Analyzing the Impact of Blockchain on Modern Supply Chain Management

This report examines the influence of blockchain technology on supply chain management. It begins by defining blockchain and bitcoin, explaining their historical development and evolution, and highlighting real-world applications, including healthcare and finance. The report details how blockchain enhances transparency, efficiency, and cost reduction within supply chains through digital currency transactions and secure record-keeping. Furthermore, it analyzes the future impact of blockchain, including smart contracts and automation, while acknowledging current challenges such as network limitations. The conclusion emphasizes the transformative potential of blockchain for supply chain management, promoting increased efficiency and security for businesses.

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
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Table of Contents
Introduction......................................................................................................................................3
Concept of Blockchain and Bitcoin.................................................................................................3
History of blockchain and bitcoin and their evolution....................................................................4
Real life application of blockchain..................................................................................................5
Impact of blockchain on supply chain in future..............................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

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Introduction
Blockchain is a leading platform for digital assets. This is a technological system and
used in improving the supply chain management in a business. Blockchain is an emerging
technology that has a great impact on supply chain system. However, blockchain is an elastic
system and it can be fitted in any process (Mettler 2016). Application of blockchain helps the
business to anticipate and control the demand and supply. Blockchain enables the business
organization to keep a record regarding the demand and supply of a supply chain management
system. Bitcoin is the most popular application of blockchain technology. Bitcoin is used for
financial transaction in the supply chain management. This study deals with the impact of
blockchain on supply chain management in future. Therefore, the literature will show the
evolution of bitcoin and blockchain and their role in the supply chain management system.
Concept of Blockchain and Bitcoin
Blockchain is an emerging technology and it is a distributed database, which keeps the
record of digital data. On the other hand, bitcoin is a technological application of blockchain.
This is a currency system and use for financial transaction. (Yli-Huumob et al. 2016). However,
blockchain is a cryptocurrency transaction. Blockchain is a completed block and it is increasing
as per its chronological order. Application of blockchain allows marketers to keep a track of
digital currency transaction and there is no need for central recordkeeping system. On the other
hand, Bitcoin is a virtual currency mechanism, which is derived from blockchain. Bitcoin is an
accounting method. In order to verify the transaction process blockchain and bitcoin are used. By
using the blockchain and bitcoin digital transaction is done by inserting the code and any
document into blockchain. Blockchain is considered as the main technological innovation of

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biotin and the bitcoin validates the transaction process while one party pays to another against
purchasing a good and service. However, bitcoin technology reduces the need for third party that
is involved to process the payment process.
History of blockchain and bitcoin and their evolution
Blockchain is discovered by Satoshi Nakamoto in 2008. Bitcoin is derived from
blockchain and bitcoin is also known as electronic cash (Wright and De Filippi 2015).
Blockchain technology operates bitcoin process and it is considered as the biggest ground of
banking transaction. Blockchain records digital information and nobody can remove it. This
maintains the transparency of the banking transaction. Many people think that bitcoin and
blockchain is the same system, however, today bitcoin is separated from blockchain. In the
recent years, people invest more in the alternation process of blockchain as they realized that
blockchain can be used for more operation than cryptocurrency. Blockchain reduces the presence
of third party in the transaction process as a result, transaction cost is reduced.
At first, the blockchain and bitcoin are used only for transaction process. However, in the
recent years, bitcoin is used in transaction while blockchain is used in various commercial uses.
Blockchain has created an open-source platform that acts as the hub for software development.
Due to the disruptive innovation internet blockchain is developed. At present blockchain
includes better chance to obtain rigorous protocol and standardization through using the open
source collaboration. This develops the blockchain and makes it easier and accessible. In the
recent years, first generation of blockchain technology is applying in banking sectors to carry out
the transaction process (Zhang and Wen 2017). Therefore, due to the evolution, the blockchain

