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Phillip Moorman

Blockchain is making a major impact in many industries, especially within supply chain management. Blockchain is still in its early days and has long way to go before the technology becomes the standard, but we’ve been seeing more and more companies leverage the power of blockchain to do everything from tracking the origin of products in the supply chain to making an impact in healthcare.

Managing a supply chain can be quite difficult, and that’s the case even when you’re running a small business. By the time you start searching through the larger national and international companies, the supply chain starts to look less like a chain and more like a spider web, full of interconnectivity and riddled with far too much inefficiency.

Supply chain management has become one of the biggest businesses around with specialist popping out of the wood workings trying their best to deal with these inefficiencies and save companies more money. From Artificial intelligence, machine learning, and other recent technology, everything is being applied to optimize the supply chain. Even so, out of all of these new emerging tech ideas, one of them has finally come out to change the entire system.

What is Supply Chain Management?

It’s important to understand the concept of supply chain management.

Simply put, Supply chain management includes integrated planning as well as the execution of different processes. This includes material, information as well as financial capital flow. The management of transferring goods, services, and information involve the storage and movement of raw materials, such as building products as well as full-fledged completed goods from one location to another is known as supply chain management.

A supply chain within the SCM is a network of individual entities, organizations, businesses, resources as well as technologies that are combining together for the manufacturing of a product or service.

All supply chain progress by delivering the raw materials from a supplier to a manufacturer and eventually ends by delivering the find products to the consumer. Proper implementation of supply chain management can result in benefits such as increased sales and revenues, decreased fraudulence, overhead costs, and quality improvisation. Furthermore, this will also lead to accelerating productions and distribution.

While this may come off as a simple process when written down, maintaining a supply chain is actually very tedious task even for small businesses. The interconnectivity of various influences in the supply chain gradually causes it to become inefficient when the business expands. In order to resolve this increasingly growing problem to save a company money, different technologies are being introduced to improve the supply chain. This is where blockchain technology comes in to fix this ongoing conundrum.

Blockchain Solutions for the Supply Chain

Blockchain has become known for being capable of challenging the many problems undertaking the Supply Chain industry such as complicated record keeping and tracking of products. Due to its being an incorruptible and better-automated alternative to centralized databases. Here are some ways that blockchain can be quite useful in the supply chain industry.


Large businesses and organizations have tons of material goods in the supply chain. Because of this, it’s become quite difficult for them to track each and every record even for multinational corporations This lack of transparency has lead towards massive costs and customer relation issues which has lead towards damaging the company’s brand name.

For blockchain-based supply management, record keeping and tracking have become seamless as the product information can be accessed with the help of embedded sensors and RFID tags. The products information of its original location to where it’s currently at in the present time can be traced through blockchain. Furthermore, this type of accurate tracking can lead to finding any frauds in the part of the supply chain.

Cost Reduction

With real-time tracking of a product in a supply chain, thanks to the help of blockchain shall lead to the reduction of overall cost for transporting goods in the supply chain. According to a survey of supply chain workers done by the APQC and the Digital Supply Chain Institute (DSCI), over more than one-third of people noticed reduction cost as the topmost beneficial application for blockchain in supply chain management.

When blockchain is being utilized to speed up administrative processes in the supply chains, the extra cost occurring in the systems will be automatically reduced while still guaranteeing the security of transactions. The complete elimination of the middlemen and intermediaries for the supply chain saves the chances of frauds, product duplicity and saves tons of money as well. Payments will be processed by customers and suppliers within the supply chain by utilizing cryptocurrency rather than relying on EDI. Additionally, efficiency will be further improved and the risk of losing goods will be reduced thanks to accurate record keeping.

Ensuring Trust

Ensuring trust for a highly complex supply chain with many participants is necessary for a seamless operation. For instance, when a manufacturer shares their products with suppliers, the will be able to depend on them for following factory safety standards. Moreover, when it comes to regulatory compliances such a custom enforcer, trust plays a very important role. The immutable nature of blockchain in the supply chain is designed to prevent possible tamperings and further establishing trust between the supplier and consumer.

The Benefits of Supply chain with Blockchain

One of the major benefits of blockchain is that it makes data much more interoperable. Businesses will be able to seamlessly share information with manufacturers, couriers and other suppliers and vendors. This increased transparency will be capable of reducing delays and disputes, and it’ll also prevent shipments from being stuck in unknown locations. It’s not possible to lose something if it’s being tacked in real-time after all.

The blockchain is also known to be more scalable, offering a nearly unlimited database that’s capable of accessing multiple touch points from all over the globe. It provides a higher standard of security and the capability to be customized to feed more specialized applications. Businesses will be able to create private blockchain to keep data internal and share it with only those they’ve explicitly given permission too.

