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 requires resources in the form of human labor, raw materials, machinery, organizations, 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 daily. 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 things that could be corrected like writing down 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 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 different producers make these parts, 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 organization 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 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 for 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 required in almost every industry.

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

Supply Chain Management is All About Customers

Over the years, SCM has helped businesses improve efficiency and reduce their operational costs in a very evident manner. This is continuing to be a priority, while customers today play a vital and front-and-center role in setting SCM priorities. It is said, “Customers live and die in the supply chain. Their loyalty towards the brand is set upon the enterprises and their service efficiency. The ability to respond and act on instant demand, accurately fulfilling expectations, sets the bar high.

From raw material sourcing to manufacturing, logistics, trade, and order management, everything is coordinated and given to the customer as a fine product in a reasonable time frame. And this can be efficiently improved with the benefits of bringing in blockchain in supply chain management. Companies can easily make use of the selling points from the customer response and ease their production with improved tactics altered and implemented by tracing their progress in the production process on time and managing time constraints.

Blockchain Technology in the Supply Chain: Traceability, Reputation, and Trust

Blockchain technology revolutionizes supply chain management by enhancing traceability, repudiation, and trust within the network. Blockchain in supply chains boosts traceability, prevents fraud, and builds trust. The Ledger system helps in tracking every item and transaction in the journey, letting you trace from raw materials to delivery in real time. Therefore, there are constraints on disappearing shipments and forged documents through digitally signed and locked systems. Blockchain transparency in supply chain management is a resilient key that optimizes logistics, fights counterfeiting, and builds confidence among all players. This results in streamlined operations and happy customers experiencing the best out of your products. With blockchain, the supply chain sees a sustainable future overheating the technical hurdles.

5 Phases of Supply Chain Management Through Blockchain

With the power to transform different industries, blockchain technology, including supply chain management, is a cakewalk. By introducing blockchain in supply chain management, it brings in transparency, traceability, and security. Here are the five major phases of integrating blockchain into supply chain management.

1. Planning and Design

The organization can assess its supply chain requirements and seamlessly identify areas where blockchain can bring value. The planning stage involves defining objectives, selecting suitable blockchain platforms, and designing a roadmap for implementation. In the planning stage, the organization should consider the challenges and risks associated with implementing blockchain technology. This includes evaluating the costs and resources required and choosing a blockchain platform that aligns with the organization's specific needs and goals. From there, it extends to designing a clear roadmap for implementation, prioritizing tasks, and establishing a timeline for the successful integration of blockchain into its supply chain processes.

2. Supplier Onboarding

By implementing blockchain technology into the supply chain, the organization can have a transparent and trustworthy system for validating and onboarding suppliers. By creating a decentralized and secured network, the onboarding process is seamless. The smart contracts are automated to verify and proceed to ensure that the suppliers meet predefined criteria. This establishes a trust layer within the supply chain. This trust layer helps reduce the risks associated with counterfeit products or unreliable suppliers. This ultimately leads to improved efficiency and cost savings. Integrating blockchain into the supply chain enhances security and streamlines operations, making the organization more competitive in the market.

3. Visibility and execution

Blockchain eliminates the need for manual intervention. Therefore, it reduces errors and delays in the supply chain. Transparency is promoted by enabling real-time visibility through blockchain across the supply chain. With automated execution, organizations can react quickly to any disruptions or changes in the supply chain. This ensures smooth operations and minimizes downtime. Each transaction is recorded in an immutable ledger, providing a transparent and auditable history. Blockchain technology enhances efficiency and effectiveness as the smart contract automates execution and automatically initiates it under predefined conditions.

4. Compliance and Monitoring

Real-time transparency and accessibility of blockchain in the supply chain monitor compliance and regulation to ensure quality and standards. It reduces the risk of fraud and ensures accountability for the actions of every participant in the network. Therefore, it is easy to identify any deviations or breaches immediately and take action accordingly.

5. Payments and Settlement

Blockchain technology in the supply chain ensures secured, transparent, and safe transactions within the network. Smart contracts automate payments on predefined conditions that are met, thereby eliminating the need for intermediaries in the process. This cut down additional hands, time, and labor involved. It also minimizes the forecastable disputes. While blockchain’s immutability provides an additional layer of protection for financial transactions, it is ensured to be tamper-proof.

How will blockchain improve supply chain management?

We can say that blockchain is a perfect solution to disrupt the current system of supply chain management. Every time the commodity changes hands, there will be a permanent record that will be stored in the blocks, this will create detailed information about the product right from the procurement of the product to 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 improve

Recording and tracking of orders, receipts, change orders, 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. rises.

Therefore, it is clear that this technology

Will bring transparency into the system

This will create a bigger and more decentralized system

Its immutability will overcome problems related to trust and corruption rises.

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 of 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 management in this era of globalization.



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