blockchain supply chain

blockchain supply chain

Here we can see, “blockchain supply chain”

What is Blockchain?

Blockchain may be a shared, immutable ledger that facilitates recording transactions and tracking assets during a business network. An asset is often tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything useful is often tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.

What is Supply Chain Management?

In more explicit terms, Supply chain management includes integrated planning also because of the execution of various processes. This involves material flow, information flow also as financial capital flow. The management of the flow of products, services, and knowledge involving the storage and movement of raw materials building products as full-fledged finished goods from one point to a different are named supply chain management. A supply chain within the SCM may be a network of individual entities, organizations, businesses, resources, and technologies that combine within the manufacturing of a product or service.

Any supply chain progresses by initially delivering the raw materials from a supplier to a manufacturer and eventually delivering the ultimate product to the buyer. Proper implementation of supply chain management may result in benefits like increased sales and revenues, decreased frauds and overhead costs, quality improvisation. Moreover, this may also cause accelerating production and distribution.

While this seems simple in theory, practice maintaining a supply chain may be a tedious task, even for tiny businesses. The interconnectivity of various elements within the supply chain gradually becomes more inefficient when a business grows. Different technologies like AI and Machine learning are being applied to SCM to resolve these inefficiencies and save a company’s money. Amongst these, blockchain is exploring new ways to vary the general game.

Viability of Blockchain for Supply Chain

Before moving on to the core topic of our discussion, allow us to recall the four most distinctive features of blockchain that make it highly applicable for the availability chain managers:

  • Transparent and controlled transactions. Blockchain has no intermediary (e.g., a bank). It leads to faster and more transparent settlements because the ledger is updated automatically. Payment conditions are often pre-programmed automatically, including the visibility of a transaction, so that it can only be visible to the authorized participants.
  • We have preapproved transaction fees. When making cross-border payments with Swift, the commission for the transaction is deducted only after the transaction completion — or, to be more exact, upon running through an entire number of the intermediary banks, which are executing this transaction. Just in the case of blockchain, you recognize the fees beforehand.
  • Auditability. All the transactions are immediately visible to authorized parties, meaning nobody can tamper, delete or conceal any information added to the blockchain.
  • Reliable. Thanks to its distributed nature, blockchain doesn’t have one point of failure. Besides, all the transactions processed on the blockchain are immutable and irrevocable, further eliminating fraud risks.
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While blockchain supply chain use cases are still emerging, a variety of successful pilots suggest that managers can realize significant benefits from blockchain, starting from cost-savings and increased efficiencies to new operational models, specifically within the following areas of supply chain management:

  • Procurement
  • Provenance and traceability
  • Digital payments and contracts
  • Logistics
  • Manufacturing

Let’s review them one by one.


Blockchain can act as a “single source of truth” for all the entities (subsidiaries, partners, etc.) making purchases on your behalf and negotiating different terms with suppliers. A blockchain-based database can store relevant data from all of your partners, giving your company a 360-view of the entire volume of purchases, no matter who managed the acquisition activity. There’ll be no need for individual users to share operational data and somebody else to crosscheck it constantly — the audits will be conducted automatically, eliminating the resource-heavy processes like extra price verification.

Here’s a quick example, for instance, this further. Your organization wants to barter a purchase deal supported total ecosystem volume — a figure that has purchase data from both you and your partners. Storing data during a blockchain-based system means you’ll effortlessly calculate the special volume discount supported total purchasing and mathematically prove that it’s correct. The simplest part? You’ll do so without disclosing each company’s volumes.

Provenance and Improved Traceability

The food supply chain will likely be the primary one to undergo a significant blockchain nation, especially when distributing fresh produce. Recalls have been a severe and dear industry issue for years. Thus, several major foodborne bacteria outbreaks, which have recently happened within the US, are encouraging more and more companies to look into blockchain as a replacement method for increasing the visibility and traceability of the products.

Consumers, as well, are putting pressure on businesses to supply more insights about the goods’ provenance, authenticity, and “life before reaching the shelves.” Most consumers can pay a premium for sustainable and ethically made goods. Consistent with Nielsen, 49% of shoppers can pay extra for products that have top high quality/safety standards.

