The impact of blockchain technology on supply chain transparency and efficiency
The research paper discusses how the benefits of blockchain technology, though at times contested, are very likely to make a lasting impact in bringing about enhanced transparency and further efficiency regarding supply chain management. Blockchain addresses big pain points; this research paper example addresses fraud and delays with fragmented data across supply chains by allowing a decentralized ledger mechanism in a secured manner. Next, by citing examples of Walmart's food traceability and Maersk's TradeLens, the paper goes on to demonstrate how blockchain ensures real-time tracking by automating verification processes. This example also discusses the challenges, such as high implementation costs and regulatory complexities, which make the adoption of blockchain low. Research papers like this provide useful insights for businesses and policymakers considering the path to integrate blockchain as a means to build more resilient and efficient supply chains.
November 15, 2024
* The sample essays are for browsing purposes only and are not to be submitted as original work to avoid issues with plagiarism.
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The Impact of Blockchain Technology on Supply Chain Transparency and Efficiency
Name
Course
Date
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Introduction
Blockchain is a decentralized ledger that allows for secure, verifiable record-keeping.
Supply chains have complex networks that entail suppliers, manufacturers, and distributors,
which rely on accurate information for the chains to seamlessly move from origin to
consumer. Besides fraud and delays, traditional models also operate with fragmented data.
Through the described challenges, the blockchain addresses a solution. It is a transparent,
secure, and decentralized means of recording transactions. For this reason, this essay
examines how supply chains are still becoming more transparent and efficient, given the
critical insight into the review of the evaluation of benefits, challenges, and real-world
applications of blockchains across industries.
Blockchain Technology: Relevance to Supply Chains
Blockchain is a distributed ledger mechanism for recording transactions in a secure
manner with the use of cryptography.1Unlike traditional centralized database management
systems, blockchain is a peer-to-peer network in which every participant or "node" on the
network possesses the same copy of the ledger.2In other words, the supply chain on the
blockchain works by recording each transaction and verification through multiple
stakeholders as a chain of immutable records. This architecture answers many of the
challenges around traceability, accountability, and fraud.3
Traditional supply chains are heavily dependent on paper records and thus prone to
errors and manipulation. Counterfeit products, data loss, and incorrect tracking result in lost
3Ibid., 215.
2Rashmi P. Sarode et al., “Blockchain for Committing Peer-To-Peer Transactions Using Distributed Ledger
Technologies,” International Journal of Computational Science and Engineering 24, no. 3 (2021): 215,
https://doi.org/10.1504/ijcse.2021.115651.
1Rashmi P. Sarode et al., “Blockchain for Committing Peer-To-Peer Transactions Using Distributed Ledger
Technologies,” International Journal of Computational Science and Engineering 24, no. 3 (2021): 215,
https://doi.org/10.1504/ijcse.2021.115651
3
revenue, reputational damage, and health risks-particularly in sensitive industries such as
pharmaceuticals and food.4Many of these issues can be diminished with blockchain
architecture. This technology allows for secure, time-stamped records across transactions that
are shared with all relevant stakeholders. The openness fosters a trust that might exist among
suppliers, manufacturers, distributors, and consumers.
Increasing Transparency with Blockchain
Transparency within supply chain management is crucial for delivering the relevant
stakeholders with the most appropriate information about the origin and history of the
product. This would mean end-to-end visibility since it gives a real-time complete view that
can be looked at by all authorized participants.5Each time possession of the product changes,
it creates an unalterable record, minimizes fraud possibilities, and allows traceability.6
Blockchain finds its clear application in enhancing traceability in the food industry. A
case in point is Walmart, which applies blockchain to trace the sources of produce, a process
that would take days but is now achieved in mere seconds.7Such rapid traceability allows the
identification of, and removal from the marketplace of, contaminated items, hence enhancing
food safety.8In pharmaceuticals, this technology offers authentication of drugs with the view
of reducing the entry of counterfeit medications into market flows. To consumers, blockchain
8Ibid., 2631.
7Anupam Sharma, Deepika Jhamb, and Amit Mittal, “Food Supply Chain Traceability by Using Blockchain
Technology,” Journal of Computational and Theoretical Nanoscience 17, no. 6 (June 1, 2020): 2630–36,
https://doi.org/10.1166/jctn.2020.8958.
6Rashmi P. Sarode et al., “Blockchain for Committing Peer-To-Peer Transactions Using Distributed Ledger
Technologies,” International Journal of Computational Science and Engineering 24, no. 3 (2021): 215,
https://doi.org/10.1504/ijcse.2021.115651.
