Blockchain in the Supply Chain: What Remains After the Hype

Why the blockchain question keeps coming back

A customer from the automotive industry asks whether the business can provide proof of origin for raw materials. A software vendor offers a blockchain-based solution that is supposed to map supply chains seamlessly and tamper-proof. And the press is talking about the EU's digital product passport. Many owners wonder: do I need to deal with blockchain, or is the topic over?

The central question, then: What does blockchain actually deliver in supply chains, and when is it the right choice for a small or medium-sized business? To answer it, we first clarify what a blockchain is and is not, then look at documented projects and studies, and present a decision model. Then we weigh two perspectives and apply the result to your own business.

What a blockchain is and what it cannot do

A blockchain is a register maintained jointly by several participants. New entries are bundled into blocks and cryptographically chained to the previous ones. Anyone wanting to change an old entry would have to change all subsequent ones and convince the majority of participants. Subsequent manipulation thus becomes difficult and visible.

A distinction is made between public blockchains, in which anyone can participate, as with bitcoin, and permissioned blockchains, where an operator determines who may write and read. In supply chains, almost only permissioned variants are used. A smart contract is a program on the blockchain that automatically triggers something under certain conditions, for example a payment upon confirmed receipt of goods.

What matters is what the technology cannot do. It ensures that an entry is not changed unnoticed. It does not ensure that it is correct. If a supplier enters a wrong country of origin, this false information is then stored in tamper-proof form. Experts call this the oracle problem: the blockchain needs a source that creates the link to the physical world, and this source must be trusted.

An analogy makes this tangible. A notary certifies that two parties have signed a contract and keeps the deed safe. Whether the goods named in the contract actually exist and have the promised properties, he does not check. A blockchain is a very good notary for entries, but not an inspector of goods.

A blockchain does not make a false entry true. It only makes it permanent.

What documented projects show

The best-known project was TradeLens, a platform of the shipping company Maersk and IBM that, from 2018, was to map container traffic from shipper to recipient without paper. At the end of 2022, the partners announced its discontinuation, and in 2023 the platform was shut down. Maersk explained that the platform had not reached the commercial viability needed to continue as an independent business.

Moraes, Godinho Filho, and Teles (2026) examined the reasons in a model of non-technological barriers. They surveyed 15 experts with at least five years of experience with blockchain in supply chains and ranked the barriers by their influence on each other. Using the TradeLens case, they show that the platform did not fail because of the technology. Companies hesitated to share information on a platform in which a competitor played a leading role. Without broad participation, no network effect emerged, and without it, no benefit for those who took part. The authors name further barriers: skepticism toward the technology, resistance to high transparency between business partners, and missing rules for joint governance.

There are also projects that continue, above all in food traceability and in proof of origin for raw materials. According to Walmart, in an early test the time needed to trace mangoes back to the farm fell from around seven days to a few seconds. In a survey of supply chain professionals, Pham, Liang, and Jiang (2026) found that traceability, data sharing, and smart contracts improved collaboration and performance on social and environmental goals, with traceability having the strongest effect. The study measures respondents' perceptions, not a comparison with a conventional database.

The thinking model: do you need a blockchain at all?

In 2018, the computer scientists Karl Wüst and Arthur Gervais presented a decision scheme that is still frequently cited today. It does not ask whether a blockchain is modern, but whether the problem needs its particular properties. Six questions lead to the answer.

1. Does data need to be stored?

   If not, no database is needed, and therefore no blockchain.

2. Do several parties write?

   If only one party enters data, a conventional database is sufficient.

3. Is there a trusted party that is always available?

   If so, for example an industry association, a service provider, or the major customer itself, that party can run the database. A blockchain is then not necessary.

4. Are all writers known?

   If not, only a public blockchain is an option. In supply chains, the participants are almost always known.

5. Do all writers trust each other?

   If so, a shared database with rights and logging is enough. Only when they do not trust each other does the blockchain become interesting.

6. Must the public be able to verify?

   This determines whether a public or a permissioned blockchain fits.

The scheme has a clear message. The blockchain is a solution for a particular situation: several known parties write into a shared register, they do not fully trust each other, and there is nobody to whom all are willing to leave the management. That was exactly the idea behind TradeLens. And it was precisely at the third question that the project failed in practice: a register co-operated by a major market participant was not seen as neutral by its competitors.

