Blockchain and supply chain management integration: a systematic review of the

literature: Purpose – This paper aims to identify, analyse and organise the
literature about blockchains in supply chain management (SCM) context (blockchain–
SCM integration) and proposes an agenda for future research. This study aims to
shed light on what the main current blockchain applications in SCM are, what the
main disruptions and challenges are in SCM because of blockchain adoption and what
the future of blockchains holds in SCM.
Design/methodology/approach – This study followed the systematic review approach to
analyse and synthesise the extant literature on blockchain–SCM integration. The
review analysed 27 papers between 2008 and 2018 in peer-reviewed journals.
Findings – Blockchain–SCM integration is still in its infancy. Scholars and
practitioners are not fully aware of the potential of blockchain technology to
disrupt traditional business models. However, the electric power industry seems to
have a relatively mature understanding of blockchain–SCM integration, demonstrated
by the use of smart contracts. Additionally, the disintermediation provided by
blockchain applications has the potential to disrupt traditional industries (e.g.
health care, transportation and retail).
Research limitations/implications – The limitations of this study are represented
mainly by the scarcity of studies on blockchain–SCM integration in leading journals
and databases.
Practical implications – This study highlights examples of blockchain–SCM
integration, emphasising the need to rethink business models to incorporate
blockchain technology.
Originality/value – This study is the first attempt to synthesise existing
publications about the blockchain–SCM integration, shedding light on the disruption
caused by, and the necessity of, the SCM reconfigurations.
Blockchain and Supply Chain Management: A New Paradigm for Supply Chain Integration
and Collaboration: Despite there are some arguments about blockchain, it has been
highlighted as an important distributed secure technology in the 21st century. It
is an incorruptible digital ledger of economic transactions that can be programmed
to record not just financial transactions but virtually everything of value.
Dobrovnik et al. (2018) suggest that blockchain is a revolutionising technology
that would change industries at an international level, add values to firms and
supply chain networks, improve commerce, and drive economy. Although blockchain has
attracted attentions, very few blockchain studies have been focussed on supply
chain integration and collaboration areas. This study illustrates the possibilities
of applying blockchain technology in the coordination of activities for effective
and efficient supply chain management. The study takes a closer look at the use of
blockchain in supply chains beyond cryptocurrency, payment, and finance via the use
of smart contract and consensus algorithm (i.e., imposing constraints). The key
attributes of blockchain are discussed and potential questions were identified in
New Zealand. The expected outcome of this study will advance the understanding of
the blockchain and supply chain literature, besides inspire both researchers and
practitioners to consider the use of blockchain in different context-aware future
studies.
Blockchain in supply chain management: a review, bibliometric, and network
analysis: Blockchain is a distributed ledger technology that has attracted both
practitioners and academics attention in recent years. Several
conceptual and few empirical studies have been published focusing on addressing
current issues and recommending the future
research directions of supply chain management. To identify how blockchain can
contribute to supply chain management, this
paper conducts a systematic review through bibliometric and network analysis. We
determined the key authors, significant
studies, and the collaboration patterns that were not considered by the previous
publications on this angel of supply chain
management. Using citation and co-citation analysis, key supply chain areas that
blockchain could contribute are pinpointed
as supply chain management, finance, logistics, and security. Furthermore, it
revealed that Internet of Things (IoT) and smart
contracts are the leading emerging technologies in this field. The results of
highly cited and co-cited articles demonstrate that
blockchain could enhance transparency, traceability, efficiency, and information
security in supply chain management. The
analysis also revealed that empirical research is scarce in this field. Therefore,
implementing blockchain in the real-world supply
chain is a considerable future research opportunity
Blockchain technology: implications for operations and supply chain management:
Purpose – This paper aims to encourage the study of blockchain technology from an
operations and supply chain management (OSCM) perspective, identifying potential
areas of application, and to provide an agenda for future research.
