Web3's Role in Supply Chain and Logistics Management

    Tanya Sharma
    Tanya Sharma
    Published on January 11, 2023 5:10 PM
    When used with supply chains and logistics, Web3 provides numerous benefits such as decentralized data management, aggregation, and control of supply chain components. Let's explore its role.
    Web3's Role in Supply Chain and Logistics Management
    Source: Unsplash

    The global economy's development is continually putting a premium on supply chain management and logistics. This is especially true given today's shipping backlog at all major worldwide ports and the decrease in commodity availability in stores.

    In such cases, Web3 is connected with supply chains and logistics and provides numerous benefits. Do you know what the core stack of web3 integrated supply chain and logistics consists of? Are supply chain management and logistics automation solely concerned with web3? 

    It consists of several technologies, including smart contracts, artificial intelligence, web3 programming languages, and distributed ledgers.

    Also See: As Web3 evolves, here are major security trends for 2023

    Web3 technology maintains a record of all documents connected to the supply chain flow and represents data coordination from all supply chain participants such as organizers, suppliers, and others.

    Source: Statista

    According to all facts and figures about the logistics industry-

    • 53% of respondents believe blockchain will revolutionize the logistics business.

    • 40% of supply chain leaders plan to invest in blockchain and IoT sensors.

    • The retail logistics industry in the United States was estimated at USD 43.17 billion in 2021 and is predicted to develop at an 11.0% CAGR from 2022 to 2030.

    Further down the lane, we will see the potential benefits of Web3.

    What exactly is web3 in the context of supply chains and logistics?

    The global economy's expansion constantly places a premium on logistics and supply chain management. This is due to the current shipping backlog at all global important ports, as well as the decreasing supply of items in stores.

    When used with supply chains and logistics, Web3 provides numerous benefits such as decentralized data management, aggregation, and control of supply chain components.

    The automation of supply chain management and logistics through web3 is a combination of technologies such as artificial intelligence, smart contracts are written in web3-specific programming languages, and distributed ledgers. All of these components comprise the basic stack of web3 integrated supply chain and logistics.

    Web3 supply chain and logistics enable an open record keeping of all the supply chain flow's linking documents. It exhibits seamless data synchronization from all supply chain parties, such as various organizers, suppliers, and so on.

    Web3's integrated supply chain increases transparency while lowering costs and risks throughout supply chain management and logistics regulation. It improves the traceability of the material supply chain, ensuring that all corporate criteria are met.

    Along with less paperwork and lower administrative costs, web3 enhances visibility and compliance in outsourced contract manufacturing when incorporated with supply chain management.

    Web3 in supply chain management also decreases losses from the grey market or counterfeit commerce. It also handles supply chain components and enhances accuracy with end-to-end tracking at the highest level.

    It is feasible to digitally change physical goods and create a decentralized, distributed ledger and transaction record using web3. As a result, it is feasible to trace the flow of assets from production to distribution in real-time.

    Web3's integrated supply chain also provides complete product history as well as increased transparency. This provides advantages such as improved visibility to customers and enterprises.

    Identity verification is another critical part of web3 supply chain management. It is extremely important in web3 supply chain management and logistics. It specifies when and who is in charge of the flow of goods and commodities in the supply chain regulation.

    Web3: How Does It Help Supply Chain & Logistics?

    Web3, and its underlying blockchain technology, can improve supply chain and logistics management in three key ways:

    1. Traceability and High Operational Efficiency are Improved

    Web3 improves supply chain management and logistics management by providing the most secure technique for monitoring and surveying the corporate supply chain and logistics. Consumers have begun to request sourcing data on the products they order and purchase as the level of digitization has increased.

    As a result of Web3 and blockchain technology, many businesses can understand their supply chain and logistical data. Furthermore, this technology supports businesses in engaging with customers by providing them with actual, verifiable, and unchangeable items and transaction data.

    1. Web3 Increases Transparency

    You can not only generate independent and extraordinary hash values for data and every transaction, including claims and certificates, with the help of a Web3 development business, but you can also form trust and security within the supply chain and logistics management process.

    It also provides individuals with permissionless and open access to the whole supply chain and logistics management process.

    When Web3 registers an enterprise's supply chain, it quickly confirms its validity using network validators. This latest iteration of blockchain technology includes a transparency feature that aids in real-time updating and validation of information on the Web3 supply chain.

    1. It facilitates trade in the supply chain and logistics industries

    One of the most important aspects of Web3 is traceability, which specifies the level of readability and redefines old marketplace terms.

    Web3 and blockchain make it very simple for supply chain participants to tokenize an asset.

    They can divide the commodities into equal portions and obtain approval of legitimate or digital ownership of participants who tokenize the assets in this manner. It is identical to fractional ownership shares on a stock exchange. The token owners will then be able to easily swap and transfer all of their tokens.

    What are the characteristics of a web3 supply chain?

    Web3 integrated supply chain and logistics are very secure and feature the following distinguishing characteristics:

    Continuous tracking

    Web3 supply chain and logistics include distributed ledger, which ensures that supply chain players maintain and monitor the end-to-end history of all actions beginning with orders, production activity, and payments to packaging and good transportation in real-time.

    Keeping records automatically

    All supply chain and logistical transactions between participants, as well as all essential information from linked systems like ERPs, IoT data management bases, and so on, are checked automatically. They are then securely kept on web3 distributed ledgers.

    Data from verified suppliers

    Web3's core technology is blockchain, which provides vendors with identity management and verification capabilities. It allows trusted validators to validate supplier data and offers an immutable audit trail for all suppliers on-chain.

    Hashing and timestamping

    In general, Web3 supply chain and logistics work by generating a hash value on the blockchain. This ensures that every data block in the blockchain network has a unique cryptographic identifier value.

    If the supply chain data in one of the blocks is amended or changed, the hash value of all subsequent blocks will be adjusted. Because of the timestamping and hashing, the web3 supply chain and logistics data are safe and tamper-proof.


    When combined with supply chain and logistics management, Web3 achieves high security and provides data encryption, multi-factor authentication, permission-less chain access and control, fraud detection algorithms, and other features.

    How does web3 improve product recall throughout the supply chain?

    Global supply networks support anything from consumer packaged goods to product recalls. Recalling consumer items or raw materials may be necessary on occasion to prevent accidents or illnesses.

    Recalls of consumer items affect millions of individuals globally, resulting in lost sales, replacement costs, and litigation bills. Web3 can increase product traceability by reducing counterfeiting and accelerating product recall.

    Recalls become less expensive and more successful when manufacturers can quickly and easily identify faulty items. Web3 enables a more visible and traceable supply chain, allowing for faster and more effective recalls.


    The goal of web3 for the supply chain is to increase supply chain and logistics transparency, improve traceability of activities involving multiple supply chain parties, eliminate manual labor from triggering and recording supply chain transactions, and improve the security of sensitive supply chain data.

    The growing demand for supply chain accountability and traceability, the dependability of supply chain and logistics transactions, and the strong automation of supply chain financing processes without middlemen are the key drivers of web3-based solution adoption.

    Web3 and Supply Chain Management FAQs

    What effect does Web service technology have on supply chain management?

    One approach is to automate the tracking and distribution of inventory. However, the most significant advantages of technology in supply chain management are cost reduction, improved customer service, and increased operational efficiency.

    What exactly is blockchain in the supply chain?

    Blockchain gives all participants in a supply chain access to the same information, potentially minimizing communication or data transfer problems.

    What are the three functional areas of the supply chain?

    Strategy, service, and cost are our three pillars (or principles) of outstanding supply chain management excellence.