5Anupam Sharma, Deepika Jhamb, and Amit Mittal, “Food Supply Chain Traceability by Using Blockchain
Technology,” Journal of Computational and Theoretical Nanoscience 17, no. 6 (June 1, 2020): 2630–36,
https://doi.org/10.1166/jctn.2020.8958.
4Rashmi P. Sarode et al., “Blockchain for Committing Peer-To-Peer Transactions Using Distributed Ledger
Technologies,” International Journal of Computational Science and Engineering 24, no. 3 (2021): 215,
https://doi.org/10.1504/ijcse.2021.115651.
4
enables them to verify the origin of products or whether sourcing has been done ethically,
thus building their trust in both the quality and safety of the product.
Smoothing Efficiency in Supply Chain Operations
Primarily, beyond just the element of transparency, blockchain does a great deal to
further enhance efficiency by reducing reliance on intermediaries and mechanisms of manual
verification that may delay things with time and raise costs. The blockchain system allows for
direct and automated verification among its participants, hence eliminating repetitive
activities. Through smart contracts—self-executing agreements coded into the
blockchain—blockchain automates important functions, such as payment processing and
shipment verification, once pre-set conditions have been met.9
In addition to that, the collaboration between Maersk and IBM on TradeLens perfectly
illustrates how blockchain increases efficiency in global shipping. TradeLens brings shippers
and customs officials into one single tamper-proof ledger for smooth paperwork that
accelerates customs clearance.10 With TradeLens, Maersk reduced transaction time and was
able to cut costs, proving very well how well blockchain does the work of reducing errors,
cutting delays in approval, and making tracking reliable.11
Lastly, studies have shown that blockchain can slice transaction costs for shipping by
as much as 20% because this can speed up the process and also enable automated
verification.12 This saves so many valuable resources for companies, with efficiency gains
12Ibid., 174.
11Ibid., 173.
10 Marcelo Aránguiz et al., “International Trade Revolution with Smart Contracts,”
Https://Doi.org/10.1016/J.procs.2021.01.224 181, no. 2 (April 1, 2021): 169–84,
https://doi.org/10.1002/9781119646495.ch12.
9Anupam Sharma, Deepika Jhamb, and Amit Mittal, “Food Supply Chain Traceability by Using Blockchain
Technology,” Journal of Computational and Theoretical Nanoscience 17, no. 6 (June 1, 2020): 2630–36,
https://doi.org/10.1166/jctn.2020.8958.
5
trickling down to suppliers and consumers through increased competitiveness and customer
satisfaction.
Challenges in Blockchain Adoption in Supply Chains
Apart from all these advantages, there are a number of issues standing in the way of
wide adoption of the chain in the supply chains. The high implementation costs of specialized
hardware, software, and expertise might be too high for small and medium-sized
enterprises.13 This integration with the already existing systems is technically cumbersome
and time-consuming.
Additionally, the technology is further complicated by regulatory and privacy issues
in the adoption of blockchain. The same transparency that blockchain uses to verify
information raises a lot of questions concerning data privacy and compliance.14 Organizations
should, therefore, ensure that the blockchain systems attain set laws for protection against
data, such as the GDPR in the European Union.15 This, together with similar regulatory
complexity, hinders the applicability of Blockchain, especially in regions with severe
restrictions on privacy.
Furthermore, resistance to change is another big barrier. Most stakeholders are
interested in new technologies only in the context of immediate return on investment.
Besides, scalability is still an issue: with big transaction volumes, the requirements for
computational and storage resources become higher. In this case, this makes blockchain
15 Koppiahraj Karuppiah, Bathrinath Sankaranarayanan, and Syed Mithun Ali, “A Decision-Aid Model for
Evaluating Challenges to Blockchain Adoption in Supply Chains,” International Journal of Logistics Research
and Applications 26, no. 3 (July 6, 2021): 1–22, https://doi.org/10.1080/13675567.2021.1947999.
14 Koppiahraj Karuppiah, Bathrinath Sankaranarayanan, and Syed Mithun Ali, “A Decision-Aid Model for
Evaluating Challenges to Blockchain Adoption in Supply Chains,” International Journal of Logistics Research
and Applications 26, no. 3 (July 6, 2021): 1–22, https://doi.org/10.1080/13675567.2021.1947999.
13 Koppiahraj Karuppiah, Bathrinath Sankaranarayanan, and Syed Mithun Ali, “A Decision-Aid Model for
Evaluating Challenges to Blockchain Adoption in Supply Chains,” International Journal of Logistics Research
and Applications 26, no. 3 (July 6, 2021): 1–22, https://doi.org/10.1080/13675567.2021.1947999.
