IoT Devices and Blockchain Technology: A Very Fine Match

May 2

Understanding Blockchain

IoT devices and blockchain innovations have a lot more in common than you may realize.

First, let’s examine blockchain. Basically, blockchain applies time-stamps and visibility to online transactions. A blockchain continues to build upon itself, so with each blockchain transaction, security expands. In terms of supply lines, blockchain tech in conjunction with IoT can do a great job of reducing operational cost.

Supply chains generate quite a bit of paperwork. As a matter of fact, it’s estimated that about 20% of the supply chain cost is caused by paperwork. Blockchain technology in combination with IoT devices helps make information visible, but not alterable, to those with requisite access permissions. And combining blockchain with IOT technology can help substantially reduce supply chain costs.

Additionally, IoT supported by blockchain technology provides:

  • Workflow Improvement
  • Infrastructural Management
  • Reduction of Security Threats
  • Asset Life Cycle Management
  • Reduction of out-of-stock incidents
  • Reduction of data redundancy


Workflow and Infrastructure

The supply chain is complex and IoT devices can help improve operational workflow and supply chain management.  Case studies in the shipping industry have identified opportunities for cost reduction and process improvements through paperwork reduction and real-time workflow management. The improved supply chain transparency will reduce fraud and processing errors and improve inventory infrastructure management. And when the paper trail is replaced by an automated record tracking system more, and more accurate, data can be collected and used to manage the process and the operational infrastructure. In addition, with real-time data collection, and storage in the cloud, inventory in the entire supply chain can be better controlled. Inventory levels and usage rates at key stations are visible to the entire supply chain. The inventory consumption rate and replenishment rate at these key stations can then be used to tightly control the inventory levels. A more tightly controlled inventory level in the supply chain, while preventing stock-out and overstock situations, results in significant cost savings.

Improved supply chain transparency is also beneficial in situations when a product is selling particularly well. The higher sales numbers can be transferred to manufacturing facilities in real-time, allowing them to increase their production to replenish a supply line before the inventory is exhausted.

Security and Assets

Almost everything can be recorded with the records in a blockchain. A blockchain is a centralized shared ledger that is tampering resistant. It allows participating companies to store, view and share digital information in a secure environment. Blockchains are designed to be secure and because of this feature companies are exploring ways to use blockchains for fraud prevention. Fraud in supply chains is an issue because they are complex and offer lots of opportunities for fraud to be committed and go undetected. Blockchain can help to reduce fraud in the supply chain with greater transparency and improved traceability of inventory. Once an item is digitized on a blockchain, it can easily be traced back to its origin. With blockchain ledgers supported by IoT devices,  security threats to assets in a supply chain can be identified and reduced.

Reduction of Redundancies

Something else that is considerable here is the reduction of data redundancies. In terms of backup, redundancy is good, but with a supply chain, too much paperwork can “clog the works”. With blockchain-enabled IoT, everyone can more easily get on “the same page”, errors can be identified, and obtuse bureaucratic data creation can be managed such that the weight of infrastructural supply chain organization is reduced.

Optimizing Your Supply Chain

IoT devices which incorporate blockchain protocols can help optimize supply chains in terms of security, efficiency, and ultimately, profitability. An added bonus is increased competitiveness through decreased operational losses, and subsequent increase in profit. Accordingly, introducing this technology has a high chance of paying for itself.

Johannes Beekman

About the author

Our CEO has more than 25 years of experience in manufacturing in the high-tech industry. Johannes has worked for 25 years in the semiconductor industry, where he worked for Philips, Infineon, and Sematech in various management positions in process development, engineering, operations, and sales and marketing. While working for Philips, he was an engineering manager in 2 wafer fab startups. And while at Sematech, he managed various international technical symposia. He has built 3 successful digital marketing companies in the past 8 years. His focus is marketing integration, marketing technology, SEO, and inbound and outbound marketing. And he has developed a content creation system that uses the AIDA model to develop content for every stage of the sales funnel. Johannes has experience working with companies in manufacturing, the high-tech industry, process industry, IT, healthcare, and legal industry, and he has published on several trade-focused websites.


Agriculture IoT, Healthcare IoT, home IoT, industrial IoT, internet of things, IoT, IoT blog, IoT Business, IoT companies, IoT consulting, IoT cybersecurity, IoT Devices, IoT home, IoT marketing, IoT Security, IoT sensors, IoT Technology, Manufacturing IoT, Medical IoT, Retail IoT

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}