Supply Chain and Block Chain
MBA-IT 393
Can Cui
May 29, 2025
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Blockchain technology is described as a decentralized, immutable ledger system that
enables secure, transparent, and tamper-proof recording of transactions. (Drescher, 2017) This
technology has great potential to transform supply chain management (SCM) by addressing
critical challenges such as lack of transparency, inefficiency, and susceptibility to fraud.
Supply chains involve multiple independent parties exchanging goods and information.
Blockchain’s distributed ledger records transactions in linked blocks using cryptographic hashes,
ensuring data integrity and preventing unauthorized changes. (Drescher, 2017) This is especially
valuable in SCM, where end-to-end traceability is essential for verifying product authenticity and
compliance with regulations (Kshetri, 2018). For example, blockchain can track food from farm
to table or pharmaceuticals from manufacturer to patient, enabling stakeholders and consumers
to verify provenance.
A key feature of blockchain highlighted as the smart contract, self-executing code stored
on the blockchain that automatically enforces agreements. (Drescher, 2017) Smart contracts can
automate routine supply chain processes, such as releasing payments upon delivery confirmation
or managing inventory reorders, thereby reducing administrative overhead and errors (Casino, et
al., 2019). This automation fosters operational efficiency and minimizes disputes.
Integration with Internet of Things (IoT) devices further enhance blockchain’s utility in
supply chains. IoT sensors can feed real-time data about location, temperature, and handling
conditions directly onto the blockchain ledger, creating an immutable and transparent record of
shipment quality (Saberi, et al., 2019). Such transparency supports sustainability goals and
regulatory compliance.
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While blockchain presents significant benefits, challenges including scalability,
interoperability, and the need for industry-wide standards. (Drescher, 2017) Despite these
hurdles, the combination of blockchain’s core principles, decentralization, security, and
automation, with IoT innovations is driving the adoption of blockchain-based solutions across
diverse supply chains.
In summary, blockchain technology integrates with supply chains by providing a secure,
transparent ledger and enabling automated processes via smart contracts. Drawing on Drescher’s
foundational concepts and supported by recent scholarly research, blockchain stands to improve
supply chain traceability, efficiency, and trust.
3
References:
Casino, F., Dasaklis, T. K., & Patsakis, C. (2019). A systematic literature review of blockchain-
based applications: Current status, classification and open issues. Telematics and
Informatics, 36, 55-81. https://doi.org/10.1016/j.tele.2018.11.006.
Drescher, D. (2017). Blockchain basics: A non-technical introduction in 25 steps. Apress.
Kshetri, N. (2018). 1 Blockchain’s roles in meeting key supply chain management objectives.
International Journal of Information Management, 39, 80-89.
https://doi.org/10.1016/j.ijinfomgt.2017.12.005.
Saberi, S., Kouhizadeh, M., Sarkis, J., & Shen, L. (2019). Blockchain technology and its
relationships to sustainable supply chain management. International Journal of
Production Research, 57(7), 2117-2135. https://doi.org/10.1080/00207543.2018.1533261.
Catalini, C., & Gans, J. S. (2016). Some Simple Economics of the Blockchain. Communications
of the ACM, 59(11), 24-27.
