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International Journal of Computer Applications (0975 – 8887)
Volume 185 – No. 49, December 2023
5
Blockchain-Powered Security and Transparency in
Supply Chain: Exploring Traceability and Authenticity
through Smart Contracts
Nawrin Afrin
Lecturer
Department of Business Administration
BGC Trust University Bangladesh
Abhijit Pathak
Assistant Professor
Department of Computer Science and Engineering
BGC Trust University Bangladesh
ABSTRACT
Blockchain technology has emerged as a revolutionary force in
reshaping supply chain management, providing innovative
solutions to age-old security, transparency, traceability, and
authenticity challenges. This research paper delves into the
intricate relationship between blockchain technology and
supply chain management, specifically emphasizing its role in
enhancing traceability and ensuring authenticity, particularly in
the context of smart contracts. Through the decentralized and
secure storage of data in an immutable ledger, blockchain
technology transforms supply chain operations, effectively
mitigating risks and fostering accountability. This paper,
informed by a comprehensive literature review and real-world
case studies, illustrates the myriad applications and tangible
benefits of blockchain technology in supply chain
management, focusing on the traceability and authenticity of
smart contracts. By exploring the critical role of blockchain in
enhancing traceability, the research demonstrates how it
enables end-to-end visibility into the movement of goods.
Moreover, the paper investigates how blockchain ensures the
authenticity of smart contracts by creating tamper-resistant and
verifiable digital records. The findings underscore the
considerable advancements in supply chain security and
transparency achieved through blockchain adoption,
specifically in the domain of smart contracts. This paper
contributes to a nuanced understanding of the transformative
power of blockchain in the realm of supply chain management,
with a specific focus on the traceability and authenticity of
smart contracts. It highlights the potential of blockchain
technology to shape the future of global trade, providing a
foundation for further exploration and implementation in the
evolving landscape of supply chain dynamics.
General Terms
This research paper explores the transformative impact of
blockchain technology on supply chain management, with a
particular emphasis on its role in improving traceability and
ensuring the authenticity of smart contracts. By leveraging
decentralized and secure data storage in an immutable ledger,
blockchain revolutionizes supply chain operations, addressing
longstanding challenges related to security, transparency,
traceability, and authenticity.
Keywords
Blockchain Technology, Supply Chain Management (SCM),
Security, Authenticity, Traceability, Smart Contracts,
Immutable Ledger.
1. INTRODUCTION
In an era characterized by globalized trade and complex
manufacturing processes, the management of supply chains has
become not only crucial but also increasingly intricate. The
effectiveness of supply chain management (SCM) is
instrumental in ensuring that goods and services are delivered
to consumers efficiently and with minimal disruptions. This
importance lies not only in the context of businesses striving
for competitiveness but also in the broader perspective of
economic sustainability and consumer well-being.
Yet, the modern supply chain landscape is fraught with a
multitude of challenges that have persisted despite
advancements in technology and logistics. Key among these
challenges are the imperatives of security, transparency,
traceability, and authenticity. The traditional, centralized
models of supply chain management, although once
groundbreaking, have exhibited limitations in addressing these
challenges adequately. The vulnerabilities in security, the
opacity in transactions, the lack of end-to-end traceability, and
the ever-looming specter of counterfeit products compromise
the integrity and efficiency of supply chains [1].
It is against this backdrop that this research endeavors to
explore the transformative potential of blockchain technology
in the realm of supply chain management. Blockchain, known
for its decentralized, tamper-proof ledger, offers a novel
approach to addressing these challenges. By providing a secure
and transparent platform for recording and verifying
transactions, blockchain technology presents an opportunity to
revolutionize the way supply chains operate.
The core objectives of this research are to elucidate the role of
blockchain technology in enhancing the security, transparency,
traceability, and authenticity of supply chains. The authors will
delve into the theoretical underpinnings of blockchain
technology and its practical applications within the supply
chain context. Through an examination of real-world case
studies and a comprehensive review of existing literature, The
authors aim to provide insights into how blockchain is
reshaping supply chain management practices and the broader
implications for businesses, consumers, and the global
economy. As authors embark on this exploration, the
significance of this research becomes apparent – it holds the
potential to not only address persistent challenges but also
redefine the future of supply chain management in an
increasingly interconnected world [2].
2. LITERATURE REVIEW
To appreciate the significance of blockchain in supply chain
management, it is essential first to understand the evolving
landscape of supply chain management (SCM). SCM has long
been recognized as a critical component of business operations,
involving the planning, control, and optimization of material,
information, and financial flows across the supply chain. The
International Journal of Computer Applications (0975 – 8887)
Volume 185 – No. 49, December 2023
6
integration of global markets, the emergence of e-commerce,
and the ever-increasing customer expectations have made SCM
more complex and vital.
