[TL;DR]
- Global supply chains face critical issues such as lack of transparency, burdensome paperwork, trust deficits, counterfeit goods, and data silos.
- Blockchain technology can address these issues through digital product passports, smart contract automation, decentralized trust mechanisms, product authenticity verification, and secure data sharing platforms.
- Wallet-as-a-Service (WaaS) accelerates circularity, decentralization, and financial integration in supply chains by enabling blockchain adoption without technical barriers, easy onboarding for diverse participants, scalable transaction handling, and multi-network support.
1. Current Challenges in the Supply Chain & Logistics Industry
1.1. Lack of Transparency and Traceability
Today’s global supply chains have become more complex than ever. It is common for a single product to pass through dozens of countries and hundreds of companies before reaching the end consumer. Due to this complexity, ensuring transparency across the supply chain and tracing products has become increasingly difficult.
In particular, for domestic companies to remain competitive in the global market, they must be able to clearly track every step from raw material sourcing to final delivery. However, in reality, complete traceability is not being achieved. Most companies lack visibility beyond their first-tier suppliers, which poses serious vulnerabilities in terms of quality control, ethical sourcing, and risk management.
For example, when contaminated ingredients are discovered in the food industry, it can take anywhere from a few days to several weeks to identify the exact origin and distribution path of the materials. Such delays not only threaten consumer safety but also seriously damage corporate reputations.
Moreover, in today’s complex international trade environment, a precise traceability system is essential for proving product origin, resolving tariff issues, and demonstrating regulatory compliance. Without such a system, companies face significant costs and legal risks. In fact, many domestic exporters often fail to receive tariff benefits or are penalized due to issues related to proof of origin.
1.2. Complex Paperwork and Administrative Inefficiency
Paperwork still plays a major role in logistics and supply chain management. Dozens of documents such as bills of lading, invoices, certificates of origin, and insurance certificates are required for each transaction, and most of them are still handled in paper format or managed through fragmented digital systems.
According to one study, approximately 20% of international trade costs are attributed to administrative expenses related to document processing. For small and medium-sized domestic enterprises, this issue is even more severe due to a shortage of specialized personnel to handle the complex export/import procedures and paperwork.
Moreover, delays and errors caused by poor information exchange among stakeholders are another serious problem. Shippers, forwarders, customs brokers, carriers, ports, and customs offices all use separate systems, often leading to data inconsistencies. As a result, containers may arrive at a port but get delayed at customs due to paperwork issues, or cargo may be held at a warehouse because of delayed payments.
These inefficiencies not only waste time but also lead to increased inventory management costs, worsened cash flow, and lower customer satisfaction, directly impacting business competitiveness.
1.3. Lack of Trust and Frequent Disputes Among Supply Chain Participants
Global supply chains are inherently composed of diverse participants with different interests. Suppliers, manufacturers, logistics companies, distributors, and retailers all tend to pursue their own interests, often leading to conflicting priorities and goals.
In particular, trust becomes difficult to build when information asymmetry exists between participants. For example, a supplier may not fully disclose issues with production capacity or quality, and a logistics company may withhold the real reason for a delay. This information gap fosters defensive business relationships rather than collaborative ones.
As a result, disputes frequently arise over contract terms, delivery schedules, quality standards, and payment conditions. Many small domestic manufacturers experience unfair contract changes or unilateral order cancellations by large buyers, and these disputes often escalate to legal battles, costing all parties time and money.
The lack of trust also hampers collaboration and innovation across the supply chain. In an environment where participants don’t trust each other, there is less willingness to share crucial data or insights—ultimately undermining the overall efficiency and competitiveness of the supply chain.
1.4. Counterfeit Products and Quality Control Issues
Counterfeit goods and quality management have become increasingly serious problems in global supply chains, especially in industries such as pharmaceuticals, electronics, luxury goods, and automotive parts where the damage caused by counterfeit products is enormous.
According to one report, the global counterfeit market is estimated at around $500 billion annually, accounting for about 3.3% of legitimate global trade. In Korea, the value of counterfeit goods seized by customs authorities reaches several trillion won each year.
Counterfeit goods pose not only economic damage but also severe risks to consumer safety and corporate reputation. In particular, counterfeiting of safety-critical products like medicines or auto parts can even lead to loss of life. Genuine manufacturers suffer from decreased brand value, loss of customer trust, and declining sales.
