Supply chains of the future

Today, many products travel an incredibly long way halfway around the world until they are available from us in the form to which we are accustomed.

The journey of this product is usually very difficult to understand for the end consumer. Companies already know a lot more about the entire supply chain of their products than the end consumer, and yet tracking, controlling and auditing the entire value chain is not easy for a company.

Blockchain technology, which is becoming increasingly important, has the potential to greatly impact and restructure the supply chain.

What is a supply chain?

The supply chain is a complex system that encompasses all the stages a product must pass through to be delivered to the end consumer, from raw material to finished product.

What benefits do blockchains bring to supply chains?

Integrating blockchain technology into the supply chain improves efficiency and transparency while ensuring data security and integrity. This is accomplished by each stakeholder/member of the supply chain immutably recording the data that the product presents to them. When data about products, shipments, orders, and payments is entered into the blockchain at each stop in the supply chain, it is visible and retrievable by the other members of the supply chain, ensuring full traceability of products.

Supply chain based on blockchain technology.

Advantages through blockchain technology

The use of blockchain technology in a supply chain offers many advantages:

  1. Companies can improve supply chain efficiency by streamlining the flow of information between stakeholders.
  2. Blockchain technology is helping to make the supply chain more transparent by giving customers insight into the manufacturing process and making products more traceable, which can help improve customer loyalty.
  3. The supply chain features improved data security and integrity. Blockchain technology uses cryptographic techniques to make data on the blockchain immutable. This minimizes the likelihood of fraud or data manipulation.

Blockchain technology as a sustainability-oriented innovation?

There is significant potential for the use of blockchain technologies to positively impact the sustainability of supply chains by increasing security, accountability, and efficiency. For example, because each step of the product's process is recorded and stored, the integration of blockchain technology can help reduce food waste in food supply chains. This means that the origin of quality defects can be better traced and the problem can be corrected more quickly.

Despite the strong link to sustainability goals, many experts emphasize that the adaptation of blockchain technology to food supply chains is driven by financial interests: "Money is the driver."

What challenges does a supply chain based on blockchain technology bring?

There are some challenges in integrating blockchain technology into a supply chain. For example, integrating existing processes and systems into the blockchain is sometimes difficult to accomplish and involves high overhead costs. Blockchain technology requires new ways to process and store data, which many companies have yet to implement.

One issue that repeatedly leads to challenges in decentralized networks is the feed-in of external data from the real world. Smart contracts, which are immutable software, can address and solve these issues. For example, decentralized oracle networks (DONs) enable the creation of hybrid smart contracts that combine on-chain code and off-chain infrastructure to respond to real-world events and interoperate with traditional systems.

Another challenge is the scalability of the blockchain. Blockchains store all transactions, which can make them very large and, unfortunately, slow. Therefore, we need to find ways to limit the size of blockchains and increase their scalability. (Read more about scalability in our blog "What are Layer 2 solutions").

Despite high complexity, the possibilities are huge...

Supply chain based on blockchain technology offers a great opportunity to improve supply chain efficiency, transparency and security. Blockchain technology enables companies to better manage their supply chain and provide customers with end-to-end tracking of their products.

And this is where the next innovation in blockchain technology comes into play: smart contracts. Supply chains in conjunction with smart contracts leads to automation and increased efficiency of individual processes. For example, smart contracts can control that payments to producers are only released once a certain quality standard has been met.

Of course, revisions are still needed here, too, because the restructuring of supply chains is still in its infancy. But we are curious to see what the standard supply chain will look like in five years.


Although we have made every effort to carefully research and verify the information in this article, the blog posts are neither an offer nor a solicitation to buy or sell investment or other specific products and cannot substitute for personal advice from a financial, legal and/or tax advisor. The content in this post is for general information purposes and therefore does not constitute investment advice. No liability can be accepted for decisions made on the basis of information in this blog post.

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