In the literature, supply chain management is consistently
described as a multifaceted process that requires coordination
among various stakeholders, including suppliers,
manufacturers, distributors, and retailers. It has been
acknowledged that an effective SCM strategy can lead to cost
reductions, improved customer service, and enhanced
competitiveness. However, it is also apparent that traditional
SCM systems often fall short in addressing the contemporary
challenges that have arisen [3].
Blockchain technology, which originally gained prominence as
the underlying technology for cryptocurrencies, has garnered
substantial attention for its potential to disrupt various
industries, including supply chain management. The
blockchain is a distributed ledger technology that relies on a
decentralized network of nodes to record and verify
transactions. It is characterized by its immutability,
transparency, and security features, making it an appealing
solution for mitigating the challenges that have long plagued
SCM.
The literature on blockchain underscores its ability to facilitate
trust among parties, eliminate the need for intermediaries, and
create an indelible record of transactions. These attributes have
led to blockchain being described as a promising technology
for enhancing transparency and security in various domains. Its
applicability in SCM arises from the potential to enhance
traceability, security, and authenticity, addressing limitations in
traditional supply chain systems.
Traditional supply chain systems have demonstrated certain
limitations that have fueled the exploration of alternative
technologies such as blockchain. Among the prominent
challenges are security concerns, particularly in the age of
cyber threats and data breaches. The centralized nature of
traditional SCM systems has made them susceptible to attacks
and unauthorized access.
Moreover, the lack of transparency in these systems has been a
longstanding issue. Participants in a supply chain often have
limited visibility into the actions of other stakeholders,
resulting in information silos and difficulties in tracking the
flow of goods and data. This opacity can lead to inefficiencies,
delays, and a lack of accountability [4].
Additionally, traceability and authenticity have been elusive
goals in traditional supply chains, contributing to issues related
to provenance and the presence of counterfeit products.
Traditional systems often rely on paper-based documentation,
which is susceptible to fraud and errors.
These challenges, well-documented in the existing literature,
underscore the need for innovative solutions in supply chain
management. Blockchain technology emerges as a viable
candidate to address these limitations, as it promises to offer a
decentralized, transparent, and secure alternative to traditional
SCM systems.
The existing literature on the topic of how blockchain
technology enhances the security and transparency of supply
chain management, with a focus on traceability and
authenticity. The authors will provide a summary of relevant
findings from existing papers:
"Blockchain Technology and Supply Chain Management: A
Review" by Iqbal and Khan (2019)”
- This paper provides an in-depth review of how blockchain
technology can be leveraged to address challenges in supply
chain management. It emphasizes that blockchain's
decentralized ledger can enhance security by reducing the risk
of fraudulent activities and unauthorized access in the supply
chain. Additionally, it highlights the potential for blockchain to
enhance transparency and traceability by creating an
immutable record of transactions [5].
“Research on agricultural supply chain system with double
chain architecture based on blockchain technology" by Leng et
al. (2018)”
- Leng and his colleagues examine the challenges faced by
traditional supply chain systems and how blockchain
technology can offer solutions. The paper discusses how
blockchain's decentralized and tamper-proof ledger can ensure
the authenticity of products by recording their entire journey
through the supply chain. It also emphasizes the role of
blockchain in enhancing traceability by providing stakeholders
with real-time visibility into the movement of goods [6].
“Blockchain for Supply Chain Traceability: Business
Requirements and Critical Success Factors" by Bass et al.
(2018)”
- Bass and his team focus on the critical aspect of traceability
in supply chains. The paper highlights the importance of
traceability for ensuring product authenticity and discusses
how blockchain can serve as a powerful tool to achieve this. It
provides insights into the business requirements and critical
success factors when implementing blockchain for traceability
[7].
"The Impact of Blockchain Technology on Business Models in
the Supply Chain: A Systematic Literature Review" by Hackius
and Petersen (2017)”
- This systematic literature review delves into the
transformative potential of blockchain in supply chain
management. It explores how blockchain can enhance
transparency and security by eliminating information silos and
intermediaries. The review also highlights the significance of
blockchain in ensuring the authenticity of products and
improving traceability [8].
"Blockchain Technology in the Supply Chain: Benefits and
Future Challenges" by Zheng et al. (2020)”
- This paper examines the benefits and challenges of applying
blockchain technology to supply chain management. It
discusses how blockchain can enhance transparency and
traceability by creating a shared ledger accessible to all
participants. It also underscores the potential to verify the
authenticity of products using blockchain [9].
These existing papers collectively underscore the
transformative potential of blockchain technology in
addressing the security, transparency, traceability, and
authenticity challenges in supply chain management. They
provide a foundation for further research and emphasize the
need to explore real-world applications and case studies to fully
understand the impact of blockchain in supply chain contexts.
2. BLOCKCHAIN TECHNOLOGY IN
SUPPLY CHAIN MANAGEMENT
Blockchain technology is a decentralized and distributed ledger
system that underlies cryptocurrencies like Bitcoin. It's known
for its transparency, security, and the elimination of central
authorities.