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technology is transformed from complex to simple system. Such evolution of blockchain
technology leaves a significant impact on transaction process.
Real life application of blockchain
Blockchain not only involved in digital transaction but also involved record keeping. This
digital technology keeps a record regarding any operation in healthcare sectors (Mettler 2016).
The real-life application of blockchain includes healthcare operation, finance management,
security management and decentralization of web. However, in healthcare industry blockchain is
used to keep universal record along with a timestamp. Blockchain helps to retrieve the data from
diverse databases. In finance management, the blockchain cuts the cost that is required financial
institution. Therefore, transparency in financial management can be maintained by using
blockchain technology as this is an effective record keeping process. In order to maintain
security of any digital information blockchain is used. By using this technology an organization
can keep a track of the shared information.
As for example, Microsoft and Intel use blockchain technology to keep security of the
digital assets. Such organizations use ethereum blockchain system to maintain confidentiality of
their digital information. Therefore, Microsoft uses blockchain technology to manage their
supply chain. By using such blockchain technology they keep a track of their assets and
blockchain enables this organization to find a way to reduce waste and fraud from their supply
chain management. Blockchain is brought by Microsoft to work with their customers and
partners to improve the readiness of the organization (Azure.microsoft.com 2018). On the other
hand, Bontech is a popular healthcare in Sydney that uses ethereum blockchain to create a
decentralized infrastructure for data wallets. This organization distributes their data storage and

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they get assurance about the integrity of data distribution by using blockchain technology.
Therefore, the users are able to manage the digital currency by using blockchain as it enables the
user to contribute data against cash or company’s digital currency, which is offered by business
partners (Beckershospitalreview.com 2018).
Impact of blockchain on supply chain in future
Blockchain helps to keep transparency, efficiency and cost reduction in supply chain
management process. However, this is done by using a centralized system from which the data
cannot be changed. In near future, the blockchain technology will be improved and this problem
will be solved as blockchain highlights automation and quality of trust (Tian 2016). Blockchain
provides smart contracts and online platform, which enable an organization to generate self-
executing contract in form of software. In near future, such automation technology will enhance
the fluidity, which will reduce the cost of supply chain management.
Blockchain technology is associated with bitcoin as well as the cryptocurrency. As a
result, by using this currency an organization will be able to do their transaction smoothly. In
order to improve the supply chain process, every aspect of supply chain should be connected in a
structured way. This can be done by DLT, which is powered by blockchain. However,
blockchain networks contain many nodes. Therefore, many networks are new and there is lack of
nodes. These nodes include the high cost in managing supply chain and the transaction process
becomes slower. This is a major drawback of blockchain in supply chain management (Lemieux
2016). Despite this loophole, blockchain is crucial to improve the supply chain in near future by
keeping the track of each data along with maintaining security.

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Conclusion
From the above study, it has been received that blockchain is an emerging and new
technology that involves in conducting the transaction process and record keeping. In order to
maintain the security of digital data blockchain is used. However, bitcoin is a part of blockchain
technology, which involves in transaction process. In healthcare sectors, blockchain has been
using rapidly. It has been found that Microsoft uses blockchain to keep the continuity in supply
chain management. Therefore, Bontech healthcare sector uses blockchain to keep a track of all
records. Apart from these blockchain has a great impact on supply chain management as it will
enhance the supply chain management by enhancing the transparency and frequency in the
system.

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References
Azure.microsoft.com. 2018. Blockchain on Azure. [online] Available at:
https://azure.microsoft.com/en-in/solutions/blockchain/ [Accessed 22 Mar. 2018].
Beckershospitalreview.com. 2018. 25+ blockchain companies in healthcare to know | 2017.
[online] Available at: https://www.beckershospitalreview.com/lists/25-blockchain-companies-in-
healthcare-to-know-2017.html [Accessed 22 Mar. 2018].
Lemieux, V.L., 2016. Trusting records: is Blockchain technology the answer?. Records
Management Journal, 26(2), pp.110-139.
Mettler, M., 2016, September. Blockchain technology in healthcare: The revolution starts here.
In e-Health Networking, Applications and Services (Healthcom), 2016 IEEE 18th International
Conference on (pp. 1-3). IEEE.
Tian, F., 2016, June. An agri-food supply chain traceability system for China based on RFID &
blockchain technology. In Service Systems and Service Management (ICSSSM), 2016 13th
International Conference on (pp. 1-6). IEEE.
Wright, A. and De Filippi, P., 2015. Decentralized blockchain technology and the rise of lex
cryptographia.
Yli-Huumo, J., Ko, D., Choi, S., Park, S. and Smolander, K., 2016. Where is current research on
blockchain technology?—a systematic review. PloS one, 11(10), p.e0163477.
Zhang, Y. and Wen, J., 2017. The IoT electric business model: Using blockchain technology for
the internet of things. Peer-to-Peer Networking and Applications, 10(4), pp.983-994.

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