Role of Blockchain in Supply Chain Optimization

August 5, 2018

The Supply chain is complicated, cumbersome, and time-consuming. It is basically a network of entities that are involved in getting the goods from its point of origin to the final point of consumption. But the system is severely faulted and poses a plethora of problems. Even a simple payment needs days to be passed from the manufacturers, through the suppliers to the vendors and customers. If the supply calls for transportation across international borders, the archaic paperwork and the lengthy authentication process takes ages to complete. Lawyers and bankers need to review the contracts which take up a lot of extra time and money. There are delays in delivering the cargo, difficulty in tracing the goods back to its suppliers, and too much friction and uncertainty at each step. These problems cause serious inefficiency, disorganization, and incompetence. The rise of blockchain technology has changed the game and given the market a new opportunity for an efficient, accurate, and transparent supply chain.

Role of Blockchain in Supply Chain Optimization

What is Blockchain?


A blockchain is a digital ledger that is distributed among all the different members involved in the supply chain. The ledger records every transaction, data, or action that takes place in a series of blocks. It exists in multiple copies, among multiple computers, so that all the users may access, add, or inspect the data. Despite the fact that users can add to the existing information, nothing can be changed or deleted, making it fully tamper-resistance. As all the original information stays put even with the addition of new blocks, the entire process is transparent, traceable, and efficient. This record-keeping mechanism offers an easy, safe, and proficient way to deal with the supply chain deficiencies.

What is the role of blockchain in the supply chain?


Blockchain plays several crucial roles to make the entire flow of the supply chain more accessible, safe, and efficient. Here are some ways it has changed the supply game.

  • Automotive supplier payment: Blockchain allows easier, uninterrupted, and steady transfer of funds across the globe. You do not need to hassle with the traditional banking methods or the time-consuming transfer among various members of the supply chain. Blockchain offers a simple, safe, and swift transfer of funds directly between the payer and the payee.
  • Product traceability: Blockchain allows companies to track its products’ status at any point in time. The product status is recorded using blocks and is easily accessible to all the relevant members. It allows companies to see where the product comes from, when was it processed, where was it stored, when was it sold, and so on. In the event of a product recall, one can easily and effortlessly trace back the product to its origin.
  • Monitoring cold chains: Perishable items like pharmaceutical products and food need special care and storage facilities. Even the smallest of inefficiencies at any point of time might cause irrevocable harm. Blockchain not only allows you to keep track of such products but also avails customized sensors of such perishable products. The sensors will record the temperature, humidity, vibration, or anything that is relevant to the product life. This accurate and tamperproof data is stored on blockchains, accessible to all members of the supply chain. Therefore, any negative change in the product’s status can be dealt with in the most efficient and time-conscious manner.
  • Electric power microgrids: Blockchain allows electric power providers to record and monitor the energy distribution and redistribution in an effortless way. A detailed report is available on Blockchain regarding all relevant information about the neighborhood grid. Designed for building smart contracts, blockchain also helps in the buying and selling of green energy for the betterment of our environment.

The blockchain is not only changing the supply game but also forcing industries to avail this great opportunity to streamline their own business. The development process is ongoing but the blockchain has definitely helped supply chains be more efficient, accurate, and transparent.

Interested to know how blockchain can optimize your business? To get more information about how we can help, contact us at, and we promise to help you in the best possible manner.  

Rohit Madaan

Rohit Madaan

Assistant Digital Marketing Manager at Signity Solutions
I am an enthusiastic internet marketer.
Rohit Madaan