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Ten Blockchain Benefits for Supply Chain Management

Blockchain, as a distributed database that stores digital information securely is transforming supply chain management in the manufacturing space.

Even though blockchain was initially intended for financial transactions, smart factories are finding different usages for this technology, as it can hold, record, and verify anything of value.

Deloitte describes the potential of blockchain for the intelligent factory as, “Smart factories can operate within the four walls of the factory, but they can also connect to a global network of similar production systems and even to the digital supply network more broadly.”

I draw upon our recent experience with a leading manufacturer of food products in NA to write up this blog to list top ten benefits of blockchain for supply chain management in manufacturing.

1. Increase Automation

Blockchain reduces dependency on paperwork and manual processes. Manufacturing supply chains, if they have even one single bit of inaccurate data can result in disputes, and disrupt operations. This leads to operational inefficiencies and the delays can be costly. Blockchain provides `an automated method for storing information in a tamper-evident digital format. This ability of blockchain can benefit planning, compliance, deliveries and inter-department approvals.

2. Efficiency in Connectivity

Supply chains can benefit from high levels of transparency where data silos are reduced and document authenticity is not compromised. A single source of truth helps operations to move documents from one stakeholder to the next safe in the knowledge that the documents are secure and tamper proof. In addition, error-free document flow ensures the free flow of goods, which help to speed up deliveries. A recent survey by Deloitte states that over 90 percent of consumers’ surveyed list, food product transparency, as a critical factor affecting the purchase and they expect manufacturers to provide the necessary information.

3. Erasing Boundaries

Supply chains that are spread across geographies require the management of transportation, customs collaboration and other such dependencies. Accurate documentation ensures that there are no broken links that can cause delays to supply. Blockchain helps to digitize physical assets and create a decentralized record of transactions making it possible to trace and track.

4. Adding Authenticity

Blockchain ensures that authenticity can be added to products which are produced in one country but supplied to another. Especially in the case of luxury items or pharmaceutical products, blockchain provides the authenticity on its source and preservation through tamper-proof digital documentation.

5. Cooperation Between Man & Machines

Blockchain invokes digital trust between partners, customers and suppliers. Trust is the bedrock of supply chain management and blockchain enables this by enhancing communication between machines and humans. “Blockchains allow us to have a distributed peer-to-peer network where non-trusting members can interact with each other without a trusted intermediary, in a verifiable manner.”- Institute of Electrical and Electronics Engineers (IEEE)

6. Blanket RFQs

Blockchain enables the creation of tamper-proof smart contract that automatically includes multi-party agreements. Smart contracts self-verify terms and conditions and self-execute by releasing payments to concerned parties. Multiple contracts can be created across an entire supply chain where the value and terms are integrated. Though such agreements are tamper-proof, they are outwardly visible to stakeholders across each stage of the chain.

7. Origin Tracking for CRM

In a typical manufacturing supply chain, all stakeholders focus on moving products from one stage to the next. Sometimes the broad picture is ignored for the small, i.e. in this case the customer. Customer tracking from the first order is imperative for long-term relationship management and brand building. Blockchain helps with provenance tracking and ensures that all data is never lost or compromised.

8. Cost Control

A survey of supply chain works conducted by the Digital Supply Chain Institute (DSCI) states that more than one-third of people quoted reduction of costs as the highest benefit of blockchain in supply chain management. By hastening administrative processes, it controls extra costs without compromising transaction security

9. Fraud Management

Digital consumers are making conscious buying decisions and suppliers are searching for newer and better ways to invoke confidence and prove authenticity. Blockchain provides all the proof required by consumers to ensure that compliance has been maintained by the manufacturer. In the food industry, especially, it is estimated that there is a loss of $40 billion every year from food fraud. Food fraud refers to the deliberate and intentional substitutions of inference products for financial benefits. Blockchains can embed origination data and as the food travels down the chain, all other historical data is added and the customer gets the complete origination history.

10. Outsourced Contract Manufacturing

Businesses can maintain more control over their outsourced manufacturing by providing all parties in the supply chain with access to the same information. Less time is spent on data validation and focus remains on improving goods, reducing costs and delivering within stipulated time lines.

Blockchain opens up possibilities to expedite and streamline the everyday processes businesses run on. The beauty of blockchain for supply chain management, specifically, is that it not only simplifies the procurement or precision parts selling process, but it also makes the method safer, faster, and less expensive. Trigent has in-depth domain knowledge and technology expertise of manufacturing systems to help companies optimize their supply chains.


  • Abishek Bhat

    Abishek Bhat is the Vice President of Business Development at Trigent Software. He enables businesses to adopt strategic outsourcing to make their processes and workforce more productive and improve ROI. A passionate advocate of digital transformation, he guides organizations on their journey towards digital maturity and excellence with a keen focus on QA.

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Ten Blockchain Benefits for Supply Chain Management