Benefits Of using Blockchain Technology in Supply Chain Industry

This article explains what are the main challenges that supply chain industry is facing and how it can be resolve through blockchain technology. Further it explains how Walmart and different companies are using blockchain to stream line their process.
November 14, 2023
15 min read
Supply Chain Industry

We are seeing some great advancements in blockchain technology and how it is helping different industrial sectors. The main sector that has a strong impact on blockchain technology is the supply chain industry. Consider a scenario of the food industry, where blockchain can be employed and record each step of the supply chain. And in case of a contamination issue, the exact origin of affected products can be easily identified, preventing a widespread. This is one of the scenarios that we have discussed there are more scenarios in blockchain that can be employed. But first, we have to understand what is blockchain and how it can be implemented. 

What is Blockchain?

Blockchain is a decentralized, distributed ledger technology that records transactions across a network of computers. These transactions are grouped into blocks, which are linked together in chronological order, forming a chain. Each block contains a cryptographic hash of the previous block, ensuring the integrity of the data. This decentralized nature of blockchain eliminates the need for a central authority, providing transparency, security, and immutability.

The Benefits of Blockchain

Enhanced Security and Data Integrity

Blockchain's architecture lends itself to unparalleled security. Transactions are encrypted, and any attempt to alter a single block becomes a complex task, as it would require the consensus of the majority. This level of security is particularly valuable in sectors dealing with sensitive data, such as financial institutions and healthcare providers.


Traditional systems often rely on central authorities, leading to potential vulnerabilities and single points of failure. Blockchain operates on a decentralized model, giving individuals more control over their digital identities and assets. This empowerment can drive financial inclusion, especially in regions with limited access to traditional banking.

Transparency and Immutability

Transparency is at the heart of blockchain. Every participant in the network has access to the same immutable ledger, ensuring a shared version of the truth. This transparency can revolutionize industries by reducing fraud, enhancing accountability, and enabling more efficient auditing processes.

Supply Chain Industry

Now that we have a basic understanding of blockchain technology let’s explore the supply chain industry and its operational model. The supply chain is an interconnection of organizations, activities, resources, people, and information for transforming natural resources and raw materials into a finished product for delivery to the end customer. It involves a network of companies, resources, activities, and technologies that work together to move products or services from the point of origin to the final destination. Some popular supply chain industries include giants like Amazon, Walmart, AliExpress, eBay, etc.

The Supply chain process typically includes the following key stages:
  1. Panning and Sourcing: This involves determining what products to produce, in what quantities, and where to source the raw material. Companies need to consider market demand production capabilities and supplier relationships during this phase
  2. Manufacturing: Once raw materials are sourced, they are transformed into finished goods through the manufacturing process. This can involve various stages of production, assembly, and quality control.
  3. Distribution: After production, the products need to be transported to distribution centers or directly to retailers. This phase involves managing transportation, warehousing, and inventory to ensure timely and efficient delivery.
  4. Retail and Sales: The goods are then made available to consumers through various retail channels. This can include brick-and-mortar stores, e-commerce platforms, or a combination of both.
  5. After-Sales Services: The final stage involves consumers purchasing and using the products. Companies may also provide after-sales services, such as warranties or repairs.
Technologies Used in the Supply Chain Industry

Supply Chain operations are facilitated by various technologies and methodologies, these are:

  1. Supply Chain Management(SCM) Systems: These are software solutions that help organizations manage and optimize their supply chain processes. They often include modules for demand planning, inventory management, logistics, and more
  2. RFID and Barcoding: These technologies help track and manage inventory at various stages of the supply chain, improving accuracy and efficiency.
  3. Advance Analytics: Data analytics is increasingly used to gain insights into supply chain performance, forecast demand, and identify areas for improvement.
  4. Collaboration Platforms: Many companies use collaborative platforms to enhance communication and coordination among supply chain partners, ensuring a smoother flow of information and goods.

Benefits of using Blockchain Technology in Supply Chain

There are some challenges that the supply chain industry is facing, below is the list of major problems and how they can be solved through blockchain technology.

Lack of Transparency

Problem: Many supply chains suffer from a lack of transparency, making it difficult to trace the origin and movement of products

Solution: Blockchain creates an immutable and transparent ledger that can record every transaction and movement of goods. This transparency helps all stakeholders track products in real time, reducing the chances of fraud and errors.

Inefficient Record Keeping

Problem: Traditional record-keeping methods are often paper-based or rely on disparate systems, leading to inefficiencies and errors

Solution: Blockchain provides a decentralized and secure way to record and store data. This eliminates the need for multiple record-keeping systems and ensures that all participants in the supply chain have access to a single, accurate version of the truth.

