Blockchain-Based Supply Chain Management 

Blockchain technology is bringing revolutionary and transformational changes in the supply chain processes through efficiency, security, and transparency. For instance, drones and IoT devices are analyzing the production and manufacturing process, and AI (artificial intelligence) is gaining an upper hand on quality control processes. Approximately 1.9 billion robots are implemented in the warehouse and production facilities across the world. Today, we’ll discuss blockchain-based supply chain management; and how it improves traceability, challenges, and applications.

What is Blockchain-Based Supply Management? 

Blockchain-based supply chain management automatically updates and upgrades the data transaction record when any change happens; it amplifies traceability along with the entire SC network and process. It is completely different from

The blockchain-based SC network would be permission-oriented, private, and closed blockchain with limited actors. On the contrary, Bitcoin and other cryptocurrency financial applications are public. It amplifies the probability of developing an open partnership. The blockchain-based SCM network comprises of following actors and they play a key role;

  • Registrars

The registrars would offer SC network actors with predefined and distinct identities.

  • Standard Organizations

The standard organizations would develop tech specifications and standard rules or standard schemes for the purpose of fair trade like environmental-friendly SC networks and processes.

  • Certifiers

It verifies individuals and people for showing interest in the SC network and process.

  • Actors

The registered certifier and auditor would verify various actors and participants like buyers, sellers, and producers to maintain the credibility of their system.

The interesting feature of flow management and SC structure is the product owned or transferred to a particular actor; it is the main benefit of blockchain in SCM. Now, the question is that how the blockchain system makes the SCM network transparent.

It is the requirement of concerned parties and partners to satisfy smart contracts and conditions before selling or transferring the product to another actor or party to verify the exchange of products and goods. After compiling all the participants with their processes and duties, the blockchain ledger would update the transaction information. It comprises improving transparency across the value chain network.

The ownership, location, quality, quantity, and nature of product dimensions are visible transparent relevant to blockchain technology. As a result, customers would analyze the continuous flow of transactions from the procurement of raw supplies to the sale of finished products. It removes the requirements for reliable central supply to manage and maintain the digital supply chain.

Blockchain Improves Traceability in SCM

Tracking of traceability in the SC network is the capability to analyze the existing and previous locations of the inventory and record the custody of the product. It comprises tracking the flow of products from the raw supplies to the merchant, and customers; as it goes through various geographical regions.

However, one of the main benefits of blockchain-based SCM networks is traceability or tracking. The blockchain comprises of decentralized open-source ledger for recording data; it is because the transaction would occur in real-time and is easily replicable among users.

Resultantly, the blockchain would establish an SC network that is secure and smarter because it helps you in tracking the products. It helps you in tracking the products through audit trails that are visible and transparent. However, when you integrate the SC network through the decentralized system; the blockchain would have the potential to have a smooth flow from suppliers to manufacturers and producers.

Challenges of Blockchain-Based SCM

Some of the main challenges to blockchain-based supply chain management are as follows;

Adoption of Stakeholders

The blockchain is still in the early stages of infancy. It is difficult to encourage the company’s stakeholders and SC leaders to adopt and implement blockchain technology; because they want to know the real and direct value addition to the company. SC leaders should engage in the discussion of developing industry standards for blockchain and allocating resources for its development; otherwise, it won’t happen.

Privacy and Security

Every tech solution brings privacy and security risks. Companies should keep in mind the risk factors while designing and implementing the technological solution for the product or business lifecycle. The privacy and security risks would come up in the following categories;

  • Smart contract
  • Consensus mechanism
  • Integrity
  • Confidentiality


Some of the main factors impacting the public blockchain while scaling are; proficient storage space, energy consumption, speedy internet connection, and processing power. When it comes to employing private blockchain networks or public networks; companies would utilize and implement the public for the business needs and requirements.


Blockchain is still in the maturity development stage, and its network needs universal information exchange standards. It would resolve compatibility issues among different types of decentralized applications and blockchain platforms. It allows the end-to-end transaction and cross-communication throughout the SC network.

Application & Uses of Blockchain-based SCM

Some of the main applications and uses of blockchain-based supply chain management are as follows;

  • Employing transparent methods in the sourcing of material and making sure that the company is employing ethical or sustainable sourcing methods
  • Making sure the company is complying with the local laws and regulations, and maintaining auditable records of SC processes
  • Monitoring food safety to ensure that the food items are safe and clean for consumption
  • Decreasing administrative costs and savings by employing automated technology
  • Optimizing inventory management processes and tracking inventory levels
  • Establishing smart contracts between buyers and sellers and written directly into the lines of codes

Conclusion: Blockchain-Based Supply Chain Management 

After an in-depth study of the blockchain based on supply chain management; we have realized blockchain for SCM is highly significant for smooth business transactions. If you are learning about the blockchain for the supply chain, then you should keep in mind the abovementioned uses, challenges, and elements.

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