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Can Blockchain Technology Innovate the Supply Chain ?

Blockchain technology is transforming the supply chain with limitless potential. It’s strengthening connections, making it more secure and transparent. Therefore, it’s a gateway for consumers to hold their favorite brands and companies accountable while guaranteeing product authenticity and responsible sourcing.

According to IBM:

Blockchain for supply chain solutions help supply chain leaders use data to handle the disruptions of today and build resiliency for the future

From UPS to Louis Vuitton to Pfizer, blockchain is improving efficiency, ensuring authenticity, and reducing costs. Big changes are on the horizon for many brands as they discover the potential and consumer demand rises.

Will Blockchain Technology Provide Vital Solutions for the Supply Chain?

Blackchain and the Supply Chain
Can Blockchain technology be useful to the Supply Chain and innovation in that area?

What is a ‘Blockchain’?

A blockchain, simply put, is a shared database that records transactions and tracks assets.

Let’s break it down.

First, the ‘block’. In this case, transaction information. The block stores information such as; the buyer, the seller, product type, and the amount exchanged, etc. In reality, a block is a hashed line of code comprised of various numbers and letters; ‘e3f44q2bn…’.

Sort of like a DNA strand, a block holds the information, and if the block is altered it would be considered a completely different block.

Second, the ‘chain’. When a new block is made, the information gets encrypted and linked chronologically in a chain. Then a copy of the block is shared with everyone in the network. Storing the blocks chronologically, like a chain, means that each block relies on the block that comes before it like how each link of a chain relies on the link before it.

Blockchain Technology
Blockchain Technology is best known for being the underpinning of cryptocurrencies such as the (in) famous bitcoin

Cybersecurity and Blockchain Technology 

The security of the blockchain relies on the decentralized nature of the system. Everyone in the network gets a copy of the chain. If someone were to attempt to change the information of a block, all the information in the chain following that would be void as there would be a break in the chain. This means that someone would have to adjust ALL the blocks following in order for the chain to accept that new block. 

Let’s say that someone accomplished this feat.

The problem that arises is that this single chain no longer matches the chain that everyone else in the network has a copy of. This essentially voids that chain. The shared database recognizes tampering with the chain and corrects the information. This means that the only way someone could change information, is if they changed over half of all the chains in the network, which is nearly impossible.

Supply Chain Implementation

The supply chain has the potential of implementing blockchain technology in many ways.

Business runs on information. The faster it’s received and the more accurate it is, the better – IBM

In the example above, a company can store transaction information to ensure authenticity and security. This helps with customer disputes, prevents fraudulent transactions, and false claims.

Blockchain technology can offer tracking and traceability. 

In sourcing, a block is created containing information about the exact location of where the raw materials were sourced. It can hold the payment and receipt information for the primary sector. This ensures proper compensation for the farmers, loggers, and miners acquiring the raw materials. An area that typically draws the short straw in the distribution of wealth.

In transportation, a block is created containing information about each step in production. The lifecycle of a product can be stored that includes production, distribution, and delivery. Companies can display a public product blockchain to their consumers to showcase fair trade and ethical sourcing. The increase in transparency allows for greater trust from consumers. Public blockchains can even provide consumers with real-time tracking of a product which is vital in the evolution of last mile delivery.

Courier companies like UPS and Fedex are beginning to use this technology through BiTA.


Big name companies are already implementing blockchain technology.

Fashion companies like Louis Vuitton and Prada are collaborating with Aura to authenticate products and display a transparent supply chain. Products are tagged with a microchip to display product authenticity, manufacturing date, and where it was made. The customer can also easily find the model number, where it was purchased, its description, and much more by simply scanning the tag. It can even show consumers the entire product lifecycle to ensure ethical sourcing.

According to the Prada Group:

The technology offered by the Aura Blockchain Consortium enables direct-to-consumer access to product-history and proof of authenticity; they can easily and transparently follow a product’s lifecycle, from conception through distribution, with trusted data throughout, and thus strengthen their relationship with their favorite luxury brands

Prada Group from Milan

Big pharmaceutical companies like Pfizer and Bayer are collaborating with MediLedger to reduce costs, increase efficiency, and reduce chargebacks and fraud. For example, real-time tracking ensures compliance with regulations in temperature and humidity. Tagging drug inventory tightens the supply chain to reduce counterfeit drugs. As a result, this also helps when validating drug returns to manufacturers when wholesalers receive excess inventory. 

According to Harvard Business Review:

The U.S. Drug Supply Chain Security Act of 2013 requires pharmaceutical companies to identify and trace prescription drugs to protect consumers from counterfeit, stolen, or harmful products

The Big Potential of Blockchain Technology for the Supply Chain

There is big potential with the use of blockchain in many sectors of business.

In the automotive industry, the technology can be used to store VIN numbers for easy recalls of vehicles, transfer car titles more efficiently, and track insurance data.

For the food industry, it can display ethical sourcing and environmentally friendly practices. In the hospitality industry, hotel chains can reduce third-party booking services and create efficient booking and selling processes.

In conclusion, blockchain technology has the potential to improve the supply chain of companies in ways we haven’t even discovered yet.

The blockchain provides a more secure, decentralized way to store information companies can become more efficient and transparent than ever before

As a result, connecting and tightening the supply chain from the source to the sale. Although, only the future can tell how blockchain technology will continue to improve and transform the supply chain.

Jared Roth

Jared Roth

Jared is a senior Business Administration major with a focus on Supply Chain Management and Logistics at Arizona State University. Based in Milwaukee, Wisconsin currently located in Paris, France with Visionary Marketing.


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