International Journal of Computer Applications (0975 – 8887)
Volume 185 – No. 49, December 2023
7
Fig. 1. Blockchain Technology for Supply Chains
Let's break down the fundamentals of blockchain technology,
including decentralized ledgers, smart contracts, and consensus
mechanisms:
3.1 Decentralized Ledgers
A blockchain is a digital ledger or database that records a series
of transactions. Unlike traditional centralized databases,
blockchain is decentralized, meaning it is not stored on a single
central server or controlled by a single entity.
Instead, copies of the blockchain ledger are stored on a vast
network of computers (nodes) that are distributed worldwide.
Each node has an identical copy of the ledger.
Decentralization enhances security, transparency, and
immutability. It makes it extremely difficult for any single
party to manipulate the data or control the entire network.
3.2 Smart Contracts
Smart contracts are self-executing contracts with the terms of
the agreement directly written into code. They automatically
execute and enforce the terms of the contract when predefined
conditions are met. Smart contracts are a fundamental feature
of some blockchain platforms, such as Ethereum. They can be
used for a wide range of applications, including financial
agreements, supply chain management, and even voting
systems.
The code of a smart contract is stored on the blockchain,
ensuring transparency and trust in the execution of contractual
agreements without the need for intermediaries.
3.3 Consensus Mechanisms
Consensus mechanisms are protocols used in blockchain
networks to achieve agreement among nodes on the validity of
transactions and the order in which they are added to the
blockchain.
The most well-known consensus mechanism is Proof of Work
(PoW), used in Bitcoin. In PoW, miners compete to solve
complex mathematical puzzles to validate transactions and
create new blocks. The first miner to solve the puzzle adds a
new block to the blockchain.
Another widely used consensus mechanism is Proof of Stake
(PoS), which is used in cryptocurrencies like Ethereum 2.0. In
PoS, validators are chosen to create new blocks and validate
transactions based on the amount of cryptocurrency they
"stake" as collateral.
Other consensus mechanisms include Delegated Proof of Stake
(DPoS), Practical Byzantine Fault Tolerance (PBFT), and
more, each with its unique approach to achieving consensus
[10].
3.4 The Potential Applications of Blockchain
in Supply Chain Management
Blockchain technology holds significant promise in
revolutionizing supply chain management by enhancing
transparency, security, and efficiency in the flow of goods and
information. Its potential applications in this domain are
diverse and impactful.
One of the primary benefits of blockchain is the provision of
enhanced transparency. By offering a shared, real-time ledger
accessible to all stakeholders, it facilitates end-to-end visibility
into the supply chain. This transparency allows for tracking the
movement of goods, verifying product authenticity, and
monitoring the performance of suppliers and logistics partners.
Blockchain's traceability features are another valuable asset.
Each product or batch can be assigned a unique digital identity,
recording information about its origin, manufacturing process,
quality checks, and shipment details. This traceability
empowers supply chain actors to swiftly identify the source of
issues, whether they be related to contamination, defects, or
theft [11].
The technology also plays a pivotal role in reducing the
prevalence of counterfeit products. The immutable records
created by blockchain make it difficult for counterfeit goods to
infiltrate the supply chain. Customers and businesses can verify
the authenticity of products by scanning a QR code or accessing
the blockchain's product history.
Furthermore, blockchain's smart contracts streamline supply
chain processes. These self-executing contracts with
predefined rules can automate and optimize various operations,
such as releasing payments to suppliers upon successful
product delivery. This automation minimizes manual
paperwork and delays.
Inventory management benefits from blockchain as well. Real-
time tracking of inventory levels prevents overstocking or
understocking, optimizing resource allocation and reducing
costs. Additionally, blockchain can enhance supply chain
financing by creating a secure and transparent digital ledger for
trade finance, ultimately improving access to working capital
for suppliers.
International Journal of Computer Applications (0975 – 8887)
Volume 185 – No. 49, December 2023
8
Ethical sourcing and sustainability efforts can also be
strengthened through blockchain technology. Companies can
trace the origin of raw materials, ensuring they come from
ethical and sustainable sources. This transparency is especially
critical in industries where consumers and regulators demand
responsible sourcing practices [12].
In the unfortunate event of product recalls, blockchain enables
quick and accurate identification of affected batches, thereby
reducing the scope and cost of recalls and minimizing their
impact on consumers and brand reputation.
Supplier management is another area where blockchain can
bring transformative benefits. By creating a comprehensive
supplier database with transparent records of performance,
quality, and compliance, organizations can make more
informed decisions and foster stronger relationships with
reliable suppliers.
Customs processes and compliance verification are simplified
through blockchain. The technology offers secure and
transparent documentation, helping to verify compliance with
trade regulations and reducing the risk of fraud.
Data security is paramount in supply chain management.
