Blockchain in Supply Chain: The Use Cases of Blockchain in the Supply Chain

The management of today’s supply chains across all industries is incredibly challenging. In order for supply chain operations to remain successful, end-to-end communication is absolutely essential. Whichever form this end-to-end communication takes, it requires no global restraints while remaining robust and transparent. In this context, the role of blockchain in Supply Chain Management is growing in popularity due to the complexity and lack of transparency in today’s supply chains.

In business, vertical integration means a whole supply chain of the company is controlled and owned by the organization. Thus, making it possible to control each step through customers. in the digital world, vertical integration happens when a company can control the primary access points to acquire data from consumers.

The use of blockchain in the supply chain can improve transparency and traceability while also lowering administrative expenses.

This research will look into how blockchain is or will be improving Supply Chain Management.

Why Companies are Incorporating Blockchain in their Supply Chain

A distributed digital ledger gets referred to as a blockchain. Transactions get recorded in the ledger as a series of blocks that are linked together in a chain. The ledger gets distributed across numerous computers, updated as the blockchain changes.

Due to the system that enables blockchains to work, data within a block cannot get changed, and tampering with blocks is nearly impossible. Every transaction has a single source, enabling a comprehensive transaction flow verification and audibility in the supply chain management. This feature means that, in the case of blockchain in the supply chain, businesses may develop trust that transactions are correct and secure — even when there is little to no trust between the participants.

For example, suppose a company works with suppliers and logistic carriers worldwide. In that case, it will track all parts and ensure that they are authentic without relying on third parties and intermediaries. Ultimately, blockchain technology enables firms to function in a “zero trust” environment in supply chain management.

Blockchain Use Cases for the Supply Chain Industry

Bitcoin is the most well-known Blockchain implementation. However, Blockchain’s distributed ledger properties enable it to help execute and monitor any transaction, not only cryptocurrencies. For one, the deployment of Blockchain in the supply chain gets driven by reliability and integrity.

When it comes to large-scale supply chain transactions, regardless of how strong of a business relationship two parties have, the added security of blockchain technology is beneficial. Since hundreds or thousands of partners must do business as efficiently as possible, supply chain management can use and benefit from blockchain technology.

Distributed Ledger Technology solutions that use blockchain in the supply chain enable worldwide trading partners to interact securely and with consensus over shared facts, increasing efficiency, transparency, and visibility. Immutability into the provenance of commodities, the elimination of reconciliation burden across numerous parties, real-time visibility to do track and trace analysis, identify risks, and expedite physical and financial supply chains are examples of blockchain use cases for supply chains.

Although supply chain blockchain implementations are still scarce, a growing number of many more supply chain management use cases for blockchain are being explored, including:

Supply Chain Logistics

With so many go-betweens and so much back and forth between partners, friction is a key issue in modern supply chains. As a result, suppliers, providers, and customers interact through third-party businesses rather than dealing directly with each other. In supply chain logistics, blockchain promises that transactions may be verified, documented, and coordinated autonomously without the involvement of third parties. This removes an entire layer of complexity from global supply chains.

Supply Chain Finance

Blockchain and supply chain finance solutions are growing in popularity. These solutions offer overall process efficiency improvements as well as enhance the transparency and security of all transactions. Invoice payment terms, for example, are typically 30 days but can be much longer. Companies may use smart contracts to trigger immediate payments when the product is delivered and signed for by merging supply chain financing and blockchain technology.

Supplier Payments

As blockchain technology currently stands, some solutions already offer fast, secure, and low-cost money transfers. They utilized encrypted distributed ledgers to track the transfer of funds using cryptocurrencies. With this distributed ledger, anyone can view the transfer of funds between two people. All they need is the wallet address of each party to verify the successful transfer of funds.

The coffee business is one example of a supply chain blockchain for supplier payment. Bext360 is employing blockchain technology to improve supply-chain productivity by better tracking all aspects of the global coffee trade, from farmer to consumer. This implementation o blockchain in the supply chain ensures direct payment to farmers as soon as their products get sold, thanks to the use of cryptocurrencies.

Food Safety

Cross-contamination and isolation are difficult to track and isolate in many food safety situations. Lack of data and insight into the supply chain results in sluggish response times when an issue develops. Plus, it results in excessive waste and recalls’ financial and reputational costs. Thus, a consortium is employing blockchain in supply chain tracking to ensure that all product movement and status are transparent across the supply chain.

Companies like Nestle, Walmart, and Unilever are utilizing blockchain to identify and eliminate the source of foodborne illness in the supply chain.

Traceability of Cold Chain

Food and pharmaceutical products have a lot in common regarding storage and shipping. Temperature, humidity, vibration, and other environmental variables can get recorded using blockchain and IoT sensors on products. The data gets recorded in a blockchain, and smart contracts ensure that any readings that move out of range are automatically corrected.

Walmart’s creative use of blockchain to trace the source and quality of its pork products arriving from China is one early example of blockchain in the food supply chain. Walmart now requires all of its spinach and lettuce suppliers to use blockchain due to the technology’s success in the supply chain.


A company’s ability to successfully implement blockchain in the supply chain is contingent on their solution’s ability to provide the performance and scalability they require. Moreover, supply chain development should look into methods to incorporate blockchain into operations where it makes the most sense now that the technology is constantly maturing. Blockchain technologies that can embed trust and efficiency into a wide range of transactions are needed to transform the supply chain business.

Learn More From The Book Blockchain Business Models


Read Next: EthereumBlockchain Business Models Framework Decentralized FinanceBlockchain EconomicsBitcoin.

Read Also: Proof-of-stakeProof-of-workBlockchainERC-20DAONFT.

Other Commercial Applications On Top Of The Blockchain


Decentralized finance (DeFi) refers to an ecosystem of financial products that do not rely on traditional financial intermediaries such as banks and exchanges. Central to the success of decentralized finance is smart contracts, which are deployed on Ethereum (contracts that two parties can deploy without an intermediary). DeFi also gave rise to dApps (decentralized apps), giving developers the ability to build applications on top of the Ethereum blockchain.


An ERC-20 Token stands for “Ethereum Request for Comments,” which is a standard built on top of Ethereum to enable other tokens to be issued. Based on a smart contract that determines its rules, the ERC-20 enables anyone to issue tokens on top of Ethereum. As they are using a standard, those are interoperable. ERC-20 Tokens are critical to understanding the development of Ethereum as a business platform.

Decentralized Autonomous Organizations

A decentralized autonomous organization (DAO) operates autonomously on blockchain protocol under rules governed by smart contracts. DAO is among the most important innovations that Blockchain has brought to the business world, which can create “super entities” or large entities that do not have a central authority but are instead managed in a decentralized manner.


Non-fungible tokens (NFTs) are cryptographic tokens that represent something unique. Non-fungible assets are those that are not mutually interchangeable. Non-fungible tokens contain identifying information that makes them unique. Unlike Bitcoin – which has a supply of 21 million identical coins – they cannot be exchanged like for like.


Blockchain companies use sharding to partition databases and increase scalability, allowing them to process more transactions per second. Sharding is a key mechanism underneath the Ethereum Blockchain and one of its critical components. Indeed, sharding enables Blockchain protocols to overcome the Scalability Trilemma (as a Blockchain grows, it stays scalable, secure, and decentralized).


A Proof of Stake (PoS) is a form of consensus algorithm used to achieve agreement across a distributed network. As such it is, together with Proof of Work, among the key consensus algorithms for Blockchain protocols (like Ethereum’s Casper protocol). Proof of Stake has the advantage of the security, reduced risk of centralization, and energy efficiency.

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