The Role of Blockchain Technology in the Supply Chain

Blockchain is a transparent and global database management system that provides encrypted transaction tracking and has high security features. Blockchain technology, which is often mentioned with cryptocurrencies because it is in the background of cryptocurrency networks, has actually been in our lives for about 20 years, but it has developed further in the last 10 years, especially after the covid epidemic. Blockchain is based on a record-keeping system in blocks that work by connecting to each other and is a highly reliable and transparent technology. Therefore, Blockchain, a potential game changer in the world of finance, continues to be developed as a promising new generation infrastructure in many areas related to finance. It promises great prospects in the supply chain as well as in other areas.

In Supply Chain processes, data may not always be reliable. However, accessing the right information in the right place at the right time is critical for all actors in the process. Thanks to Blockchain, it is easier to act on disruptive issues by recognizing issues that require intervention. Blockchain technology offers a security that cannot be changed or captured by cyber-attacks. Thus, it becomes possible to increase customer satisfaction and improve service quality with the comfort of acting by taking the security of information at the right place and time. In other words, blockchain technology, which provides visibility, transparency, and reliable information at every stage of the process from the manufacturer to the shelves, means an important information flow infrastructure that offers critical advantages for both organizations and consumers.

Blockchain enables faster and more cost-effective delivery of products. This means huge advantages in the commercial flow involved in the supply chain. Whether B2B or B2C, the increased traceability and transparency of products or services in all business processes can greatly improve supply chain processes by helping to improve coordination between partners and access to financing. Blockchain, with its highly secure data protocols, enables procurement professionals to obtain reliable data. All these benefits contribute to the improvement of the procurement process, as well as the advancement of corporate communication goals of commercial players involved in supply chain processes and serve to develop a proactive approach to the potential for a communication crisis.

Blockchain enables a company, supply chain partners or customer to track the product or service, identify all suppliers related to the product, identify relevant production and shipment groups, and efficiently obtain information in the feedback flow. For perishable products, it allows participating companies to automatically monitor quality. Particularly for temperature-sensitive products such as perishable food or pharmaceuticals, the data of a refrigeration system such as a refrigerated container equipped with an Internet of Things (IoT) device to monitor the temperature, e.g. unsafe fluctuations, can be recorded by the blockchain. Thus, records of storage conditions can be shared instantly and reliably. In crisis-prone phases such as returns, possible customer concerns about the product can be eliminated with the information provided through the blockchain. In addition, since counterfeit products will not have a verification history in the blockchain, there are no concerns that the products are not genuine. In this way, blockchain technology contributes positively to the actors in the supply chain in terms of customer satisfaction and brand loyalty.

Blockchain increases supply chain transparency. Visibility into the flow of products and services, the secure sharing of information on an immutable and common ground, and the indexing of retrospective data into a specific data history ensure transparency in the flow of information. In this way, blockchain technology can help develop sustainable supply chains. Identifying deficiencies or disruptions through blockchain or predicting and eliminating them while they are at the possibility stage, supports the efficiency of efforts in the fields of institutionalization and communication, and contributes to proactive communication. Therefore, it prepares the ground for the sustainability of corporate relations in these areas. Blockchain reduces costs and increases benefits in business processes and technically enables faster flow of processes, enabling the development of commercial flow. In supply chains, the reduction of non-original, low-quality products helps make commercial competition fairer. Thanks to the blockchain infrastructure, organizations can also carry out environmentally friendly business processes, indirectly contributing to low carbon emissions and environmental sustainability as they accelerate supply chain processes.