Blockchain ensures data security through encryption and
decentralized storage, safeguarding sensitive supply chain
information from cyber threats and data breaches.
As blockchain technology matures and gains wider adoption,
its potential to bring efficiency, security, and transparency to
supply chain management becomes increasingly evident. These
applications are actively being explored in various industries to
reduce costs, mitigate risks, and meet the growing demands for
ethical and sustainable sourcing, ultimately reshaping supply
chain management practices fundamentally [13].
3.5 Blockchain: A Solution for Security and
Transparency
Blockchain technology has the potential to address security and
transparency issues in various industries, including supply
chain management, financial services, healthcare, and more.
Fig. 2: The Architecture of a Data Chain in a Blockchain Network
Here's an exploration of how blockchain can provide solutions
to these challenges:
3.5.1 Security
Immutability: Once data is recorded on the blockchain, it
becomes nearly impossible to alter. Each block contains a
reference to the previous block, and any change to the data in
one block would require changing all subsequent blocks, which
is computationally infeasible. This immutability enhances data
security.
Decentralization: Blockchain operates on a decentralized
network of computers (nodes). Data is not stored on a single
server or controlled by a central authority. This distributed
structure reduces the risk of a single point of failure and makes
it more challenging for malicious actors to compromise the
network.
Cryptography: Transactions on the blockchain are secured
through cryptographic algorithms. Private keys provide access
to users' digital assets, while public keys are used to verify the
authenticity of transactions. This cryptographic layer enhances
the security of data and digital assets.
Consensus Mechanisms: Blockchain uses consensus
mechanisms like Proof of Work (PoW) or Proof of Stake (PoS)
to validate and add transactions to the ledger. These
mechanisms ensure that only valid and authorized transactions
are added, reducing the risk of fraudulent activities [14].
3.5.2 Transparency
Shared Ledger: The blockchain ledger is visible to all
participants in the network. This transparency means that all
stakeholders can access the same data, reducing information
silos and discrepancies.
Real-Time Updates: Changes to the blockchain are recorded
in real-time and are immediately visible to all relevant parties.
This feature allows for up-to-the-minute tracking and
verification of transactions.
Public vs. Private Blockchains: Depending on the use case,
organizations can choose between public or private
blockchains. Public blockchains provide full transparency to
anyone, while private blockchains restrict access to authorized
participants. This flexibility allows organizations to balance
transparency and privacy based on their specific needs [15].
Smart Contracts: Smart contracts are self-executing
agreements with predefined rules. They automatically execute
when conditions are met, ensuring that contractual terms are
transparent and enforceable.
Audit Trails: The blockchain ledger provides a permanent and
unchangeable audit trail of all transactions. This is crucial for
International Journal of Computer Applications (0975 – 8887)
Volume 185 – No. 49, December 2023
9
regulatory compliance and dispute resolution.
Blockchain's ability to address both security and transparency
challenges makes it a powerful tool in various sectors. In supply
chain management, it ensures the authenticity of products,
tracks goods in real-time, and reduces the risk of counterfeiting.
In healthcare, it secures patient records and enhances data
sharing. In finance, it provides secure and transparent
transactions. The combination of security and transparency
makes blockchain an attractive solution for businesses and
industries seeking to improve their operations and build trust
with stakeholders [16].
4. TRACEABILITY IN THE SUPPLY
CHAIN
Traceability in the context of supply chains refers to the ability
to track the movement and history of products or goods from
their origin through every stage of production, processing,
distribution, and delivery to the end consumer. It involves
creating a detailed, transparent, and unbroken record of the
journey a product takes within the supply chain. This
information includes data about the product's source,
manufacturing, quality checks, handling, and transportation.
Blockchain technology can greatly facilitate end-to-end
traceability in supply chains. By leveraging blockchain, each
product or batch can be assigned a unique digital identity or
token. This digital identity is then recorded on the blockchain,
forming an unchangeable and publicly accessible record of the
product's entire history. Every stakeholder within the supply
chain, from producers and manufacturers to distributors and
retailers, can access and update this information in real-time
[17].
Fig. 3: Traceability Solutions for Supply Chains
This system ensures complete transparency and trust in the
supply chain. Consumers can verify the authenticity and quality
of products by scanning a QR code or accessing the
blockchain's product history. In the event of recalls, blockchain
enables quick and precise identification of affected batches,
minimizing the scope and cost of the recall and ensuring the
safety and satisfaction of consumers.
Real-world applications of blockchain for traceability are
abundant. For instance, in the food industry, companies like
Walmart and Nestlé have adopted blockchain to trace the
origins of food products. In the diamond industry, De Beers
uses blockchain to track the journey of diamonds from mines
to consumers, ensuring they are conflict-free. Additionally,
pharmaceutical companies are exploring blockchain to combat
the proliferation of counterfeit drugs and enhance the
traceability of medications.
