The supply Chain Management System is integral to a company’s overall strategic goals and success. Conventional or Traditional supply chain systems suffer from issues like fraud susceptibility, inefficiencies in tracking items, and a lack of transparency. Scalability and higher demand for transaction throughput maximization are two major concerns of the existing blockchain-based approach. This paper proposes a novel framework to manage the supply chain system using Decentralized Identity. The integration of Decentralized Identity and Smart Contracts can help to lessen this challenge by streamlining transaction processes and reducing network congestion through more efficient validation approaches. The integration of Decentralized Identity solutions into blockchain-based supply chains can enhance data confidentiality. The proposed system was tested on the existing dataset and a significant reduction of cost, and scalability improvement was observed. The proposed approach improves the transaction throughput of our work by 25% and also reduces verification time by 70%, however, cost optimization highly depends on client requirements and security.