To address the developmental dilemma of Yunnan’s traditional Chinese medicinal materials—characterized by “abundant resources but a small-scale industry”—this paper draws on supply chain management theory and employs a four-dimensional analytical framework of “upstream—midstream—downstream—collaboration” to systematically examine the constraints faced at each stage in the transformation of Yunnan’s traditional Chinese medicinal materials into the fragrance industry. The study found that weak scientific research support for fragrance quality, the absence of harvesting standards, insufficient deep processing capabilities, limited influence of end-market brands, and the lack of a traceability system tailored to the fragrance industry collectively hinder the efficient transformation of Yunnan’s TCM resources into high-value-added fragrance products. It is recommended to strengthen scientific research support and standardization for fragrance quality, enhance deep processing capabilities across the entire fragrance industry chain, cultivate end-market demand drivers in the fragrance sector, and establish a full-chain traceability system covering “fragrance fingerprints.”