Blockchain in Supply Chain | Use Cases, Advantages, and Features

Published : May 06, 2021

Supply chain blockchain use cases

  • The management of today's supply chains is extremely difficult. The role of blockchain in supply chain management (SCM) is gaining traction as a result of the difficulty and lack of transparency in today's supply chains. The blog examines five of the most popular blockchain supply chain use cases.

    The modern supply chain cannot work effectively without visibility, accountability, and confidence between potentially thousands of players. In the supply chain, blockchain has the ability to deliver on these factors. However, we are still in the early stages of blockchain, and despite all of the potential benefits, there are issues with blockchain supply chain development that a company like Oodles may be able to address with its expertise and experience.

    What Role does Blockchain Play in the Supply Chain?

    Let's begin with a definition of blockchain. A distributed digital ledger is referred to as a blockchain. Transactions are recorded in the ledger as a series of blocks that are connected together in a chain. The ledger is distributed through several machines, each of which is changed as the blockchain shifts.

    Because of the way blockchain works, data inside a block can't be changed, and messing with blocks is nearly impossible. For any transaction, there is a single source of reality, and blockchain in supply chain management enables full verification and auditability of any transaction flow.

    This means that, in the case of blockchain in the supply chain, businesses may maintain confidence that transactions are right and secure–even when there is little to no trust between the parties.

    For example, if a business works with manufacturers and logistic carriers all over the world, it would be able to monitor all parts to ensure that they are authentic without having to rely on third parties and intermediaries. In supply chain management, blockchain technology helps businesses to function in a near-zero-trust environment.

    Also, Read | Blockchain, a Must for Supply Chain Development after COVID-19

    Blockchain Features for the Industry


    Both parties must agree for a transaction to be legitimate. Without this agreement, no new blocks or modifications are made. This implies that both parties are aware of what a change is being made and have agreed to it.


    In reality, provenance is a key feature in the supply chain. You will know exactly where raw materials or goods came from and where they are in the supply chain thanks to blockchain technology. Supply chain practitioners will easily see who possessed properties and when they did so using provenance.


    Implementing blockchain in the supply chain makes falsifying a payment transaction, inventory information, warehousing conditions, delivery times, and other data extremely difficult.


    The shared ledger's copies all have the same version of the facts. Since both parties have a single view of the transaction, trust is built. For supply chain management (SCM), blockchain provides a level of certainty that eliminates conflicts and allows all partners to build stronger relationships.

    Also, Read | Blockchain in Supply Chain | Tracing From Food to Healthcare

    The Most Important Advantages of Blockchain in Supply Chain Management

    Any transaction in which trust is a problem could benefit from blockchain technology. Supply chain management is full of transactions involving hundreds or thousands of partners that must work together as quickly as possible.

    Automation of Manual Processes 

    In the supply chain, blockchain technology will replace these manual processes with a digital end-to-end process that provides new levels of visibility and transparency.

    End-to-End Traceability

    One of the most common blockchain applications in the supply chain is track and trace. Supply chain transparency improves visibility across supply chain processes, resulting in better inventory utilization, faster delivery times, higher quality, and lower revenue losses from black and grey market goods.

    Faster Processes 

    Blockchain technology, in principle, ensures the confidentiality of both the data and the transaction. There are fewer mistakes and disagreements. Since there is lesser product recalls and re-filling orders, the whole process is sped up.

    Furthermore, as previously said, smart contracts remove the need for intermediaries or third parties. Blockchain in the supply chain, for example, would remove the need for banks or clearinghouses in the payment process.

    Also, Read | Supply Chain Traceability and Sustainability with Blockchain

    Most Significant Blockchain Use Cases in the Supply Chain

    Although supply chain blockchain examples are still scarce, a growing number of supply chain management use cases for blockchain are being investigated, including:

    Finance for Supply Chains

    There has recently been a lot of buzz about blockchain and supply chain finance technologies because they can improve invoice processing efficiency and provide more open and safe transactions.

    Invoice payment periods, for example, are typically 30 days but maybe much longer. You can use smart contracts to initiate immediate payments as soon as the product is shipped and signed for by integrating supply chain finance and blockchain technology.

    Logistics in the Supply Chain

    With so many go-betweens and so much back and forth between partners, friction is a major issue in modern supply chains. As a result, rather than dealing directly with each other, vendors, providers, and consumers communicate via third-party organizations. According to DHL, the promise of blockchain in supply chain logistics is that transactions can be authenticated, tracked, and coordinated autonomously without the involvement of third parties, removing an entire layer of complexity from global supply chains.

    Also, Read | How Blockchain Transforms Logistics and Supply Chain

    Payments to Stakeholders 

    Through the use of encrypted distributed ledgers that provide trusted real-time verification of transactions without the need for intermediaries such as correspondent banks and clearinghouses, blockchain technology promises to facilitate fast, secure, low-cost international payment processing services (and other transactions). Using cryptocurrencies, this blockchain technology in the supply chain ensures that farmers are paid directly when their goods are sold.

    Traceability of the Cold Chain

    Food and pharmaceutical products have a lot in common when it comes to storage and delivery. Temperature, humidity, vibration, and other environmental metrics can be recorded using blockchain and IoT sensors on products. The data is stored in a blockchain, and smart contracts are used to ensure that if any of the readings go out of range, they are automatically corrected.

    Walmart's groundbreaking use of blockchain to monitor the provenance and quality of its pork products coming from China is one early example of blockchain in the food supply chain.

    Keeping Food Healthy and Safe

    Cross-contamination and separation are difficult to monitor and isolate in many food safety problems. Lack of documentation and visibility into the supply chain results in sluggish response times when a problem occurs, as well as needless waste and the financial and reputational costs of recalls.

    Companies like Nestle, Walmart, and Unilever are using blockchain to speed up the process of identifying and eliminating the source of foodborne illness in the supply chain.

    Final Thoughts

    We aren't there yet, but the signs are promising. When it comes to blockchain, supply chain businesses must look beyond the hype to see how the technology will help their company. Connect with our blockchain development experts for more information about blockchain in the supply chain.  

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