Walmart may be a pioneer in this domain, partnering with IBM since 2016 on a blockchain-based traceability solution that might be applied across the company’s food supply chain. The tested system allowed the retailer to trace incoming food supplies from “farm to store” real-time. Apart from increased visibility, the corporate also explores how blockchain technology is often extended towards monitoring and controlling the spread of foodborne illnesses and helps minimize costly recalls. In 2019, the organic phenomenon giant planned to roll out its blockchain-backed traceability program, mandatory for all lettuce growers.

Other businesses are exploring how blockchain is often wont to certify the origin and paths of products sold and supply data on the authenticity. For example, OriginTrail, in partnership with TagItSmart, has recently tested the IoT and blockchain combo to stop wine fraud. In China, nearly 30,000 counterfeit wine bottles are sold every hour. Some of them contain hazardous additives that will cause serious health problems among consumers. The companies’ blockchain-based protocol allows tracking every bottle from the vineyard to the stores. Its anti-counterfeit technology that utilizes photochromic ink alongside unique QR codes helps verify each bottle’s provenance and authenticity.

As early pilots prove, blockchain and provide chain management are often a potent combination. Such a lot so that within the next six years, 20% of the highest 10 global grocers will adopt blockchain for food safety and traceability to build up their visibility into production, quality, and freshness.

Beyond the food industry, other traceability-based blockchain projects are catching up too:

  • IBM has ongoing collaborations with various gold and diamond industry leaders (Asahi Refining, Helzberg Diamonds, and others), helping them create new solutions for tracking and authenticating their products with blockchain throughout the availability chain. Everledger startup is attempting to try to an equivalent.
  • LVMH conglomerate plans to release a cryptographic provenance platform for their portfolio of 60+ luxury brands.
  • UPS features a pending application, describing a blockchain-based solution for planning package routes and tracking them globally through multiple carriers.

Digital Contracts and Payments

Even the foremost successful companies need to affect days sales outstanding (or even payment upon receipt.

This issue partially stems from the very fact that the current invoicing processes are mainly inefficient. Most invoice processing remains done manually by teams on each side, and corporations typically spend between $5-$25 per invoice.

Smart contracts devised on the blockchain can automate the invoicing process and “patch” the expensive procure-to-pay gaps. Payment terms are often codified, and cash is often obtained immediately after the trade has been executed and a logistics company has provided proof of delivery.

Smart contracts in supply chain management can help reduce data redundancy across trading partners and eliminate costly mistakes. For example, if a supplier sends a replica invoice, the blockchain-based system will analyze all the weather of the contract – contract terms, open purchase orders, or existing invoices. If things “don’t end up,” the system will reject the invoice, and it’ll recover to the vendor for extra verification.

In essence, smart contracts on blockchain act as an independent third party, which reviews all the contract aspects and clauses, only accepting entries that match all the pre-programmed values. This suggests, no errors, dubious or “lost” invoices can creep into your records.

To sum up, smart contracts can:

  • Help ensure data consistency between all actors of the availability chain and enforce complete contract term execution;
  • Automatically maintain consistency across all participating entities and streamline the method of managing trading relationships;
  • Provide better security levels than most existing approaches.


The logistics industry still relies on a vast written record of documents, especially in the customs process. This majorly reduces the visibility companies have regarding the status of shipments as they follow the availability chain. Blockchain can do several things to unravel this issue:

  • Increase the quantity of seamless data exchanges between all stakeholders to realize greater transparency and predictability of logistics operations;
  • Generate cost savings by powering more automated, error-prone, and secure processes;
  • Help establish more sustainable and responsible supply chains at scale. Pairing blockchain with IoT can help logistics companies gain more insights into the transportation conditions and add additional preventive measures against counterfeiting.

In particular, the ocean freight industry can massively enjoy the adoption of blockchain. Specifically, it can enhance all the trade documentation and administrative processing for ocean freight shipments. At present, a sample of refrigerated goods from East Africa to Europe can undergo nearly 30 people and organizations, with quite 200 different interactions and communications happening between these parties. A blockchain-based system can effectively replace the present means of communication, acting as a “single source of truth.” All entities will be ready to seamlessly add the required data, leading to fewer delays and better visibility.

