What is Blockchain Supply Chain?

If you ever heard the term “blockchain”, you’re probably thinking about bitcoin or any other type of cryptocurrency. While it is true that this is how the blockchain appeared, it is a rather versatile solution for a wide range of problems. For example, it could solve issues in supply chain management and make the involved processes run smoother. This is how the blockchain supply chain can contribute to the improvement of supply chain management. The benefits of blockchain in supply chain are endless, but some of the most obvious are increased transparency in supply chains and increased trust between parties. By providing a decentralized database that is shared among all parties, blockchain technology can cut costs and improve efficiency.

How Does the Blockchain Work in Supply Chain Management?

With the blockchain in supply chain, the potential of supply chains grows exponentially. It is enough just to think about what blockchain means and it will be easy to understand how great current supply chains can grow and improve. To make it easier for you to understand how the blockchain work, you should think about it as a very large database. But, in comparison with traditional databases, the blockchain is not controlled by anyone or any entity. However, changes or updates can take place in the blockchain, but only if the majority of its participants agree with the change. Thus, besides being capable of managing large amounts of data, the blockchain can make processes easier while giving everybody an equal share of rights.

Blockchain technology in SCM is a part of the Diploma in Supply Chain Management and Global Logistics online program and Part-Time Online MBA concentration in Supply Chain Management. These programs are offered through a flexible learning system, and they lead to the PhD in Logistics and Supply Chain Management – a research-based doctorate degree.

blockchain in supply chain management


It provides valuable security benefits. For Example:

  • An inaccurate shipping address could lead to products being lost or stolen. With blockchain, shipping information is tracked and recorded on a public ledger, making it much more difficult for this type of fraud to occur.
  • Blockchain can also be used to verify the authenticity of products, from food to luxury items. By using a smart contract or token system, consumers can be assured that what they’re buying is what it says it is.


If you’re looking for ways to implement blockchain in your supply chain, keep in mind that there are different types of blockchain technology. Some work better for certain applications than others. For example:

  • Private blockchains are suitable for businesses that want to keep their data private, whereas,
  • Public blockchains are best suited for applications that require transparency and security.

How a Blockchain Can Improve Supply Chain?

  • In a supply chain, blockchain technology can be used to record and track product shipment data.
  • With blockchain, all relevant information can be tracked, making the implementation of supply chain mapping and the supply chain process more transparent.
  • With this technology, companies can avoid counterfeit products and reduce fraud.
  • They can also improve the safety of products in the case of the local supply chain, as well as the international supply chain.
  • All parties in the supply chain — from manufacturers to retailers — can use the information provided by blockchain to make informed decisions. For example, they can use real-time data to ensure that products meet production standards. This will reduce errors and lead to better quality control.
  • By using it, companies can reduce costs and increase efficiency.
  • They can also improve customer trust in their business. When customers know that the products they buy are safe, they will be more likely to purchase them again.

How the Blockchain Will Transform the Logistics and SCM Industries?

There are many things that can be significantly improved in the supply chain industry with the help of the blockchain. For example, every transaction is recorded on one of the blocks belonging to the blockchain and on numerous copies of the entire ledger. These recordings are then distributed over a higher number of computers, which makes the information highly available and, therefore, very transparent. Increased security is another advantage of using blockchain technology in supply chain management, as one block is only connected to the one that follows it and the following to the next, and so on and so forth. Thus, it is extremely difficult to compromise the security of a blockchain.

blockchain in supply chain

Application of Blockchain Technology in Supply Chain:

Let us take a look at businesses in the food industry, for example. Because these businesses, like restaurants, work with fresh produce, it is crucial for the business to follow the product from their source to the end client, as they are highly perishable. Due to the fact that it is more transparent, it is easier to track pork sourced from China, for example, with the blockchain,  tracking down every piece of meat, how it is processed, where it is delivered, and when it is sold. Thus, the entire process is made more effective so that the end consumer enjoys a greater level of quality.

blockchain supply chain

Advantages & Disadvantages of Blockchain in Supply Chain Management:


  • Improved collaboration between the parts involved in the supply chain;
  • Transparency in every stage;
  • Improved security and encryption;
  • Decentralization of data and the possibility to reach consensus;


  • It may be challenging to make a blockchain scalable;
  • A lack of controls concerning data access;
  • It may not be completely compliant with the legislation of some countries;

How Blockchain Will Revolutionize Supply Chain Management?

With the help of blockchain technology, it is extremely easy to transform a regular supply chain into a global supply chain. This is due to the fact that there is no need for a bank to make payments, as funds can be transferred from anywhere, with ease and in complete safety. Besides transparency, supply chains that use blockchain technology will also become more effective, saving time, effort, and resources.


With respect to end-to-end traceability, speed of product delivery, coordination, and financing, there is still a lot of room for improvement in supply chains. Based on our study, companies have used blockchain to address those issues. Now is the time for supply chain executives who are sitting on the sidelines to take note of its potential. To make progress, they should join forces to establish new regulations, test various blockchain technologies, conduct proofs-of-concept with different blockchain platforms, and build an ecosystem with other firms. The effort will certainly require some resources, but the investment may well pay off big time.