Creating the Future of Supply Chain with Blockchain

May 7, 2021 | 4 minute read
Text Size 100%:

Blockchain for Supply Chain: Uses and Benefits

Are you considering the blockchain for supply chain management? Supply chains have countless moving parts -- literally and figuratively -- relying on a dynamic process with many involved parties. While records now exist in the digital space, there is limited interoperability between most tracking and logistical platforms. But by consolidating resources onto a blockchain, supply chain management becomes streamlined with more robust security and accessibility, all while delivering transparency and visibility.

Why Blockchain for Supply Chain

Let’s consider the inherent benefits of the blockchain, first by examining a macro view of how the blockchain works. Blocks of records (or data) are recorded on a ledger, all sequentially linked together. Because each record relies on the previous one on the ledger, they are permanent. And as the ledge is publicly audited through nodes using one-way encryption, any attempts to hack or change records are quickly caught and restored, all while making the data accessible as a single source of truth.

 Now let’s take that into the different elements of the supply chain process. Consider the example of a procurement manager sourcing a part that requires light manufacturing prior to arriving at the main plant.

●      The procurement manager puts in the order with the vendor’s ordering system.

●      The ordering system confirms the transaction and sends the order details to the warehouse.

●      The warehouse prepares the order for shipment to the off-site manufacturing center.

●      The package ships with a logistics company, including signature confirmation upon receipt.

●      The manufacturing center prepares the part by building it into a module for final use.

●      The manufacturing center prepares the final module for shipment to the home plant.

●      The module ships with a logistics company, including signature confirmation upon receipt.

●      The home plant’s receiving department sends it internally to the plant floor for integration.

This supply chain involves five parties (each with numerous staff members): the originating company, the vendor, the off-site manufacturing center, and two logistics companies. This also involves two internal processes for both the originating company and the vendor. 

With so many parties involved, now step back and apply these processes across the entire supply chain for one organization, whether it’s for a consumer product or a large aerospace project. Regardless of the size or scope of the organization, a single misstep in the supply chain process can upset schedules and possibly impact critical paths.

But with a blockchain, the platform’s core benefits of security, accuracy, transparency, and permanence, all across a single source used by all parties. Thus, a blockchain for supply chain ensures that everyone is on the same page such that even if unexpected issues occur, workarounds can immediately be implemented to mitigate impacts.

Benefits of Blockchain for Supply Chain

Based on the example above, let’s drill down and look at how the blockchain’s specific features can benefit supply chain management.

Single Source of Truth: In many cases, current supply chain management is a combination of internal trackers and shared shipping info, all of which update at different frequencies and have different levels of accessibility/visibility. This creates inherent problems,from simple lag to human error propagating the typos or copy/paste mistakes. As mentioned above, the blockchain can act as a single source of truth for all parties involved. With time-sensitive materials being ordered, prepared, and shipped, a single source of truth ensures that all parties are in sync.

Verified Transactions: This single source of truth leads to verification of transactions without relying on a third party (such as a bank) to provide confirmation. Visibility and specific payment conditions can be built into the transaction, ensuring security of sensitive data while streamlining the overall process and providing visibility for all involved parties.

Traceability with Permanence: What if a shipment arrived, got put into a storeroom for several months, and then opened up later only to find systemic damage with all materials? Now all parties involved have to go back into historic records to verify the possible source of damage. When a blockchain is used for supply chain management, the ledger is permanent and immutable. This provides an inherent level of traceability, so different parties can retrace the records while using the same source records.

Accuracy: The single source of truth created by a blockchain for supply chain management consolidates the amount of potential human error. When multiple tracking sources are used, data has to be exported and copied to propagate forward. This inevitably creates moments where human error will naturally occur -- and if not human error, issues from saving and online transmission can also create hiccups in data. All of these different variables create incidents that impact accuracy, and issues can quickly spiral out of control if mistakes propagate unchecked. Under a blockchain, all of this is minimized while also being simplified.

Quick Updates: Time is of the essence in supply chain management, and a blockchain can update in near-real time to ensure the process runs as efficiently as possible. And because the blockchain acts as a single source of truth, these updates are immediately visible for all parties involved, creating a more secure, more accurate process from start to finish.

Enterprise Blockchain For Supply Chain Management

Oracle provides the means to easily integrate the blockchain into your enterprise configuration, including specific tools built to maximize supply chain management. Learn more about Oracle’s tools and support for bringing the blockchain into your supply chain process.


Oracle Blockchain SaaS Application For Supply Chain:

Supply Chain Visibility With Oracle Track & Trace:


Sunjay Chopra

I am a product marketing analyst working on the Cloud Platform team at Oracle. I am a UCLA graduate and have been at Oracle for 3 and half years with experience now in both sales and marketing.

Previous Post

Blockchain Solutions in COVID-19 Fight

Mark Rakhmilevich | 9 min read

Next Post

A Stronger Future For Healthcare with Blockchain

Sunjay Chopra | 4 min read