In 2018, IBM launched TradeLens – a blockchain initiative with 94 participants, like freight forwarder CEVA Logistics, ocean carrier Pacific International Lines (PIL), and a network of 20 port and terminal operators spanning 234 maritime gateways. Together, they’re testing how blockchains are often wont to reduce delays and minimize freight documentation errors. An early pilot showed that the maximum amount of 40% might reduce transit time for a product shipped to the US.

Alibaba’s subsidiary logistics company Lynx International is actively exploring another blockchain use case, tackling cross-border logistics processes. The company’s new blockchain-based system now stores and operationalizes all the essential information about the imported shipments, including production, transport methods, customs, and third-party verification. So far, over 30,000 imported goods have been successfully logged into the system.


IoT and blockchain are arguably the foremost promising business opportunities in supply chain management, as 63% of SAP survey respondents state. The 2 technologies combined offer several significant benefits for the availability chain within the manufacturing industry:

  • Improved information continuity. IoT sensors can capture a spread of knowledge at manufacturing facilities and beyond them and transmit all the knowledge to a centralized repository. Managers, in turn, can gain a mess of the latest insights about material usage, transportation conditions, etc., and apply them in planning/optimization.
  • Robust fraud detection. Blockchain-based systems are impossible to tamper with. Any bait and switch or other mishaps within the factories are often instantly spotted and acted upon. Companies that put their reputation first will be ready to reduce reputational and business risks by being fully transparent about their supply and manufacturing processes.
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Producers, liable for transforming the raw materials into final products, can attain greater control over the flows incoming from suppliers, automate compliance to a particular extent and gain better control over overproduction.

Freight forwarders can automatically ensure that the products are being transported under the proper conditions, as IoT sensors are often programmed to capture data regarding temperature, moisture levels, etc., during transportation. They will also attain better visibility into the general logistics.

Using blockchain to drive supply chain transparency

New technologies are presenting promising opportunities for improvement across the availability chain. Using blockchain within the supply chain can enhance supply chain transparency and traceability and reduce administrative costs.

Monitor advancements

A blockchain supply chain can help participants record price, date, location, quality, certification, and other relevant information to manage the availability chain more effectively. The supply of this information within the blockchain can increase traceability of the fabric supply chain, lower losses from the counterfeit and grey market, improve visibility and compliance over outsourced contract manufacturing, and potentially enhance an organization’s position as a pacesetter in responsible manufacturing.

Deloitte recommends: Using blockchain within the supply chain can help participants record price, date, location, quality, certification, and other relevant information to more effectively manage the availability chain.

Recent developments and outlook

Bitcoin, the earliest blockchain implementation, triggered widespread experimentation of blockchain, particularly in financial services. In 2015, Nasdaq and OMX Group Inc. worked with a blockchain startup, Chain, to pilot and test blockchain technology to trade shares in Nasdaq Private Market.1 Visa Europe, the Commonwealth Bank of Australia, RBS, and many of the U.K.’s leading street banks have all announced that they’re performing on their proofs-of-concept using blockchain.2,3,4

As blockchain gains publicity, large corporations and startups are exploring technology uses outside the financial services industry. Many organizations are already experimenting with blockchain innovations to satisfy a variety of needs. Provenance, a supply chain transparency startup, recently completed a six-month pilot for tracking responsible sourcing of tuna in Indonesia via blockchain.5 Monograph, a startup launched in 2014, uses blockchain to secure the usage and sharing rights of digital media like video clips or brand-sponsored content and enable revenue sharing across media creators, publishers, and distributors. Skuchain builds blockchain-based B2B trade and provides chain finance products targeted towards the $18 trillion global trade finance market that involves numerous entities, including buyers, sellers, logistics providers, banks, customs, and third parties.6

Blockchain-driven innovations within the supply chain will potentially deliver tremendous business value by increasing supply chain transparency, reducing risk, and improving efficiency and overall supply chain management.