Overall, blockchain's ability to create a transparent, immutable,
and accessible ledger makes it a powerful tool for achieving
end-to-end traceability in supply chains, ensuring product
authenticity and quality while streamlining recall processes and
compliance with regulations [18].
5. ENSURING AUTHENTICITY WITH
BLOCKCHAIN IN SUPPLY CHAINS
5.1 Counterfeit Products and Ensuring
Authenticity in Supply Chains
The issue of counterfeit products is a pervasive and persistent
challenge in supply chains across various industries.
Counterfeits not only lead to financial losses for companies but
also pose significant risks to consumers' safety and the integrity
of brands. Ensuring product authenticity is paramount, and
blockchain technology offers a compelling solution to address
this pressing concern.
5.2 Blockchain's Role in Verifying Product
Authenticity
Blockchain, with its foundational features of immutability and
transparency, can play a crucial role in verifying the
authenticity of products. By creating unique digital identities
for each product or batch and recording their entire journey on
the blockchain, companies can establish an unchangeable and
publicly accessible record. This digital identity includes
essential information, such as the product's source,
manufacturing processes, quality checks, handling, and
transportation [19].
The immutability of blockchain is a game-changer. Once data
is entered into the blockchain, it becomes nearly impossible to
alter. This is because each block in the blockchain contains a
cryptographic reference to the previous block, making any
modification requires changing all subsequent blocks, which is
a computationally infeasible task. This immutability ensures
the security and authenticity of the product's history.
5.3 Real-World Applications of Blockchain
to Combat Counterfeiting
Several case studies and examples demonstrate the efficacy of
blockchain in combating counterfeiting:
Food Industry: Major players like Walmart and Nestlé have
harnessed blockchain technology to trace the origins of food
products. This not only ensures food safety and quality but also
helps in swiftly identifying the source of contamination or
International Journal of Computer Applications (0975 – 8887)
Volume 185 – No. 49, December 2023
10
quality issues.
Diamond Industry: De Beers, a prominent player in the
diamond industry, utilizes blockchain to guarantee the
authenticity and conflict-free status of diamonds. The
immutable records on the blockchain assure consumers of the
legitimacy of their purchases.
Pharmaceuticals: The pharmaceutical sector is increasingly
adopting blockchain to combat the proliferation of counterfeit
drugs. By allowing consumers to verify the authenticity of
medications through blockchain, pharmaceutical companies
enhance patient safety and ensure the quality of the drugs they
produce.
These examples showcase the transformative potential of
blockchain in enhancing transparency and trust within supply
chains. Its capacity to create unchangeable, accessible, and
comprehensive records of product histories provides a
powerful tool for combatting counterfeits and assuring the
authenticity of products, ultimately safeguarding consumers
and the integrity of brands [20].
6. SECURITY AND TRANSPARENCY:
BLOCKCHAIN'S DUAL ROLE IN
SUPPLY CHAIN MANAGEMENT
Blockchain technology offers a comprehensive solution to
enhance security and transparency in supply chains. Here's a
brief analysis of how blockchain achieves this and a
comparison with traditional supply chains:
6.1 Enhanced Security
Data Encryption: Blockchain employs cryptographic
techniques to encrypt data, ensuring that sensitive information
remains secure and inaccessible to unauthorized parties. This
encryption adds an extra layer of security to transactions and
data storage.
Access Control: Blockchain provides users with private keys
to access their digital assets. Public keys are used to verify the
authenticity of transactions. This access control mechanism
ensures that only authorized individuals can interact with the
blockchain, reducing the risk of unauthorized access and fraud
[22].
Decentralized Verification: The decentralized nature of
blockchain means that transactions and data are verified and
stored on a distributed network of nodes. This decentralized
verification makes it extremely difficult for a single entity to
manipulate or control the entire network, enhancing data
security.
6.2 Achieving Transparency
Distributed Ledger: Blockchain operates on a distributed
ledger that is visible to all participants in the network. Every
participant has an identical copy of the ledger, ensuring that
information is shared among stakeholders. This distributed
ledger minimizes information silos and fosters transparency.
Real-Time Updates: Changes to the blockchain are recorded
in real-time, and this information is immediately accessible to
all relevant parties. Real-time updates allow for up-to-the-
minute tracking and verification of transactions, contributing to
transparency.
6.3 Blockchain vs. Traditional Supply
Chains
Security: Blockchain-based supply chains have a distinct
advantage in terms of security. The combination of data
encryption, access control, and decentralized verification
significantly reduces the risk of data breaches and fraud. In
traditional supply chains, data is often stored in centralized
systems, making them more vulnerable to attacks and
unauthorized access.
Transparency: Blockchain-based supply chains excel in
transparency due to their distributed nature and public
accessibility. Every stakeholder has access to the same, up-to-
date information, reducing information disparities and
enhancing trust. Traditional supply chains often involve
fragmented data storage and a lack of real-time visibility,
leading to reduced transparency and potential inefficiencies.