From a quality control perspective, multi-tiered supply chains present significant challenges. It’s nearly impossible for a final product manufacturer to verify the quality of every component and raw material, yet a single faulty component can significantly compromise the safety and quality of the entire product.
This challenge is worsened in global supply chains, where differing national quality standards and regulatory environments make consistent quality management more difficult. This can result in product recalls, customer complaints, and legal liabilities—leading to substantial financial burdens for companies.
1.5. Limited Data Sharing and Data Silos
In modern supply chains, data is a core asset and source of competitive advantage. However, most companies still regard data as proprietary and are reluctant to share it externally, leading to the formation of data silos that hinder end-to-end visibility and collaboration.
In reality, although many Korean companies have implemented ERP, SCM, and other systems, these systems mostly manage internal or first-tier transactional data. An integrated data flow that spans the entire supply chain remains rare.
Data sharing is especially limited between competitors or between large enterprises and SMEs where there is a power imbalance. This makes it difficult to make data-driven decisions in areas like supply chain optimization, demand forecasting, inventory management, and risk response. For instance, if a retailer doesn’t share real-time sales data with its supplier, the supplier will struggle to plan production accurately—leading to either overstock or stockouts that reduce overall supply chain efficiency.
Furthermore, inconsistency in data formats and standards is another major issue. When companies use different data formats, codes, and classification systems, integration and analysis become more complex, increasing costs and the potential for errors.
Although data silos may offer short-term advantages in protecting data security or intellectual property, they pose a fundamental obstacle to visibility, collaboration, innovation, and risk management across the entire supply chain in the long term.
2. Solutions Offered by Web3 and Blockchain
2.1. Digital Product Passports and Origin Traceability Systems
Blockchain technology can resolve the issues of transparency and traceability in supply chains by generating "digital passports" that record the complete history of a product. From raw material sourcing to manufacturing, distribution, and retail, every movement and transformation of the product is immutably recorded on the blockchain.
These digital passports are particularly valuable for high-value products or those where safety is critical. For instance, in the pharmaceutical industry, blockchain-based tracking systems allow for transparent management of the entire supply chain—from raw material sourcing to drug manufacturing, storage, and distribution. This prevents counterfeit drugs from entering circulation and enables swift recalls in case of issues.
In international trade, proving product origin is a major challenge, and blockchain can greatly simplify this process. By recording the exact source and processing steps of each product component on the blockchain, it becomes possible to automatically verify and prove compliance with origin regulations. This helps maximize tariff benefits and reduce trade disputes.
Moreover, consumers can access this information as well, allowing them to verify the authenticity and sustainability of products firsthand. Through QR codes or NFC tags, consumers can check the full history of the products they purchase, enhancing brand trust and supporting premium pricing strategies.
2.2. Process Automation Through Smart Contracts
Blockchain smart contracts can automate various processes within the supply chain, significantly reducing administrative inefficiencies. Smart contracts are autonomous programs that execute automatically when predefined conditions are met, enabling complex transactions and operations without intermediaries.
For example, international trade involves multiple stages such as shipping, delivery, customs clearance, and payment, each requiring documents and approvals. Smart contracts can automate these procedures—detecting shipment completion via IoT sensors, issuing a bill of lading on the blockchain, and triggering payment upon submission of customs documents.
Smart contracts can also revolutionize supply chain finance. Traditional supply chain financing is slow due to manual document processing and approvals, but with blockchain, product movement can be tracked in real time, enabling instant capital access based on verified status updates. This is particularly beneficial for small businesses with tight cash flow.
Another key application of smart contracts is in SLA (Service Level Agreement) management. Delivery times, quality standards, and storage conditions can be coded into smart contracts, which automatically apply penalties or rewards based on performance. This helps reduce disputes and strengthen trust between supply chain participants.
2.3. Decentralized Trust Mechanisms
One of blockchain’s most transformative aspects is that it enables trust among participants without relying on centralized authorities. With distributed ledger technology, all transactions and data are shared across the network and validated through consensus, making it impossible for a single party to manipulate data.
This is ideal for global supply chains that consist of numerous companies with no direct trust relationships. Exporters, importers, transporters, banks, and customs officials can share a single source of truth without the need for a central administrator.
Since all transactions and documents are timestamped and immutably stored on the blockchain, they can be easily audited in the event of a dispute. This helps minimize conflicts over contract terms, delivery timelines, or quality standards.
