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How blockchain is making the supply chain more trustworthy

(Photo credit: XYO/Facebook)

Blockchain is a technology that many people quickly associate with cryptocurrency. Although it initially gained recognition that way, the potential uses for blockchain span much further.

More specifically, the technology could bring more trust to the supply chain, improving the reputations of companies that make merchandise available for sale.

Reducing the instances of counterfeit goods

Counterfeit merchandise collectively represents substantial losses for many industries. As a start, about 10% of all luxury goods sold each year are fakes, resulting in about $28 billion in lost profits. Plus, the consequences of non-authentic components can be especially severe for electronics manufacturers, particularly if they make products for the aviation or military industries.

One blockchain-based solution to combat these problems involves cryptographic “smart tags” that have unique identifiers to confirm the provenance and source of each part of a product. If all the parties in a supply chain have access to that information, they can rest assured of an item’s authenticity.

Giving guaranteed uptime and high integrity

Blockchain offers several characteristics that make it a secure method of storing information. For example, it’s a distributed network, so even if part of it goes down, that failure does not cause an entire network outage. Additionally, a blockchain’s ledger system is virtually immutable due to the verification process that each entry goes through before getting added to the blockchain.

Since blockchain has security components built in, it’s easier for supply chain professionals to rest assured of consistent functionality when using it. In addition to the security-related benefits, blockchain provides data that supports better decision-making. In the apparel industry, for example, parties using blockchain can see real-time information about the top-selling items of clothing, enabling better demand forecasting.

The way that blockchain makes it difficult to tamper with information and how it’s unlikely to go down due to hacks makes this technology appealing for fulfilling the supply chain needs faced by various industries, regardless of the specific products they track.

Improving the ability to trace consumable products

Today’s consumers are increasingly concerned about where the things they eat and drink come from. Many prefer to purchase items that are sustainably sourced, organic, fair trade-certified or produced without genetically modified ingredients (GMOs).

IBM created a Food Trust blockchain that reportedly tracked millions of food products during a trial participated in by brands including Dole and Carrefour. Plus, the National Fisheries Institute is using the system to aid in verifying species information for seafood products.

This ability to trace products also supports the brand reputations of companies that produce gourmet products. For example, statistics say that 59% of Americans drink gourmet coffee daily. Most willingly pay more for it, but they care about where the coffee comes from, the production process and how it tastes. Blockchain can provide that information for them, leading to more-confident purchases.

Proving that companies don’t use conflict materials

Similar to how people are paying more attention to the sources of the things they eat and drink, they also want proof that companies don’t use conflict materials. Those are substances that come from war zones and perpetuate the continued unrest in the region.

Unfortunately, many high-tech materials, like those used to make electric car batteries, could potentially originate in conflict zones. Some companies are taking steps to show that their supply chains are conflict material-free. Volvo uses blockchain to make that promise by tracking recycled cobalt from China across two months.

Tracking minerals like cobalt using blockchain is not the only solution for eliminating a company’s dependence on conflict materials. But, it’s a step in the right direction because it helps a brand show a commitment to responsible sourcing.

Applying IoT technology to blockchain for cold-chain transport

Effective cold-chain transport ensures that perishable items such as frozen foods and refrigerated medications stay at the correct conditions from the time they leave their sources to when they reach their destinations. A report from MarketsAndMarkets shows that the cold chain monitoring market will have a combined annual growth rate of 11.17% from 2018-2023 due to factors like the demand for increased food quality and temperature-sensitive medicine.

Internet of Things (IoT) sensors can track the conditions of temperature-controlled items in transit, verifying that the responsible parties don’t keep the goods in environments that could damage them. Bringing IoT sensor data to blockchain allows parties to quickly identify issues and resolve them before the merchandise remains in a dangerous temperature zone for too long.

Parties that are excited to use blockchain for supply chain management must be aware that it may not be a magic fix – or at least not right away. That’s because whether companies use blockchain to check the process of temperature-sensitive items or other things, all the entities within the supply chain must be fully committed to using it. Moreover, they must implement steps to tackle irregularities in the stored information.

Technology that’s worth a closer look

This overview shows that although blockchain technology is still in the early stages and not a solution that will instantly fix every problem that the supply chain faces, it’s already making significant positive changes.

Companies and consumers alike want to feel comfortable about trusting the products they buy. The visibility that blockchain provides could help that happen.


  1. scarlet emilye

    Using distributed ledger network, Blockchain has an effective component for storing information. So, it’s easier for supply chain professionals to rest assured of consistent functionality.

  2. Andreiah Wilson

    There are lot of tremendous competitive and business advantages in the Supply chain management especially for manufacturers and enterprises.

  3. Diya Shree

    Blockchain technology in the supply chain, offers more scalability through which any vast database is accessible from multiple locations around the world.


    I really think supply chains and government institutions (like USPS) should switch to blockchain backends for the sake of integrity.

Comments are closed.

Kayla Matthews

Kayla Matthews is a technology journalist and writer interested in manufacturing and the supply chain. Her work has been published on Thomas Insights, Industrial Machinery Digest, American Machinist and