Design/methodology/approach – An explanation and analysis of blockchain technology
is provided to identify implications for the field of OSCM. Findings – The hype
around the opportunities that digital ledger technologies offer is high. For OSCM,
a myriad of ways in which blockchain could transform practice are identified,
including enhancing product safety and security; improving quality management;
reducing illegal counterfeiting; improving sustainable supply chain management;
advancing inventory management and replenishment; reducing the need for
intermediaries; impacting new product design and development; and reducing the cost
of supply chain transactions. The immature state of practice and research
surrounding blockchain means there is an opportunity for OSCM researchers to study
the technology in its early stages and shape its adoption. Research
limitations/implications – The paper provides a platform for new research that
addresses gaps in knowledge and advances the field of OSCM. A research agenda is
developed around six key themes. Practical implications – There are many
opportunities for organisations to obtain an advantage by making use of blockchain
technology ahead of the competition, enabling them to enhance their market
position. But it is important that managers examine the characteristics of their
products, services and supply chains to determine whether they need or would
benefit sufficiently from the adoption of blockchain. Moreover, it is important
that organisations build human capital expertise that allows them to develop,
implement and exploit applications of this technology to maximum reward.
Originality/value – This is one of the first papers in a leading international OSCM
journal to analyse blockchain technology, thereby complementing a recent article on
digital supply chains that omitted blockchain.
Blockchain Technology in Supply Chain Management: An Application Perspective: Given
the hype around the cryptocurrency Bitcoin, blockchain technology (BCT) has also
received considerable attention outside the financial sector. Multiple applications
of BCT in supply chain management (SCM) are discussed in business practice and
there is increasing interest in this topic within the academic community. In this
paper, we intend to combine these two perspectives on BCT in SCM to summarize a
current state of the art and to derive avenues for further research. For this
purpose, a comprehensive framework of use case clusters of BCT in SCM is developed
according to the distinctive features of BCT. The framework is used to analyze 53
applications of BCT in SCM which are derived from a systematic literature review
and a secondary dataset of blockchain-driven innovations in SCM. We identify five
emerging use case clusters of BCT in SCM which clearly extend the scope beyond
frequently mentioned applications such as product tracking and tracing
Blockchain technology and its relationships to sustainable supply chain management:
Globalisation of supply chains makes their management and control more difficult.
Blockchain technology, as a distributed digital ledger technology which ensures
transparency, traceability, and security, is showing promise for easing some global
supply chain management problems. In this paper, blockchain technology and smart
contracts are critically examined with potential application to supply chain
management. Local and global government, community, and consumer pressures to meet
sustainability goals prompt us to further investigate how blockchain can address
and aid supply chain sustainability. Part of this critical examination is how
blockchains, a potentially disruptive technology that is early in its evolution,
can overcome many potential barriers. Four blockchain technology adoption barriers
categories are introduced; inter-organisational, intra- organisational, technical,
and external barriers. True blockchain-led transformation of business and supply
chain is still in progress and in its early stages; we propose future research
propositions and directions that can provide insights into overcoming barriers and
adoption of blockchain technology for supply chain management.
BLOCKCHAIN AND SUPPLY CHAIN MANAGEMENT: AIRCRAFTS’ PARTS’ BUSINESS CASE: To serve
target customers better than their competitors, supply chain management (SCM) teams
today look into new technologies such as Big Data, Internet of Things (IoT) and
Blockchain. These new technologies allow managers to develop and provide complex
supply chain services and products faster with improved reliabilities. With these
technologies, SCM teams can build complex models of a supply chain or systems of
supply chains using a data-driven approach. With the growth of aviation domain
across the world, there has been increasing demand in aircraft for airlines and
other customers. In this domain, SCM teams deal with complex networked supply
chains for aircraft’s spare part purchase and delivery for aircraft’s maintenance
and repair. Aircraft’s spare parts are shipped to single assembly hubs, located
globally. All parts come with certain life expectancy, specific requirements and
maintenance attributes. With thousands of spare parts, hundreds of parameters, and
number of manufactures distributed globally, SCM team need to deal with very large
amount of data. In this paper, we use an industrial scenario of aviation industry
SCM to demonstrate the necessity of having decentralized system based on
distributed data-driven application technologies such as Blockchain, not only to
assist in maintaining inventory of the aircraft’s parts but also to monitor the
performance, usage, etc. This will help to achieve a transparent network of supply
chain for aircraft’s parts and reduce the risk of availability of aircraft’s parts
in black market. These new data-driven technologies when embedded into SCM
scenarios will help the SCM managers to analyse the supply, demands, source of
availability of spare parts and provide methods to procure them from the right
sources.
