Blockchain for Supply Chain

The supply chain sector has been identified as one of the sectors where blockchain technology holds great potential. Many supply chain use cases are likely to satisfy the minimal requirements for blockchain use cases:

  • Multiple parties need to reach consensus on shared data
  • Transactions need to be checked for validity on a technical and economic level
  • The use case is clearly delineated and well understood

One particularly promising use case is supply chain tracking. A comprehensive tracking system could make it possible to trace food “from farm to fork,” measure the ecological footprint of products in real time, and implement innovative profit-sharing models within complex supply chains. The Blockchain Research Lab evaluates the potential of blockchain technology for supply chain tracking as part of the publicly funded DiBiChain research project.

For any given use case, it is important to identify the expected benefits of applying blockchain technology. The potential benefits are manifold. Blockchain can enable decentralization and transparency, increase security within the system, and act as a powerful catalyst to foster change in complex systems.

To bring these benefits to life, however, the blockchain must be tailored to the use case. The real-life complexities of a supply chain must be mapped to a technical system, its objects and its users. This entails a number of specific requirements which influence the selection of the most appropriate blockchain technology, particularly whether a public or private blockchain should be used, and the design of the blockchain system. Particularly important factors are the capability to define diverse assets with complex relationships, a sufficient degree of confidentiality and flexibility, the availability of fine-grained user roles and a transaction throughput which can satisfy the requirements of the use case. Supply chain blockchains can also benefit from advanced sharding capabilities that make it possible to archive information about products which have reached their end of life.

For a comprehensive discussion of blockchain for supply chain, read the BRL Working Paper “Blockchain for Supply Chain: From Promise to Practice” by our researcher Dr. Elias Strehle here.