Driving value in the supply chain

Blockchain can provide increased supply chain transparency, also as reduced cost and risk across the availability chain. Precisely, blockchain supply chain innovations can deliver the following key benefits:

Primary potential benefits

  • Increase traceability of fabric supply chain to make sure corporate standards are met
  • Lower losses from counterfeit/gray market trading
  • Improve visibility and compliance over outsourced contract manufacturing
  • Reduce paperwork and administrative costs

Secondary potential benefits

  • Strengthen corporate reputation through providing transparency of materials utilized in products
  • Improve creditability and charitable trust of knowledge sharing
  • Reduce potential P.R. risk from supply chain malpractice
  • Engage stakeholders

Blockchain can enable more transparent and accurate end-to-end tracking within the supply chain: Organizations can digitize physical assets and make a decentralized, immutable record of all transactions, making it possible to trace assets from production to delivery or use by the user. This increased supply chain transparency provides more visibility to both businesses and consumers.

Blockchain can drive increased supply chain transparency to assist reduce fraud for top-value goods like diamonds and pharmaceutical drugs. Blockchain could help companies understand how ingredients and finished goods are skilled for each subcontractor, reduce profit losses from counterfeit and grey market trading, and increase confidence in end-market users by reducing or eliminating the impact of counterfeit products.

Furthermore, businesses can maintain more control over outsourced contract manufacturing. Blockchain provides all parties within a respective supply chain with access to equivalent information, potentially reducing communication or transfer data errors. Less time is often spent validating data, and more are often spent on delivering goods and services—either improving quality, reducing cost, or both.

Finally, blockchain can streamline administrative processes and reduce costs by enabling an efficient audit of supply chain data. Processes involving manual checks for compliance or credit purposes that will take weeks are often accelerated through a distributed ledger of all relevant information.

What are the Benefits of Blockchain in Supply Chain Management?

Blockchain technology, including the power to program business logic with the utilization of smart contracts, enables the following:

  • Transparency into the provenance of commodity — from the source point to finish consumption
  • Accurate asset tracking
  • Enhanced licensing of services, products, and software

Even in today’s technologically advanced world, supply chains could dramatically improve efficiency, audible tracking and limit exploitative behaviors. Within the container industry, paperwork can account for half the value of transport. A nationwide study conducted within the U.S. from 2010 to 2012 by the international ocean advocacy organization Oceana revealed that seafood is mislabeled up to 87% of the time. In makeup, electronics, and automobile paint, Mica is usually sourced from illegal mines by child laborers. 

Furthermore, consumer goods, especially electronics, pharmaceuticals, and luxury brands, are vulnerable to counterfeiting and fraud. A report from PwC claims that quite 2% of worldwide economic output results from counterfeiting revenues. 

Implementing public, private, and hybrid blockchains will bring traceability, transparency, and accountability to the movement of products and commodities. The technology is often applied to logistics to form business processes more efficient and to chop costs from supply chain infrastructure. 

How does blockchain make supply chain management more efficient?

Supply chains contain complex networks of suppliers, manufacturers, distributors, retailers, auditors, and consumers. A blockchain’s shared I.T. infrastructure would streamline workflows for all parties, regardless of the dimensions of the business network. Additionally, a shared infrastructure would offer auditors greater visibility into participants’ activities along the worth Chain.

How does blockchain technology cut costs from the supply chain infrastructure?

Blockchain can drive cost-saving efficiencies and reinforce the buyer experience through traceability, transparency, and traceability. 

What are the Blockchain Use Cases in Supply Chain Management?

Enterprise blockchain technology can transform the availability chain with these three use cases:

  1. Traceability
  2. Transparency 
  3. Traceability
  • Traceability improves operational efficiency by mapping and visualizing enterprise supply chains. A growing number of consumers demand sourcing information about the products they buy. Blockchain helps organizations understand their supply chain and interact with consumers with accurate, verifiable, and immutable data.
  • Transparency builds trust by capturing critical data points, like certifications and claims, then publicly provides open access to the present data. The knowledge is often updated and validated in real-time. Once registered on the Ethereum blockchain, its authenticity is often verified by third-party attestors.
  • Traceability may be a unique blockchain offering that redefines the traditional marketplace concept. Using blockchain, one may “tokenize” an asset by splitting an object into shares that digitally represent ownership. Almost like how a stock market allows trading of a company’s shares, this fractional ownership allows tokens to represent the worth of a shareholder’s stake of a given object. These tokens are tradeable, and users can transfer ownership without the physical asset changing hands.

