In the age of technological advancements and global trade liberalization even the most sophisticated supply chains face various issues associated with integrity of goods, trust, tracking, and information security (Wang). Despite many improvements and revolutionary breakthroughs that made supply chain more efficient and resilient, the real-time information was not always readily available due to the lag between participants (Wang).
It wasnt until the introduction of blockchain technology that companies finally found a way to increase the speed of data transfer, make it more accurate and secure. While blockchain significantly improves and simplifies supply chain management, the technology itself is quite complex and sophisticated. Blockchain consists of many information blocks and is a distributed public ledger containing all the transactions ever executed (Wang).
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Every new block is added in a chronological order and is linked to the previous one with a unique hash value computed by a mathematical relationship called the trapdoor function (Wang). The data stored in Internet nodes is permanent and visible to all the users of the network. Nodes, in contrast, are anonymous and only linked to a couple of other nodes (Wang). Each node automatically downloads an entire version of the blockchain after joining the network, therefore, the copies of the existing authentic ledger are distributed among all participants in a supply chain (Wang). Since each operation is signed digitally to guarantee its authenticity, the ledger itself and its existing transactions are highly reliable (Wang).
Moreover, any new data must be verified by the digital signature algorithm to ensure its integrity and matched against the set of transactions before it could be permanently added to the chain (Wang). There is a strong belief that blockchain technology could revolutionize the management of the supply chain. Numerous specialists claim that blockchain could become a leading global supply-chain operating system due to its advantages and extensive range of applications: shorter transaction process with greater security, integrity, and validity, greater transparency, innovation, and real-time transaction processing (Wang).
In particular, the blockchain provides a unique opportunity for companies to record where the product originated as well as track its movement throughout the supply chain up until the final delivery to the customer. Scalability is another advantage of the blockchain technology. It enables storage of the information on the Internet nodes rather than on a central server (Wang). This forms a large database that can be accessed by any number of people at any time (Wang). For instance, it could be applicable in health care where digital patient records could be accessed by authorized people including doctors and insurance company agents.
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