Blockchain and Lean Systems in Supply Chain Management

Posted on Mar 31, 2026 in Business Administration and Management (BAM)

Blockchain Technology in Supply Chain

Blockchain is a tool used to build a shared story. As a decentralized system, it is useful for creating a shared record of events. Once recorded, data cannot be changed. It encompasses various models, including decentralized, distributed, centralized, public, and private systems. This innovative technology enhances customer service and increases efficiency by creating shared and secure data records.

Benefits to Supply Chain Management (SCM)

  • Advanced Traceability: Tracking products throughout the entire chain.
  • Improved Transparency: Open access to verified data.
  • Boosted Efficiency: Streamlined operations and reduced delays.
  • Security and Trust: Immutable records ensure data integrity.
  • Easy Compliance: Simplified regulatory reporting.
  • Throughput and Performance: Optimized flow of information.
  • Standardization and Data Privacy: Uniform protocols with secure access.

Operations Strategy: Push, Pull, and Postponement

Strategic operations can be categorized into three main types:

  • Push (Generate Stocks): Production is based on forecasted demand to build inventory.
  • Pull (On-Demand): Production is triggered only when a specific request is made.
  • Postponement: A hybrid approach (e.g., in the automotive industry, the first stage is push to create base components, while the second stage is pull to customize the car).

JIT, TPS, and Lean Manufacturing Principles

Just-in-Time (JIT), the Toyota Production System (TPS), and Lean Manufacturing solve three primary issues: eliminating waste, removing variability, and improving throughput.

1. Eliminating Waste

Waste is defined by Ohno’s Seven Wastes: Inventory, Queues, Defects, Overproduction, Motion, Transportation, and Over-processing. To combat this, the 5Ss framework is used:

  • Sort, Simplify, Shine, Standardize, and Sustain.
  • Additional pillars include Security and Support.

2. Removing Variability

Variability refers to any deviation from the optimum process. JIT and Inventory management are essential tools used to identify and eliminate these deviations.

3. Improving Throughput

A pull system increases throughput. By removing inventory cushions, the manufacturing cycle time is significantly reduced.

Productivity and Capacity Management

Measurement Problems

Productivity measurement faces challenges regarding quality, external elements, and the use of precise units.

Capacity Decisions

Capacity must be integrated into the mission and strategy by forecasting demand, understanding technology, determining the optimum operating level, and building for change.

Managing Demand Scenarios

  • Case 1: Demand exceeds Capacity. Strategies include increasing prices and long-term capacity expansion.
  • Case 2: Capacity exceeds Demand. Strategies focus on stimulating the market.
  • Case 3: Adjusting for Seasonal Demand. Strategies involve building complementary products.

Case Study: The Porkchain Platform

The following points clarify the operational logic of the Porkchain platform:

  • In the Porkchain case, Ethereum and Bitcoin are used as blockchains for smart contracts. False.
  • In the Porkchain platform, it would be impossible to have data traceability without the hash. True.
  • The Porkchain platform works in a centralized manner and uses centralized records. False.
  • The Porkchain platform provides an immutable ledger of data, from livestock to the slaughterhouse. True.

Advanced JIT Techniques and Implementation

Just-in-Time (JIT) ensures materials arrive where and when they are needed through several techniques:

  • Suppliers: Requires a meaningful buyer-supplier relationship and on-time deliveries.
  • Layout: Utilizes work cells for product families, large numbers of operations in the same area, minimized distance, improved communication, flexible equipment, and cross-trained workers.
  • Inventory: Employs a pull system and reduced lot sizes. This requires improved material handling and reduced set-up times.
  • Scheduling: Uses level scheduling (processing frequent small batches) and Kanban (a card system serving as an authorization for the next container of material to be produced).
  • Quality: Utilizes statistical process control, empowered employees, and immediate feedback.

Toyota Production System and Lean Organizations

TPS focuses on continuous improvement (Kaizen and organizational culture), respect for people, and standard work practices. Work is defined by:

  • Defined Tasks: What, how, when, and the expected result.
  • Direct Relationships: Clear customer-supplier links.
  • Simple Flows: Direct movement of goods and services.
  • Scientific Improvement: Improvements made via the scientific method at the lowest level of the organization.

Lean Manufacturing Operations

Lean operations are focused on the customer, optimizing the entire process from the customer’s perspective. Regarding sustainability, Lean aims to maximize resource use and economic efficiency while focusing on issues outside the immediate firm.

Building a Lean Organization

Building a Lean organization is difficult but typically involves the following attributes:

  • Implementation of JIT techniques.
  • Systems that help employees produce perfect parts.
  • Reduced space requirements.
  • Developed partnerships and educated suppliers.
  • Elimination of all non-value-added activities.
  • Employee development and challenging job roles.
  • Increased worker flexibility.