Furthermore, blockchain enables transparent reputation systems to evaluate participant trustworthiness and performance. Metrics such as on-time delivery, product consistency, and responsiveness can be recorded on-chain and used as objective criteria for forming new partnerships or selecting suppliers.
2.4. Product Authenticity Verification and Recall Management
Blockchain can serve as a powerful tool for verifying product authenticity and detecting counterfeits. By assigning each product a unique digital identity and recording it on the blockchain, real-time verification systems can be established.
In the luxury goods industry, for instance, NFC chips or QR codes can be embedded in products and linked to their unique blockchain records, allowing consumers or sellers to instantly verify authenticity. These systems greatly reduce the circulation of counterfeit goods while protecting brand value and consumer trust.
Blockchain also brings innovation to product recall management. When a defective product or part is identified, companies can quickly trace its exact distribution path and current location, enabling precise identification and efficient retrieval. This lowers recall costs and enhances consumer safety.
In industries where safety is critical, such as food or pharmaceuticals, blockchain enables instant access to batch-level product histories and root cause analysis when contamination or defects are discovered. This minimizes recall scope and reduces both consumer harm and corporate financial loss.
2.5. Data Sharing Platforms and Real-Time Visibility
Blockchain can break down data silos and serve as the foundation for secure data sharing platforms that provide real-time visibility across the supply chain. With its decentralized architecture and sophisticated access control mechanisms, participants can retain ownership of their data while sharing only what’s necessary.
In such platforms, each participant maintains full control over their data and can define precisely who can access what. For example, a manufacturer may only disclose production capacity data to specific customers, while a logistics company may share real-time tracking data exclusively with the shipper.
Secure data sharing of this nature enables collaboration and optimization across the supply chain. Real-time retail sales data, when shared with manufacturers, enables more accurate demand forecasting and production planning. Likewise, shared logistics status updates allow rapid contingency planning for unexpected delays.
Moreover, blockchain-based platforms standardize data formats and access protocols, enhancing interoperability between different systems like ERP and SCM. This facilitates seamless data exchange and strengthens digital connectivity throughout the supply chain.
These platforms can also be used to monitor sustainability across the entire supply chain. Environmental data such as carbon emissions, energy usage, and waste disposal methods can be collected and recorded on-chain, allowing businesses to assess the environmental impact of their products and make data-driven improvements.
3. The Value of WaaS in the Supply Chain & Logistics Industry
3.1. Blockchain Adoption Without Technical Barriers
Despite the many benefits of blockchain, building and operating blockchain infrastructure independently presents significant technical hurdles and costs for supply chain and logistics companies. Wallet-as-a-Service (WaaS) significantly lowers these barriers, allowing more companies to utilize blockchain technology.
WaaS provides easy-to-integrate APIs and development tools, enabling companies to implement blockchain functionality without needing expertise in blockchain architecture, cryptography, or distributed systems. This is particularly beneficial for small logistics firms or manufacturers with limited IT personnel.
For example, a freight company can use WaaS to build a blockchain-based cargo tracking system within just a few weeks—a project that might otherwise take months or over a year if developed in-house. This rapid deployment allows businesses to respond quickly to market changes and experiment with innovative solutions.
Moreover, WaaS providers handle infrastructure maintenance, security management, and technology updates, freeing businesses from the burden of building and maintaining an internal blockchain team. This leads to significant cost savings and allows companies to focus on their core business and blockchain use case development.
3.2. Easy Onboarding for Diverse Participants
The supply chain and logistics industry involves numerous participants of varying sizes and technical capabilities. Since the value of a blockchain network increases with more participants, it’s crucial to make onboarding easy for everyone involved.
WaaS provides user-friendly interfaces and tools that allow all participants to join the blockchain network regardless of their technical background. Complex tasks like key management, network configuration, and node operation are abstracted away, enabling non-technical users to benefit from blockchain features.
For example, a small-scale farmer can register their products on the blockchain through a simple mobile app, while a small trucking company can update cargo status on-chain via smartphone. This inclusivity significantly enhances the digital connectivity and data integrity of the entire supply chain.
Additionally, WaaS offers educational resources, sample code, and templates to support the onboarding process, making it easier for traditional industry players to integrate blockchain into their operations despite their lack of digital experience.
