the continuing push for affordable health care, one of the biggest stumbling blocks is still the confused and error-filled manner in which electronic data is shared among doctors, insurers, hospitals and patients. One solution, writes The Wall Street Journal (May 29, 2018), could be blockchain technology.

In the current tangle of incompatible records systems that typifies U.S. health care, incorrect information can creep in when patient data gets re-entered multiple times by doctors’ offices, insurers and hospital staff. Big errors can seriously affect the quality of care that patients receive, small discrepancies can result in wrongful denials of insurance coverage, and errors of all types add to the system’s cost.

Blockchain, by contrast, puts patients, insurers and providers all on the same page. With a low-cost and decentralized-ledger approach to managing information, blockchain technology gives all of the parties in the provision of health care simultaneous access to a single body of strongly encrypted data, and it creates an audit trail each time data is changed, helping to ensure the integrity and authenticity of the information.

Eventually, blockchain could be used to provide a secure and accurate medical history for every individual patient. MedRec, a blockchain system being developed at MIT, is designed for patients to be able to manage their own records and give permission to different doctors or providers to access and update the records. And Change Healthcare, a health network of 800,000 physicians, 117,000 dentists and 60,000 pharmacies, introduced a blockchain system this year for processing insurance claims. The shared ledger of encrypted data represents a “single source of truth” for those providers.

Classroom discussion questions:

  1. Explain the concept of blockchain.
  2. How can blockchain work in the supply chain?

OM in the News: The Blockchain Chicken

Did the chicken you just buy at the supermarket have a nice life, roam free, and eat healthy grains? asks Businessweek (April 16, 2018).  Every chicken at Carrefour, the big France-based grocery chain, comes complete with its very own life story, thanks to blockchain software. All you need to do is scan the label with your smartphone to get all the details. Carrefour wants to do whatever it can to ensure its products aren’t tainted, part of a broader industry trend that buys into the as-yet-unproven promise that blockchain can improve food safety.

Nestlé, Dole Food, Unilever, and Tyson Foods are also working with their biggest customer, Walmart, to implement a blockchain platform built by IBM. “There’s no question about it, blockchain will do for food traceability what the internet did for communication,” says Walmart’s VP. For every 1% reduction in food-borne diseases in the U.S., the economy is estimated to benefit by $700 million from increased productivity.

By making suppliers more accountable, adoption of the technology would help reduce some of the headline-grabbing food tampering of recent years: wood pulp blended with Parmesan cheese, horse meat passed off as minced beef, melamine added to water-diluted milk to raise protein (which caused 300,000 illnesses in China), and plastic mixed in frozen chicken nuggets. Such meddling, health dangers aside, costs the food industry as much as $49 billion a year.

Reducing waste is another goal. Recalls contribute to the 133 billion pounds of food  lost in the U.S. every year. Let’s say there’s a norovirus or listeria outbreak associated with spinach at your local grocery. It’s currently very difficult to identify the origin of contaminated food. With blockchain, grocers can quickly pinpoint the source, narrowed to even a single farm. And once in stores, blockchain data—combined with sensors and computer models—could help grocers better gauge the shelf life of produce.Classroom discussion questions:

  1. What are the strengths and weaknesses of blockchain?
  2. How does it work?

OM in the News: Walmart Tries Out Blockchain

Walmart found blockchain can improve the speed and accuracy of product recalls

Blockchain isn’t only about bitcoin. The technology best known as the record-keeping system behind cryptocurrencies seems poised to play a broader role in business, where it could change how supply chains work.
Walmart is using the blockchain technology to manage supply chain data for mangoes, berries and dozens other products. “The system, built with IBM, will help Walmart figure out where bad food came from during product recalls,” writes The Wall Street Journal (Feb. 7, 2018). 

Here is how it works: A blockchain ledger allows participants to add blocks of information after each party runs algorithms to evaluate a proposed transaction. If the parties agree that the transaction looks valid — identifying information matches the blockchain’s history and follows the rules created by the participants — then it will be approved, time-stamped and added to the chain.

For example, after a mango is picked from a tree, it makes many stops before getting to a store shelf. Farmers, packing-house workers, and others along the way use a mobile app from Walmart to send details such as harvest dates, locations and images of their fruit to the retailer’s blockchain. The process is simpler and more secure than the array of barcodes, scanners, paper forms and individual databases Walmart usually uses.

In a simulated recall under the blockchain system, Walmart traced the origin of a bag of sliced mangoes in 2.2 seconds. With Walmart’s other systems, the same exercise took 6 days, 18 hours and 26 minutes. This speed and accuracy could save sales that otherwise would be lost as stores pull all mangoes off shelves while waiting for trace-back results. It could also prevent illness and death. “We’re all after trust in the supply chain, especially in a crisis,” says Walmart’s head of food safety.

Classroom  discussion questions:

  1. Explain what a blockchain is.
  2. Why is the concept so potentially valuable as a supply chain tool?

 

OM in the News: IBM and Maersk Apply Blockchain to Shipping

Shipping giant Maersk and IBM formed a joint venture using blockchain

Shipping giant Maersk is the latest company jump onto the blockchain train, entering a joint venture with IBM to create a more efficient and secure platform for organizing global trade using blockchain technology, writes The Wall Street Journal (Jan. 17, 2018). The platform could be used to streamline operations for the entire global shipping ecosystem. The idea came from the current stack of paperwork needed to process and track the shipping of goods. The cost of the required trade documentation to process and administer many of the goods shipped each year is estimated to reach 1/5 of the actual physical transportation costs.

The companies said blockchain, the technology behind increasingly popular cryptocurrencies such as bitcoin, is ideal for organizing large networks with different partners like the shipping industry, which transports more that $4 trillion goods a year. “The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit,” said a top Maersk exec.

More corporations, including General Motors and P&G , are exploring ways to use it to streamline supply chains and customs clearance. Singaporean and Peruvian customs also are exploring collaborating with the platform to facilitate trade flows and enhance supply chain security.

The move comes as Maersk and IBM have been attempting to reinvent themselves. IBM, the 106-year-old technology giant, has been looking to new lines of business, including blockchain, as sales in its legacy business of selling hardware and software slow. Maersk has been trying to transform itself to into a global supply-chain major like UPS and FedEx by integrating its transport and logistics units.

Classroom discussion questions:

  1. What is blockchain and why is it important in OM?
  2. How does blockchain relate to supply chains?