“The Products Story” – Blockchain Technology in Supplychain

Do you know where your iPhone comes from? Do you know where the raw materials originated? Who manufactured the components? Who built the device? Most people aren’t even aware of how many steps are there between the design and the delivery of the product. Application of blockchain technology in supply chain management will help us track each and every step in the life of a product.

Blockchain is a type of distributed ledger that records the history of transactions in blocks of data. Each block is then chained to the next block, using a cryptographic hash referencing the previous block. This blockchain can be shared with anyone with the appropriate permission. Any tampering in the blocks will be immediately reflected to all the partners in the blockchain. This makes blockchain immutable!

It can be implemented in industries like media, markets, real estate, healthcare, supply chain, payments and so on.

The concept was introduced in 2008 by Satoshi Nakamoto, and then implemented for the first time in 2009 as part of the bitcoin, a digital cryptocurrency. Blockchain is the underlying technology behind bitcoin. Bitcoin has still not made a stand in the market but the blockchain technology would for sure reinvent the business world.

What internet did for information, blockchain will do for transactions!        – ginni Rometty, CEO of IBM

Below is a video on how blockchain works.


Advantages of BlockChain

Efficiency -Blockchain can reduce error and increase speed as it is all interconnected by nodes. This helps in making seamless cross border payments involving multiple parties.

Transparency – Get real time insights in trade and transactions rather than repots at different times.

Trust-The majority of participants in blockchain system need to approve transactions and agree upon data written, altered or removed. This helps to deter fraud and promote stronger relationships.

Resilience -The larger the number of blockchain participants, the more robust the data is as it is massively replicated.

Challenges of BlockChain

Lack of industry standards – With the growing number of blockchain companies and monopoly patents, it is very difficult to have cross platform network due to the innumerable blockchain platforms. It is required to create a cross industry open standard. 

Security – Since there is absence of common network standards and protocols, the nodes in blockchain could be breached.

Cost- building a block chain will be feasible only if there is increased volume that will drive down. The network will only be valuable when a critical mass of institutions have made a commitment to support distributed ledgers.

Regulation and governance – continuous monitoring around establishment of policies to ensure that they are correctly implemented and there is proper accounting. There needs to be a regulation in place for potential risks such as money laundering, terrorist financing, system risk and frauds.

In 2006, United States had a Spinach Outbreak with around 4000 projected cases of people infected with E.Coli bacteria causing a few deaths and hundreds of hospitalization! US Food and Drug Administration (FDA) took around 2 weeks to track back the spinach to the original farm, until then, spinach supply in the country was on a hold leveraging loss to the farmers. The outbreak occurred due to one farm and the losses were worldwide! It was time that we had a superfast, reliable and secure way of tracking a product from its origin to the shelf.

Wal-Mart is partnering with IBM and China’s Tsinghua University to begin a pilot test of blockchain shared digital ledger technology, using the highly encrypted technology to track produce transactions in the U.S. and pork-related transactions in China in an effort to improve food safety.

The blockchain system used for the pilot project is built on IBM’s version of the open-source Hyperledger platform, and the aim is to record data about all parties and transactions involved in products. All the participants in the blockchain would have digitally signed the smart contracts which specify the terms and conditions of each entity involved.

With the implementation of blockchain in the product life cycle, each product will be traceable and transparent. So now I would know the what-where-when of any product, is the product organic or chemically grown, how was it transported, was it responsibly sourced, was it fair trade, were the products transported under the agreed temperature conditions and so on.

Below is a video of how IBM blockchain tracks the shipment of a package as it moves along the supply chain, passing through multiple carriers.


Implementing blockchain in supply chain would benefit us with enhanced food safety, fresher food, less food wastage, deter food fraud, increase speed, promote responsibility, accountability and very importantly- Build consumer trust.

If the trial is successful and Walmart adopts blockchain technology to track food across the world, it could end up being the biggest deployments of the technology not just in food safety, but in food waste too.