How Blockchain in Supply Chain Management is Transforming Businesses?

Blockchain in supply chain management is transforming businesses that are involved in sourcing raw materials, shipping, and producing among other tasks.

blockchains in supply chain

Blockchain is a technology that has expanded across multiple sectors including production, IoT, AI, fintech, and banking among others with an unbelievable speed. Due to its features such as transparency, traceability, and improved performance, the technology has become a favorite pick for tech experts. 

Some common applications of Blockchain that you might have heard often are cryptos like Bitcoins, smart contracts, secured chatbots, and cybersecurity. However, from the perspective of supply chain management, manufacturing companies are adopting the technology with a speed unlike ever before.

blockchain supply chain

Statista reports say the blockchain technology is expected to touch a global spending value of $19 billion. The major contribution of blockchain revenue is credited to manufacturing companies, customer service providers, banking, and financial companies as well. For tasks such as cross-border payment settlements, elimination of third parties, enhanced cybersecurity, and more, blockchain is used as a reliable technology.

What is supply chain management?

Before we proceed and discuss a few benefits of blockchain operations, let’s understand supply chain management in simple terms. Supply chain management, as the name suggests, is managing the process beginning from production to delivery. Stages such as inventory management, shipment, etc., are taken care of under the supply chain management processes. Here’s why Supply Chain Management (SCM) is gaining momentum across industries -

  • Companies are able to cut costs and reduce wastage of deliveries

  • The time invested into the shipment process can be reduced

  • Raw materials can be monitored and sourced more conveniently

  • The entire process can be better tracked and transparent

  • Automatic authorizations eliminate the human error

  • Consumers receive deliveries faster

  • Helps in creating a smarter shipment procedure for temperature-sensitive commodities

  • With predictive analytics, inventory requirements can be predicted

Why are blockchain applications needed in the SCM?

Well, that is a question that you should certainly focus on; especially if your businesses deal in the continuous distribution of produced goods in different markets. Furthermore, let’s discuss each blockchain benefits that are brought on the table to power a smoother supply chain management process.

blockchain applications

1. Financial settlements

To ensure smooth financial settlements, blockchain paired up with technologies such as Smart Contracts can be used to eliminate the requirement of manual approval of payments. The blockchain in supply chain tasks can be useful in processes such as raw material order placements, settlements of taxes, and payments. Smart contracts are a set of rules and conditions that are uploaded on blockchain servers to automate such settlement processes. Segments like insurance companies are already using its advantages.

2. Cost-efficient supply chain

Blockchain and supply chains can coexist to ensure a smoother and more efficient inventory management process. There are a few ways that can make it possible-

  • Keeping a track of inventories to forecast and place orders of raw materials according to demands

  • Using the best possible cybersecurity protocols to eliminate losses caused by cyber threats

  • By keeping a track of the wastage and establishing proper recycling channels with the help of blockchain features such as traceability

  • Reducing the need of hiring third parties to manage inventories and place orders

  • Reduced need for buffer stocks by keeping a real-time track of stocks

  • Speedy insurance claim processing to recover unpredictable losses

  • Keeping an eye on any possible hardware or software glitch in the real-time

  • Using IoT to keep real-time tracks of incidents such as theft attempts, rerouting the shipment, etc

3. Protection against contamination

Blockchain-supported supply chain technology paired up with IoT sensors is useful in automating processes such as scanning and registering stocks. Scanning stocks for data such as their ID, condition, temperature, etc can help authorities in keeping a track of the condition of such stocks. 

Not only it can be useful in identifying if these stocks are up to the quality standards or not, but blockchain with IoT can also be useful in recording the conditions of stocks on each checkpoint throughout the shipping route. Tracking the real-time conditions of stocks can help in identifying and filtering contaminating stocks that otherwise would get delivered or ruin other stocks too.

4. Smarter supplier relationships

With features such as smart contracts, blockchain usage makes it easier to onboard suppliers on a supply chain network. Moreover, healthier relationships can be built with these suppliers through blockchain software development by automating processes such as transactions, order placements, tracking of the origin of products, etc. 

IBM blockchain, for instance, also offers an AI that can detect and predict any possible anomalies causing disruptions. Relatively, as blockchain is known for its immune records that can neither be modified nor deleted, the digital supply chain can be more reliable for all parties involved in the process.