6
resource-intensive for big supply chains.16 These are the challenges that require education
programs, regulatory guidance, and investment in scalable infrastructures. As the technology
matures, these kinds of challenges are those that can be answered and support blockchain
adoption across global supply chains.
Case Studies and Practical Applications
In the last few years, quite a fair number of companies are enjoying success from the
implementation of blockchain on their supply chain models. Successes and setbacks guide a
sense of the benefits and challenges of this technology. Walmart's blockchain for tracking
produce is an example of enhanced transparency and efficiency in that the company can track
food products in instances of contamination within seconds.17 Regarding high-value
consumer products, LVMH leverages the benefits of blockchain through the authentication of
high-value products as being genuine by the technology to earn consumer trust and protect
the brand reputation.18 From these case studies, it has emerged that blockchains guarantee
increased transparency in enhanced operational efficiency while underlining the need for
technological and regulatory adaptation.
Conclusion
The potential of blockchain technology to greatly increase transparency and efficiency
through secure decentralized record-keeping could transform supply chain management.
Blockchain enables real-time visibility and reduces friction caused by intermediaries which
are key limitations of traditional supply chains. Blockchain, therefore, brings several
18 Elena Isabel, Paul Bergey, and Brett Smith, “Blockchain Technology for Supply Chain Provenance: Increasing
Supply Chain Efficiency and Consumer Trust,” Supply Chain Management 29, no. 4 (March 12, 2024),
https://doi.org/10.1108/scm-08-2023-0383.
17 Elena Isabel, Paul Bergey, and Brett Smith, “Blockchain Technology for Supply Chain Provenance: Increasing
Supply Chain Efficiency and Consumer Trust,” Supply Chain Management 29, no. 4 (March 12, 2024),
https://doi.org/10.1108/scm-08-2023-0383.
16 Koppiahraj Karuppiah, Bathrinath Sankaranarayanan, and Syed Mithun Ali, “A Decision-Aid Model for
Evaluating Challenges to Blockchain Adoption in Supply Chains,” International Journal of Logistics Research
and Applications 26, no. 3 (July 6, 2021): 1–22, https://doi.org/10.1080/13675567.2021.1947999.
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advantages in cases related to food safety and luxury goods, given that trust is built and
operations are smoothened. How it will reach its full potential is through addressing the high
cost of implementation, regulatory issues, and privacy concerns. Blockchain continues to
evolve in technology, and the role it plays in supporting resilient supply chains that are
efficient and transparent will continue to expand, placing it as one of the key tools in supply
chain management for years to come.
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Bibliography
Aránguiz, Marcelo, Andrea Margheri, Duoqi Xu, and Bill Tran. “International Trade
Revolution with Smart Contracts.” Https://Doi.org/10.1016/J.procs.2021.01.224 181,
no. 2 (April 1, 2021): 169–84. https://doi.org/10.1002/9781119646495.ch12.
Isabel, Elena, Paul Bergey, and Brett Smith. “Blockchain Technology for Supply Chain
Provenance: Increasing Supply Chain Efficiency and Consumer Trust.” Supply Chain
Management 29, no. 4 (March 12, 2024). https://doi.org/10.1108/scm-08-2023-0383.
Karuppiah, Koppiahraj, Bathrinath Sankaranarayanan, and Syed Mithun Ali. “A
Decision-Aid Model for Evaluating Challenges to Blockchain Adoption in Supply
Chains.” International Journal of Logistics Research and Applications 26, no. 3 (July
6, 2021): 1–22. https://doi.org/10.1080/13675567.2021.1947999.
Sarode, Rashmi P., Manoj Poudel, Shashank Shrestha, and Subhash Bhalla. “Blockchain for
Committing Peer-To-Peer Transactions Using Distributed Ledger Technologies.”
International Journal of Computational Science and Engineering 24, no. 3 (2021):
215. https://doi.org/10.1504/ijcse.2021.115651.
Sharma, Anupam, Deepika Jhamb, and Amit Mittal. “Food Supply Chain Traceability by
Using Blockchain Technology.” Journal of Computational and Theoretical
Nanoscience 17, no. 6 (June 1, 2020): 2630–36.
https://doi.org/10.1166/jctn.2020.8958.
November 15, 2024
24/7 custom essay writing by real academic writers
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Academic level:
Undergraduate 3-4
Type of paper:
Research paper
Discipline:
Supply chain
Citation:
Chicago
Pages:
6 (1135 words)
Spacing:
Double
* The sample essays are for browsing purposes only and are not to be submitted as original work to avoid issues with plagiarism.
