by Judith Schuermans, Sebastiaan van Herk & Nienke Swankhuisen

While most people relate blockchain to large companies in the financial industry, small companies and other sectors could also benefit from the blockchain technology. Maintaining and improving the safety of data transactions, optimising organisational processes and inter-organisational coordination, and implementing smart contracts play a large role in the sectors of logistics, health and agro-food. However, there are several obstacles which led to slower adoption of blockchain and other distributed ledger technologies in these sectors.

Since the launch of bitcoin in 2009, most of the research and progress on blockchain has been done within the financial sector. Among others, Santander, JP Morgan, American Express and Goldman Sachs are all setting up pilots and conducting multiple blockchain-related efforts. Though it makes sense to use blockchain for money-related businesses, safe and secure data transactions and smart contracts also optimise supply chains and improve client satisfaction by automated services. This is, for example, the case when shipments need tracking in real-time across 20-30 organisations when sensitive medical records are shared between practitioners or researchers, or to assure the strategy, quality and origin of food production.

These advantages can make a difference for all types of companies, both multinationals, smaller companies and startups. Nevertheless, while large corporates often have the resources to experiment and develop new products and services like blockchain, this is not the case for SMEs while they are experiencing problems for which blockchain can be a solution.

Here are three sectors where blockchain could make a difference:

1. Logistics

Transporters have to deal with a lot of required administration like bills of ladings, especially when delivering internationally. Small transporters often don’t have the organisational capacity to deal with all these processes which can require large amounts of paperwork to be filled in, signed and sent to a number of different locations around the world. Blockchain has the potential to ease this process by making it an automated system to prove the integrity of documentation throughout the transport. It can record and track assets as they move through the chain. This will decrease the administrative burden for SMEs in logistics.

2. Agricultural and food

For SMEs in the agricultural and food sector, the costs of safety compliances have a big impact. To make sure that their suppliers have delivered safe products, sampling needs to be executed. This means that for a single batch at every step of the supply chain, an SME is forced to take a sample to prove compliance. Furthermore, in case a faulty batch is discovered it takes relatively long until all involved stakeholders are notified, resulting in health risks and wasted production capacity for the SMEs.

By using blockchain, all precompetitive sampling information can be shared with all stakeholders which will lead to a strongly reduced need to sample at the individual SME level. The individual SME can namely benefit from samples already executed elsewhere. Besides, it results in an early warning system which minimises the time to discover a faulty batch since the information about the batch will be shared in the blockchain database accessible by all SMEs.

3. Health

The main issues with drug safety in the pharmaceutical supply chain have to do with how the drugs are initially manufactured. The traceability of active pharmaceutical ingredients during the actual manufacture is a difficult process but highly needed. Drugs containing different active ingredients than intended can lead to harm a patient or even death.

Blockchain’s features make it possible to provide a basis for complete traceability of drugs: from the manufacturer to the end-consumer (the patient) and provides the ability to identify exactly where the supply chain breaks down during an issue. A blockchain would remove inefficiencies, reduce time and costs, and support better customer experiences with less frequent manual errors and delays.

Blockstart

To make sure SMEs can experiment if and which blockchain solution will help to tackle the problems in these sectors, Bax & Company has set up the project Blockstart, together with the partners Brightlands, BioRegio STERN, Medicen, Multitel, Chainpoint, University of Surrey and the University of Windesheim. The aim of Blockstart is to increase the competitiveness of SMEs in the health, agro-food and logistics sectors by identifying and testing business opportunities from blockchain innovations. Together with business networks, incubators and blockchain experts, SMEs will test the market readiness of different blockchain solutions in real-life settings.

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