1. Introduction

Supply chain management has been a pivotal concern in the corporate strategies of most firms with the fast-paced globalization. However, traditional supply relationships are very often oversaturated with a dozen players, information-invisible. In general: they often present various problems like inefficiency, data silos— fraud risks very high scar & Veronica M effectively impede operational efficiency also jeopardize product quality and customer satisfaction, let alone corporate image. Thus, enhancement of transparency, efficiency and security within the supply chain system has become vital to organizations.Indeed, supply chain management has quite recently emerged as the most fertile field for the practical application and adoption of blockchain technology [1, 2, 3]. The very features at the core of the blockchain system (decentralization plus immutability and traceability) make it applicable in solving the problems attacking the supply chains and those that are critical. For instance, through the blockchain technology, information on each business deal or transaction relating to any item in transit is recorded perpetually in public registers in real time. This could promote information verification among parties involved, boost transparency, and eliminate trust issues or information asymmetry problems [4]. Embedding smart contracts into these blockchain systems would facilitate the automatic execution of contractual obligations and fund transfers instead of manual processes; hence operational efficiency is achieved to save on costs by reducing intermediaries' intervention [5].

There is scant detailed literature on the application of blockchain technology to supply chain management. The present paper attempts to fill this gap through a detailed review of the literature, analysis of real-world case studies, and key challenges and limitations in applications of blockchain technology in supply chain management. Development directions were also put forward taking into consideration integration of blockchains with other emerging technologies and potential for wide implementation from one sector to another. In this way, it is hoped that the review would contribute to the ongoing conversations on applying blockchain (or other similar technologies) to improve globalized supply chain management.

2. Overview of blockchain technology

2.1. Fundamentals of blockchain technology

It is made up of linked blocks, each containing the cryptographic hash of the previous block, a timestamp, and transaction data [3]. This design guarantees that security, transparency, and immutability run throughout the entire network [3] Every transaction is confirmed through the consensus mechanism; so it becomes difficult to change previous records which in turn builds up trust within distributed systems [3]. The Blockchain structure is not just simple storage of data but shared trust amongst multiple parties to guarantee transparency plus security with high-end tampering risks (Figure 1) [1]. A blockchain is a revolutionary decentralized digital ledger system for recording transactions across a vast network of computers. It is normally compared with a centralized database on one server. The database is securely protected using linked chambers and several security deadbolts, but this level of security cannot be compared with a blockchain of similar nature. This database differs in one way from normal databases that would copy any activity that happened to it. The trick with the blockchain is that it verifies itself. Further on, when someone makes any record on the network, it takes the previous record and some other important information to solve a complex mathematical problem. Finally, it is very secure because the person altering has to change all the copies at the same time. This is done using a voting mechanism by all persons using the network [1,2]

Figure 1. Blockchain structure [1]

Decentralized— that is one of its fundamentals. Instead of working with a single central authority, the blockchain works on a distributed network: each participant (referred to as a node) has a complete copy of the ledger. The implications of this decentralization: the chances of single points of failure are minimized; security is enhanced, too. Thus, Blockchain is more resistant to attacks and system failures because of this strenghtend security model where it thrives.

Moreover distributed, how the various parties reach consensus on what transactions are valid and how they may be added and – and most important – how it stays resilient; with doing proof of work, that is solving complicated puzzles using computational power and proof of stake which states that participants need to confirm transactions depending on the number of coins one has in his possession, are just a few of the more common methods for achieving consensus. There is an alternative method for reaching agreement provided by Byzantine Fault Tolerance in the event there are some faulty or malicious nodes. All nodes in the system must first run a view so that new transactions become applicable on views about the current state of the ledger before the integrity. It's trustworthy and its integrity are preserved.

Another important feature of blockchain is immutability. This is the concept that the information added to the blockchain cannot be changed. At least, not without changing all later blocks — making it infeasible without computational resources beyond feasibility without consensus from the network. Trust is reposed with this kind of immutability for information. And proper data reliability is maintained— very much needed in system(s) with a high need for security and high level(s) of accuracy like supply chain management. And then comes the basic of smart contracts. Smart contracts are basically lines of code agreement between a buyer and a seller. It automatically self-executes and enforces the terms by itself or automatically acting upon having them agreed upon at a prior time or specific condition be met (without need for human action when related to conditions) in which case the processes would be streamlined, intermediaries would no longer be required and efficiency would be increased. Smart contracts are usually considered one of the first positive aspects of blockchain since they provide a way to do away with human error or operational delays and, at the same time, ensure transparency and accountability.

