Blockchain Technology Trend for Future Use in Supply Chain Visibility and Tracking

Introduction

Blockchain technology offers many benefits over conventional supply chain tracking systems, especially when it comes to making the supply chain more secure, transparent, and efficient, as opposed to traditional barcode systems. While blockchain is currently being used heavily within food supply chains, this chapter explores how it can be applied to and benefit apparel supply chains as well.

According to IBM, Blockchain is defined as a decentralized, distributed, and immutable digital ledger used to record transactions across a network of computers (Susnjara & Smalley, 2025). It ensures data security and transparency by chaining data blocks together using cryptographic hashes, making records nearly impossible to alter. Blockchain is innovative because it supports secure and transparent transactions without relying on traditional third-party firms. It is designed to reduce errors related to inventory, storage, tracking, fraud, and data inconsistencies. In addition to improved loss prevention and security, blockchain technology also offers increased efficiency and the potential for lower operational costs.

The apparel industry continues to rely heavily on traditional tracking systems, including barcodes, which are prone to tracking and inventory errors (Chapman, 2024). Beyond operational inefficiencies, the apparel industry is often criticized for being inherently unethical and unsustainable (Bari, Jin, & Min, 2025). Specifically, labor and human rights issues are escalated by a lack of visibility and transparency across supply chains. In contrast, the food industry has made significant progress by utilizing blockchain technology to improve visibility, traceability, and accountability. By using the food industry as a model, the apparel industry could streamline operations, strengthen sustainability efforts, and improve loss prevention initiatives. The food industry has adopted blockchain more quickly because it has stricter safety and traceability rules (Vignesh et al., 2025).

Background

Unlike blockchain technology, the apparel industry has existed for centuries and has undergone multiple innovations. These include advancements in production speed, globalized supply chains, the development of natural and synthetic fibers, and the introduction of more sustainable processes. However, these innovations also come with ongoing challenges, including visibility, fragmentation, sustainability, ethical concerns, and counterfeiting.

Limited visibility makes it difficult for companies to track products across multiple tiers of suppliers. Fragmentation, caused by global outsourcing, leads to disjointed systems and communication gaps across the supply chain. As a result, businesses often experience delays, inefficiencies, and communication gaps between partners.

The apparel industry faces operational challenges, as well as ongoing concerns related to sustainability and ethics. Resource-intensive production processes can harm the environment and generate significant waste, and labor practices are difficult to monitor without clear systems.

Counterfeiting further damages brand integrity and consumer trust even more, making it harder for companies to stay credible in a market that is becoming more focused on accountability. At the same time, consumer demand for sustainability and ethical accountability has significantly increased. However, this rise in demand has been paralleled by an increase in greenwashing, where companies make misleading claims about their environmental or ethical practices (Bari, Jin, & Min, 2025). As a result, blockchain technology has become a possible answer because it connects transparency and traceability, which lets businesses check claims about sustainability.

Trend Analysis

Blockchain technology was first introduced with the creation of Bitcoin in January 2009 (Sunny et al., 2020). Initially, it functioned as an experimental technology system before transitioning into more strategic business adoption (Deloitte Consulting LLP, 2020). This shift is primarily driven by increasing consumer pressure for companies to take greater responsibility for supply chain visibility, ethical sourcing, and sustainability practices.

Within the apparel industry, blockchain can be applied to several key areas, including supply chain visibility, product authentication, sustainability tracking, and digital product passports (Shamsuzzoha et al., 2025). These applications allow companies to provide verifiable data about a product’s origin, materials, and production conditions, creating a more transparent relationship with consumers.

Despite its advantages, blockchain technology comes with limitations (Sunny et al., 2020). The accuracy of blockchain outputs is entirely dependent on the accuracy of the data entered, meaning that incorrect inputs can still lead to misleading results. Additionally, blockchain is still relatively new and requires a high initial investment for implementation. Although long-term cost efficiencies may offset these expenses, the upfront cost remains a barrier for many companies.

Another challenge is the lack of standardization across blockchain systems, making it difficult for organizations to determine which platforms best meet their needs. Furthermore, blockchain is more complex to implement across large, global supply chains compared to smaller, more centralized ones.

Advanced technologies and transparency practices across supply chains are continuing to rise, transforming how sourcing decisions are made. These developments include improvements in supplier selection, lead times, cost frameworks, and risk evaluation. As companies adopt more data-driven systems, sourcing professionals are beginning to shift away from forecasting-based models and more toward real-time decision-making. This shift allows for greater accuracy, efficiency, and responsiveness within global supply chains.

