Blockchain in Supply Chain Management: A Good Idea?

blockchain in supply chain

The creation and subsequent application of blockchain technology in several sectors have bridged various gaps. Despite the technology still being in its primitive phase, people seem to think it is a miracle solution to every human error and want to tailor a place for it to go in every department. One such department is supply chain management. And while blockchain elections may not be the solution to put voters’ minds at ease, could blockchain in supply chain management be the saving grace?

What It Has to Offer

The demand for sustainable supply chain management is growing. And professionals see this potential in blockchain technology.

In its simplest form, blockchain is akin to a ledger that holds digital data records. The trick here is that the roster is controlled by a group of people (called nodes) on a peer-to-peer network, equally mistrusting one another. So, when a transaction is requested, each node solves equations to check and validate it. The transaction then joins others, creating a data block for the ledger.


Blockchain in supply chain management displays transparency thanks to blockchain’s main selling point: transparency. You see, its decentralized nature means the decision-making lies not in a single center but in teams, divisions, and local branches. As a result, any network member can verify the recorded data, unlike regular centralized data that gets selectively published to the public.

Bonus point: The recorded data is immune to editing; no one can alter or tamper with it.

Free from Censorship

Every country in this world has had an insufferable government at some point in its history. Well, with blockchain, governmental bodies, like everyone else, are on the outside looking in, incapable of preventing operations. A traditional bank, for example, can lawfully suspend a user’s account at their discretion. Can you imagine where a country like Lebanon would be now had the economy been blockchain-based?

Not All That

Blockchain seems like the ideal solution to counter human error and lapses of judgment. But consider the following.

Speed and Performance

Blockchain in supply chain management is not as quick as companies would like. A transaction has so many hoops to get through that it puts Cirque du Soleil performers to shame.

High Implementation cost

Does it protect against malicious intent? Yes. Will it cost you more? Also, yes. A company that applies blockchain must trade time and money for it.

  • Best Case Scenario: it might cost you a measly 5,000 USD.
  • Worst Case Scenario: it will cost you upward of 100,00 USD.

Data Modification

In blockchain technology, the data’s immutability protects the data from alteration but also hinders the users that enter the wrong data. In conclusion, you cannot easily and quickly fix mistakes.

Final Thoughts

We often seek technological additions under the misguided guise of “automation removes human error.” We also often fail to fully acknowledge that it brings with it a new set of challenges that complicates matters. Blockchain technology is a grand example of human genius. Nevertheless, blockchain in supply chain management may not be worth its weight.

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