2.2. Features and benefits of blockchain for supply chain

Transparency and immutability are the major features that turn the same technology of the blockchain into very feasible goals for the enhanced productivity of supply chains [6]. In real-time monitoring the products and parts, fraud or error in the supply chain can be limited, and the products will be authentic [6]. This can be fully automated via smart contracts, ensuring each stage of the supply chain moves concurrently and promptly work in building trust between suppliers, manufacturers, and consumers — especially in international trade environments. With blockchain technology, an unchangeable record of transactions helps to identify any discrepancies or issues much faster. It provides a secure and transparent way of verifying where came goods from, how they move, and under what conditions— making industries that need a considerable amount of traceability and accountability incredibly beneficial [7].

Other important features of blockchain technology which make it greatly advantageous for employment in supply chain management include transparency plus traceability. This high level of traceability enables transparent records to be kept since evidence on any tempering of information is traceable in a supply chain. Further, such transparent records drastically reduce fraud risks since traceability at such levels provides companies (and their customers) with certified information about the place, time, and conditions of production for a given product. Pursuant to this, companies can trace product information back to the very origin up to the final consumer. This in turn helps them have better visibility over their supply chain and timely notice of any irregularities or problems [8].

Security is another key advantage of blockchain technology in supply chain management. Decentralization by nature of the blockchain, coupled with the advanced cryptographic techniques, ensures that all sensitive security-related data is recorded and transmitted securely across the network. This further enhances protection for crucial supply chain information: specifics of a transaction, who the suppliers are, and where do the products come from. With the assurance of securing data right from every stage of the supply chain with no entry for unauthorized tampering— which has been a headache for traditional supply chain systems and the reason behind frequent data leakages— is minimized.

Another big shot in enhancing efficiency is the application of blockchain technology. When used in the supply chain, blockchain can automatically execute different processes using smart contracts right from the execution of orders to transfering of payments. Processes automatically executed avoid intermediaries' interventions, eliminating delays due to human intervention and reducing human errors' frequency. As a result, firms are able to achieve more orderly operations in resource management, as well as swifter transaction processing, towards a more efficient supply chain management.Cost reduction potential is another very attractive advantage of blockchain. Eliminating intermediaries and automating several processes via smart contracts enable a drastic cut in operational costs typical in traditional supply chain management. Firms are self-sufficient in verifying transactions or contract enforcement, which reduces related administrative costs and speeds up the time of the transaction. Such a technology that is used in reducing costs and improving resource distribution would be convenient for optimizing supply chain and raising profitability for companies interested in that.

3. Blockchain using case in supply chain

The fast-paced development of the e-commerce sector has, therefore, seen blockchain technology take the stage in pursuit of enhanced transparency in eradicating fake products— more in particular to cross-border online trade. Traditional supply chain data is very high risk— particularly for international transactions, where data delays and data inconsistency result in the enticement of counterfeit products. The mentioned challenges are effectively catered for by a decentralized ledger that is implemented by the blockchain technology to enable all movements of a product to be permanently recorded across different sectors. Also, Alibaba has implemented blockchain technology quickly in tracing the sources and confirming authenticity for products sold on its platform. This is done by giving every item what can be described as the digital equivalent of a passport. What happens is that these files are encrypted and added to the blockchain, it can be subsequently accessed by scanning the QR code; this makes it tamper-proof and easily accessible. This, in its turn, enhances consumer trust via product genuineness and allows brands to reduce risks from counterfeit products [9].

Another way in which blockchain technology brings about transparency is through keeping immutable records of transactions. This is of immense importance in areas such as luxury items and pharmaceuticals, where the issue of authenticity is everything. Companies such as Provenance and IBM Food Trust use blockchain in tracing back the source of high-value products to make them genuine, thereby reducing the levels of counterfeit products. For instance, Provenance traces back luxury goods from production to purchase: this allows the purchaser to check the product’s history at each link in the supply chain [9,10].

Blockchain helps standardize data shared across cross-border e-commerce platforms, facilitating a more uniform and credible flow of information. This improves the feasibility of cross-border transactions by reducing the amount of counterfeit goods. For platforms that have undertaken to facilitate cross-border commerce with the intentions of having a large clientele reach, their efforts could be hampered by the enormous resources required for setting up compatible systems of exchanging data in place [10].

It revolutionizes goods tracking, fraud prevention, and payment processes in logistics and transport. Among the key forerunners involved in applying blockchain solutions to bring transparency and real-time tracking within supply chains are big companies like DHL and Maersk. One of the major headaches in logistics-related operations is the real-time unavailability of tracking information for the movement of goods. Data at hand when stakeholders inquire is usually not location data for most legacy logistics systems. Enter blockchain, the technology that stores shipping data on a decentralized ledger. Information is shared with all authorized parties, i.e., consignors, consignees, and carriers. And decentralized: so the data is immutable and trusted.

