The Role of Blockchain in Supply Chain: Enhancing Transparency and Trust

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The Role of Blockchain in Supply Chain: Enhancing Transparency and Trust
By Muhamad Ghazi Athira

Supply chain is the network of activities, processes, and entities that produce, distribute, and consume commodities and services. Supply chain management is the process of coordinating and optimizing these processes to increase efficiency, quality, and customer satisfaction. However, supply chain management has several issues, including a lack of visibility, trust, and accountability among supply chain partners, as well as the risk of fraud, errors, and disruptions. 

Blockchain has the potential to improve transparency and traceability in the supply chain, hence addressing these concerns. Blockchain is a decentralized, immutable, and transparent digital ledger that records transactions between numerous computers. The ledger itself can also be designed to initiate transactions automatically. Key characteristics of blockchain technology include:

  1. Decentralization: No single entity has complete control over the network, which ensures distributed consensus and eliminates the need for intermediaries.
  2. Immutability: Once a transaction is recorded on the blockchain, it cannot be edited or tampered with, making it a trustworthy and auditable source of information.
  3. Transparency: All participants in the network may view and validate transactions, increasing trust and accountability.

Blockchain offers a lot of benefits for supply chain, such as:

  1. Faster and cost-efficient delivery: Blockchain technology can shorten and lower the cost of supply chain transactions by removing intermediaries, paperwork, and manual processes. Blockchain technology can also provide real-time information exchange and tracking of goods and services along the supply chain, leading to increased efficiency, quality, and customer satisfaction. 
  2. Enhanced product traceability: Blockchain technology can create a complete and immutable record of a product’s origin, history, and whereabouts across the supply chain. Also be used to authenticate and verify products through digital signatures, smart contracts, and other cryptographic approaches. This can increase product safety, quality, and compliance while also preventing counterfeiting, theft, or diversion. 
  3. Improved coordination with partners: Blockchain technology can help supply chain partners collaborate and coordinate by providing a common and trustworthy platform for data sharing and decision-making. Blockchain technology can also be used to create smart contracts, which automate transactions based on predetermined rules or conditions. This can lead to increased trust, responsibility, and performance among supply chain partners.
  4. Easy access to financing: Blockchain technology, which uses digital tokens or cryptocurrencies to represent value or ownership, can give supply chain actors with access to alternate finance sources. Blockchain technology can also enable peer-to-peer lending or crowdfunding services, which connect borrowers and lenders directly, eliminating the need for intermediaries. This can help supply chain actors improve their liquidity, cash flow, and risk management capabilities.

Blockchain technology is a viable solution for improving supply chain transparency and trust. Blockchain technology can provide several advantages, including faster and more cost-effective distribution, increased product traceability, improved partner coordination, and simpler access to funding. Blockchain technology can also be applied to a variety of supply chain management sectors and domains, including manufacturing, retail, technology, and financial services. Blockchain technology, is the key to supply chain, with the potential to revolutionize and improve present processes and models.


Satpathy, A. (2023) The role of blockchain technology in enhancing transparency and traceability in the supply chain, Medium. Available at: (Accessed: 31 April 2024).