Blockchain technology in supply chains

A fast and accurate flow of information is of crucial interest nowadays. Blockchain provides shared, transparent, and immediate access to information for users with permission. It represents a distributed, shared, immutable, digital ledger. Blockchain is a system that facilitates recording information, with guaranteed fidelity and security of recorded data. It is mostly known for its application in cryptocurrency systems, where transactions are recorded in a secure and decentralized manner. The information is immutable once recorded, which highly enhances reliability. Blockchain is organized as a shared database, where information is collected into blocks. When the capacity of a block is filled, it is closed and linked to other filled blocks, forming a chain of data blocks. This is irreversible and marked with a timestamp so that everyone accessing a block has access to the same information. The blocks are chained chronologically and linked via cryptography. Blockchains are also known as distributed ledger technology (DLT).

The application of blockchain in supply chain systems represents an emerging area. Supply chains can be very complex, involving a large number of stakeholders. Therefore, the need to perform the necessary operations efficiently and transparently is growing. The utilization of blockchain technology enables distributed and immutable operations. Blockchain brings transparency into the supply chain, which is necessary to deal with potential illegal practices or counterfeit products. The principle of saving each transaction immutably makes it faster and easier to detect issues in the supply chain. As blockchain utilizes encrypted transactions, the security aspects of a supply chain can be highly enhanced, by means of a tamper-proof, trustworthy sequence of actions. The information stored as blocks is immutable and permanent, which leads to increased traceability of information exchange. Potentially, financial exchanges in the supply chain can also be managed by using blockchain. Blockchain could reduce the cybersecurity risks in supply chains, as it records timestamped, immutable, permanent transactions, agreed by all parties involved. Adopting blockchain technology to the supply chain can be optimized in different ways, for example by utilizing machine learning solutions. This could result in smarter supply chains, that are able to synchronize logistics better, identify and resolve bottlenecks and enhance collaboration.

Although the advantages of applying blockchain to supply chains are evident, there are also several challenges regarding adopting these solutions. Currently, there is a very limited amount of experience reported in this area, as the idea is relatively young. There is a need to standardize blockchains in supply chains, in order to define the necessary concepts of application. Distinctly, the utilization of blockchain technology in supply chains requires a technology adoption or even transition for all participants. This process could be extensively challenging. There are also some other practical concerns as dealing with high data volume and providing computation power for that. It is important for the stakeholders to be aware of all technical details, in order to build trust among involved partners. Special attention should be paid to the quality of data, as blockchain transactions are immutable, and fixing data errors could be challenging. Therefore, these aspects need to be evaluated carefully when striving to implement blockchain in supply chains.

It is evident that blockchain technology has the potential to revolutionize supply chains, but there is a need to invest some effort and resources to assess the practical aspects and potentials, in order to recognize the best way to apply blockchain to a particular supply chain successfully, utilizing all the potential benefits.

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This blog is signed by: the UNSPMF team


Project Coordinator: Sofoklis Efremidis
Institution: Maggioli SPA
Email: info{at}
Start: 1-10-2020
Duration: 36 months
Participating organisations: 14
Number of countries: 10



EU flagThis project has received funding from the European Union’s Horizon 2020 Research and Innovation program under grant agreement No 952690. The website reflects only the view of the author(s) and the Commission is not responsible for any use that may be made of the information it contains.