Even so, private blockchain can only do so much, and most of the value from blockchain technology comes from the fact that its capable of connecting different ledgers and data points to provider one centralized bank of information. Which can help to deal with fraud and other issues,

Blockchain Use Cases

Thanks to its increase in popularity, blockchain technology is appearing to be the most likely solution in many industries. Supply chain continues to grow in popularity among the industry that holds cases where the application of blockchain technology has shown a difference. A single shipment of products can have somewhere between 20 to 25 organizations in the process which leads up to 200 interactions between them, causing a lengthy process.

If applied properly, blockchain technology can assure proper tracking and traceability across the supply chain. Thus making counterfeit goods lessen and ensure safety in the processes. The Following are some of the uses cases of blockchain in a supply chain.

Food Safety

During 2018, the Centers of Disease Control and Prevention has investigated over 17 different instances of reported food borne illness outbreaks, which include salmonella in pre-cut melon products, E.coli found in romaine lettuce, and cyclospora in Fresh Express Salad Mix, which was sold at McDonald’s among other businesses. While the U.S is known to be the most food safety-conscious nation in the world, there are still 48 million cases of food borne illness every year, the equivalent of 1 in 6 Americans becoming ill.

Plenty of food borne illnesses are insidious, with their effects remaining latent for hours, days or even weeks at times before the real pain kicks in. E.coli, for example, is known to take up to 8 days before any symptoms make their presence known, which can include severe diarrhea, vomiting, and possible kidney failure, lasting somewhere between 5 to 10 days. This severe health consequences of mismanagement for the food supply chain can lead to major, potentially irreconcilable disruptions in personal and professional life. Meaning that necessary steps need to be undertaken to enhance the transparency of the industry.

This latent nature of food borne illness has made it even more difficult to deduce exactly where the contaminated product originated. Although, with the cooperation of many members of a food supply chain, a single product can be tracked in 2.2 seconds, meaning that the time it takes to trace the contaminated product to its source is very small.

Comparatively, the link-by-link process of tracing these products in a non-blockchain monitored supply chain can take weeks or even months to do so. Meaning that these additional hours will lead to the risk of more lives, as 5 people have died from the 2018 romaine lettuce that hosted an E.coli outbreak.

Drugs and Pharmaceuticals

The Drug supply chain has become one face to the pharma business that can be highly profited by blockchain. Counterfeit medicines are becoming an ongoing problem as the global black market has continued to provide such drugs to people without getting under the radar. This immense risk to human life that rises from consuming counterfeit drugs is something no one should underestimate.

The WHO has reported an increase in sales of global counterfeit drugs from $75 billion during 2010, a 90% increase during the next five years. Populations are suffering on a massive scale due to these fake drugs that are being developed in places like Asia and Africa where the drugs make up around 10 to 30 percent of the total medicines for ales. That’s why it’s become an important issue for pharmaceutical companies and distributors around the globe to improve the security and traceability of the drug supply chain.

With how complex the current drug supply chain system is due to the increasing number of people, there has to be a more reliable technology and management system in place that will be capable of securing the overall process. Blockchain technology will be capable of solving these issues as it has become significantly popular in terms of application relating to supply chain management.

Security vulnerabilities in the drug supply chain have caused some serious issues due to the minimal amount of visibility for tracking and authenticating the products. With the introduction of blockchain in these cases, several benefits can be reaped. Drugs will be tagged with barcodes and once they’ve been scanned, their records will then be kept on the blockchain digital ledgers. These records will be capable of being updated in real-time as the drugs are transported to one entity to the other in the supply chain. Parties with authorization access will provide drug traceability from manufacturer to customer and allow people to check if the system has become compromised in some area. Along with ensuring the products integrity and introducing anti-counterfeiting efforts, blockchain will also help overcome the financial issues dealt by smaller retailers and operators along the supply chain.


A great example of a blockchain company that is disrupting the blockchain industry is VeChain.

VeChain is on a mission to change the way luxury goods, supply chain, logistics, food, government, and other industries validate that products are indeed legit.

Using VeChain, companies are able to track items through a supply chain, ensure the authenticity and quality of goods, as well as maintain the quality control of food products.

VeChain uses a mix of blockchain technology and their in-house built chip to track items throughout their lifecycle. The smart chip can be implemented in items such as wine, luxury bags, food, and many others through a technology called RFID (Radio Frequency Identification).

This allows retailers and customers to identify counterfeit items immediately which is a major issue in the luxury goods and Chinese wine industries.

Blockchain technology, beyond VeChain, is already drastically changing supply chain management. It being one of the more obvious applications of blockchain technology bodes well for for the supply chain industry as more companies attempt to out the necessary tools.

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