Consider DHL — it developed together with Accenture a blockchain-based product serialisation prototype that allows tracking pharmaceutical products from one stage of the supply chain to another. It assures that these products are genuine and greatly reduces the risk of counterfeit medicines finding their way to the market. By embedding a record of each transaction and product movement in its waybill, DHL enables complete instant tracking of all activities on demand across channels as never before visible.

There's also Maersk's TradeLens platform (developed with IBM) — core to this is a blockchain-based solution for global logistics. A) TradeLens allows information to flow from one end to the other of an application completely openly B) enabled all actors on the logistics line to have access in real-time to data about any shipment. In doing so, it marks a very great improvement in what decisions are arrived at and resources thus allocated — since the concerned parties can take action more effectively regarding delays or disruptions, among other logistical problems — on the base of this capacity.

DHL's blockchain invoicing system automatically generates and validates invoices. No human error and the process is quickened Payments are error in this processing speed up. It ensures that all ‘these’ information on payments is available to all parties Involved It may be the particular which minimizes the chance of disagreements and fraud [9].

4. Challenges and limitations

Though, for blockchain technology, actually, there exist a large number ofs in supply chain management, a number of the most vital challenges need to be tackled to help facilitate implementation and eventually embrace wider deployment. One most critical of the challenges impeding the innovative blockchain technology is related to its scalability [11]. The higher the volume of transactions, the slower and more resource-intensive a blockchain system—particularly in large-scale global supply chains. This results from a requirement to achieve consensus of agreement on transactions newly added across multiple nodes on the network, hence leading to delays in their processing. For instance, in fields related to logistics processing millions of daily shipments on any blockchain with limited scalability, the speed of the operations will greatly slow down [12]. According to Rejeb et al., this bottleneck effect constitutes a major impediment to the generalization of blockchain use in several industries—logistics and transportation sectors included—despite real-time tracking capabilities offered by the platforms like TradeLens. It remains quite a challenge to scale these systems on millions of transactions that are underway worldwide on any given day [12].

Other than that, a major hurdle is the very costly implementation associated with initiating a system based on blockchain. This includes, at the outset, very high investments related to the integration of blockchain with existing supply chain management systems that are in place, infrastructures meant to be imputed, and workforce training for effective and efficient use of the technology. This comes in addition to maintenance, technical support, and system upgrades that are regular impending toward cost components [13]. The other is that big companies can bear the costs of blockchain adoption because DHL and Maersk are two major logistics examples given their financial capabilities. More specifically, in most cases, costs are very high for small- and medium-sized companies to adopt blockchain technology. Therefore, most small- and medium-sized firms find it very difficult to bear the burden of this investment only because of one of the major barriers that come out of the scope of limited mainstream industrial solutions in supply chain management — financial aspect. It emerged as one of the major barriers because small- and medium-sized enterprises find it very difficult to bear the burden of this investment just due to its mainstream scope in different industries as one of the mainstream solutions in supply chain management based on one of the major barriers — its financial aspect.

Besides, the technology of blockchains themselves faces some legal and regulatory issues, particularly when it is decentralized and in a cross-border environment. Blockchain is worldwide, so it has to conform to many different legal systems and regulatory requirements that greatly vary from one country to another [14]. For instance, if DHL were to implement blockchain across pharmaceutical supply chains, it would relate to logistics regulations, and also healthcare compliance laws that are different across regions. Time-intensive and challenging alignment must comply with numerous (often conflicting) laws, subjecting an additional barrier to the firms willing to implement blockchain on an international scale. As Rejeb et al. put it, this requires weaving adjustments that may, in turn, lead to delays or integration difficulties with legacy systems [12].

In the supply chain, data privacy remains one of the most challenging issues to address. While blockchain transparency is a strength, it might at times conflict with the need for ultra protections of very sensitive information. For industries like luxury goods, the pharmaceutical industry, high-value electronics and many more, protecting customer data as well proprietary supplier information is very sensitive. It is the priority by keeping it absolutely confidential. The way blockchain establishes transparency makes known all details of the transactions to all network participants. It may be revealing in detail things which are later sources of breaches on privacy-related issues. Rejeb et al. stated that the transparency need in reconciling supply chain operations with stringent data privacy requirements is one of the most challenging aspects for companies willing to implement blockchain.

