Block Chain in Supply Chain

Rooted in bitcoin fame, block chain is making industry leader rethink how they will conduct business to bring efficiency, improve traceability and inculcate a culture based on trust supported by technology. Supply Chain is no exception. Block chain is already disrupting the supply chain. A Gartner survey shows that almost 60% of the industry is thinking or have a strategy to use block chain in digital transformation.

Recollecting the basics of block chain will guide us how to innovatively identify areas of application of block chain in the supply chain. The three pillars of block chain are verification of transactions through established rules (trust), encrypting the transaction and its history that makes hacking impossible (immutability), and a distributed ledger to record the entire history of a transaction in distributed computers (traceability). This process has its inherent draw back to using too much energy and hence application is limited to those parts of the business that is deemed most valuable or at risk.

In Supply Chain, some probable areas of application of block chain are:

a) Recording and tracking transactions .

b) Negotiating and documenting smart contracts

c) Digital Recording of attributes of a product.

d) Enhancing efficiency in collaboration.

e) Authentication of goods.

Some companies are collaborating with others to use block chain technology, some are attempting to innovate by themselves. To name a few leaders who have already pioneered in this area are Walmart who has championed the use of blockchain in ensuring food quality, DeBeers who is tracking the route of diamonds to ensure sourcing from conflict free zone, Toyota is using blockchain to retrieve data from drivers to design the autonomous car.

So how will an industry figure out how to or if at all use this technology for their business. Where do we start? Companies could start with a strategy, understand their culture, assess risk with respect to change management and identify compelling business reasons to embrace the new technology. Leaders could start by defining their enterprise governance rules, define the collaborators of their block chain and identify the owner. Next task could be to define areas where they feel block chain could bring value that standard technology will fail to provide traceability, enhance authentication and secure their data by using the new technology. Finally, we must recognize that the technology is still very young and experts claim that for next few years block chain in the supply chain will remain at the proof of concept stage. But the momentum is strong to explore the feasibility of using block chain in all walks of business including supply chain.


1.  Alex Pradhan & Andrew Stevens. (March 8, 2018). What You Need to Know About Blockchain in the Supply Chain.

2.  Manav Gupta. (2017). Block Chain for Dummies, IBM Limited Edition. NJ: John Wiley & Sons, Inc

About the Author

Molly Chakraborty is co-founder and managing partner of Trinamix Inc. Earlier in her career, Molly worked with Oracle as a thought leader in technology and application of Oracle products. Molly is a gold medalist from Jadavpur University. She has demonstrated leadership in successfully enabling major SCM and Manufacturing initiatives while taking Trinamix from a small startup to a globally recognized system integrator in the process.

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