Four Known Barriers to Adopting Blockchain Technology in Supply Chain Management


Blockchain technology is an excellent way to monitor, record, and verify transactions at all supply chain stages. Ultimately, Blockchain may seem too good to be true. So, in this article, I’d like to share the four hurdles that the supply chain industry needs to overcome to adopt this technology.

Four obstacles for Blockchain in the supply chain

It’s easy to see the enormous potential that Blockchain offers in managing the global supply chain. The technology will help the industry grow and become more secure and transparent. Therefore many good China sourcing companies are using this technology in their process. However, some hurdles need to be overcome before the industry fully embraces Blockchain. Here are four of those hurdles.

Barrier 1- adoption

If not the entire supply chain industry, most companies will need to adopt Blockchain to be effective. It is not enough for one, two, or even three supply chains to adopt the technology. Sure, you can implement Blockchain in your supply chain and fill in the gaps in your current system, but it will be more complicated than if management maintains its current system and doesn’t leverage Blockchain.

There is a “jump” moment with any new technology when the industry takes a risk and steps into the unknown. Most people in the supply chain industry are excited about Blockchain but are hesitant to take that leap.

Barrier 2- Technology

The Blockchain itself is an ambitious solution to hidden ledgers and inappropriate means of transactions. However, the technology needs to be adopted and used effectively across the industry.

Part of that adoption is accelerating the use of Blockchain at every touchpoint in the supply chain. Supply chain systems need to commit upfront to adopt other technologies to ensure that the entire chain can operate using Blockchain. In the industry’s view, this is relatively expensive. Once this project is funded, the issues will converge on scalability.

Barrier 3- The gap

Blockchain is a great technology, but it creates a gap between the digital ledger and real-world transactions. Blockchain could undoubtedly solve many of the recurring problems in the supply chain industry today, but the realities of the industry make it a straightforward solution.

Blockchains can track, record, and verify transactions, but there are still variables that cannot be digitized: people. Accuracy between the ledger and actual events becomes an issue.

Barrier 4 – Cooperation and fraud

The Blockchain creates a secure and transparent ledger of transactions but does not prevent people from colluding outside of the technology. To further address the three barriers above, those who want to raid the system will find a way to do so. In most cases, they will not be able to eliminate them.

One of the industry’s concerns is how to deal with offenses after Blockchain is implemented. Blockchain is bringing about significant changes to the global supply chain landscape, and it is a difficult question to answer how supply chain operators will be protected.

The benefits of Blockchain

There will be a certain amount of problems in any system, be it politics, capitalism, or supply chains. This is a normal part of any system. However, Blockchain is a technology that offers various benefits to the entire global supply chain industry.

Sure, there may be new problems that need to be solved, but many global sourcing companies have the confidence, knowledge and experience to find a solution. The advantages of Blockchain far outweigh the disadvantages.

Your global supply chain management experts

At EDS International, quality and description are our top priorities. Our procurement consulting firm strives to deliver on our promise to help our customers find the best supply chain solutions worldwide. Whether you need a manufacturer or a supplier, we can help you. With the expansion of Blockchain into the supply chain industry, we strive to stay on the cutting edge of innovation while using tried and true strategies to achieve the best results for our customers.

Comments are closed.