A game-changer for logistics and supply chain management

Blockchain has come a long way since its advent in 2009. Today it is lauded as the ‘’fifth evolution” of digital computing. Fundamentally speaking, it is an innovative way to manage a distributed database. The ingenuity comes from integrating old technology in a new manner.

What are the ramifications of blockchain for the logistics and supply chain management industries?

The technology’s capacity to record exchanges between parties permanently, securely and in a tamper-proof manner has a number of profound benefits.

A single integrated data source, the increased transparency that comes with end-to-end tracking gives parties the ability to track, trace and verify high-value assets in the supply chain and robustly counter counterfeit products.

Cryptographic encryption using blockchain offers a viable solution to improving IoT security. All the same, the players in the logistics industry are still at the start of their journey to unlock the true benefits that blockchain technologies promise.

Listed below are a few ways in which blockchain will revolutionise logistics and supply chain management globally:

Smart contracts

In any given supply chain there are several players involved which means that there are many contracts, payments, tracking and communications. Given that supply chains are becoming increasingly complex, smart contracts are autonomous systems that can make processes simpler by self-executing manual processes that are traditionally accompanied by legal contracts.

Once smart contracts have been put in place, it will automatically enforce the terms and conditions agreed upon by the stakeholders. If these conditions are met, the previously agreed upon actions take place automatically. Smart contracts reduce administrative costs and boost efficiency by lowering processing times for goods at checkpoints. One may think of it as software code replacing “human blockchains”.

Data transparency

Although there has been a wave of digitalisation across industries, in many areas, logistics and supply chain management can be very paperwork-heavy.

Blockchain technology ensures that documents are tamper-proof, accurate and from a verifiable source. In this manner, every stakeholder obtains access to a shared dataset which prevents the situation in which there are multiple copies of the same record maintained by different parties.

By establishing a single source of information, discrepancies in records and vulnerability to tampering can be significantly reduced.


The decentralised nature of blockchains means that there is less likely to be a disruption in the entire supply chain due to a localised attack or failure. This is because each component will have its own entry in the blockchain which can be tracked over time.

Authorised users would be able to update the status of a component in real-time. Smart contracts also assist in quality assurance as stakeholders would be able to track every component of a product from origin to destination.


A key challenge in supply chain management is limited cross-process visibility. This issue arises when players in this industry do not have information across the entire supply chain to make strategic decisions relating to their isolated role in the ecosystem.

Blockchain technology is a solution that seeks to integrate all players on a common platform and thereby improve efficiency in decision-making.

According to Ginni Rommety (Executive Chairperson of IBM), the utilisation of blockchain in the global supply chain alone could lead to more than $100 billion in efficiencies.

Over the next several years, we are likely to witness the logistics and supply chain management industries embracing blockchain and its applications over a number of processes. But it is important to note that for these benefits to be realised, the isolated software systems currently in place need to be merged to an industry-wide standard. This will allow for a seamless flow of information in a secure and compliant manner.

Ultimately, blockchain will offer a scalable solution for players in these industries to maintain high performance in the foreseeable future.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)