blockchain in supply chain

The Evolution of Blockchain in Supply Chain Management


Supply chain management plays a crucial role in streamlining a company’s operations and enhancing customer satisfaction. In recent years, the integration of blockchain technology has revolutionized the supply chain industry. This article explores the evolution of blockchain in supply chain management, its benefits, and how it enhances traceability and tradability.

The Concept of Supply Chain Management

Supply chain management (SCM) involves the coordination and control of various activities in the production flow, from sourcing raw materials to delivering the final product or service. It encompasses the movement of materials, information, and finances associated with a good or service. While logistics is a part of the supply chain, SCM focuses on the entire production process.

Traditional SCM systems involve planning, sourcing, manufacturing, delivering, and after-sales service. These steps are centrally controlled to ensure efficient supply chain management. Modern SCM systems are now managed using software, incorporating technologies like AI, robotics, and blockchain.

The Evolution of the Modern Supply Chain

Contemporary technologies such as AI, robotics, and blockchain are transforming the modern supply chain. The digital supply network combines data and information from various sources to distribute goods and services efficiently. Supply chain infrastructure has evolved from physical, functional systems to a vast, interconnected network of assets, data, and activities.

AI algorithms enable businesses to extract insights from large datasets, allowing for proactive inventory management, warehouse automation, optimized sourcing connections, improved delivery times, and enhanced customer experiences. AI-powered robots automate manual tasks like order picking, packing, and transportation, increasing efficiency and productivity.

Blockchain technology, with its immutable nature, enhances traceability within the supply chain. By utilizing blockchain, businesses can track and trace the source of products, identify counterfeit items, and mitigate fraud. For example, in the transportation of perishable goods, blockchain can monitor temperature conditions to ensure product quality.

How Blockchain Enhances Supply Chain Management

Blockchain technology improves supply chain management by enhancing transparency and traceability. Unlike traditional supply chains, blockchain-based supply chains automatically update data transaction records, improving traceability across the network. Blockchain-based supply networks may use closed, private, and permissioned blockchains, ensuring limited access to authorized actors.

Blockchain enhances transparency by requiring parties to fulfill smart contract conditions before transferring products. The blockchain ledger is updated with transaction information, providing transparency across the value chain. Blockchain technology specifies product dimensions transparently, allowing customers to view the continuous chain of custody and transactions.

How Blockchain Enhances Traceability in the Supply Chain

Blockchain enables efficient traceability by providing access to information such as price, date, origin, quality, certification, and destination. Traceability in the supply chain involves tracking products as they move through various stages, from raw materials to customers. Blockchain’s decentralized open-source ledgers enable real-time transactions and create a robust audit trail, ensuring almost concurrent visibility.

By connecting supply chain networks through a decentralized system, blockchain enables frictionless movement between suppliers and manufacturers. Producers and distributors can securely record information such as nutritional value, product origin, and quality using a collaborative blockchain network. This access to product history assures buyers of ethical production practices, making supply chains more sustainable.

How Blockchain Enhances Tradability in the Supply Chain

Tradability is a unique advantage of blockchain technology. Blockchain platforms enable tradability by tokenizing assets, transforming tangible objects into digital assets. Each product is represented by a digital token that can be exchanged in the market. Tokenization allows for the transfer of ownership without physical exchange, and smart contract payments ensure accurate licensing of software, services, and products.

Blockchain’s consensus mechanism eliminates disagreements over transactions, providing a secure and transparent system for tracking ownership records. Asset tokenization speeds up peer-to-peer payments and prevents fraudsters from taking advantage of chargeback situations. By using blockchain for payment, businesses can receive funds faster and reduce the risk of unauthorized withdrawals.


Blockchain technology has revolutionized supply chain management by enhancing transparency, traceability, and tradability. Its integration into the modern supply chain has led to more efficient operations, improved customer experiences, and increased sustainability. As the supply chain industry continues to evolve, blockchain will play a crucial role in shaping its future. The benefits of blockchain in supply chain management are evident, making it a valuable tool for businesses seeking to streamline their operations and meet customer demands.