Supply chain is a crucial part of business and it is essential for the success of the company and customer satisfaction. With better Supply chain management, the right product in right quantity can be delivered to the right place at right time. For many businesses dealing in supply chain management, the daily processes have been transformed by new technologies. The requirement for accurate delivery and real – time tracking makes supply chain management ripe for innovation. Transportation and logistics sectors are already operated heavily through wireless, mobile, handheld technology.

Today, Supply Chain has become cumbersome and complicated. There are frequent delays in transaction whether it’s between manufacturer and a supplier, or a customer and a vendor. Contractual bindings require administrations of lawyers and bankers, which in turn increases extra cost and delays. Tracing back the products and parts often becomes a difficult job which makes the elimination of defects challenging. The other issues include friction in supply chain, uncertainty in the process and many more. Blockchain can be the perfect tool to undertake many of these issues.

Before discussing the uses of Blockchain, let us first look at what is supply chain and blockchain?

Supply Chain refers to a system between an organisation and its suppliers to produce and distribute a specific product to the final buyer. This system incorporates various activities, entities, individuals, data and information. The process of transfer of a product or service to the customer in its original state is also referred as supply chain. The companies use supply chain so that they can reduce their expense and to continue being competitive in the business.

Blockchain technology is a decentralized record that tracks exchanges that happens over a distributed system. This innovation permits members from over the system to affirm their exchange without the requirement for a central authority, this incorporates cash exchanges, casting vote, and trade settling and many more

Let us look at the application of blockchain in supply chain:


Organisations can utilize distributed ledger frameworks (Blockchain) to record product status at each phase of production. The records are immutable and permanent. They make it feasible to follow every item to its source. Worldwide retailer Walmart also uses Blockchain to follow deals of pork in China. Its framework lets the organisation monitor where each bit of meat originates from, the processing and storing step in the supply chain network, and the product’s expiry date. In case of a product recall, the organisation can trace which batch is affected and the buyer’s info.


Through Blockchain, funds can be transferred from anywhere in the world without the requirement of traditional banking transactions, as exchanges are made legitimately among the payer and the payee. Also, it is secure and fast; For example, it takes only few minutes as compared to days for clearing house payments. This results in reduction of operational expense. Bitcoin is one the major application of blockchain through which transfer of payments is done, which also incurs lower fees. Australian vehicle producer, Tomcar utilize Bitcoin to pay a portion of its suppliers. Presently, three partners in Israel and Taiwan acknowledge instalment from Tomcar using Bitcoin.


RFID tags used in contract bids and Execution. These are used commonly in supply chain for storing information about the products. The tags are read and processed by the IT system. Hence, these might be used to improve the supply chain processes. Information about the delivery location and date can be stored in palette and cartons. And the applications are then run by the associates to bid for the contract. The one bidding the optimal price and service, gets the business. The status and performance are then tracked by the smart contract.


Blockchain Technology is still an emerging technology, and there are still some issues that need to be addressed;


Using bitcoin as a mode of payment is an easy way. But the exchange rate is changed rapidly between Bitcoin and other currencies. So, for recovering the value expected, the transaction term needs to be short and flexible.

Also, if the password for accessing the cryptocurrency reserve is lost then the account recovery is impossible.


Blockchain emerged when individuals started scanning for an approach to decentralize applications and tasks. They needed to create conditions on concentrated elements like optional banking instead of obligation. So, it might be a scenario where individuals would take time to shed the mental barriers and get om board with the blockchain technology.


Blockchain has the power to transform various businesses and their supply chain and ecosystems. It has the power to transform even the traditional businesses such as banking sector. However, the in-depth transformation of supply chain is not an overnight process, but in some areas of operations the technology can be used. Through Smart Contracts, cost delays and waste generations can be eliminated. More advancement and progress await in the supply chain to make the process more intelligent and effective.

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This article is written by Kalyani a Marketing student from IMT Ghaziabad and a Maths graduate from Delhi University.

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