Blockchain and Supply Chain Management: Guide for Professionals

Blockchain and Supply Chain Management: Guide for Professionals


Introduction to Blockchain Technology

Blockchain technology seems to be complicated, but it is not. If it was a complex term to understand, then why call it ‘BLOCKCHAIN’?  Starting from its most basic level, it means a chain of blocks, but a sense of saying this is not traditional. When we talk about “block” & “chain” as per this context, we are in reality talking about the digital information stored and hashed in forms of ‘Blocks’, which are stored on a public or private blockchain or hybrid network.

To be precise, it has three parts:

1. Blocks usually store information revolving around transactions such as the amount, date, and time of your latest purchase from Amazon.

2. A Block stores information regarding everyone participating in that transaction. Instead of using our original name, the purchase is stored without using any identifying details. It uses a unique sort of “digital signature” which is a type/sort of like a username.

3. Every block can be distinguished from another easily as it stores a unique code called ‘Hash’, which allows us to distinguish different blocks. Hashes are generated based on cryptography to encrypted codes much like secure pgp keys.

What does Supply Chain Management (SCM) mean?

Understanding the basics first, Supply chain management is referred to as the management of flow of goods as well as services, including all those processes that take part in transforming the raw materials into final finished products. It usually involves the running smoothness of any business’s supply activities, aiming to gain a competitive advantage over other firms and maximize consumer value.

SCM usually denotes an effort by the suppliers to grow, develop and implement their supply chains in such a way that they are efficient and economical as much as possible. It covers everything, starting from production to finished products to the information systems required to direct these undertakings.

Blockchain And Supply Chain: A Dynamic Duo technology. The life cycle of any product is a consuming one. Whenever you are buying something next time in tube supermarket, just grab that product in your hand and try to think of what all it must have gone through to get in your hands. Think about what and where all those raw materials came from, who transported the raw material to the production plant where it was manufactured, and how does it eventually got packed and finally ended up in that very shop where you are buying that right now.

What are the benefits of blockchain in supply chain management?

Blockchain Technology is overcoming many supply chain industry challenges such as product tracking or complex record keeping.

1. Interoperability

The Blockchain technology helps data to stay interoperable, which simplifies the data sharing procedure among involved manufacturers, vendors, contractors and retailers. This type of transparency in sharing of data helps reducing delays or other originating conflicts.

Besides, it prevents misplacement of any goods by providing real-time data of that product location. 

2. Scalability

With this technology, the capacity of materials is available in surplus. It offers scalability with the help of which large databases can be accessed from any random as well as multiple locations all around the world.

These were the primary purposes of using this technology. Others benefits of Blockchain technology in supply chain management:

  • Advanced inventory management system
  • Remove fraud or errors in data
  • Minimization of delays in paperwork
  • Lowering down courier costs
  • Identify any issue faster than before
  • Build consumer trust

Blockchain Use Cases in Supply Chain Management

Any Enterprise blockchain technology can help in transforming the supply chain with these three use cases:

  • Tradability
  • Traceability
  • Transparency

Tradability is a unique blockchain advantage that reshapes the conventional concept of the marketplace. By using blockchain, we can tokenize any asset by dividing an object into different shares that represent ownership digitally. These tokens are further tradeable, and users can transfer their ownership without changing the physical asset hands.

Traceability helps in improving a firm’s operational efficiency by visualizing & mapping their supply chains. Blockchain helps firms to understand their supply chains and engage their consumers with real and verifiable data.

Transparency helps in building trust with the help of capturing critical data points such as claims and certifications and thus provides public access to this data.

IBM blockchain:

Supply chain data is not always available, trusted, or visible. IBM Blockchain system helps its partners to share trusted data through allowed and permissible blockchain solutions.

In today’s world, all consumers want their brands to guarantee product authenticity; on the other hand, the supply chain participants demand responsible and safe sourcing to minimize disputes.

IBM has been a leader in blockchain for the supply chain industry. They bring firms together via a technology platform that results in deployment flexibility and scalability to enable governance of shared value.


1. Helps in Increasing supply chain transparency

Supply chain partners can be limited by gain an advantage over, one-down visibility. Using distributed ledger technology, IBM provides a shared and single version of the truth, as its Blockchain supply chain solutions allow permissioned participants to have more significant watch across all supply chain activities of their firm.

2. Helps in giving Better response to disruptions

One unexpected happening or event can cause disruptions in a firm’s supply chain activities. IBM Blockchain supply chain solutions use smart contracts that automatically initiates when pre-defined or set business conditions are matched. This helps a firm to keep real-time watch on its activities and take necessary actions at the right time.

3. Streamlined supplier onboarding

Onboarding a New supplier is a time-consuming process and a manual experience for both buyers and sellers in a supply chain. IBM Blockchain supply chain solutions can help in speeding this process through a permanent record of new vendor details that business network participants can trust.

Conclusion: The case for modernized supply chains

Industries using supply chains are the ones responsible for delivering products right from the beginning to the end; it could be either another company or a consumer. As we all know now that a supply chain has to overcome many hurdles until the process reaches the end stage of finished products. For example, let us consider a textile supply chain. This concept in the textile sector denotes the back end of the industry. The supply chain in this industry is processed by connecting:

1. Raw materials required

2. Industries that use these raw materials and make clothes

3. A distributed network that delivers these clothes to consumers

This process makes it complicated for the manufacturers to find where the different types of products came from. So to overcome all these types of hurdles, blockchain can be easily applied to face many such challenges of the Supply Chain industry. Like keeping various records and tracking of the various products with less corruption and better-automated alternatives to centralized databases.

Therefore, to avail such task easing technology for your supply chain management, the best option to choose would be the none other than Blockchain Firm. They work hard to bring the best out of every single business transaction and to trade with high security and by using authentic universal business networks.

Blockchain can help in experiencing lower cost, no human errors, and transparency for your supply chain logistics.

Kunal is a management professional with 3 years of experience in the technology industry. He hails from Delhi, Republic of India.

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