Counterfeiting and Fraud

Problem: Counterfeit products and fraudulent activities can enter the supply chain, causing financial losses and damage to brand reputation.

Solution: By using blockchain for product tracking, it becomes nearly impossible to tamper with the data. Each product's journey from manufacturer to end-user can be recorded on the blockchain, providing a verifiable and unforgeable history.

Complex and Lengthy Payment Processes

Problem: Traditional payment processes in supply chains can be time-consuming and involve multiple intermediaries.

Solution: Smart contracts on a blockchain can automate and streamline payment processes. These self-executing contracts can trigger payments automatically when predefined conditions are met, reducing delays and the need for intermediaries.

Supply Chain Visibility 

Problem: Limited visibility into the entire supply chain can result in inefficiencies and delays in responding to disruptions.

Solution: Blockchain's real-time visibility allows stakeholders to access up-to-date information about the status and location of products. This enhanced visibility enables quicker decision-making and better response to unforeseen events.

Data Security

Problem: Centralized databases are vulnerable to hacking, putting sensitive supply chain data at risk.

Solution: Blockchain's decentralized and cryptographic nature enhances data security. Each block is linked to the previous one, forming a secure chain. Once data is recorded, it cannot be easily altered or hacked, ensuring the integrity of the information.

Supplier and Vendor Management

Problem: Managing relationships with numerous suppliers and vendors can be complex, leading to communication breakdowns

Solution: A blockchain-based system can provide a shared platform for all parties involved, improving communication and collaboration. Smart contracts can automate and enforce agreed-upon terms, reducing disputes and improving overall relationships.

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Companies Using Blockchain

Below are some examples of companies that have streamlined their process by using blockchain technology.

Walmart Canada 

Over 500,000 shipments are delivered to distribution centers and retail locations nationwide each year by Walmart Canada using both its own trucks and outside transportation. Each invoice must individually calculate and account for more than 200 data items. These consist of temperature updates, the stops for each load, and the number of gallons of fuel the carriers use. As a result, there are many disparities in the data, and 70% of invoices need to be reconciled. 

Multiple information systems that are unable to communicate at the application level are the source of the problem. This makes the reconciliation procedure labor-intensive and time-consuming because it must be completed manually. 

Walmart Canada reached out to DLT Labs, a pioneer in developing and implementing creative business solutions with distributed ledger technology, to establish the blockchain network. Walmart Canada's carrier, Bison Transport, was also involved. 

After extensive testing, the pilot version went live in January 2019. In March 2021, the network—known as DL Freight—was extended to 69 additional carriers. It is solely visible to the parties engaged in the transaction and automatically collects and synchronizes data at every stage. Less than 1% of invoices contain errors since DL Freight was introduced, which significantly lowers the costs of reconciliation operations and enables carriers to be paid on schedule.

Information about transactions shared between several parties is recorded and safeguarded by the decentralized ledger. Profiting from this technology, cryptocurrencies such as Bitcoin and Ethereum enable an infinite number of unidentified parties to engage in transactions without the need for a middleman. 

On the other hand, supply chain management focuses on using blockchain technology to enable a predetermined number of identifiable parties to manage transactions with one another. Supply chain blockchains "mint" a variety of transaction-related data in place of coins, producing distinct and easily verifiable IDs for things like inventory units and purchase orders. 

Each user on the blockchain has a unique digital signature that is used to verify the legitimacy of tokens as they move around the chain. 


FedEx has integrated blockchain technology into its chain of custody to facilitate the resolution of customer disputes. Additionally, the organization supports the adoption of blockchain as an industry standard and is a member of the Blockchain in Transport Alliance. 


DeBeers addresses consumer concerns about the ethical sourcing of gemstones by using blockchain to track the origin and progress of every natural diamond they mine.


In conclusion, blockchain's integration into the supply chain industry represents a paradigm shift, bringing transparency, efficiency, and security to the forefront. Investors, company owners, and customers stand to benefit from the myriad advantages offered by blockchain technology. As we navigate this transformative landscape, Blockmob Labs stands ready to be your partner in embracing the future of supply chain excellence through blockchain integration. Our expert team is committed to tailoring blockchain solutions that align with your specific industry needs, ensuring a seamless integration process. Whether you are an investor seeking growth opportunities, or a company owner striving for operational excellence, Blockmob Labs is here to guide you through the transformative journey. Together, let's build a more transparent, efficient, and customer-centric supply chain ecosystem.

Samran Ahmed

This article explains what are the main challenges that supply chain industry is facing and how it can be resolve through blockchain technology. Further it explains how Walmart and different companies are using blockchain to stream line their process.

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