When Blockchain Meets Supply Chain: A Systematic Literature Review on Current
Development and Potential Applications: This study aims to explore the current
status, potential applications, and future directions of blockchain technology in
supply chain management. A literature survey, along with an analytical
review, of blockchain-based supply chain research was conducted to better
understand the trajectory of related research and shed light on the benefits,
issues, and challenges in the blockchain-supply-chain paradigm. A selected corpus
comprising 106 review articles was analyzed to provide an overview of the use of
blockchain and smart contracts in supply chain management. The diverse industrial
applications of these technologies in various sectors have increasingly received
attention by researchers, engineers, and practitioners. Four major issues:
traceability and transparency, stakeholder involvement and collaboration, supply
chain integration and digitalization, and common frameworks on blockchain-based
platforms, are critical for future orientation. Traditional supply chain activities
involve several intermediaries, trust, and performance issues. The potential of
blockchain can be leveraged to disrupt supply chain operations for better
performance, distributed governance, and process automation. This study contributes
to the comprehension of blockchain applications in supply chain management and
provides a blueprint for these applications from the perspective of literature
analysis. Future efforts regarding technical adoption/diffusion, block-supply chain
integration, and their social impacts were highlighted to enrich the research
scope.
The power of a blockchain-based supply chain: A supply chain is a system of
organizations, people, activities, information and resources involved in moving a
product or service from supplier to customer. It is designed to maintain the
quality of sensitive goods during the whole shipment. Centralized supply chain
management systems expose the supply chain to corruption, fraud, and tampering.
Blockchain has emerged as a new distributed information technology; it represents a
new ap- proach in supply chain area, where visibility and transparency of product
flows are the principal challenges. This paper describes how the blockchain can be
integrated into the supply chain architecture to create a reliable, transparent,
authentic and secure system. To reach this goal, we studied the benefits of
introducing the block- chain to the supply chain and the challenges encountered in
a blockchain-based supply chain management ecosystem. We combined theoretical and
real-world application studies to build our theory about the require- ments for an
efficient blockchain-based supply chain.
Blockchain and Supply Chain Management: Many authors have explored the potential
impact of blockchain on supply chain management, and indeed, many articles in the
popular press extol the potential of blockchain to impact the supply chain. In this
white paper, we argue that while blockchain does have some potential to impact
supply chains in the short term, many of the potential blockchain-enabled supply
chain impacts will require signif- icant research advances. We identify four
categories of issues that researchers must address in order for many of the
interesting proposed blockchain-enabled supply chain use cases to be feasible. If
these issues are addressed, we have little doubt that the potential of blockchain-
enabled supply chain is enormous.
An analysis of Blockchain in Supply Chain Management: System Perspective in Current
and Future Research: Purpose: This study aims to review the current academic
research on blockchain, especially in the fields of business and economics. Based
on a systematic review of literature retrieved from the Web of Science service, the
researchers explore the top-cited articles, the most productive countries, and the
most common keywords. Methodology: This research conducts a clustering analysis and
identifies the following five research themes: “economic benefit,” “blockchain
technology,” “initial coin offerings,” “fine tech revolution,” and “sharing
economy.” Findings: It showed that the most common subject area is Computer
Science, following research by Engineering, Telecommunications, and Business and
Economics. With regard to Business and Economics, several key nodes have been
identified in the literature, such as the top-cited articles, most productive
countries.
