The blockchain concept works on two major factors, tracing, and tracking, in a decentralized manner. It has provided multiple enhancements in the supply chain domain. Blockchain in supply chain is emerging as a game-changing innovation that enables transparency, efficiency, and trust across global logistics networks. The blog will cover these benefits with a detailed introduction to this blockchain and supply chain mashup.
What is a Blockchain in a Supply Chain?
Blockchain in supply chain management is a decentralized and distributed ledger system that records and verifies transactions across all participants. It records various transactions to improve security, accountability, and transparency. One of the use cases of blockchain is integration with supply chain management.
In a blockchain-based supply chain management system, the clients have access to the shared ledger used to record various events. and transactions. In fact, according to a leading data analytics organization survey, 55% of supply chain executives believe that blockchain has the potential to improve the workings of supply chains.
How Blockchain Impacts Supply Chains
Blockchain technology provides a decentralized, transparent, and traceable method of handling supply chains, building trust, limiting fraud, and increasing efficiency. It offers unchangeable transaction records, giving everyone involved access to a single, verified record of each stage of the supply chain.
Here’s where AI and blockchain overlap to transform supply chain activities:
1. Improved Transparency and Traceability
Blockchain makes it possible for everyone to see a product’s complete history, from its raw materials to the final customer, by creating a shared ledger. This kind of transparency encourages genuineness, the avoidance of counterfeiting, and speedier recall in important situations like pharmaceutical flaws or food safety.
2. Enhanced Efficiency through Automation
Smart contracts reduce human error and expedite processes by automatically managing logistics, tracking inventory, and making payments. By combining them with AI, these programs can forecast demand, optimize routes, and minimize costs even more.
3. Less Fraud and Counterfeiting
Because of its immutability, blockchain virtually eliminates fraud by making it impossible to alter or fabricate records. This is particularly important in industries such as luxury products, diamonds, and electronics, where product authenticity matters most.
4. Supply Chain Financing
Financial clarity is improved by real-time access to transaction data, which also makes it easier for small and medium-sized businesses to obtain trade finance more quickly and securely.
5. Global Logistics Optimization
Blockchain, when applied to global shipping, gives end-to-end visibility, streamlines customs processing, and lowers shipping fraud.
6. Product Authenticity and Verification
Luxury fashion, automotive, and healthcare industries can leverage blockchain to authenticate goods and components, providing buyers more confidence in their purchases.
7. Sustainability Tracking
Blockchain allows tracing products from end to end throughout the lifecycle, supporting responsible sourcing and facilitating ESG reporting. Businesses are able to certify sustainable practices at each supply chain step.
8. Increased Trust Across Stakeholders
All parties involved, from manufacturers to consumers, can have confidence in the data they are viewing when there is a shared, impenetrable system in place. As a result, collaboration is made simpler and business partnerships are strengthened
Benefits of Blockchain in Supply Chain
Blockchain technology has brought significant transformations to various industries, and supply chain management is no exception. It has enabled a secure, decentralized, and transparent way of managing the entire supply chain process.
Here are some benefits of blockchain in the supply chain:
1. Improved Efficiency
Supply chain participants can automate many of the manual processes currently required for tracking and verifying products using blockchain. This can lead to significant cost savings and improved efficiency throughout the supply chain.
2. Transparency
It provides complete transparency to all parties involved in the supply chain, including suppliers, manufacturers, distributors, and retailers.
3. Improved Compliance
It can help supply chain participants comply with regulatory requirements by providing a transparent record of all transactions. In addition, it can help reduce the risk of non-compliance and associated penalties.
4. Traceability
With blockchain, tracking every step of a product’s journey from its origin to its final destination is possible. It can provide a complete product history, including its source, manufacturing process, transportation, and storage information.
5. Enhanced Security
Blockchain provides a secure and tamper-proof record of all transactions, making it nearly impossible for hackers or malicious actors to tamper with the data. It ensures the authenticity of products and protects against fraud.
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Top Blockchain Use Cases in Supply Chain
Blockchain technology is revolutionizing a plethora of industries, and it is certainly making its mark in the realm of supply chain management. The implementation of this technology has resulted in a substantial enhancement of transparency, security, and efficiency within the supply chain processes.
Numerous instances exist where blockchain technology has been employed to augment supply chain management. A few of these are mentioned below:
1. End-to-End Traceability
The utilization of blockchain technology allows for the monitoring of the source and journey of goods from their point of origin to their ultimate point of consumption. This provides complete end-to-end traceability, which yields an increase in transparency and accountability within the supply chain. Consequently, it becomes simpler to both identify and prevent malicious activities, counterfeit products, and unethical sourcing.
2. Secure Data Sharing Across Supply Chain Ecosystem
The application of blockchain technology provides a secure and decentralized mode of exchanging information among stakeholders throughout the supply chain. This eliminates the requirement for intermediaries, minimizes the chance of data breaches, and guarantees the genuineness and integrity of the information. It further simplifies the supply chain process while simultaneously decreasing administrative costs.
