How can blockchain improve supply chains

How the blockchain is changing supply chain management

The prerequisite for the successful introduction of the blockchain

Basically, however, the question arises as to how the blockchain can be implemented in today's supply chain. According to industry experts, the benefits of the technology are very promising. However, the technology must also be implemented in order to realize these advantages. A trusted network is required for a successful implementation. The contractual partner must also ensure that the process changes and implementation are financed. Above all, companies that are at the beginning of the supply chain cannot achieve any particularly large, immediately realizable advantages. Nonetheless, the introduction of DLT must start at this point. In addition, the participants in the network must also agree to provide data and contracts for the products. For this reason, a step-by-step introduction of the blockchain in supply chain management is advisable.

As a first step, experts recommend implementing an internal blockchain database. Above all, this lays the foundation for further introduction and familiarizes those involved with the new technology. The implemented solution can then be extended to the upstream and downstream partners in the supply chain. This approach can promote trust among partners and stimulate the exchange of data. The last step is a holistic introduction of the technology that extends to the end user. This benefits from the high degree of transparency, more efficient processes and the associated cost reductions.

Examples of the successful implementation of blockchain systems

At the current time, the distributed ledger technologies are not yet enjoying market-wide acceptance. However, more and more companies are focusing on this possibility of process optimization. Below we present some successful blockchain projects in supply chain management.

IBM Food Trust - the blockchain for the food supply

Food Trust is a DLT solution from the US technology group IBM. The main focus of this system is on the supply chain in the food sector. This supply chain is characterized by a high degree of complexity, because the food goes a long way from the farm to the end consumer. Numerous companies and individuals are involved in these transactions. With Food Trust, IBM is creating a new level of transparency and accountability in the food supply chain. In addition to improved transparency through automated processes, this blockchain system also creates trust among the participants. In particular, end users are given the opportunity to trace a product back to its origin and check the growing conditions. In addition, there is a new standard in the security conditions of the market. If the tracing of a contaminated product took several days in the past, this decentralized database enables direct identification of the origin and thus quick problem solving.

The blockchain improves working conditions in the primary sector

The primary sector also benefits from the potential of blockchain technology. The use of the technology can contribute to fair working conditions when mining raw materials. In particular, the mining of relevant raw materials such as cobalt is the focus of this business model. Accordingly, manufacturing industries rely on DLT solutions to promote fair and sustainable mining methods. This approach can be observed in various industries. Food manufacturers are also relying on the blockchain to prevent unfair production conditions when mining food or coffee.

Use of the blockchain in the energy market

The energy transition in particular poses challenges for companies and households. At the current level, market participants only have the option of drawing energy from the power grid and paying for their own consumption. But here, too, the supply chain is facing a fundamental change, because intelligent power grids have the potential to revolutionize the market. The use of this technology makes intermediaries obsolete. Instead, households can use intelligent systems to trade with their available resources and thus provide the energy when needed. There is a maximum of transparency and efficiency for the market.


Even if technologies such as artificial intelligence, RPA or machine learning are currently changing the everyday life of companies, blockchain technology is already emerging as the next key technology for digital transformation. Above all in the supply chain, there are many possible uses. These can effectively transform the market and sustainably increase transparency, security and efficiency. Companies are already researching the possible uses of the technology and are successfully completing test phases. For the sustainable breakthrough of the technology, however, an adaptation in the entire supply chain is required.