Blockchain for the future of sustainable supply chain management in Industry 4.0:
The objective of this study is to provide an overview of Blockchain technology and
Industry 4.0 for advancing supply chains towards sustainability. First, extracted
from the existing literature, we evaluate the capabilities of Industry 4.0 for
sustainability under three main topics of (1) Internet of things (IoT)-enabled
energy management in smart factories; (2) smart logistics and transportation; and
(3) smart business models. We expand beyond Industry 4.0 with unfolding the
capabilities that Blockchain offers for increasing sustainability, under four main
areas: (1) design of incentive mechanisms and tokenization to promote consumer
green behavior; (2) enhance visibility across the entire product lifecycle; (3)
increase systems efficiency while decreasing development and operational costs; and
(4) foster sustainability monitoring and reporting performance across supply chain
networks. Furthermore, Blockchain technology capabilities for contributing to
social and environmental sustainability, research gaps, adversary effects of
Blockchain, and future research directions are discussed.
How Blockchain Enhances Supply Chain Management: A Survey: Providing transparency
and trust among participants and stakeholders and ensuring an efficient operation
are current supply chain challenges. These challenges are difficult to resolve
because the records of supply chains may be exposed to alterations by participants.
Blockchain technology has been identified as a promising solution to resolve these
challenges. In this paper, we introduce blockchain and survey recent blockchain
frameworks that address some of the supply chain challenges. We describe the
components and operation of these blockchain frameworks. We identify the objectives
and motivation in each of the surveyed use cases and highlight the advantages and
disadvantages of each adopted framework. We analyze how the reported blockchain
frameworks address different supply chain challenges. We present a comparative
summary of existing literature on blockchain for supply chain. We also summarize
the properties of a blockchain framework for its successful adoption in future
supply chains and discuss several remaining challenges and opportunities.
An exploration of blockchain technology in supply chain management: Day by day new
technologies are applied to the business environment. Since the start of the fourth
industrial revolution, the digital tools allow productivity improvement. Different
kinds of technologies have been used to support companies in tasks of sending and
receiving information. The information exchanged between companies has always being
a concern when having in mind trust, speed, and safety. During few decades, EDI
(electronic data exchange) was the main technology supply chain professionals used
to send and receive information. Recently, with the rise of the fourth industrial
revolution and the Internet of Things (IoT), many aspects of the business
environment have changed. Individuals and organizations are required to be more
productive. One of the mainstreams for the business environment is blockchain. Some
researches argued that bitcoin is the pioneer of blockchain technology. Financial
companies joined forces to build a technological infrastructure to use the
cryptocurrency on the market. The first blockchain conceived in 2008, in the wake
of the global financial crisis and it has never been hacked. Supply chains are
complex networks of distant, separate entities that exchange goods, payments, and
data across a dynamic, continuously evolving landscape. Blockchain technology
allows visibility providing the customer the opportunity to understand how the
supply chain works and how to get more information about products traceability.
However, there are some challenges to implement blockchain in logistic and supply
chain. The paper presents a theoretical review including the principles of the
blockchain operations and the required infrastructure to implement it. The paper
does not cover the technology architecture applied to the blockchain. The potential
benefit of the blockchain will be covered to understand how to apply it in
logistics and in the supply chain environment, presenting some examples already
implemented or identified.
Leveraging the Internet of Things and Blockchain Technology in Supply Chain
Management: Modern supply chains have evolved into highly complex value networks
and turned into a vital source of competitive advantage. However, it has become
increasingly challenging to verify the source of raw materials and maintain
visibility of products and merchandise while they are moving through the value
chain network. The application of the Internet of Things (IoT) can help companies
to observe, track, and monitor products, activities, and processes within their
respective value chain networks. Other applications of IoT include product
monitoring to optimize operations in warehousing‚ manufacturing, and
transportation. In combination with IoT, Blockchain technology can enable a broad
range of different application scenarios to enhance value chain transparency and to
increase B2B trust. When combined, IoT and Blockchain technology have the potential
to increase the effectiveness and efficiency of modern supply chains. The
contribution of this paper is twofold. First, we illustrate how the deployment of
Blockchain technology in combination with IoT infrastructure can streamline and
benefit modern supply chains and enhance value chain networks. Second, we derive
six research propositions outlining how Blockchain technology can impact key
features of the IoT (i.e., scalability, security, immutability and auditing,
information flows, traceability and interoperability, quality) and thus lay the
foundation for future research projects.
