Although many people know it as the technology that powers the cryptocurrency Bitcoin, fewer realize that blockchain technology can be a powerful ally in supply chain management. To highlight the myriad benefits blockchain can offer, we’ll give you an A-Z rundown on this emerging technology, including the real-world applications it holds for those working in logistics and supply chain management.

Whether you’re a blockchain expert who’s already leveraging this technology or someone who’s only heard the word tossed around, you may find yourself inspired by the case study examples we’ll share—and find yourself motivated to apply this technology in new, creative ways that improve your operations.

Let’s start from the top.

What Is Blockchain—Exactly?

Blockchain is often defined as “a distributed, decentralized public ledger.” In other words, you can think of it as record-keeping technology that makes information easily accessible to multiple parties. Additionally, these records, because they’re stored across multiple locations and secured by cryptography, are very difficult to fraudulently alter, making its data more trustworthy for all those involved.

To break it down even further, think about it this way: “Block” is digital information that’s stored in the “chain,” which is essentially a public database.

The cryptocurrency Bitcoin, in addition to being the most widely known usage case for blockchain, also serves as a great example for understanding this technology. All Bitcoin transactions are recorded—and can be verified—in the blockchain. So if Person A arranges to purchase something for two bitcoin, the fact that Person A actually has those two bitcoin to spend is information that’s recorded in the blockchain. Then, if the transaction goes through, the fact that Person A spent those two bitcoin is also recorded in the blockchain so they’re not able to spend those same bitcoin a second time. Additionally, the two bitcoin credited to the seller will also be recorded.

Here’s where blockchain gets really interesting: It can not only store information about currency exchanges like Bitcoin, but it can also store information about other kinds of transactions as well, such as those that occur down the length of the supply chain. Using blockchain technology offers four main benefits, and we’ll walk you through all four of them. However, it’s useful to note that there are probably many more benefits to be uncovered, especially if you’re interested in creatively managing your supply chain.

#1: Blockchain Provides Transparency & Traceability

By using blockchain technology to track every step of the supply chain, it’s possible to reliably trace the origins of all kinds of products, from raw materials all the way to finished goods. For example, products labels such as “organic” or “fair trade” could more easily be verified, since blockchain technology would make it possible for all parties involved—manufacturers and consumers—to trace the origin of the raw materials and makeup of the finished products.

For example, take a look at this real-world application from the diamond industry. Many consumers today are searching for conflict-free or ethically sourced diamonds. For the most part, they have to trust that diamonds labeled in this way are, in fact, what they claim to be. However, IBM has collaborated with a number of companies in the industry, including Helzberg Diamonds, to create blockchain solutions for tracking and authenticating their materials from mining all the way through to the finished product. Ultimately, this could allow potential consumers to reliably track exactly where the diamond they plan to purchase has originated from, boosting their confidence that they’ve chosen a stone that meets their personal criteria.

The seafood industry is also looking to blockchain technology to combat the problem of mislabeled fish. It’s estimated that as much as 87% of seafood sold gets mislabeled before being marketed to consumers. Additionally, many consumers are concerned with provenance, specifically seeking out seafood that’s been caught according to sustainable fishing practices. The Norwegian Seafood Association is leveraging blockchain technology to capture the full journey of Norwegian fish from ocean to store to reassure consumers that they’re getting a safe piece of fish that was “produced in a healthy, sustainable manner.”

Finally, Walmart has been using blockchain technology since 2016 to manage their food supply chain. Most recently, the chain is leveraging blockchain to track and trace lettuce distribution, simplifying recalls in case of incidents like 2019’s E. coli infection, which was traced to romaine lettuce from a farm in Arizona.

In addition to making it easier for manufacturers, sellers and consumers to trace the origins of the products they make, buy and sell, blockchain technology can also assist in preventing fraud.

#2: Blockchain Can Prevent Counterfeiting & Fraud

Fraud is a big problem for many businesses. A recent PwC report suggested that more than 2% of global sales result from transactions involving counterfeit goods. Additionally, counterfeit prescription drugs account for nearly 188 billion dollars of lost revenue regarding prescription drugs alone.

Blockchain technology, however, can quickly reveal the true provenance of prescription drugs, luxury goods, electronics and other consumer goods that are susceptible to counterfeiting. Luxury brand LVMH is implementing blockchain technology to provide proof of authenticity of their goods from raw materials through the initial sale and all the way through to the resale market, giving consumers the confidence that they’re purchasing authentic goods, not knock-offs.

In China, wine fraud is a significant issue, with nearly 30,000 counterfeit bottles sold every hour. A company called OriginTrail recently combined blockchain with IoT technology to track every bottle of wine from the vineyard to the stores. As a result, customers can buy wine with greater certainty, knowing that what’s in the bottle matches what’s on the label.

#3: Blockchain Can Create a More Efficient Workflow

One of the useful features of blockchain offers all the parties in a supply chain access to the same information, which can improve the speed of doing business. For some members who might worry about revealing proprietary business practices by doing so, that might not be an attractive proposition. However, blockchain’s transparency and flexibility offers opportunities for supply chain managers to get creative and leverage this technology effectively.

For example, many have seen possibilities for application in the ocean freight industry. When managing the transit of a single container from origin to destination, think about all the parties involved, as well as the documents and communications they exchange along the way, especially where an international shipment is concerned. Blockchain technology, it’s been argued, could offer a simple, centralized location to store all this information, one all the parties in the transaction could access—and trust.

Blockchain technology forms the basis for IBM’s TradeLens platform, which carriers Maersk, Hapag-Lloyd and Ocean Network Express (ONE) all leverage within their operations. Through this platform, IMB hopes that their technology can help reduce delays and minimize documentation errors. Early results suggested that transit time for products shipped to the U.S. could be reduced by as much as 40%.

#4: Blockchain Can Streamline Operations

Because it can act as a transparent, single source of truth, blockchain technology can also streamline operations which, in turn, can reduce costs. A Hong-Kong based company called 300cubits got particularly creative with blockchain technology in order to streamline two problems in ocean freight: 1) no-shows, when booked cargo fails to show up and 2) rolling, which is often a direct result of overbooking in order to compensate for these no-shows.

To combat this issue, 300cubits created their own cryptocurrency, based on TEU (twenty-foot equivalent units), backed by blockchain technology. 300cubits issued a number of free tokens to test the system, with plans to make others available for purchase. If you wanted to book space on a vessel, you’d deposit a token, as would the steamship line. If your container no-showed, the steamship line would take both tokens. If your container got rolled, you’d get both tokens, to offer financial consequences on both sides when either party reneges on their side of the agreement. 300cubits’ ultimate goal was, of course, to discourage no-shows and overbooking to streamline processes and increase efficiency.

Unfortunately, the program was slow to catch on, and after about a year, 300cubits disbanded the program, citing low interest on the part of shippers and steamship lines. However, even though 300cubits’ program wasn’t a long-term success, it does offer a glimpse into the possibilities blockchain can offer to combat business problems along the supply chain.

Leveraging Technology Across the Supply Chain

New technology—automated warehouses, IoT, virtual reality equipment, and blockchain—offer the logistics and supply chain industry nearly endless possibilities. As companies continue to increase their applications and push the limits of innovation, it will become increasingly clear which are financially viable and which, like 300cubits’ TEU cryptocurrency, just don’t get the momentum they need to truly lift off. However, by staying on top of these technologies as they emerge, you may just find yourself inspired to create new applications that create efficiencies, boost transparency, and streamline your own operations.




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