Blockchain in Supply Chain Management

Blockchain is one of the most exciting technologies today. Many companies are adopting blockchain technology to increase the speed and safety of their platforms. Blockchain tech has numerous applications, including digital currency, smart contracts, and digitalization of assets. One of the popular use cases for blockchain technology is the transport and logistics space.

Blockchain technology is not only fast, but it is one of the safest technologies with proper implementation. This does not mean that blockchain is guaranteed to benefit your business. Even though it is well adopted, the applications of blockchain in supply chain management are not as tested as the ones currently in use.

Advantages of using Blockchain Technology in Supply Chain Management

1. Faster Transactions

Blockchain is well known for its incredible transaction speed. Even though the technologies we are using today are performing well, they are not equipped to deal with the data that is estimated to increase in the coming years. Even if the current tools can do that, they may not work at the same speeds.

This is where blockchain comes in. Since blockchain is a decentralized network, the data storage and recovery rates will increase significantly. Any request made to or by the blockchain network will be resolved at incredible speeds.

Some supply chain systems still rely heavily on paper and are extremely slow in general. Blockchain can easily replace these systems with faster, more secure, and easily accessible ones.

2. Secure Systems

As new technologies are emerging, more and more flaws are being detected in the older ones. As a result, we see an increased number of cyberattacks on legacy stems as of late. Blockchain technology is equipped to handle such security issues.

If properly implemented, it is almost impossible to crack a blockchain system. If an attacker wants to crack the data of a single transaction, they have to crack the entire blockchain, which is physically inefficient.

Take a look at bitcoin, for instance. Bitcoin networks combined have more processing power than the entire NASA. This would mean that if you want to crack the bitcoin network, you need to have more processing power than hundreds of thousands of people together.

3. Reduced Transaction Costs

Blockchain has a decentralized system, and every block you propose to add demands a small fee from the owner. However, comparing this fee with the current technologies transaction fee makes it look very minimal. Even though it’s just a theory, implementing blockchain technology can reduce the overall cost of maintaining the system.

Moreover, if you are using a permissionless or a public blockchain, you can rest assured of safety. However, privacy will be an issue you will have to deal with in such cases. Backing up the data you have multiple times is almost pointless when using a permissionless blockchain.

4. Increased Traceability

Implementing a blockchain network for your supply chain needs increases the overall traceability of the system. This increased traceability ensures that all the standards are met. In addition to this, blockchain technology also inhibits any counterfeit and gray market trading and reduces its losses.

5. Lower Administrative Costs

Blockchain not only has lower transaction costs, but it also reduces administrative costs. Since the network is decentralized, you won’t need as big of an IT team you may need right now. Along with this, blockchain also reduces the use of paper and other such office supplies, saving a ton of money in the long run.

Blockchain also reduces the paperwork the employees have to do in the office. Since blockchain essentially maintains every record and can be integrated with automation technologies, the overall paperwork you have to do will be reduced significantly.

6. Increased Transparency

Transparency became an important thing in the corporate environment. The customers are demanding to know what the company is up to, which created a massive demand for transparent operational technologies.

Blockchain is one such fantastic technology to show people that your company is transparent and open. More transparency means more openness, and that means more customers.

7. Reliability

Blockchain offers something that most normal technologies do not, reliability. Unlike the technologies companies are using today, blockchain does not have a single point of failure. Even if one server fails, the blockchain still remains intact.

Moreover, blockchain also offers more trusted transactions. These transactions cannot be tampered with. However, some modern tools also offer great reliability. Choosing among the existing tools and new technology such as blockchain may pose a severe decision issue for some companies.


Is Blockchain Good for all Supply chains?

Even though blockchain may sound like a fantastic solution for all supply chains, it may not be for everyone.

One of the primary reasons is that the initial blockchain technologies we saw to date are not as effective as they are in theory. In addition to this, blockchain technology is also not able to capture the data from the numerous untrusted sources that will exist in a complex supply chain system.

There is a severe lack of blockchain developers. As a result, there is no clear idea on how to make use of blockchain technology effectively. There is also a lack of resources, making it hard for the new developers to enter the field.

Some of the blockchain features, such as transparency and reliability, are available in high-end supply chain technologies at this moment. This creates a dilemma on whether to switch to a blockchain network or stay with the current, well-tested technologies.

Ultimately, blockchain in transport and logistics may not be for everyone. However, the potential use cases are quite fascinating.


Blockchain is a fascinating technology and is considered one of the best technological advancements in the last decade. Numerous multinational organizations are looking to adopt a blockchain network to deliver what the customers need. The future of blockchain in transport and logistics is looking quite optimistic, with many projects in beta stages and many more on the way.

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