**Abstract**

Supply chain management has existed for thousands of years. Technology started evolving with the industrial revolution and yet, paper-based bills of lading are still widely used in the international trade today. This chapter explores what problems exist in today's supply chains, and whether blockchain technology can help solve them. The problems are categorized into three categories: The origin of the raw material or the product is not obvious; trust issues can exist between seller and buyer; and the supply chain execution is inefficient. A brief explanation of blockchain technology follows as the second part, with a focus on the technology that is useful for this purpose of this article. The two parts come together in the third part, showing how blockchain technology can solve the problems. Finally, a critical view is taken to show the limitations of blockchain technology as a problem solver.

**Keywords:** blockchain technology, supply chains, supply chain management, use cases

## **1. Introduction**

Supply chain management manages the flow of material, money, and information from the origin of the raw materials to the final consumer. Supply chains have existed for thousands of years, which includes procurement, transportation, inventory and warehouse management, customs clearance, and distribution. A supply chain involves many entities, including companies and governments, and several departments in each of these entities. However, 62% of the surveyed companies responded that they have only limited visibility of their supply chains [1].

In the latter part of the twentieth century, companies and governments started to digitize the management of the supply chain (also see [2]), first in technological silos in which each department had their own hardware and software, such as an inventory management system (IMS) or an accounting system, for example. With increasing acceptance of computers in businesses, an increasing amount of software entered the market. Examples are distribution and fleet management systems, automatic ordering systems, automatic storage and retrieval systems (AS/ARs) and transport management system (TMS) to name but a few. All these systems were finally integrated into an enterprise resource planning (ERP) system. However, not all ERP systems could integrate all the different software systems, and—most importantly—often not across companies within the same supply chain.

Vertical and horizontal integration requires the exchange of fast and accurate information between the various members of the supply chain. These members include first-tier and second-tier suppliers, wholesalers and retailers, as well as service providers [3]. Even without fully integrating the supply chains, information exchange is crucial to an efficient operation. The traditional method for an exporter was to type their invoice and packing list, send it to their forwarder, and have the forwarder retype it as a shipping instruction to the shipping line who in turn retyped the data into the bill of lading (B/L); and at destination, a customs broker retyped all the data into the customs clearance system. This is not only inefficient but can cause problems, starting from typing mistakes to the opportunity for fraud.

Blockchain technology is a technology that has many use cases. It became known for cryptocurrency, as the first cryptocurrency, Bitcoin, was also the first use case for blockchain technology [4]. This chapter will show how blockchain technology is much more versatile and can be used in supply chains in order to manage complex supply chains efficiently and accurately.

This chapter is structured as follows: Section 1: Introduction. Section 2: Problems intrinsic to traditional supply chains. Section 3: Brief introduction to blockchain technology. Section 4: How blockchain technology can help solve the problems. Section 5: Possible problems with blockchains. Section 6: Conclusion.
