A blockchain is a digital ledger containing records of all transactions or events, shared among participants. Every transaction is independently verified by most participants in the system. Bitcoin is the most widely used cryptocurrency as an example of a blockchain. In 2008, Satoshi Nakamoto released a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. However, Blockchain in the supply chain records transactions in a digital ledger that is shared over the Network, making it untouchable. Anything of value, such as land assets, cars, etc., can be recorded as a transaction on the blockchain. Business runs on information. That should be received as fast as possible, and the more accurate it is, the better. However, Blockchain is suitable for the dissemination of that information since it offers real-time, simultaneous, and measurable data that resides in a tamper-proof database accessible only to authorized members of the decentralized network. Moreover, an application can also track orders, payment accounts, production and other things on a blockchain network. Since members have a common perspective of the truth, one gets an outlook of the details of a transaction from beginning to end – making it more certain and unveiling new possibilities of efficiencies. Why Blockchain Adoption in Supply Chain Management Is Crucial Today Given its roots in virtual currency, it’s crucial to recognize blockchain’s broader implications. Among various fields, supply chain management stands out as highly promising for blockchain’s application. Key features like decentralization, immutability, and transparency make blockchain ideal for solving supply chain issues. Moreover, in this section, we explore the necessity of blockchain in supply chain management today, highlighting enhanced visibility and accountability, improved efficiency and cost savings, enhanced security, compliance, and governance, bolstered interactions and trust, increased sustainability, and real-time tracking and alerts. Enhanced Transparency and Traceability: Confidentiality and record keeping are important when tracking the movement of products and materials, especially in industries. It requires product sources and authenticities such as food, drugs, and designer products industries. Blockchain presents an authenticated database where the tracking of every supply chain activity is stored. This ledger is available only for admitted individuals and every stage of the supply chain is visible and corroborated. Consequently, Blockchain finds application in the food industry by tracking a product’s journey from farm to consumer, showcasing every process it undergoes. This transparency enables swift responses to issues like contamination or recalls, ensuring customer safety and brand reputation preservation. Improved Efficiency and Reduced Costs: Blockchain can automate various processes in the supply chain and eliminates third-party involvement. In traditional supply chain systems, there are many intermediate dealers which increases the complexity and expense. Through using the blockchain, it is possible to get rid of these middlemen since there is a single source of truth. Smart contracts are digital contracts that automatically execute terms, like fund transfers or quality checks. For example, they can pay a supplier upon goods verification, streamlining paperwork, reducing errors, and speeding up transactions. Thus, it translates to huge cost savings and enhanced efficiency. Enhanced Security: Security is a critical factor in supply chain management, and data leaks and cons pose a significant risk. Blockchain is distributed, so no one party can have access to the entire chain of records, making it less vulnerable to hacking or modifications. Every business on the blockchain has a unique cipher, and it links up to the previous transaction block to form a series of blockages the tampering with this block is almost impossible. Furthermore, blockchain guarantees data immutability, meaning no one can alter or delete data once written. This is crucial to maintain record integrity and equitable information access. Use Cases for Blockchain in Supply Chain Management Blockchain finds multiple applications in supply chain management, particularly in enhancing traceability and transparency and promoting environmentally and ethically sustainable practices. Traceability and Transparency Ensuring Product Authenticity: Blockchain in the supply chain ensures a seamless chain of custody from manufacturing to purchase, as product authenticity can be readily verified. For instance, in the pharmaceutical industry, follows each process right from the production of drugs and guarantees potency and quality. Enhancing Food Safety: A notable real-world example of blockchain is in the food industry, where it traces products from manufacturers to consumers, aiding in identifying contamination sources and facilitating product recalls to protect consumers and minimize business losses. Improving Recall Efficiency: In the recall scenario, blockchain improves recall procedures due to the enhanced accuracy of tracing. In the automotive industry, it keeps track of parts, from the manufacturer to the end distributor and consumer to enable organized and precise recall. Environmental and Ethical Sustainability Verifying Sustainable Practices: Blockchain captures sustainable initiatives all through the production process right from the procurement. In fashion, it monitors environmental management systems of suppliers and informs consumers regarding sustainability information. Ensuring Ethical Sourcing: Blockchain provides a record of labor practices and certifications that are secure and can be easily audited. In the coffee industry, it follows beans from the farm to the cup and helps to support better labor practices and social justice. Reducing Environmental Footprint: Providing detailed insights into power consumption and CO2 emissions, blockchain empowers businesses to improve supply chain efficiency, reducing fuel loss, greenhouse gas emissions, and costs simultaneously. Promoting Circular Economy: Thus, blockchain in recycling and reuse helps in tracking the product life cycle. They apply it in electronics where it helps identify reusable components thus encouraging the recycling of used ones. Challenges and Limitations of Blockchain in Supply Chain Management Scalability Issues: The main drawback of employing blockchain in SCM is the scalability issue. Traditional supply chains handle vast amounts of information and transactions daily, posing a challenge for modern blockchains to process the data influx in real-time. Energy Consumption: Moreover, the proof-of-work version of blockchain is notorious for its high energy consumption levels. Mining, the process of verifying transactions on the blockchain network through solving complex mathematical problems, requires significant resources and consumes immense power. This drawback is exacerbated by industries’ ongoing efforts to reduce their environmental impact. Integration with Existing Systems: Additionally, deploying blockchain in