3.3. Scalable Transaction Processing
Global supply chains generate millions of transactions and updates every day. In sectors like international trade or large-scale logistics, huge volumes of data must be processed in real time. Therefore, blockchain systems must be highly scalable.
Many public blockchains face limitations in throughput and latency, making them unsuitable for large-scale supply chain applications. WaaS addresses this issue by employing various technical approaches to scalability, such as hybrid on-chain/off-chain processing models.
For example, status updates from a busy container terminal can be processed off-chain and periodically summarized and recorded on-chain, maintaining real-time responsiveness while leveraging blockchain’s benefits. Routine low-priority transactions can be handled differently from critical legal or financial ones.
Enterprise-grade infrastructure and load-balancing features provided by WaaS vendors ensure stable performance even during peak seasons or high-volume periods. This is a crucial advantage for retail supply chains during holidays or events like Black Friday.
3.4. Support for Multiple Blockchain Networks
The supply chain and logistics industry is a highly interconnected environment involving various business networks and ecosystems. Different industries, countries, and companies may choose different blockchain protocols based on their specific needs, resulting in a multi-blockchain landscape.
WaaS plays a vital role in enabling interoperability across this fragmented environment, offering support for multiple blockchain networks and cross-chain functionality that allows asset and data exchange between them. For example, a pharmaceutical manufacturer may use a private blockchain for internal supply chain management, collaborate with global distribution partners via a consortium blockchain, and implement consumer-facing authentication services on a public blockchain. WaaS enables the unified management of these multi-chain strategies through a single interface.
This flexibility is especially important when supply chain participants use different blockchain technologies. Through WaaS, companies can protect their existing blockchain investments while effectively interacting with partners on other networks.
4. Strategies for Adopting Blockchain in the Supply Chain & Logistics Industry
4.1. Integration with Existing Systems
Supply chain and logistics companies have already made significant investments in a variety of systems, and fully replacing these systems is not realistic. Therefore, the key to successful blockchain adoption is effective integration with existing infrastructure.
The first step in integration is API-based connectivity. Most WaaS solutions provide standard APIs that allow for seamless communication with existing systems. For example, when a new order is created in an ERP system, the information can be automatically recorded on the blockchain; or when inventory levels change in a WMS, the update can be synced to the blockchain.
A well-defined data synchronization strategy is also crucial. Recording every piece of data on-chain can be inefficient, so it’s important to decide carefully which data should be stored on-chain and which should remain off-chain. Typically, key information like proof of transaction, major events, and status changes is stored on-chain, while detailed transaction data or large documents are kept off-chain using a hybrid approach.
In addition, developing an “adapter” or “middleware” between legacy systems and blockchain platforms is an important integration strategy. This middleware layer transforms differing data formats and protocols while maintaining consistency across systems. WaaS solutions often provide tools and templates to simplify the development of such integration layers, reducing time and costs.
4.2. A Hybrid Approach for Gradual Adoption
Rather than a full-scale transformation, a step-by-step, incremental approach to blockchain adoption is often more effective. This allows for better risk management, time for stakeholders to adapt to new technologies and processes, and the opportunity to scale adoption based on early success.
A good starting point is to launch a pilot project with clear business value and relatively simple implementation requirements. Examples include digital authenticity verification for high-value product lines, automation of document processing for a single trade route, or the implementation of smart contracts with a specific supplier.
Based on the experience and insights gained from such pilot projects, companies can gradually expand the scope of implementation. Initially, they might focus on internal process optimization, then move on to collaboration with direct partners, and finally scale up to a comprehensive blockchain network encompassing the entire supply chain ecosystem.
A gradual approach can also be applied functionally. Companies can start with basic features such as information sharing and tracking, then gradually add more advanced capabilities such as smart contract automation, tokenized asset trading, and DAO-based governance. WaaS solutions support this modular approach, making it easy to add new features as needed.
4.3. Building Industry Consortia and Standardization
The value of blockchain increases with the number and diversity of participants. In the supply chain and logistics industry, one of the most effective strategies for blockchain adoption is to build industry consortia involving competitors, suppliers, customers, logistics partners, and other stakeholders.
Such consortia play a key role in defining common standards, protocols, and governance frameworks, and in maximizing network effects. Many blockchain initiatives in the industry are being led by consortium-based models driven by leading enterprises.