Two perspectives: failed hype or quiet building block?

Both perspectives have evidence. The discontinuation of TradeLens and the model by Wüst and Gervais suggest that blockchain is not necessary in most supply chains. The findings of Pham and colleagues and the ongoing traceability projects show that it makes a contribution in certain situations.

I consider the first perspective the more useful starting point, without discarding the second. For a small business, blockchain is rarely a decision of its own. It is usually prescribed by a major customer, an industry association, or a platform. Then the right question is not whether the technology is good, but whether the data the business enters is correct and who is liable for errors.

What the digital product passport requires

For many businesses, the question becomes concrete through a new obligation. The EU Ecodesign for Sustainable Products Regulation (ESPR), Regulation (EU) 2024/1781, entered into force on July 18, 2024. For many product groups it provides for a digital product passport that makes information on materials, origin, repair, and recycling accessible via a code. Which products are affected and when is set by the Commission in separate legal acts, each with a transition period of at least 18 months.

A separate set of rules comes first: under the EU Battery Regulation, batteries for electric vehicles, light means of transport, and industrial batteries above 2 kilowatt hours need a digital battery passport from February 18, 2027. Textiles, furniture, and other groups follow later. According to common accounts, the rules do not prescribe any particular technology. A blockchain is possible, but not required. What is required is reliable, current, and accessible data.

For suppliers, this means: customers who must create a product passport will request information on input products. Supply chain act and EU directive describes how such requirements reach small businesses through contracts and questionnaires. Those who know their suppliers and their suppliers' suppliers have an advantage, as Geopolitics as a business risk shows.

How a business should approach the topic

From the thinking model and the findings, a procedure can be derived that starts from the task, not from the technology. It fits the principle that Why process comes before tools describes for any digitalization.

1. Name the need

   Which proofs do customers, authorities, or tenders require today and in two years? Origin, material composition, emissions, certificates?

2. Clarify the data source

   Where does the information come from, and who confirms it? This is the oracle problem in your own business. Without a reliable source, no technology helps.

3. Ask the six questions

   Go through the scheme by Wüst and Gervais. Usually it turns out that a shared database, an industry solution, or the customer's portal is sufficient.

4. Check external requirements

   If a customer requires a particular platform, check costs, data rights, exit options, and liability for entries. Who reads your data, and what may they do with it?

5. Start small

   Begin with one product and one customer. Record the data so that it can be transferred to any later solution.

Digitalization in the right order describes how to decide which process to digitize first. ESG ratings explains how customers assess sustainability data from suppliers.

What holds in general and where it stops

The history of blockchain in supply chains shows a pattern that repeats with many technologies. Expectations focused on the technology; the problem lay in cooperation. Trust between business partners can be supported by a register, but not replaced. Whoever shares data needs rules on who may see it, who checks it, and who answers for errors.

The limits of this analysis are clear. The study by Moraes and colleagues is based on 15 experts and one case review. The survey by Pham and colleagues measures perceptions. The Walmart figure comes from the company itself. And how product passports will be implemented technically will be determined by the legal acts of the coming years. For individual industries, such as raw materials with high origin risks, the assessment may turn out differently than for the typical supplier.

Conclusion: what remains of blockchain in the supply chain

To the guiding question: in supply chains, blockchain does exactly one thing well: it makes subsequent changes to jointly kept entries difficult and visible. Whether the entries are correct, it does not check. Large platforms did not fail because of the technology, but because of a lack of willingness to share data with competitors. According to the scheme by Wüst and Gervais, it pays off only when several mutually distrustful parties without a common trusted party write into a register.

For a small business, blockchain is therefore rarely the first question. The first question is whether it has the data that customers and product passports require, and how it knows that the data is correct.

• List the proofs that customers and rules require today and in two years.
• Create a table of input products, suppliers, origin, and proofs for your most important products.
• Note the source and the confirming party for each piece of information.
• Go through the six questions by Wüst and Gervais before any technology decision.
• For platforms prescribed by customers, check data rights, costs, and liability.
• Check whether your own products will fall under the digital product passport.