Blockchain vs. Supply Chain: What’s The Difference?

Although Bitcoin helped to spread awareness of blockchain, many people are still unsure of what blockchain vs. supply chain is, how it operates, or how it might be used in other industries. While early adopters are promoting the advantages of blockchain, and some experts see it as the next frontier of business, others are still attempting to understand the idea and determine whether it will work for their organization’s needs.

Here, we examine some fundamentals of blockchain technology as well as a few instances of how blockchain pioneers are using this digital powerhouse to transform supply chains.

What is blockchain?

A shared, unchangeable ledger that makes it easier to record transactions and track assets in a business network is what IBM defines as a blockchain. According to the company, assets can be physical or intangible, and “essentially everything” can be tracked on a blockchain network, which lowers risks and expenses for all parties.

Furthermore, IBM describes the key elements of a blockchain as follows:

  • Using distributed ledger technology, everyone has access to a single, shared ledger where transactions are recorded.
  • Transactions that have been recorded in the shared ledger are considered immutable records. If an error needs to be fixed, a new transaction needs to be added to undo the mistake.
  • Smart contracts are a set of rules that are automatically carried out and kept on the blockchain to assist speed up transactions.

According to IBM’s explanation of how blockchain functions, each transaction is recorded as a “block” of data that includes any type of information required. Each block is then linked to the blocks that came before and after it, forming a data chain that makes each transaction visible and enables network users to see the precise timing and order of events.

There is no way to change the order of the current blocks because they are securely connected. The statement further states that “each succeeding block reinforces the verification of the prior block and hence the entire blockchain.” This gives the blockchain its fundamental strength of immutability and renders it tamper-evident.

What Is A Supply Chain?

A supply chain, in its most basic definition, is a system that is primarily employed for the efficient production and distribution of a company’s goods and/or services to its final consumers. It includes details on the full process these goods and services go through to get from supplier to customer. In other words, it coordinates and tracks the movement of both raw materials and finished goods. Several elements make up a supply chain, including:

  • Customers
  • Materials
  • Finished Goods
  • Natural Resources
  • Retail, Services, and E-commerce
  • Ingredients and Parts
  • Returns, Recycling, and Reuse
  • Logistics (transportation of goods)

It’s also critical to distinguish between a supply chain and logistics. Logistics is only one link in the supply chain because it focuses specifically on the movement of goods. Logistics, the timing and manner of product manufacturing, and everything else on the above list is all components of the supply chain.

Nowadays, a high-functioning supply chain is in full operation in the majority of businesses. In actuality, without one, it is rather challenging to optimize their business. By increasing the effectiveness of their product delivery, supply chains assist businesses in providing better customer service. If properly managed, they frequently increase sales as well, generating a much higher profit.

Can A Blockchain Track A Supply Chain?

Yes. The optimal manufacturing and distribution of a company’s goods and services depend on its supply chains. But due to the overwhelming complexity of the current system, conventional supply chains are gradually losing their usefulness. As a result, a growing number of businesses are starting to track their supply chains using blockchain technology.

Four main costs are often involved in supply networks, including:

  • Inventory includes the cost of the stock, any surplus, any damaged or stolen goods, and any debts.
  • Cost of quality inspections carried out by a team of qualified experts.
  • Transportation – The price of delivery from the supplier to the customer.
  • Cost of the products and raw materials mentioned in the supply chain.

A blockchain makes it simple to manage all of the cost data. With its distinct hashing technique, the financial data can be transparently stored within a particular block. This enables oversight of any final decisions regarding the accuracy and modification of crucial information by each authorized member of your company’s staff.

The majority of businesses that use blockchain to track supply chains do so to cut down on human errors, delays, and needless expenditures. Additionally, it offers a trustworthy way to guarantee that all of the data obtained from the suppliers is entirely accurate.


Although blockchain vs. supply chain is distinct, they are connected more than simply by name. Blockchain technology must be included in a digital supply chain strategy. The comprehensive end-to-end electronic communication across the entire supply chain will be made possible by blockchain.

Given the investment requirements, large businesses will undoubtedly be the first to use Blockchain technology, but as time goes on, the pricing and implementation hurdles will be lessened, making this a more accessible capability for businesses of all sizes. Innovative thinking Blockchain will be taken into account by supply chain leaders as part of any long- or short-term strategy.