What is supply chain management?

A supply chain, in easier words, is called a distribution system. Supply chain management deals with planning the transit of the [product until it reaches the final customer, it includes processing of material, packaging, warehousing, delivery, wholesalers, and retailers too.

This management of the flow of goods require resources in the form of human labour, raw materials, machinery, organisations, entities as well as technology. In other words, it is a full-fledged system that starts from building a commodity and making it reach its final customer.

What are the current problems faced in the current system of management?

If we look on a global scale, the demand is rising on a greater level and hence, a product has to be made readily available. The demand for high speed, more volume and cheap consumption is increasing day by day. This fast consumer pattern has been compromised with the value of an ethical supply chain. The current system of flow of goods, information and financial capital include both uses of manual and online data which is prone to:

Human errors

While entering the data manually there could be a lot of mistakes like writing down of wrong digits or codes, not including a product in the cart, inability to check each and every product and inability to check the quality of raw materials etc.

Are difficult to track down

As today’s products use a lot of ingredients and components, it is really too hard to track that what component has an error. For example, if we take a smartphone, there are parts as small as a microchip fitted inside of it. If there is a component that is defective and fitted in it, it is nearly impossible to know which part has a defect and since these parts are made by different producers, it becomes more difficult to track the exact part that is causing errors.


The major problem in running a complex supply chain is that the vendors of every stage must be trusted. Differently, any organisation must trust that the supplier of raw material is delivering the right product, the delivery department is maintaining the safety standards and there are 100% dedicated and hardworking participants in the chain. However, humans are not too much trustworthy and the system is prone to corruption. Some basic cases may include, mixing up of different materials while collecting raw materials, hoarding, black marketing, supplier acting like a monopolist, exploitation of resources and window dressing of accounts etc.


The traditional system includes four major costs namely, procurement, transportation, inventory and quality costs. These costs include the cost of manufacturing, collecting raw material, fuels required to run daily operations, human costs as well the cost of disposal that is even after the production is complete there can be errors like quality or a defective product is manufactured and hence the entire lot will be scraped off, leading to a major loss to the firm. Such costs are at times difficult for the firm to bear.

As we can see that the well-being of a supply chain is critical to any business, the current system is quite outdated and requires a revamp.

Here the need of blockchain arises

The blockchain system is a full ledger system that functions on blocks and nodes for saving data. This technology was developed by the developers of cryptocurrency for safe and secure transactions. But ever-evolving technology has made blockchain, a revolutionary technology requires in almost every industry.

Blockchain technology is decentralised, tamper-proof, easily accessible, easily traceable, trustless and a transparent system that will disrupt the supply chain management.

How will blockchain improve suppy chain management?

We can say that blockchain is a perfect solution to disrupt the current system of supply chain management.

Every time the commodity will change hands, there will be a permanent record that will be stored in the blocks, this will create detailed information of the product right from the procurement of product till its point of sale. This will reduce the time consumed, human errors, and added costs.

What are the hurdles that the blockchain technology must overcome?

Blockchain will definitely improve:

  • Recording and tracking of orders, receipts, change order and other trade-related details.
  • The certification of the products could be easily verified and validated.
  • Linking the codes of physical items to serial numbers, barcodes and RFID tags becomes easier.

Therefore, it is clear that this technology

  • Will bring transparency into the system
  • Will create a bigger and decentralised system
  • Its immutability will overcome problems related to trust and corruption
  • The system will be unhackable, hence, creating a safe and secure place for transactions.

Summing Up

Blockchain technology is the key to all the problems present in this system. However, it will take time to develop and overcome problems like currency volatility, spreading the knowledge on its technical know-how and people’s resistance to change.

But the usage of blockchain opens up the doors for innovation and better use, we can hope that this system will be established as a norm in the management in this era of globalisation.



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Yokesh Sankar
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I am Yokesh Sankar. Co-Founder of BlockchainX, My vision and time to offer the best products for our clients without apprehensions at economic rates.


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