How Blockchain Will Transform the Supply Chain and Logistics Industry


The blockchain technology has been around for a decade now.

There are many stories circulating about this technology’s potential implementations in various business processes across numerous industries.

The fact of the matter is that ever since blockchain was introduced alongside the very first cryptocurrency known as Bitcoin back in 2009, this technology has been developed further so that it can be used for more than just cryptocurrency trade.

Today, the most important implementation of blockchain is in the supply chain and logistics industry. That being said, this technology promises to transform and revolutionize these industries for the better.

However, blockchain technology isn’t without its faults and it won’t be able to solve every problem or overcome every obstacle.

Still, it will yield significant improvements to the supply chain and benefit the logistics strategy of every company.

Let’s have a look at how blockchain technology will affect these industries and their sectors.

Common supply chain and logistics issues

Modern supply chains and logistics strategies are working well for the most part but there are issues that plague the industry, thus creating challenges and obstacles for businesses in the industry.

The average supply chain consists of procurement of materials, manufacturing, production, storing and distribution of goods from the point of origin to the point of consumption.

That said, the logistics strategy encompasses the transportation of goods throughout the supply chain. The most common issues that can occur are lack of transparency, fraud, human error, lack or abundance of inventory, inadequate paperwork, timely delays and so on. Even a minor setback can have a huge impact on the entire supply chain.

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Experts state that the blockchain technology can help resolve the majority of such issues.

What is blockchain and how can it help?

The blockchain technology represents a decentralized public ledger designed to verify, record and validate peer-to-peer transactions in a secure and encrypted environment.

This technology was made popular through cryptocurrency mining activities where the peers helped the blockchain record transactions and got rewarded in return.

Since 2009, this technology has evolved and can now be used to support the supply chain and logistics industries.

The system cannot only record data but the information stored within the blockchain cannot be tampered with, which presents a significant advantage to the existing supply chains.


When it comes to supply chains, everyone involved must trust each other party to do their work effectively.

For instance, you rely on suppliers to provide the best materials while also relying on manufacturers to assemble the best products. However, you can never be 100% sure that everyone involved in the supply chain is doing their thing the right way.

Decentralization is, therefore, a viable solution for this issue. The very essence of blockchain technology is decentralization, which means that information is not owned by a central entity. Instead, everyone involved holds a copy of the ledger with all the information on it.

This puts everything out in the open and for everyone to see, thus preventing fraud and ensuring transparency throughout the entire supply chain.

Cannot be tampered with

Once the information is stored within the blockchain it can no longer be altered or tampered with in the future. This is thanks to the cryptographic hash function technology that the blockchain is based on.

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In other words, every bit of information has a unique hash assigned to it by the algorithm.

This helps track and validate data, especially if you’re dealing with vast quantities of information.

Therefore, the algorithm takes an input of any length and gives it an output of a specific length. That means that none can tamper with financial records or validate any extra payments anymore.

This is vital for supply chain management, transparency and preventing any corruption whatsoever.

Avoiding crucial mistakes

When looking at the big picture, the blockchain technology can help companies minimize and mitigate risks while also helping them avoid any crucial mistakes.

The ledger creates a record each time certain materials or products change hands from one party to another within the supply chain.

It can also create and track purchase orders, receipts, change orders and any other trade-related detail.

What’s more, the blockchain can validate certifications, thus ensuring that materials or products are compliant with specific standards. It can also link physical objects to barcodes, serial numbers, and tags.

In essence, the blockchain technologies help save time, cut costs and exclude human error from the supply chain. With the information being available to all parties, the supply chain achieves a whole new level of transparency and trust between the involved parties.

Simply put, everyone will know the state of products and materials from the point of origin all the way to the end-users and consumers.

The blockchain technology is not solely meant for the cryptocurrency market. It can also be implemented in other industries and other processes, thus providing numerous advantages.

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The supply chain and logistics industry are among the first to fully utilize the potential of this great technology.

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