For example, Walmart has implemented ambient IoT sensors that allow it to track ownership, inventory locations, and product conditions in real time. This technology helps sourcing professionals switch from old-fashioned forecasting methods to real-time, data-driven strategies that make inventory more accurate and help them decide when to restock. This means that businesses can react more quickly to problems in the supply chain and make better choices about where to get their goods, which will make their operations run more smoothly (Violino, 2025).

In addition to operational improvements, sourcing models are progressively centered around sustainability. Platforms such as Queen of Raw illustrate how sourcing professionals can leverage digital marketplaces and blockchain technology to procure unused materials in an environmentally responsible way while also reducing costs. This supports circular sourcing models, where excess inventory is repurposed rather than discarded, allowing companies to keep making money while also reducing waste (Jones, 2020).

However, these advancements are not without challenges. Implementation of new technologies can be complex, requiring coordination across multiple systems and stakeholders. There is also a lack of standardized frameworks for evaluating traceability and transparency initiatives. Research suggests that this absence of standardization complicates vendor evaluations, weakens accountability, and increases the risk of greenwashing, often forcing companies to rely on internal evaluation systems (Bari, Jin, & Min, 2025).

As a result, sourcing professionals must balance sustainability goals, technological adaptability, and cost considerations while maintaining transparency and data-driven decision-making. This change fundamentally alters decision-making by mandating that sourcing professionals prioritize verified data over assumptions. Choosing a supplier is not just about cost and efficiency anymore; it is also about how open, traceable, and sustainable their business is. This moves sourcing to a more strategic, data-driven function within organizations. Collectively, these developments position sourcing as a strategic function that is central to both operational performance and ethical accountability, ultimately contributing to long-term business success (Bari, Jin, & Min, 2025).

Implications for Sourcing Professionals

Blockchain technology has a significant impact on sourcing professionals by making decision-making data-driven and transparent. Having real-time, verifiable supply chain data at their disposal, practitioners can choose suppliers based on ethical practices, sustainability, performance, and traceability, rather than cost or long-standing relationships.

This means sourcing professionals will need enhanced technological and analytical skills to adapt to systems of continuous monitoring and verification. Blockchain technology can also support more sustainable sourcing practices by enabling circular models and reducing waste. Taken together, these changes make sourcing a strategic function, supporting both operational efficiency and corporate responsibility.

Conclusion

Blockchain technology is reshaping the apparel supply chain by addressing long-standing challenges related to inefficiency, lack of transparency, and ethical concerns. By enabling secure, real-time data sharing, blockchain improves traceability, reduces fraud, and supports more responsible sourcing practices.

While challenges such as high implementation costs and lack of standardization remain, the increasing adoption of blockchain across industries suggests strong future potential. For sourcing professionals, this shift requires adapting to more data-driven decision-making processes and prioritizing transparency in operations. It also highlights the importance of investing in technologies that support both performance and ethical responsibility.

As consumer demand for transparency continues to grow, blockchain has the potential to become a critical tool in building a more efficient, trustworthy, and accountable apparel industry, giving future-focused apparel companies a critical competitive advantage. Although it is not without limitations, its ability to enhance visibility and verify supply chain practices positions it as a transformative force in how apparel products are sourced, produced, and distributed.

References

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Shamsuzzoha, A., Shahzad, K., Nousiainen, E., Ranta, M., Helo, P., & Govindan, K. (2025). Ensuring supply chain transparency by Deploying Blockchain‐Enabled Technology: An Overview with demonstration. International Journal of Intelligent Systems, 2025(1). https://doi.org/10.1155/int/7304193

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Susnjara, S., & Smalley, I. (2025, November 17). What is Blockchain? ibm.com/us-en. https://www.ibm.com/think/topics/blockchain#:~:text=IBM’s%20Blockchain%20Platform%20is%20an%20open-source%2C%20modular,eliminates%20the%20need%20for%20time-consuming%20record%20reconciliations

Vignesh, B., Chandrakumar, M., Divya, K., Prahadeeswaran, M., & Vanitha, G. (2025). Blockchain technology in agriculture: Ensuring transparency and traceability in the food supply chain. Plant Science Today, 12(sp1). https://doi.org/10.14719/pst.5970 

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