How to implement blockchain technology in Supply chain?

Blockchain has all the potential to transfigure supply chain. Being the technology behind the bitcoin, blockchain has become the most coveted thing today. Every industry is preparing itself to introduce the latest technology of blockchain.

What is Blockchain?

The blockchain is a disseminated, digital ledger that records every single transaction in a concatenation of blocks. The copies or nodes are shared over multiple computer networks. Every new block of the transaction is fastened to the previous blocks and hence, no tampering can be done. This attributes to the security of blockchain.

With n numbers of benefits to offer, every company belonging to every sector is keen on implementing blockchain technology in supply chain to boost their business.

How to implement blockchain technology in supply chain?

As the benefits of blockchain technology are unfolding in front of the world, various industries are trying hard to implement blockchain technology to nurture their efficiency. The sectors like banking and finance have been extensively using the technology, but not everyone knows how to implement blockchain technology.

The experts have divided the process of implementation of blockchain into four stages. Irrespective of the industry, any company can apply these four stages to garner benefits from blockchain technology.

Here are the step-by-step processes to implement blockchain in supply chain:

Stage 1: Use Case and Technology Plan

The stage 1 involves the study of a use case and obtaining technology plan.

The biggest question that arises in the first step is what products or services involve the use of blockchain technology? Who should use blockchain?

After discovering the use case, the next steps involve looking for a vendor to supply the product. This is very likely to happen with smaller firms that are keen on implementing blockchain in supply chain. Implementing blockchain technology assures competitive edge to the firms.

As far as larger companies are concerned, the process post use case identification involves identification of architecture to counter the use case. It is the time to figure out the exact budget, and deadline. The companies also need to figure out if they want to use an internal resource or take outside help. With blockchain, many companies seek contracts for outer help.

One thing that every company must consider is to get in-house expertise in blockchain irrespective whether they are implementing blockchain internally or using outside help. As blockchain is a new and complex technology, it is important to gain in-house expertise in it.

Stage 2: Proof of Concept (POC)

POC or proof of concept step of blockchain implementation is a “one-to-three month exercise”, as described by the blockchain experts.

A proof of concept, as described by the experts, is quite unmethodological as far as engineering is concerned. It is a concept where you try to recapitulate quickly and fail quickly.

A system is created that is desegregated into an isolated sandbox security environment. Here, you get an idea of how the software works in an imitated environment with original customer data. It doesn’t impact the customers, but surely it impacts the original customer data, original transaction volume. In larger volumes, you get to see if blockchain system is meeting up the demands.


The best venue for the blockchain proof of concept is “cloud”. According to experts, cloud computing helps you to spin data without any stress pertaining to the hardware. You also need not worry about the data being inside your network. The best deal is when many organizations participate in the proof of concept.

Testing can be done with the help of public cloud services as well as with private permitted blockchains. Generally, the companies like to test with permitted blockchains as they don’t like to get involved in public cloud services in the very first instance.

Getting through the second step is not an easy task as there are many obstacles that take the companies away from proof of concept. But, if planned meticulously, one can get through the stage 2 of blockchain implementation.

There are experts who think that a wide-scale POC is a blunder. A large-scale POC leads to failure. There are people down the series that need to be included in the POC process. There is a 3rd-party outsourcing team, risk management team, and a 3rd-party oversight team. The larger the POC, the more is the chance of failure. Thus, it is always sensible to start with small-scale POC that could impact only a small portion of the organization.

Another thing to consider is to use four-to-five page agreement instead of using lengthy contracts with proof of concept.

Stage 3: Field Trial

After the stage involving proof of concept, the next step is to put the real data in production. It involves limited-production run involving the customer-facing data. A small trial involving five percent of customers on the lower-volume product is ideal.

Experts consider field trial, a restart rather than progression to production. The requirements of field trial may be completely different from that of a POC.

Generally, when the businesses get comfortable with the new software and testing processes, they look forward to implementing the blockchain projects on the on-premises hardware within an enterprise and not in the cloud.

Stage 4: Full-scale Production

The final stage involves full-scale production. The fourth and the final stage demands a greater amount of commitment to blockchain application. This is the reason why no organization has yet made to the final stage of blockchain implementation.

But, if worked in a planned manner, with complete dedication, the final stage can be attained to garner the advantages of blockchain implementation in supply chain.


Blockchain can transform the supply chains. Blockchains offer numerous benefits to the organization at both the ends of the spectrum. It offers increased transparency, greater scalability, enhanced security and many other advantages. The decentralized architecture also gives the room for newer innovations.

Now that you know, how to implement blockchain technology in supply chain; every organization or company pertaining to any area must ponder upon implementing blockchain technology to give a new push to the existing business.

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