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The Supply Chain with Blockchain Benefits You Must Know

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The Supply Chain with Blockchain Benefits You Must Know

The world's leading companies rely on computerized enterprise resource planning (ERP) and supply chain management software. Products are tracked all the way to trash bins. Yet these companies have limited insight as to where their products actually are. This is a world without widespread blockchain benefits.

It's the world we live in. We saw it in action in 2015 when an E. coli outbreak at Chipotle Mexican Grill outlets left 55 customers ill. The resulting PR disaster smashed Chipotle's stock price to a three-year low which it has yet to recover from.

Blockchain technology promises a radical solution.

Keep reading to find out how blockchain works, what a supply chain with blockchain benefits looks like and why you should be implementing it.

What Is Blockchain?

Well, for starters, it's a lot like Wikipedia. Or a bit like Google Docs.

To make things simple, it's a ledger. A digital, decentralized ledger of cryptocurrency transactions. This is where blockchain benefits for companies come in.

How Does It Work?


Picture an old school ledger. The kind where you note down transactions with a pen.

Now, picture a digital version of that ledger. You're probably picturing something like Excel. You've got the right general idea, but we just said that blockchain works like Wikipedia or Google Docs.

This is where things start to get interesting.

If you're picturing Excel, picture Google Sheets instead. A platform with the same basic functionality of our Excel Ledger, right? Except that multiple people can view and add to it at any given time.

Now you're heading in the right direction.


With a blockchain, several users can write entries. This same community web of users can also control how the information within that collective ledger is changed and updated. Like Wikipedia or Google Sheets, the full collection of information that makes the ledger isn't the product of a single person.

No one person controls all the information either.

It's a similar idea as Wikipedia. But how blockchain works on a ground level is different.

Wikipedia works by allowing a user with a registered account to change information. But control of the overall database remains with Wikipedia. Anytime a user goes to this site, they see the amalgamation of updates, the 'master copy' of a page.

That's not quite how blockchain works. That's why blockchain benefits are such a big deal.


Unlike Wikipedia, blockchain works on a distributed database. Basically, it eliminates the need for a trusted party to oversee the flow of information.

Here's what happens.

The most recent transactions in a blockchain are the blocks. Once the block is completed, it becomes part of the blockchain. But unlike Wikipedia, where the input of several users editing one page is compiled to one master copy, every block is updated independently of all the others.

In other words, each block in the chain is its own unique master copy.

Once added to the blockchain, each block becomes part of the permanent database. These blocks are organized chronologically from the first block in the whole chain to the most recent.

One other thing about blocks. The system is designed such that each individual block, once added to the chain, cannot be changed, copied or deleted. They can, however, be shared.

And that's the heart of blockchain benefits.

What Are Blockchain Benefits?

In four words: visibility and information control. Plus a few others.


Chipotle and other companies with a complex supply chain have a major problem. They can't see where their products are all the time. Even though these goods are constantly being tracked.

The problem is an analog gap.

Think of it this way. Once a product is shipped, all you have is the shipping label. In theory, this is useful. In practice, the shipping label is just a copy of a printout. And the shipping number will only tell you where the box is and who signed for it.

Basically, companies have tracking information. The problem is that little of this information is actually useful. Blockchain benefits companies by allowing them to see the information they're missing along the way.

Information Control

Blockchain benefits also allow companies to see all the information they need. And they can share it without bringing in a trustworthy third party to supervise the information swap.

Think of it this way. Before blockchains and bitcoin came on the scene, the only way for two companies to agree on a data set was to bring in a middleman to account for all the numbers.

The problem is this involves a whole lot of power plays and negotiations before information can ever change hands. Power plays that significantly slow the entire process.

Blockchain benefits all involved parties because it removes the need for a central middleman. How? By synchronizing all data across a shared network. Every involved participant verifies the calculations of others. It's this level of impressive redundancy that keeps the whole system secure.

Blockchain grants access to the whole picture. The useful parts of the picture, for all involved parties, at every step along the way.

Secondary Benefits

Blockchain benefits aren't limited to just visibility and information control. Here are a few more key supply chain benefits to keep in mind:

  • Reduced administrative costs
  • Improved corporate reputation through transparency (remember Chipotle's PR disaster?)
  • Improving public trust of shared data
  • Reduce public relations risks due to faulty practices in the supply chain

When it comes down to it, blockchain benefits are more than just what you can see. When you digitize a company's physical assets to create an immutable record of all transactions, one that all involved parties can see, it helps reduce fraud along each step of the supply chain.

This is important for high-value goods. But it's also important for food companies who attain their ingredients from a whole ecosystem of suppliers.

Remember Chipotle's E. coli outbreak? With blockchain, they would be able to see how ingredients pass between subcontractors. Then they could see where mistakes were made.

Having this information broadly available within the company also helps them avoid their earlier snafu. This is a public health risk caused by a lack of awareness regarding where their ingredients were between the supplier and the end customer.

Because information is available and visible, blockchain also grants companies greater control when they outsource manufacturing. Everyone has access to the same information, which makes transfer errors and communication issues easier to spot.

In other words, instead of worrying about checking and rechecking incomplete data, they can focus on delivering to their customers.

Implementing Blockchain

Verifying data in a world of digital data is a hair-raising prospect. Especially because it's easy to convince yourself that all that data can be revised, deleted or incorrectly entered without anyone noticing.

Blockchain offers a way to solve these concerns. The thing to keep in mind about blockchains, though, is that it is ultimately a foundational technology.

The benefits that blockchains potentially bring could rewrite the foundations of our economic and social institutions. It changes how we relate to data. But changes on that scale take time.

The first application of blockchain technology was bitcoin. This system of digital currency sidesteps a central authority that would typically be responsible for issuing currency, initiating transactions, and shifting ownership.

Using blockchain technology in bitcoin, for example in stock transactions, could shrink down the entire process. And the cost of the process. Basically, it allows both parties' ledgers to update simultaneously.

How to Use Blockchain in Your Supply Chain

You might be asking: if it will take years for the entire system to adapt and use blockchain, why should I be using it now?

Simple. If your supply chain demands are not being met by today's databases, then you need blockchain to stay ahead.

You might view the supply chains of today as static. The supply chains of tomorrow won't be.

And the problems can still be solved for companies that rely on multiple suppliers. We keep referencing Chipotle, but they're not the only one. Walmart and IBM partnered to track the movement of pork in China using a blockchain.

Technology and Human Intelligence at SCOPE

We know supply chains and operations. That's why we founded SCOPE Recruiting - to bring together some of the best people in the industry to the benefit of our clients.

How? Like a blockchain, we build with our partners one step at a time. We start with a thorough intake of your shareholders so they understand everything they need to know. Then we construct a custom job search strategy based on what's most important to you, evaluating candidates against your criteria.

We do this by combining human emotional intelligence with the best new technology. This includes our fully integrated candidate database and industry network, paired with our experienced recruiters to evaluate each candidate.

Why? Filling supply chain jobs is vital to your bottom line. Using a high-quality recruiter like SCOPE can help you get there faster and get back to business.

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