Blockchain Solutions in Supply Chain Management

In e-commerce, there’s a sequence of events starting from the procurement of raw materials to manufacturing, storage, and distribution of finished goods up to the point the product reaches the consumer. This flow of goods and services from the point of origin (raw material supplier) to the point of consumption (consumer) is called a supply chain. The planning, administration, and execution of the chain of activities delivering the product to the consumer represent Supply Chain Management (SCM).

Because a supply chain involves so many different people performing different tasks, the whole process becomes large, slow, and inefficient. There is no auditing or centralized mechanism to ensure contracts are enforced as per rules. The consumer has no way of knowing if the clothes he has purchased are counterfeit, the medicine he buys is reliable, or whether the food that he consumes is adulterated. Supply chains have serious transparency and traceability issues.

All that changed with the creation of Seamless Enterprise Blockchain As A Service (BaaS). Huge swathes of supply chain data can now be digitally stored within coded ‘blocks’ chained endlessly together in a distributed ledger within the blockchain computer network. The data can’t be hacked. Once data is encrypted and recorded, it can’t be altered or removed. This data can be analyzed by blockchain to generate solutions to improve supply chain dynamics.

5 Blockchain Features That Make It Ideal for Implementing Solutions in SCM

  • The blockchain is a decentralized system that can’t be interfered with or manipulated from within, and it can’t be hacked.
  • You don’t need banks or other financial intermediaries. Transactions can be directly conducted between buyers and sellers.
  • Payments can be affected quickly, and smart contracts are executed only if underlying conditions or obligations are fulfilled.
  • Operating costs are low because overheads are nonexistent.
  • High levels of data encryption and transparency protect all users.

How Blockchain Improves Efficiencies in Supply Chain Management

If we purchase a lifesaving drug at the store, we’ll have to take the word of the pharmacist that the medicine is safe, untampered, and genuine. Suppose we tag a microchip (Internet of things) to the packet of medicine. We could trace the medicine’s journey through every step of the supply chain sequence.

Since the Internet of things is now merged with the blockchain, we have the means to capture and store data relating to the origin, manufacturing, storage, and transportation of meds. The buyer merely scans the packet using his mobile device to retrace the supply chain route taken by the meds from the point of origin all the way to the drug store. The consumer can now reject a product if its source or ingredients are suspect or if the journey from the supplier to the retail store compromises the quality of the product.


Online Tracking of Supply Chains Through Blockchain Has Many Benefits

  • Businesses can boost revenues by reducing delays.
  • We can reduce costs by adopting more efficient manufacturing and transportation methods.
  • We can also improve and control quality by eliminating wastage.
  • Sales will be boosted as products reach the consumer through faster routes.
  • We can raise production, make distribution more efficient, and increase sales through better delivery channels.

If supply chain sequences are monitored using blockchain, we can reduce errors, and avoid delays in manufacturing, distribution, and transportation. Owing to blockchain’s transparency, you have a better chance of eliminating business malpractices. Monitoring and management of each stage of the supply chain become possible. Ultimately, the customer stands to gain because he can instantly trace any product to the point of its origin, track its journey, and confirm that the product is genuine.


Blockchain Smart Contracts Protect Trading and Payment Systems

Blockchains enable trading of goods and services using smart contracts. This way, each transaction or contract can be coded into the blockchain. The code checks whether the buyers and sellers in a contract have lived up to their obligations. Payments are processed only if the underlying conditions of the contract are fulfilled. This system protects both buyers and sellers and benefits the consumer too.


Blockchain Safeguards Transactions in the Supply Chain From Criminal Elements

Counterfeiters and fraudsters will be exposed as the blockchain transactions can be traced to their wallets. Criminals can’t alter transactions because any attempt to change data will be nullified by the system as a whole.  


Blockchain Solutions Deployed in Major Supply Chains


Targeting the food and medicine supply chain industry

This blockchain enabled IoT system uses sensors to feed vast amounts of supply chain information to databases embedded in distributed blockchain ledgers. A mom purchasing baby food for her newborn has no way of verifying the conditions of storage and ingredients used. Now, she can use a mobile app to scan food labels to check the product’s quality, origins, mix of ingredients, and quality control certifications to ensure she’s buying a genuine product. Ambrosus is tying up with more and more companies to make their supply chains open, transparent and verifiable.   



Targeting the food, agriculture, healthcare, art, and business management sectors

This is a blockchain project that was set up in 2016. It uses Radio-frequency identification (RFID) tags to communicate product information to a blockchain network. The tags are tamper-proof and unbreakable. There are multiple benefits from a consumer’s point of view:

  • The blockchain confirms the genuineness of the product and audits its processing path.
  • The authenticity of the product can be scrutinized. Consumers get alerted if a counterfeit is detected.
  • The blockchain compatible IoT tags are highly secure and immune to hacking.
  • Traceability of all products is assured at every point of the supply chain.

Among the oldest of blockchain projects, WaltonChain eliminated the need to blindly trust the manufacturer or retailer in the supply chain. Consumers now have instant access to information regarding the origins of various products.


Modum is a blockchain powered solution rolled out in 2016 in Switzerland and is tailor-made for the pharmaceutical industry.

A microchip embedded in medical packaging routes data to the blockchain regarding the condition of the medicine, and temperature fluctuations recorded in transit. As the goods change hands from one contractor to another, a smart contract system embedded in the blockchain verifies if the receiver’s guidelines have been followed. Payments are routed through the blockchain only if the conditions of the contract are fulfilled. It’s the computer that closes the contract and not humans, and this eliminates third-party interference and manipulation.

The data also contains the name, specifications, and ingredients of the meds, and tracks its journey through the supply chain to ensure that a genuine product is delivered. The smart contract has provisions to follow government regulatory norms at every stage of production and transit. Consumers can rest assured that they are buying meds that are validated and compliant with industry norms.


Based in China, WaBi uses high-tech labeling to prevent counterfeiting of products in supply chains. The company incentivizes users to purchase labeled products by issuing Wabi cryptocurrency tokens. These tokens can be exchanged for goods and services through a huge network of stores that accept the tokens. The technology combines Waimai RFID-compliant labels with blockchain technology to inform consumers about the origin of items purchased by them. The RFID labeling uses an encrypted ID and dynamic coding protocols to locate products anywhere in a geographical setting.  



These new blockchain-inspired solutions are in nascent stages of development and do not claim to be a cure-all solution for all the ills that plague supply chain systems. But they have generated huge interest among businesses that are conscious of their reputation. In the near future, one cannot rule out permutations and combinations of blockchain powered smart contracts partnering with IoT and IA to impact the way industries conduct their business. Once the full potential of this technological breakthrough is realized, it’ll be welcome news for beleaguered supply chain sectors.