5. Improved traceability and transparency

To build better trust between sender and receiver of shipments, enhanced transparency, and real-time status are required. Thus, the transparency feature of blockchain supply chain systems can be really helpful. With the Internet of Things (IoT) sensors, it will become much easier to ensure that shipments are on schedule, on routes, and in the proper conditions. Also, the data collected through the server can be helpful in predicting accurate delivery schedules for future shipments as well irrespective of quantities or distance.

Wrapping up

Well, these were some of the top usages of blockchain in supply chain systems that make the process smoother. As businesses are now onboarding digital platforms and trying to automate their multiple processes, technologies such as blockchain ensure better security and transparency. Also, with blockchain logistics, segments such as pharmaceutical companies have the freedom to handle and monitor sensitive shipments better. 

However, blockchain benefits are mainly dependent on other technologies such as Artificial Intelligence (AI) or IoT. But including all these technologies in the digital supply chain is only resulting in a more efficient supply chain network and companies such as WallMart or Amazon have already adopted these logistics innovations.

Vikram <span>Content Manager</span>
Written By
Vikram Content Manager

Vikram is an experienced wunderkind, who embraced technology at a very early age, and today he is at the helm of it. Mobile apps are something that excites him the most, and now he is up to give this vertical the best shot. He routinely catches up with the new apps and comes up with the top apps that can excite you to the core.

Want To Hire The Best Service Provider?
MobileAppDaily will help you explore the best service providers depending on your vision, budget, project requirements and industry. Get in touch and create a list of best-suited companies for your needs.

Featured Blogs


What is Dogecoin? - An Introduction to its Functions

4 min read  

To answer the question “What is Dogecoin?” In short, it’s a peer-to-peer cryptocurrency just like Bitcoin. This fun online currency has seen a lot of development since its origin. And, Dogecoin has a quite interesting origin story. The cryptocurrency came into existence because of


How to Build a Blockchain Application for Android and iOS Platforms?

4 min read  

Blockchain trends are taking over multiple industries due to their security and transparency features. From securing healthcare data with blockchain to making the financial processes safer and more efficient, the technology is contributing enormously across the globe. Now, some common examples of bl


Will Cryptocurrency Rule Over The Industries?

4 min read  

The theory of cryptocurrency started back in 1983, when an American cryptographer, David Chaum, introduced an anonymous cryptographic electronic money called ecash. The initiative taken by David was tremendous that later increases its prominence across the world and made it a secure internet-based f


Should First-Time Crypto Investors Buy the Most Popular Stablecoins?

4 min read  

Stablecoins are quickly gaining momentum among users from all over the world. As technologies such as fast internet, blockchain, and more are getting access to common users, there has been an increasing trust in crypto stablecoins. Additionally, crypto stablecoins allow governments across the world

Featured Interviews


Interview With Coyote Jackson, Director of Product Management, PubNub

MobileAppDaily had a word with Coyote Jackson, Director of Product Management, PubNub. We spoke to him about his journey in the global Data Stream Network and real-time infrastructure-as-a-service company. Learn more about him.

MAD Team 4 min read  

Interview With Laetitia Gazel Anthoine, Founder and CEO, Connecthings

MobileAppDaily had a word with Laetitia Gazel Anthoine, Founder and CEO, Connecthings. We spoke to her about her idea behind Connecthings and thoughts about the company’s services.

MAD Team 4 min read  

Interview With Gregg Temperley, Founder Of ParcelBroker App

MobileAppDaily had a word with Gregg Temperley, Founder. We spoke to him about his idea behind such an excellent app and his whole journey during the development process.

MAD Team 4 min read  

Interview With George Deglin, CEO Of OneSignal

MobileAppDaily had a word with George Deglin, the CEO and co-founder of OneSignal, a leading customer messaging and engagement solution, we learn multiple facets related to customer engagement, personalization, and the future of mobile marketing.

MAD Team 4 min read  
MAD Originals
MAD Originals

Cut to the chase content that’s credible, insightful & actionable.

Get the latest mashup of the App Industry Exclusively Inboxed

  • BOTH
Join our expansive network, build connections and expand your brand presence.