Blockchain in supply chains: tracing goods from source to shelf

Why tracing goods is difficult

A bag of coffee, a phone battery or a packet of salad passes through many hands before it reaches a shop: growers or miners, processors, packers, freight forwarders, importers, distributors and retailers. Each of them keeps records in its own systems and its own format. Information usually travels one step at a time — the next company in the chain receives a delivery note, an invoice or an e-mail, but rarely sees anything further back.

That arrangement works until someone needs the whole story. When a food safety agency issues an alert, investigators must find every shop that received products from a contaminated batch and every farm that might have supplied it. When a buyer is asked to prove that a raw material was not linked to deforestation or forced labour, it has to collect evidence from suppliers it may never have dealt with directly. Reconstructing that path by asking each company in turn is slow, and the answers can be incomplete or inconsistent.

Industry has worked on this for decades. Barcodes, batch numbers and shared event formats — such as the GS1 EPCIS standard, which describes supply-chain events in terms of what happened, when, where and why — already make much of the data exchangeable. The open question is where the combined record should live and who should be trusted to keep it.

What a shared ledger adds

A common record without a single owner

Competing firms are often reluctant to hand their operational data to a platform run by one of their rivals or by a large customer. A ledger operated jointly by several participants offers a compromise: each firm writes its own events, all of them see the same sequence, and no single operator can quietly rewrite it.

Tamper evidence

Because each entry is linked cryptographically to earlier ones, changing a past record after the fact would be visible to everyone holding a copy. For auditors and regulators, that makes the history more credible than a set of spreadsheets that any participant could have edited.

Controlled sharing

Supply-chain ledgers are almost always permissioned: only approved companies take part, and commercially sensitive details such as prices, volumes and supplier names can be kept in private channels or off the ledger, with only references and fingerprints shared more widely.

The "garbage in" problem

The weakest point is the link between the physical product and its digital record. A ledger can show that an entry has not changed since it was written; it cannot show that the entry was true. If a supplier labels conventionally grown produce as organic, or mixes material from an unknown mine into a certified batch, the ledger faithfully preserves the false claim.

Projects try to narrow this gap with tamper-evident seals, sensors that log temperature or location automatically, laboratory tests and independent audits. Services that feed such outside information into a ledger are often called oracles. Each of these measures helps, but none removes the need to trust whoever is standing next to the product when data is recorded. Tags and QR codes can also be copied, so a perfect digital history can end up attached to the wrong physical item.

Regulation is pushing traceability anyway

Much of the current interest in traceability is driven by law rather than technology. The EU Deforestation Regulation (EU) 2023/1115 requires companies placing certain commodities on the EU market to collect geolocation data for the plots where they were produced and to submit due diligence statements. The EU Batteries Regulation (EU) 2023/1542 introduces a battery passport, and the EU's ecodesign framework for sustainable products provides for digital product passports for further product groups.

These laws require data to be collected, kept and made accessible. They do not require a blockchain. That is an important point for anyone evaluating a project: the obligation is to have reliable, interoperable information, and the choice of storage technology is left to the companies concerned.

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