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Blockchain in Supply Chain: A Transparent Prospect for Products


Blockchain, the technology powering cryptocurrencies like Bitcoin and Etherium, has emerged as a transformative tool for various industries, encompassing healthcare, automotive, government, insurance, retail & consumer goods, manufacturing, and supply chain management. In this discussion, we will delve into how blockchain technology is utilized in the supply chain.

Integrating blockchain into the supply chain enhances traceability, product delivery, partner coordination, and financial accessibility, making processes more efficient and swift. To gain a clear understanding of this application, it is essential to grasp the fundamentals of blockchain, its benefits in the supply chain, and how its usage differs from that in cryptocurrency.

Understanding Blockchain

Blockchain serves as a cloud-based digital ledger, maintaining a shared database that chronicles real-time transactions and alterations to the ledger. The data is stored in secure, verifiable, and tamper-proof blocks, with the ledger capable of executing transactions automatically. This technology empowers a select group of known parties to safeguard their business interests from malicious activities while enhancing operational efficiency in the supply chain.

There are primarily two types of blockchain – Permission-less distributed ledgers like Bitcoin and Permissioned centralized ledgers governed by nodes, each with distinct implications for the supply chain ecosystem.

Advantages of Blockchain Systems in Supply Chain

Blockchain stands as a revolutionary technology revolutionizing business operations and economies across various sectors, including logistics and supply chain management. Let’s explore how blockchain is propelling advancements in supply chain management.

  • Real-time Visibility & Reporting

Blockchain’s immutable record-keeping capabilities mitigate execution errors within supply chain management. The transparency provided by blockchain enables rapid error identification and correction, ensuring operational efficiency at every stage of the supply chain.

On the other hand, traditional supply chain record-keeping is prone to inaccuracies and delays, which can be significantly reduced through blockchain technology.

  • Transparency & Trust

Blockchain fosters transparency by creating a unique transaction record for each supply chain activity. This secure ledger enables supply chain managers to swiftly access transaction histories among stakeholders, eradicating blind spots present in conventional record-keeping practices.

Additionally, blockchain ensures data integrity by preventing unauthorized alterations to the ledger, promoting trust and accountability in supply chain interactions.

  • Authentication & Quality Check

Blockchain facilitates the traceability of products from their origin to end consumers, allowing for stringent quality checks and authenticity verification. By leveraging blockchain, supply chain participants can monitor product movements, ensuring adherence to quality standards throughout the supply chain.

  • Billing & Payment

Traditional supply chain operations involving multiple organizations result in complex billing and payment processes, leading to inefficiencies and potential fraud. Blockchain simplifies invoicing and payment procedures by automating transaction settlements based on predefined criteria, reducing errors and enhancing financial transparency.

In addition to streamlining financial transactions, blockchain minimizes paperwork, eliminates intermediaries, and enhances transaction accuracy and compliance.

  • Freight & Delivery

Blockchain’s smart contract capabilities optimize logistics operations by automating business workflows and reducing delivery times. By leveraging blockchain technology, supply chain stakeholders can enhance operational efficiency, detect fraud, and minimize errors in freight and delivery processes.

Real-World Applications of Blockchain in Supply Chain

Several companies are leveraging blockchain technology to enhance supply chain visibility, traceability, and authenticity across diverse industries. Some notable real-world applications of blockchain in the supply chain include:

  • Brilliant Earth: Utilizing Everledger blockchain to trace diamond origins, ensuring quality assurance and ethical sourcing.
  • IBM Collaborations: Partnering with diamond and gold industry leaders to authenticate and track products using blockchain technology.
  • Walmart, JD.com, Tsinghua University, and IBM: Exploring blockchain solutions to improve food transparency and shipment efficiency, addressing concerns like E.coli outbreaks.

These real-world examples highlight how blockchain technology is revolutionizing supply chain operations, offering enhanced transparency, traceability, and trust among supply chain partners.


Blockchain technology presents numerous benefits for supply chain management by automating processes, enhancing traceability, improving security, and promoting cost efficiency. By embracing blockchain solutions, companies can streamline supply chain operations and build trust among unknown supply chain participants. To leverage the full potential of blockchain in the supply chain, organizations must evaluate centralized and decentralized blockchain systems to identify the most suitable approach for their operations.

Image Credit: Provided by the author; Thank you!

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