WaaS solutions provide the technical support needed to build and operate these consortia. They offer tools for easy onboarding of diverse participants, voting systems for consortium governance, and access control features for managing data sharing among members, contributing to efficient and transparent operation of the network.
Standardization efforts are also essential for blockchain adoption. Defining and adopting industry standards for data formats, API specifications, smart contract templates, and token standards ensures interoperability between different blockchain systems and prevents market fragmentation. Collaboration with global standards organizations such as ISO or GS1 is also worth considering.
5. Future Outlook: A New Paradigm for Supply Chain & Logistics
5.1. Circular Economy Models and Sustainability
With growing demands from consumers and regulators for sustainability, supply chains are shifting from a linear model to a circular economy model. Blockchain and WaaS will become key technologies accelerating and supporting this transition.
Blockchain serves as a powerful tool for tracking and verifying the environmental impact of products throughout their entire life cycle. By recording data from raw material sourcing to manufacturing, usage, recycling, and disposal on the blockchain, companies can accurately measure and improve their products’ environmental footprints.
Blockchain also facilitates the core elements of a circular economy: reuse and recycling. For example, if precise information about a product’s components is recorded on-chain, it becomes easier to determine which parts can be recycled and how they should be handled when the product reaches the end of its life. This improves recycling efficiency and reduces waste.
Tokenization of carbon credits and sustainability certifications is another key direction. Blockchain-based systems allow for verified carbon reduction activities to be issued as digital tokens and traded. This provides economic incentives for companies to invest in sustainable supply chain practices.
WaaS helps make these sustainability initiatives accessible to more businesses, particularly small and medium enterprises, by lowering the technical barriers to implementing features like environmental impact tracking, carbon reporting, and circular economy certification.
5.2. Decentralized Logistics Networks
Traditional logistics models rely on centralized hubs and hierarchical structures. However, blockchain and Web3 technologies open up possibilities for more decentralized and flexible logistics networks.
In a decentralized logistics network, individuals and small businesses can participate directly in the global logistics ecosystem. For instance, a person with a private vehicle could register their transport capacity on a blockchain-based platform and automatically form service agreements through smart contracts—essentially creating an “Uber for logistics.”
This model allows supply and demand to connect and optimize without relying on large logistics companies or centralized intermediaries. Blockchain ensures trust through secure identity verification, reputation management, contract enforcement, and payments—enabling reliable peer-to-peer logistics networks.
Moreover, these decentralized logistics networks could be governed as DAOs (Decentralized Autonomous Organizations). Service providers, shippers, and technology developers could collectively define rules and share revenue within a cooperative model.
WaaS supports the technical foundation needed to build and operate such decentralized networks, including infrastructure for identity management, reputation systems, token economies, and governance mechanisms.
5.3. Integrated Supply Chain Finance and Digital Payments
Blockchain and WaaS make it possible to integrate the physical flow of goods with the financial flow, creating new supply chain finance models that enhance capital efficiency and lower funding barriers for SMEs.
In blockchain-based systems, the movement of physical goods and the transfer of ownership can be confirmed in real time, enabling automated payments via smart contracts. For example, once an IoT sensor confirms a shipment’s delivery, a smart contract can automatically trigger the payment—eliminating delays, disputes, and administrative costs.
A more innovative approach involves tokenizing assets to enable new financing methods. Inventory in warehouses, goods in transit, and even future production capacity can be represented as digital tokens and traded—increasing liquidity and enabling more flexible fundraising options.
For instance, a small manufacturer that receives a large order from a major buyer but lacks the capital to produce it can tokenize the purchase order and sell it to investors, securing the necessary funds. Once the goods are delivered and payment is received, the system automatically distributes returns to investors.
WaaS provides the technical foundation for these new financial models, supporting digital asset issuance and trading, smart contract-based escrow, multi-currency payments, and compliance features for secure execution of complex financial flows.
WaaS also plays a crucial role in cross-border payments. Traditional international remittance systems are expensive and slow, which hinders the efficiency of global supply chains. Blockchain-based payment systems offer faster, cheaper international transactions, reducing financial friction across borders.
In conclusion, blockchain and WaaS will bring not just incremental improvements but a fundamental paradigm shift to the supply chain and logistics industry. Future supply chains characterized by autonomy, sustainability, decentralization, and financial integration will help form a more resilient, transparent, and inclusive global trade ecosystem.
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