BLOCKCHAIN IN

SUPPLY CHAIN
MANAGEMENT
Written by Saad Bin Majed
 INTRODUCTION
"I have composed a concise
book from the book of
Algebra and Balancing,
encompassing the spectrum
of calculations, both grand
and minute, due to the
necessity people have for it
in their inheritances, wills,
divisions, judgments, and
trades. It covers all aspects of
their dealings, including the
measurement of lands, canal digging, engineering, and
various other subjects and arts. I present it with good
intentions, hoping that the people of knowledge will
benefit from it through the blessings and bounties
entrusted to them by the Most Blessed and Exalted Allah,
and through the beautiful trials they have experienced. I
rely on Allah for success in this and other matters, for He
is the Lord of the Mighty Throne."

- Al-Khwarizmi, Introduction to his book "Al-Jabr wa al-

Muqabala" (Algebra and Balancing)

Written by Saad Bin Majed

 DEFINITION

A blockchain is a decentralized and

digital ledger that maintains a record of
transactions in a sequential and
immutable manner. It consists of a series
of blocks, each containing a set of
validated transactions. The blockchain
exists across multiple computers,
referred to as nodes, which hold copies
of the entire ledger. These nodes work
together to reach consensus on the
validity and order of transactions,
ensuring transparency, security, and
resilience in the network.

Written by Saad Bin Majed

 KEY CHARACTERISTICS
OF A BLOCKCHAIN
SYSTEM:
It include the comparison of a book-
based ledger to a blockchain, where each
page represents a block connected
sequentially. This mapping allows for
easy detection of removal or alteration,
as each block has a unique identifier
linking it to the previous block. The
sequential arrangement and block
numbers enable efficient organization
and identification of transactions, aiding
in the detection of suspicious activity.
The tight arrangement of blocks ensures
immutability and tamper resistance,
making it difficult to alter previous
entries without raising suspicion.

Written by Saad Bin Majed

 THE IMPACT OF
BLOCKCHAIN
TECHNOLOGY IN SUPPLY
CHAIN MANAGEMENT
Blockchain operates in supply chain
management as a decentralized
database, requiring consensus among
participants for changes. This ensures
distributed data management and equal
rights. Leveraging blockchain
streamlines processes, improves
efficiency, and enhances transparency
and trust. Its capacity for handling large
data volumes enables easier and more
equitable management of data and rights
in supply chain operations.

Written by Saad Bin Majed

 BLOCKCHAIN-BASED
LOGISTIC INDUSTRY

1. Transparent Transactions: Blockchain

ensures transparency by recording
transactions on distributed blocks,
making information highly available.

2. Enhanced Security: The

interconnected nature of blockchain
provides a high level of security, making
it difficult to compromise the integrity
of the data.

3. Increased Efficiency: Blockchain

streamlines processes, automates tasks,
reduces paperwork, enhances data
accuracy, and improves overall
operational efficiency.

Written by Saad Bin Majed

 BLOCKCHAIN-BASED
LOGISTIC INDUSTRY
4. Improved Traceability: Blockchain
enhances traceability by recording and
verifying each transaction and
movement, creating a reliable and
immutable audit trail.

5. Efficient Inventory Management:

Blockchain enables real-time inventory
tracking and management, offering
accurate and up-to-date information on
stock levels, reducing costs, and
improving supply chain planning.

6. Smart Contracts and Automation:

Blockchain facilitates the use of smart
contracts, enabling automated and self-
executing agreements. This reduces
administrative tasks, improves contract
management, and ensures compliance.

Written by Saad Bin Majed

 BLOCKCHAIN-BASED
VENDOR PAYMENT
It enhances transparency and efficiency
in supply chains, saving time, effort, and
resources.
Blockchain's decentralized and
transparent nature streamlines processes,
facilitates secure transactions, and
eliminates complexities associated with
intermediaries.
The technology provides a
comprehensive and immutable audit
trail, enhancing traceability and ensuring
compliance with regulations.
Blockchain helps combat issues like
counterfeiting and fraud, building trust
among supply chain participants.
The tamper-resistant nature of
blockchain data fosters collaboration and
cooperation.

Written by Saad Bin Majed

 BLOCKCHAIN-BASED
PROCUREMENT

Blockchain technology offers a

transformative solution by providing a
decentralized, transparent, and
immutable ledger. With blockchain in
procurement, organizations can
streamline supplier verification, track
and trace products throughout the
supply chain, automate payment
settlements through smart contracts, and
ensure timely and secure vendor
payments.

Written by Saad Bin Majed

 BLOCKCHAIN-BASED
INVENTORY MANAGEMENT

Blockchain technology improves

inventory management by enabling
real-time visibility and traceability
across the supply chain. Every
transaction, from product creation to
distribution, can be recorded on the
blockchain, ensuring accurate inventory
tracking and reducing the risk of
counterfeit or fraudulent products.

Written by Saad Bin Majed

 BLOCKCHAIN IN SUPPLY
CHAIN MANAGEMENT IN
SUSTAINABILITY
initiatives by enabling tracking and
verification of responsible sourcing,
fair trade practices, and environmental
impact.
It promotes social and environmental
responsibility, supporting the
development of more sustainable
supply chains.

Written by Saad Bin Majed

 ADVANTAGES OF
BLOCKCHAIN IN SCM
Record and Track: Blockchain enables
transparent and traceable recording and
tracking of product shipment data
throughout the supply chain.

Transparency: Utilizing blockchain

enhances supply chain mapping and
processes, reducing information
asymmetry and providing visibility into
the movement of goods.

Counterfeit Prevention: Blockchain

helps combat counterfeit products and
reduce fraud by creating an immutable
record of product origin and
authenticity, making it difficult to
tamper with or forge records.

Written by Saad Bin Majed

 ADVANTAGES OF
BLOCKCHAIN IN SCM

Enhanced collaboration among supply

chain participants.

Increased transparency throughout each

stage of the supply chain.

Improved security and encryption of

data.

Decentralization of data and the ability

to achieve consensus among
participants.

Written by Saad Bin Majed

 DISADVANTAGES OF
BLOCKCHAIN IN SCM

Scalability challenges for large-scale

supply chains.

Limited controls over data access, raising

privacy concerns.

Compliance with country-specific

legislations may be challenging.

Complexity in integrating blockchain

with existing systems.

Energy consumption, particularly in

consensus mechanisms like Proof of
Work (PoW).

Written by Saad Bin Majed

Written by Saad Bin Majed