Blockchain in Supply Chain Management

Significant companies like Maersk and IBM already use blockchain in supply chain management.
Blockchain in Supply Chain Management

The recent advancements in technology and the rise in manufacturing growth have impacted supply chain management. For instance, Artificial Intelligence, and the Internet of Things are monitoring manufacturing, maintenance, and quality control. Major companies like Maersk and IBM are already using Blockchain technology. According to research, approximately 1.9 million robots have been deployed in warehouses internationally. In this article, we will discuss blockchain in supply chain management and its impact on the industry.

When PCs were introduced in the 1980s, organizations started using them for word processing, daily operations, and accounting purposes. The spreadsheets helped with the logistics and supply chain.

In order to succeed, it is crucial for companies to embrace innovations to survive and be dynamic. Blockchain technology can help to simplify the process and save time. It can be integrated with electronic data interchange (EDI) systems to save money and reduce inefficiencies. The digital transfer of documents is also a step towards betterment.

How does the Supply chain work?

The product a user gets is a combined effort of organizations and stakeholders. This is called the supply chain. Supply chain management includes “management of the product development, sourcing, procurement, production, and logistics of raw materials, products, and finished goods from one point to another.” If it is done effectively, it helps lower costs, speed up production cycles, and lower risks.

The organizations within a supply chain are linked through physical and information flows:

  • Physical flows: These involve the transformation, movement, and storage of goods and materials.
  • Information flows: It involves the coordination between partners to control the day-to-day flow of goods and materials up and down the supply chain; it also involves long-term planning.

Challenges in Supply Chain Management

There are a lot of challenges faced by Supply Chain Management. Some of them are as follows:

  1. Lack of transparency

According to Alexis Bateman, director of MIT Sustainable Supply Chains at the MIT Center for Transportation and Logistics, there are two dimensions to this:

  • Visibility: This includes accurately identifying and collecting data from all links in the supply chain
  • Disclosure: This includes communicating this information, internally and externally, at the appropriate level of detail
  1. Inefficiencies in systems

This includes bad upstream inventory management, poor allocation of products to stores, fluctuating demand, and even slow shelf rotation. The effect recalls become expensive and inconvenient. Due to all this, the vendors and suppliers are unable to connect the dots of the issues.

Blockchain in Supply Chain Management

The impact on the supply chain function is enormous as Blockchain technology allows companies to track all types of transactions more securely and transparently. Companies can easily track the history of a product right from its point of origin to where it ends. The transactions are documented securely with all the record that starts from manufacturing to the sale. Time delays, added costs, fraud, and human error can be eliminated by maximizing the impacts. Any discrepancy on part of the chain can easily be tracked.

Due to the shared blockchain ledger, logistics data can be synchronized along with tracking of shipments and payments. This builds confidence and trust in the supply chain.

Blockchain provides efficiency and transparency to supply chain management.

  • Efficiency: blockchain allows companies to complete transactions without a third party, increasing efficiency. The integration of financial and logistics services, enabling greater data collaboration between stakeholders saves time and money. radio-frequency identification tags can be used to track the items.
  • Transparency: the records on the blockchain are stored permanently so there is no risk of erasing them. All information can be tracked eliminating illegal activities.


Many companies have integrated blockchain technology. Some of them are as follows:

  • Project Proton- a blockchain pilot implemented by PepsiCo
  • Australian car manufacturer Tomcar uses Bitcoin to pay some of its suppliers and accepts cryptocurrency for payments.
  • Walmart uses IBM’s blockchain-based Food Trust to keep track of its products along every step of the chain. Nestlé, Tyson Foods, Carrefour, and Raw Seafoods, among others, also use Food Trust for this purpose.
  • Mining giant BHP is using the technology to verify its suppliers and ensure environmental, social, and governance requirements are met along the supply chain.
  • South African paper company Sappi and Indian fabric producer Birla Cellulose partnered to create GreenTrack, which tracks fabric products from sustainable forests through to production.
  • Walmart Canada used the DL Freight supply chain invoice and payment platform to automate transactions and data points for more than 500,000 annual shipments, tracking these through GPS and IoT-enabled devices.
  • Diamond giant De Beers uses blockchain technology to track stones from where they’re mined, right up to when they’re sold to customers.


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