How does blockchain technology enhance product traceability?

Global supply chains support everything from consumer grocery to product recalls. Sometimes consumer products or raw ingredients got to be recalled to stop injury or illness. Between lost sales, replacement costs, and lawsuits, recalls on consumer products negatively impact many individuals worldwide. Blockchain technology can enhance product traceability by reducing counterfeiting and by streamlining product recall.

How does blockchain technology streamline product recall?

Recalls subsided expensive and more efficient when manufacturers can locate affected products quickly and. Blockchain technology enables a more transparent and traceable supply chain, facilitating faster and more efficient recalls. 

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How does blockchain technology reduce counterfeiting?

The Global Brand Counterfeiting Report, 2018 estimates that the losses suffered thanks to online counterfeiting globally have amounted to 323 Billion USD within 2017. Counterfeit commodities account for nearly 188 billion dollars of lost revenue regarding prescribed drugs alone. Blockchain enables a private to verify that a product was sourced accurately and ethically. 

Documentation counterfeiting and fraud also are common among diplomas, certifications, and official identification. Blockchain records can transparently verify certifications and official legal documents and coordinate record-keeping immutably, preventing counterfeiting or fraud. 

How does blockchain technology improve supply chain transparency?

Blockchain technology enhances supply chain management through process tracking, regulatory compliance, reporting. 

How does blockchain enhancing supply chain transparency and process tracking?

Supply chain traceability is one of the highest use cases for blockchain technology. Blockchain provides the power to trace any digital or physical product throughout its lifecycle. Distributed ledger technology has the potential to expand the sustainable and ethical production and consumption of any commodity on a worldwide scale. Replacing the normal processes with distributed ledger technology could increase trade volume by 15% and U.S. GDP by up to five.

Almost every industry uses third-party manufacturers or various products from multiple vendors before creating and labeling the ultimate finished goods. In some cases, white-label products are sold before being repackaged and relabeled under another brand. Transparency in process tracking gives producers a bird-eye view into their value chain, allowing them to ensure the proper handoff of third-party goods and final product labeling. 

Blockchain can track the progression of assets, record the knowledge, and show previous asset records. Intelligent contracts are wont to enforce the asset tracking processes on the Ethereum blockchain. Anyone can view the provenance and journey of an asset in real-time, whether the asset is physical or digital. 

How does blockchain technology enhance regulatory compliance and reporting?

Regulatory and compliance reporting may be a severe concern for pharmaceutical companies, given many patient’s reliance on prescribed drugs. The availability chain must remain efficient while avoiding under or overstocked medications. 

Automated compliance and reporting will reduce friction, reporting costs and eliminate errors related to manual activities. Blockchain compliance will further enhance corporate governance by providing information in real-time and seamlessly distributing data to the right stakeholders. Lastly, blockchain could improve compliance and report for medical devices, prescriptions, manufacturers, and other commodities. 


I hope you found this helpful guide. If you’ve got any questions or comments, don’t hesitate to use the shape below. 

User Questions:

  1. What are the Disadvantages of Blockchain Technology?
  • Blockchain isn’t a distributed computer system . …
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  1. Can blockchain be hacked?

The issue of security has been a fundamental one for bitcoin since its development. On the one hand, bitcoin itself is tough to hack, thanks to the blockchain technology that supports it. As bitcoin users are consistently reviewing blockchain, hacks are unlikely.

  1. Where is Blockchain used?

Blockchain technology is often wont to create a permanent, transparent ledger system for compiling data on sales, tracking digital use, and payments to content creators, like wireless users or musicians.

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  1. Blockchain supply chain management and, therefore, the basics of Vechain (VET)

Blockchain supply chain management and the basics of Vechain (VET) from CryptoCurrency

  1. How can a blockchain help with supply chains?

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