The Impact of Applying Blockchain Technology on Reducing Supply Chain Costs in Saudi Business Environment

Abstract

Startup companies realize that blockchain technology has contributed to better supply chain management by reducing costs and enhancing efficiency in the Saudi business environment. This study explores how blockchain affects supply chain cost savings in procurement, inventory management, transportation, and payment systems. These inefficiencies, such as fraud, delays, and manual errors, are key features, such as transparency, immutability and decentralized record keeping addressed by supply chain processes that have emerged through the use of the blockchain. Blockchain adoption across Saudi industries, including oil and gas, retail, and manufacturing, has streamlined operations and saves significant cost. This has facilitated improved supplier collaboration, eliminated paper through smart contracts and removed risks of counterfeit. Rapid tracking capabilities have increased inventory accuracy, making it possible for businesses to do better demand forecasting and reducing the risk of possessing too many products or not having any. The reduction in transaction costs and time of international trade is aided further by blockchain, which automates payment settlement and simplifies cross border processes. Soft challenges such as regulation, integration complexity, and need for technology expertise all exist, yet Saudi Arabia early adopters have found improved operational reliability and customer satisfaction. This study argues that blockchain has the potential to transform the dynamics of the supply chains within Saudi Arabia and that the country’s policymakers and private sector must support this adoption in order to maintain competitiveness and economic growth.