In summary, blockchain technology enhances security through
data encryption, access control, and decentralized verification.
It achieves transparency through its distributed ledger and real-
time updates. When compared to traditional supply chains,
blockchain-based supply chains offer superior security and
transparency, reducing risks and inefficiencies in the process
[21].
7. SMART CONTRACTS FOR
TRACEABILITY IN SUPPLY CHAIN
MANAGEMENT
To establish a robust product traceability process, this paper
introduces the design of three essential smart contracts: the
Product Registration Contract (PRC), the Batch Addition
Contract (BAC), and the Transaction Update Contract (TUC).
These contracts are interlinked, enhancing cooperation and
ensuring a seamless flow of information. The structure involves
the PRC containing addresses of BAC contracts, and BAC
contracts containing addresses of TUC contracts, establishing a
well-connected and cooperative framework.
To facilitate comprehension, the term "product" in this context
encompasses both finished products and raw materials. The
PRC contract, initiated by the system manager, assigns a unique
BAC contract address to each registered product during the
registration process, capturing vital production batch details.
Subsequently, the BAC contract, deployed by the owner of
each product, then assigns a unique TUC contract address to
each production batch, updating the product's transfer process
within that batch. Essentially, each product corresponds to a
batch list, and each batch corresponds to a detailed product
transfer process [23].
For end consumers seeking insight into the history of a
purchased product, the ability to query transfer details by
product code and batch number is facilitated. Additionally,
each contract maintains an authorization list, ensuring that only
authorized accounts possess the right to update the contract
status. In the event of malicious activity, the regulator holds the
highest authority to remove the user from the authorization list,
ensuring system integrity.
7.1 Product Registration Contract (PRC)
The PRC contract, deployed by the system manager, features a
product registration function named register(). This function
permanently stores registration information for all products,
including product code, product name, product owner, and raw
materials. Upon registration, a BAC contract is automatically
deployed at a new address, utilizing the owner's account, and
the BAC contract address is added to the product registration
information.
7.2 Batch Addition Contract (BAC)
Initiated by the product owner during product registration, the
BAC contract provides the addBatch() function to incorporate
production batch information permanently. Batch managers
add details for each batch, including batch number, batch
International Journal of Computer Applications (0975 – 8887)
Volume 185 – No. 49, December 2023
11
manager, timestamp, and the batch number of raw materials
used. Simultaneously, a corresponding TUC contract is
deployed.
7.3 Transaction Update Contract (TUC)
Deployed by the batch manager during batch addition, the TUC
contract provides the updateTr() function to enhance the
transaction history for the batch. Product senders initiate
transactions, updating the transaction record with relevant
information, including the hash of the current transaction,
sender and recipient details, hash of the previous transaction,
and timestamp. This meticulous process ensures the
authenticity and legitimacy of each transaction, preventing
disruptions in the product traceability process [24].
Fig. 4: Product Registration, Transfer, and Tracking Workflow
Illustrated in Figure 4, the product traceability process within the supply chain system encompasses several key stages, including contract
deployment, raw material registration, raw material procurement, product registration, product distribution, product wholesale, product
purchase, and product source querying. Each step is elucidated below:
7.3.1 Contract Deployment
At the onset (Step 1 in Figure 4), the system manager deploys
the Product Registration Contract (PRC) to the blockchain,
making the contract address public.
The deployment of the Batch Addition Contract (BAC) and the
Transaction Update Contract (TUC) occurs automatically when
the register() and addBatch() functions are invoked,
respectively.
7.3.2 Raw Material Registration
Suppliers initiate the raw material registration process,
inputting information on raw materials and production batches.
Table 1. Example of Product Information List in PRC
Contract
ID
Prod
uct
Code
Pro
duct
Na
me
Prod
uct
Owne
r
Raw
Materia
ls
Timesta
mp
BAC
Addres
s
1
10973
5813
coco
a
0xc07
…f0e
4
/
1562065
155
0xbcc0
…d4c7
7
2
16545
64413
milk
0x32c
…d19
2
/
1562065
206
0x5695
…9209
c
3
69284
80334
788
Coff
ee
0x69a
…001
3
1097358
13,
1654564
13
1562065
276
0xa911
…0ac5
a
4
16311
3107
tea
0x38c
…0d2
a
/
1562065
411
0xa145
…0e6d
4
…
…
…
…
…
…
…
The supplier leverages the register() function in the PRC
International Journal of Computer Applications (0975 – 8887)
Volume 185 – No. 49, December 2023
12
contract to record raw material information (refer to Table 1).
Simultaneously, the supplier's account triggers the automatic
deployment of a BAC1 contract, with its address added to the
raw material registration information. After registering raw
materials in batches, the supplier utilizes the addBatch()
function in the corresponding BAC1 contract.