3. Smart Contracts for Automated Workflows
Smart contracts are contracts that self-execute and enforce the terms and conditions of an agreement without the need for human intervention. Within the supply chain context, smart contracts can automate payment procedures, assure compliance with regulations and standards, and advance the efficiency of supply chain operations.
4. Supply Chain Financing and Credit Transparency
Quicker loan disbursements and safer invoice financing are made possible by lenders’ and banks’ real-time access to verified transaction data. This increased visibility reduces the perceived risk for financiers, allowing even small and medium enterprises (SMEs) to access better credit terms. Blockchain also minimizes paperwork and fraud in financing processes, streamlining trade finance operations for global supply chain participants.
Blockchain in Supply Chain Examples
Let’s understand the combination with a few examples.
One of the world’s largest retail supply chain owners, Walmart uses a blockchain-based system. This system tracks the various events associated with the products. Using this, they can identify quality issues and theft from the stores and take the necessary measures to maintain the quality of the product.
- Everledger Diamond Tracking: Everledger uses a blockchain-based platform to track the supply chain of diamonds. Everledger’s system covers ownership of diamonds and their physical characteristics and records their transactions. They claim that their system guarantees zero tampering with the diamonds within the supply chain. Also, this system helps prevent diamond fraud, theft, and unethical sourcing.
- Provenance’s Fish Traceability: It is a UK-based startup. They have developed a blockchain-based system that tracks fish’s journey to the consumer’s plate. Provenance uses a blockchain ledger that tracks the fish’s origin, including the caught location, the method used for angling, and sustainability information. According to the data provided by Provenance, they have tracked over 800,00 various types of food items.
- Maersk’s TradeLens: One of the largest shipping and logistic companies originated from the Netherlands. They have developed a blockchain-based system in collaboration with IBM called TradeLens. Their system covers the end-to-end chain of the goods transported. Their system increases transaction visibility, traceability, and security within the supply chain.
- Walmart’s Food Traceability System: Walmart claims to have the world’s largest food supply chain. From farms to the aisles, they cover it all. As per the reports generated by Walmart, it takes only 2.2 seconds to track the origin of mangoes.
Emerging Blockchain Trends in Global Supply Chains
Global supply chains are being transformed by blockchain because it makes tracking simpler and more transparent. It is being used by businesses to decrease fraud, shorten delays, and increase supply chain trust.
Blockchain in Cold Chain Logistics
Temperature-sensitive products such as vaccines, pharmaceuticals, and perishable foods depend on exact, real-time tracking.
The global cold chain logistics market size is anticipated to be USD 628.26 billion by 2030, states Grand View Research. The use of blockchain technology in cold chain supply management offers end-to-end visibility along with immutability in temperature, humidity, and product movement. This cold chain monitoring through blockchain minimizes product spoilage, enhances food safety, and improves compliance.
For instance, IBM Food Trust’s blockchain platform helps companies like Walmart reduce food recall times from seven days to just 2.2 seconds, which is a significant advancement in supply chain traceability made possible by blockchain technology.
Blockchain for Ethical Labor Practices
Blockchain for ethical sourcing is reshaping the way brands authenticate working conditions across worldwide suppliers.
According to the International Labour Organization (ILO), more than 160 million children are trapped in child labor worldwide, which highlights the importance of supply chain transparency and accountability. Blockchain technology ensures ethical material sourcing, especially in the mining, textile, and agricultural sectors, and guarantees transparent labor audits.
Platforms such as Provenance and Circulor utilize blockchain for ethical supply chain tracing, which allows companies to remove forced labor and improve ESG (Environmental, Social, Governance) compliance.
Cross-Border Trade Simplification with Blockchain
Global supply chains typically experience delays because of paper-based documentation, poor visibility, and inefficient customs procedures.
Blockchain for global trade and supply chain is addressing this by converting processes into digital form, enhancing trust, and reducing trade friction. Blockchain has the potential to cut the cost of international trade by as much as 15% and increase the world GDP by USD 1.1 trillion, says the World Economic Forum.
Blockchain trade platforms such as TradeLens make cross-border supply chain management easier through real-time tracking, smart contracts, and immutable documentation. More than 100+ logistics providers, ports, and customs authorities worldwide have implemented blockchain logistics solutions to enhance transparency and minimize operational overhead.
Conclusion
The use of blockchain technology in supply chain management is becoming essential as global trade becomes more complex. From optimizing supply chain transparency and traceability to simplifying cross-border trade, blockchain logistics solutions are changing the way products are monitored, authenticated, and delivered. Walmart, Maersk, and Provenance’s real-world implementations demonstrate that this technology is more than just theoretical; it is producing measurable results in terms of sustainability, efficiency, and security.
Whether you are a logistics professional, procurement expert, or digital transformation specialist, it’s time to learn how blockchain can transform your supply chain activities.
To gain a solid understanding of blockchain technology and learn about its applications across industries such as logistics and finance, refer to Intellipaat’s detailed Blockchain blog.