How Blockchain Will Bring Major Reforms in Supply Chain Management

Whenever there is a mention of blockchain technology people instantly start thinking about the Bitcoin or any other cryptocurrency. However, there is so much more than cryptocurrencies or Blockchain app development. Blockchain has the potential to disrupt almost all major industries. And when I say disrupt, I mean in the best way possible. The benefits that Blockchain provide are nothing but, exemplary. That is the reason why many technology experts term it as the “new internet”.

One of the major industry which blockchain can be of great use is the Supply Management System. The digital ledger technology with its features can make the supply management system secure, fast, reliable, and transparent. Before we discuss it benefits, let’s look at the existing problems that the supply management system is facing.

Current Problems with Supply Chain Management

Over Centralization of Information

The current problem of Supply Management System is that it is Over-Centralized. Centralization in the Supply Management System is beneficial; however, it causes problems during the audits. It becomes extremely difficult to track a specific information. Finding the information becomes as difficult as finding a needle in a haystack.

Initially, during production, the storage of the information takes place digitally; however, during initiation of shipment, there are no endpoints left to distinguish. Additionally, the shipment has its own data which adds to the woes.

Malpractices of Middlemen: Lack of Transparency in the Process

The current supply management system is heavily dependent on the middlemen, even though when there is a lot of scepticism for their actions. Middlemen make the process less transparent for both initial and end user. The end-user usually has no idea about the whole shipment process – from where it began and the stages of shipment it went through. Similarly, the user at the initial has no idea where and how it would go forward.

In many instances, it is observed that the middlemen are indulged in malpractices which causes discrepancies. The opaque nature of the supply management system caused by middlemen causes great obstruction in finding the source of discrepancies. In some cases, the security breach can lead to a snowball effect causing huge loss.

Blockchain technology can put an end to all these problems. Let’s look at some of the significant benefits of Blockchain in a supply management system.

Benefits of Blockchain in Supply Management System

Removing Middlemen: Increasing Transparency

One big problem that people are facing in the supply management system is of the middlemen. Blockchain can effectively resolve this issue because of the way it works. Blockchain makes it possible for all the parties involved such as suppliers, manufacturers, distributors, partners and end users to share and have consensus on all the information. To dive-deep, it means that blockchain can effectively replace the middlemen and perform all its functions with a greater transparency. Moreover, blockchain can synchronise all the data which allows the participants to verify it themselves.

No Scope for Errors: Real-Time Updates of Transactions

In the traditional supply system, the transactions had to be updated manually. Due to which there was a great chance of human error. In one of the errors, the transactions were not updated on time. Moreover, it used to appear on both the places at the same time. With Blockchain technology, all the nodes are updated in real-time and all the participants get the notification instantly, which helps in the eradication of all the human error.


The supply management system has a Centralized system, due to which all the data stored at a single place. This poses a great risk of someone hacking or compromising the transactional data. With Blockchain technology, the storage of data is not at a single place. Instead, it is distributed over several nodes. So, even if someone tries to hack a few nodes, it won’t affect the overall system.

Moreover, in case if anyone compromises the data in any of the nodes then the admin can always track down the affected node and make the necessary correction. This feature of blockchain technology wherein it can isolate and track down the affected node is cutting-edge in the safety of supply chain management.

Increased Customer Satisfaction

The current generation of millennials is usually curious to know from where their product has come. Some of them are even happy to pay more, if they can have more information about their product’s journey. While some prefer eco-friendly products, and want to ensure that the product which they are buying is free from any activity which is anti-environment or cruel to animal. Blockchain technology allows the organization to be more transparent with their customers, which in turn increases their engagement.


Blockchain comes with a plethora of benefits and perks for the supply management system. In near future, we will see effective implementation of all these features. Blockchain will take the aspect of security to another level. However, we should never be complacent and over dependent on one thing. Although, one thing is for sure that as of now the supply management system is in safe hands.
Author – Bio

Shahid Mansuri

Shahid Mansuri Co-founded Peerbits, one of the leading mobile application developments company USA, in 2011.  build a mobile app” with learned concentration.