The execution of this function results in the automatic
deployment of a TUC11 contract, with its address added to the
batch information of the raw material. The system returns the
registration and execution results to the supplier (Step 2–5 in
Figure 4).
This meticulous raw material registration process ensures that
both individual raw materials and batches are systematically
recorded and linked to their respective contracts on the
blockchain [25].
7.3.3 Raw Material Procurement
The raw material procurement process unfolds in a
collaborative exchange between the supplier and the
manufacturer. Once a mutual agreement is reached—
comprising the supplier's confirmation of delivery and the
manufacturer's confirmation of receipt—the subsequent step
involves the supplier uploading transaction information (refer
to Table 3) to the contract. This action is executed by invoking
the updateTr() function within the TUC11 contract, as depicted
in step 11 of Figure 4.
Fig. 5: Mechanism for Event Responses in Transaction Processes
A. Goods Transaction Process
As illustrated in Figure 5, the intricacies of the transaction
agreement, encompassing the purchase request, confirmation,
shipping, and receipt, are explicated. This process corresponds
to step 10 in Figure 5 and is detailed below.
B. Purchase Request Initiation
The buyer initiates a purchase request, triggering the
buyEvent() event.
Key information is included in this event: Buyer's Ethereum
address (Buyer EA), Seller's Ethereum address (Seller EA), the
Product Code of the item to be purchased, and the initiator's
Ethereum account public key (EPK). A signature (Sig) is
appended, signed with the initiator's account private
key, ensuring the authenticity of the request and confirming the
identity of both parties [26].
C. Event Response
The seller, upon receiving the purchase request, queries log
records based on their Ethereum address. Verification of the
signature within the event is conducted. If successful, the seller
triggers the responseEvent() event. This event serves as a
response to the buyer's request, creating a streamlined
communication channel.
D. Goods Shipment Confirmation
After the response, the seller ships the goods to the buyer,
triggering the sendEvent() event. The information included in
this event comprises the Seller's Ethereum address (Seller EA),
the Buyer's Ethereum address (Buyer EA), the Product Code,
the Batch Number of the shipped goods, and the seller's
Ethereum account public key (EPK). A signature (Sig) is
appended, authenticated with the seller's account private key,
providing proof of shipment.
E. Goods Receipt Confirmation
Upon receiving the goods, the buyer triggers the
receivedEvent() event, certifying the successful receipt of the
goods. This event solidifies the acknowledgment of the
completion of the transaction and the receipt of the shipped
items.
7.3.4 Manufacturer-Driven Transaction
Processes
In the existing scenario, the manufacturer takes on the role of
the buyer, and the supplier assumes the position of the seller.
Upon the completion of the preceding process, the supplier
diligently updates transaction information to the corresponding
Transaction Update Contract (TUC) contract, specifically the
TUC11 contract in Figure 2. The assumption here is that both
transaction parties faithfully trigger the events described
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Volume 185 – No. 49, December 2023
13
earlier, ensuring the accuracy of the updated transaction
information and establishing the reliability of the product
source.
A. Product Registration
The manufacturer spearheads the product registration process,
encompassing both product and batch information registration.
This process prompts the deployment of the Batch Addition
Contract (BAC2) and the associated Transaction Update
Contract (TUC21). Given the similarity to the raw material
registration process, detailed steps for this are omitted, as
depicted in steps 12–19 of Figure 4.
B. Product Distribution
The distribution of products unfolds collaboratively between
the manufacturer and the distributor. Following a consensus, as
delineated in the process illustrated in Figure 5, the
manufacturer updates transaction information in the contract.
This is achieved through the invocation of the updateTr()
function within the TUC21 contract, as demonstrated in steps
20 and 21 of Figure 5.
C. Product Wholesale
The wholesale process, involving transactions between the
distributor and the retailer, follows a similar consensus-
building procedure outlined in Figure 5. The distributor, upon
consensus, uploads transaction information to the contract
using the updateTr() function in the TUC21 contract, detailed
in steps 22 and 23 of Figure 4.
D. Product Purchase
Consumers, in the final stage, purchase products from retailers
via supermarkets or hypermarkets, reaching step 24 of Figure
4. Due to the inherent uncertainty of consumer choices,
transaction information is not preemptively uploaded to the
blockchain in this step.
E. Product Source Querying
Consumers, having the option to join the network as either
lightweight nodes or full nodes, can inquire about the entire
transaction history of the purchased product using the product
code and batch number. In step 25 of Figure 4, consumers input
the product code and batch number, clicking the "OK" button
on the page to view the product source. Importantly, this
operation incurs no gas consumption [27].
8. CASE STUDY: BLOCKCHAIN
REVOLUTIONIZING BANGLADESH'S
TEXTILE SUPPLY CHAIN - ENSURING
TRACEABILITY AND AUTHENTICITY
The textile industry in Bangladesh plays a pivotal role in the
country's economy, known for its cost-effective production and
quality textiles. However, challenges related to traceability and
authenticity have persisted, with counterfeit products and labor
issues being pressing concerns. In response to these challenges,
blockchain technology has emerged as a game-changing
solution, significantly enhancing traceability and authenticity
in the textile supply chain [28].
