blockchain supply chain
What Blockchain Can Do For The Global Supply Chain?
November 20, 2019
blockchain supply chain
What Blockchain Can Do For The Global Supply Chain?
November 20, 2019

A supply chain is the integrated planning and execution of different processes involving material flow, information flow as well as financial capital flow. To be precise, the flow of goods, services, and information from one point to another. The use of blockchain in supply chain management can work as a game-changer by eliminating the vulnerabilities and inefficiencies of the current system.

What is a Supply Chain?

A supply chain cycle involves raw material delivery from a supplier to manufacturer, to delivery of the end product to the consumers.

A well-maintained supply chain involves increased revenues and sales and decreases in frauds with accelerated production and distribution.

The supply chain in the modern context is far from a simple linear chain. It is rather a complex, demand-driven network. The complexity comes with challenges such as:

  • Environmental conditions
  • Delivery locations
  • Workers’ safety, etc.

All while making sure products are being moved from one place to another efficiently and cost-effectively.

Processes Involved In A Supply Chain

A supply chain process involves going through a lot of middlemen along the way. The various stops and middlemen in the whole process include a system of organizations, people, activities, information, resources involved in moving a product or service from supplier to customer.

The various components involved in a typical supply chain include natural resources, materials, ingredients and components, finished goods, retail and e-commerce, customer returns, reuse, and recycling. In addition to distribution and fulfillment, transportation and warehousing.

Challenges in the Supply Chain Industry

The lack of end-to-end visibility in the supply chain can lead things to get out of hands easily. Moreover, unmonitored interactions in the supply chain between different stops along the way can cause business inefficiencies.

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With numerous problems such as:

  • Tracking difficulty
  • Corruption
  • Various Costs Involved in different stops
  • Globalization
  • Decentralization

How Blockchain Can Help Supply Chains?

Blockchain helps in the complicated aspects of supply chains like record-keeping and tracking of products. It can provide a better alternative to a centralized database involving corruption or lack of transparency and accountability.

Big enterprises include even minutest elements in their supply chain. This can create business inefficiencies and problems in recording and keeping tracks even for a big enterprise.

In the longer run, poor supply chain management can even create issues while diluting the brand name. Issues can pop up ranging from customer relations, to cost, to lack of transparency.

The application of blockchain in the supply chain involves the identification of product origination to its present status.

Blockchain Disrupting the Supply Chain Sector

Application of blockchain technology in the supply chain can disrupt various industries such as:

  • Coffee Supply Chain
  • Seafood Verification
  • Drugs and Pharmaceutical
  • Food Supply Chain
  • Automotive Supply Chain

Advantages of Blockchain Adoption In Supply Chains

The various advantages of adopting blockchain are as follows: –

Cost Reduction

Real-time tracking of a product in a supply chain with blockchain reduces the overall cost of moving products in a supply chain.

Blockchain can speed up the administerial process in the supply chain while guaranteeing secured transactions.  Eliminating middlemen and other extra intermediaries can save time, money, frauds, and even product duplicity.

Real-time tracking of products can improve the risk of losing products while helping in an accurate record-keeping process.

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Establishing Trust

Blockchain in the supply chain can help build up trust even in a complex supply chain process while facilitating smoother operation.

Also, when it comes to regulatory compliances such as custom enforcers, trust plays a vital role. Immutability in blockchain applications in the supply chain is well-designed to prevent tampering and establishing trust.

Other Benefits of Adopting Blockchain in Supply Chain

Other than these, a few other benefits of adopting Blockchain technology in the supply chain industry are:

  1. Reduce or eliminate fraud and errors
  2. Improve inventory management
  3. Minimize courier costs
  4. Reduce delays from paperwork
  5. Identify issues faster
  6. Increase consumer and partner trust

Use Case: The Food Industry

Food industry has started using blockchain in its supply management system to build better supply chains. Companies like Walmart have teamed up with IBM to incorporate their “Food Trust System”.

Walmart ran two test runs with IBM: one with Chinese pork and the other with Mexican mangoes. Walmart and IBM used the “Hyperledger Fabric” for these tests.

Frank Yiannas, vice president of food safety at Walmart said about the trials:

“We were so encouraged that we really quickly started reaching out to other suppliers and retailers as well”

The integration of blockchain into the food industry makes make the whole process more transparent and safer.

A transparent food system is advantageous because it enables:

  • Enhancement of food safety.
  • Assurance of fresh food as no one will risk sending “non-fresh” food in an open system.
  • Less food waste as every single piece of food is accounted for.
  • Prevents fraud as the system is open for everyone to see.
  • Promotes responsibility among the food producers since they now know that they can’t get away with underhand dealings.
  • It gives the customer trustable information about their food and empowers them to make better buying choices.
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Blockchain in food supply chains could improve in getting done of the following tasks:

  • Recording the quantity and transfer of assets like:
    Pallets, trailers, containers, etc. – as they move between supply chain nodes.
  • Tracking:
    Documents such as- purchase orders, change orders, receipts, shipment notifications, or other trade-related documents.
  • Assigning or verifying certifications:
    Determining food products if its an organic or fair trade.
  • Linking physical goods to:
    Serial numbers, bar codes, digital tags, etc.
  • Sharing information about:
    Manufacturing process, assembly, delivery, and maintenance of products with suppliers and vendors.


The use of blockchain in supply chain management can work as a game-changer by eliminating the vulnerabilities and inefficiencies of the current system. Blockchain has brought about constructive changes in many industries to date including the supply chain sector.

Corporations are exploring ways to filter the way their supply chains while adopting the change blockchain technology has to offer.

Dumping paperwork and centralized databases can bring about changes in terms of higher rewards and increased performance.

The most appealing benefit of using blockchain is that it allows the data to be more interoperable. Due to this, it becomes easier for companies to share information and data with manufacturers, suppliers, and vendors.

References: Hackernoon | Blockgeeks | Cerasis | SupplyChain247 | Information Age

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