5. Solutions

Supply chain management, through blockchain technology is terribly promising it is still very daunteda number of innovative solutions at the moment are coming up to address these problems. Major attention is drawn to the scalability of blockchain networkshence some raised or the large numbers of global supply chain transactionstaking place. Sharding and Layer 2 protocols are, for instance, examples of such solutions. Where in sharding this enactment, the blockchain network is disintegrated into smaller piecesmaking each shard responsible for processing only a fraction of the overall transactionsthereby reducing the burden on it entirely and considerably increasing through put:) what makes it more scalable generally therefore adequate for high-volume environments like logistics. Additionally, the Lightning Network belongs to a number of Layer 2 solutions that help force small transactions off- chain while maintaining their record on-chain accounted for on the main blockchain: until they are closed. This, however, shifts the burden of scalability from the primary network itself, and, as a result, the described innovations can ensure that blockchains are able to scale their performance to run large-scale supply chains while also preserving their efficiency.

Sharding and Layer 2 solutions do not only set new challenges, such as an increase in complexity of maintaining consensus or potential vulnerabilities in off-chain transactions but are also very strong promises in providing ways to handle the scalability problem. Further research is mainly advised to focus on improving this trade-off between scalability and security to enable off-chain transactions to be safe yet also reliable. More advanced consensus mechanisms and the direction of efforts for reducing energy consumption for PoW could also do much to make blockchain solutions more sustainable in the long term. The other major challenge is high costs associated with blockchain implementation. The development of a system based on blockchain often means large investments of capital at the initial stage: acquiring infrastructure, integrating it with the existing systems of the supply chain and training employees. However, with the introduction of Blockchain as a Service (BaaS) platforms by cloud providers such as IBM, Microsoft Azure and Amazon Web Services, companies have been able to be cost-effective in their approach to adopting this technology. With these services, companies can take pre-built infrastructures for their blockchain without a heavy investment in building them from the ground up, implying large capital expenses. Besides that, open-source blockchain solutions like Hyperledger or Ethereum enable firms to tailor make their solutions in reducing development costs while using these kind of platforms especially small medium-sized enterprises (SMEs).

Legal and regulatory compliance: this too stands out to be a challenge following implementation of blockchain technology in cross-border supply chains. Since standard blockchain networks pile up across many countries, each with its own legal system and regulations to boot. Trying to comply with a fragmented legal environment can pose a difficulty in compliance activity. Yet firms have to, in order to navigate these challenges need engage in what is early collaboration with local regulators so that their applications of blockchain comply with the specific laws and rules on location where they operate. Participation by such firms in international standard-setting initiatives can help shape the global regulatory landscape for blockchain, reducing legal uncertainty which obstructs smooth cross-border operations as a result. Data privacy is, however, a big deal since it is just tech that supports openness and immutability. In verticals like pharmaceutics or high-level products where enterprises are using highly critical data, data-at-rest encryption needs to be implemented. That location must strike this balance between transparency and privacy. One of those very practical solutions that implements Zero-Knowledge Proofs (ZKPs) — it’s a cryptographic technique in which one party can prove to the other that they know some information, and, collectively with ZKPs with anonymized portions on top of that, the supply chain members will be able to authenticate transactions without giving away details which he would need to firsthand know and in this way disregarding customer’s privacy but still keeping the required level of transparency for both others who deserve something: Another way could be going for permissioned blockchains, where only verified participants would get access to some very sensible details while the rest of it would be open enough in just a way closes off from where it does matter.

In conclusion, the issues of scalability, cost, regulatory compliance, and data privacy may plague blockchain, but several innovative solutions can help mitigate these challenges. Some pragmatic approaches that ensure the pathway toward hurdles such as Sharding, Layer 2 protocols, BaaS platforms and Zero-Knowledge Proofs would make blockchain all the more viable for deployment in supply chain management. The challenges related to each such aspect having been successfully dealt with, companies will be in a position to unlock the full benefits of blockchain technology. This results in a way that is marked by more transparency, efficiency and security in the global supply chains.

6. Conclusion

This paper explores the current state, challenges, and future of blockchain technology in supply chain management. Its decentralized, immutable, and traceable nature offers significant support for improving supply chain transparency, efficiency, and security.

Scalability is a concern due to the potential for blockchain networks to slow down with high transaction volumes. Yet, innovations like sharding and Layer 2 protocols are enhancing processing capacity. These solutions increase throughput by distributing transaction processing loads, which benefits high-volume logistics environments. Implementation costs are high, involving infrastructure, integration, and training. The emergence of BaaS platforms, however, allows for more cost-effective adoption by providing ready-made blockchain infrastructure, thus reducing initial capital outlays. Data privacy and regulatory compliance also pose challenges in cross-border supply chains due to varying legal landscapes. Early engagement with regulators and participation in global standard-setting is essential to navigate these complexities.

Despite these hurdles, the future of blockchain in supply chain management is promising. As the technology evolves and innovative solutions are developed, blockchain is poised to play a more critical role, enhancing supply chain management through increased transparency, efficiency, and security.