8.1 Challenges in the Textile Supply Chain
Counterfeit Products: The textile industry in Bangladesh has
faced the issue of counterfeit textiles, undermining consumer
trust and the industry's reputation.
Ethical Sourcing and Labor Conditions: Ensuring ethical
sourcing of materials and fair labor conditions has been a
persistent challenge in the industry.
8.2 Blockchain Implementation
Several key stakeholders in the Bangladeshi textile industry
have embraced blockchain technology to address these
challenges:
Authenticity and Product Traceability
o Digital Product Identities: Each textile product is
assigned a unique digital identity recorded on the
blockchain. This identity includes comprehensive
information about the product's origin, manufacturing
process, quality checks, and transportation.
o QR Code Verification: Consumers can scan QR codes on
product labels, granting them access to the blockchain's
transparent product history. This verification allows
consumers to confirm the authenticity and origin of their
purchases [29].
Ethical Sourcing and Labor Conditions
Blockchain for Labor Records: Labor records of all workers
in the textile supply chain, spanning from cotton farms to
garment factories, are stored on the blockchain. This ensures
adherence to ethical labor standards and fair compensation for
workers.
Smart Contracts: Smart contracts automate wage payments to
workers when predefined conditions are met. This mechanism
promotes transparency and equity in wage distribution.
8.3 Transparency and Regulatory
Compliance
Distributed Ledger: The blockchain ledger is accessible to all
stakeholders in the textile supply chain, facilitating real-time
transparency. Every participant has access to the same up-to-
date information.
Blockchain for Regulatory Compliance: The blockchain
system assists in meeting local and international regulatory
requirements, ensuring that products adhere to safety and
quality standards.
8.4 Results and Benefits
Mitigation of Counterfeit Products: The implementation of
blockchain technology has substantially reduced the prevalence
of counterfeit textiles. The easy verification of product
authenticity empowers consumers and deters counterfeiters.
Improved Labor Conditions: Ethical labor practices have
been significantly enhanced. The blockchain system ensures
that labor standards meet international guidelines, and workers
are fairly compensated.
Supply Chain Transparency: The textile supply chain now
operates with unprecedented transparency. This transparency is
instrumental in rapidly identifying and resolving issues.
Blockchain technology has played a transformative role in the
Bangladesh textile industry, addressing the longstanding
challenges of traceability and authenticity. The reduction in
counterfeit products, enhancement of labor conditions, and
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14
elevated transparency have not only safeguarded the
authenticity and quality of textile products but also fortified the
reputation of the industry on a global scale. Bangladesh's textile
sector stands as a powerful example of how blockchain can
bolster traceability and authenticity in intricate supply chains,
ensuring the industry's continued growth and integrity [30].
9. CONCLUSION
In conclusion, this paper has navigated the symbiotic
relationship between blockchain technology and supply chain
management, shedding light on its transformative influence on
security, transparency, traceability, and authenticity. As
evidenced by an in-depth exploration of literature and real-
world case studies, blockchain technology has emerged not
merely as a buzzword but as a tangible solution to age-old
challenges in the supply chain domain. The decentralization
and immutability inherent in blockchain architecture have
redefined the operational landscape of supply chains. By
securely recording data in an unalterable ledger, blockchain
mitigates risks and instills a new level of accountability. The
innovative applications and benefits outlined in this research
paper underscore how blockchain catalyzes positive change in
supply chain dynamics. The focal point of this paper has been
the enhancement of traceability and the assurance of
authenticity through blockchain adoption. The technology's
ability to create transparent, unforgeable digital records
facilitates end-to-end visibility into the movement of goods.
Furthermore, by establishing a secure and tamper-proof digital
trail, blockchain ensures the authenticity of products
throughout their journey in the supply chain. The synthesis of
findings strongly emphasizes the strides made in supply chain
security and transparency, attributing these advancements to
the widespread adoption of blockchain technology. The case
studies presented showcase real-world applications,
demonstrating the concrete impact of blockchain on
operational efficiency and risk mitigation within supply chains.
This research contributes significantly to understanding the
transformative power of blockchain in supply chain
management. The demonstrated potential of blockchain to
shape the future of global trade is not merely theoretical but is
supported by tangible evidence of its positive impact on key
aspects of the supply chain. As the authors conclude, it is
evident that blockchain technology is not merely a tool; it is a
paradigm shift. Its integration into supply chain management
marks a turning point, heralding a future where security,
transparency, and accountability are not just ideals but intrinsic
components of every supply chain operation. The journey has
just begun, and as blockchain continues to evolve, its role in
shaping the future of global trade will undoubtedly become
increasingly profound.
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