Potential of blockchain technology in supply chain management: a literature review
Purpose – The purpose of this paper is to review the existing literature on
blockchain technology, present some trends and consider its potential value in
supply chain management (SCM).
Design/methodology/approach – Papers that contained the word “blockchain” in their
titles, keywords or abstracts were selected for conducting trend analyses.
Findings – The blockchain technology is rapidly making inroads in many industries
and there is tremendous potential to eliminate intermediaries and to make SCM more
efficient.
Research limitations/implications – This analysis is limited to 299 papers from the
EBSCO database through December 2018.
Practical implications – This paper highlights the imperative role of blockchain
technology that has created a discourse in the world of innovation and technology.
This work will help academics to further the understanding of blockchain
technology.
Social implications – Blockchain technology will provide transparency to consumers.
Originality/value – This paper presents the first review of blockchain technology
and delves into its value in SCM. This work will help researchers in identifying
the areas where blockchain is the most desirable and can be implemented.
Keywords Blockchain, Smart contract, E-commerce, Global sourcing, Supply-chain
management,
Logistics management, Disruptive technology Paper type Literature review
Blockchain as the “trust-building machine” for supply chain management
This paper aims to investigate the impact of blockchain application on trust levels
in supply
chains. Through the systematic review of the relevant literature, three dimensions
of trust,
i.e., the trustor–trustee perspective, forms of trust, and time orientation, are
investigated. Our
findings show that, first, there are three pairs of trustors and trustees involved
in blockchain
implementation: (a) the user and the blockchain, (b) two supply chain partners, and
(c) the
consumer/public and a supply chain unit. Second, the two forms of trust, namely
cognition based and institution-based trust, are likely to be enhanced by
blockchain execution, while
affect-based trust may not be directly impacted by the technology. Third, the
presence of
blockchain technology would facilitate swift trust-building between unknown supply
chain
partners under specific circumstances. Moreover, we also find contradicting
assertions among
scholars on the implications of blockchain for trust in supply chains. While some
studies pointed out that blockchain will enable a trustless trusted scheme, others
expected the
reinforcement of interorganizational trust. To test these assertions, we develop
the blockchain entrusted supply chain models to present the three-step process of
how trust is developed
through the blockchain and diffused to supply chain partners and external
stakeholders.
Critical success factor analysis of blockchain technology in agri-food supply chain
management: A circular economy perspective
In the sustainability system, which gives importance to the availability of
resources, recycling, renewal, and reproduction strategies can be handled under the
name of the circular economy. While there are many stages to be followed from food
production to consumption and even recycling, one of the technologies that will
contribute to the circular economy that can take an active role in these stages is
blockchain technology. In this study, which is about the circular economy in
sustainable supply chain management, the contribution of blockchain technology to
agri-food supply chain management is discussed. The aim of the study is to
research, analyze and prioritize the critical success factors of the use of
blockchain technology for the agri-food sector on the way to the circular economy.
As a first step, with the help of PESTEL analysis approach, 12 critical success
factors for agri-food supply chain management under the political, economic,
social, technological, environ- mental, and legal dimensions of blockchain
technology within the scope of circular economy are determined. Analytic Network
Process (ANP) and MultiAtributive Ideal-Real Comparative Analysis (MAIRCA) methods
are used in an integrated way to consider the degree of influence between the
factors and to determine the ideal optimal factor. In the results, it is determined
that the political and technological sub-criteria of blockchain technology is
determined, and it is observed that the criteria handled in line with the
sustainability system are compatible with the perspective of reducing the waste of
resources of the circular economy. If blockchain technology is used in the agri-
food sector, it has been determined that it will contribute to the circular economy
with the success factors in this study. “Ability to prevent food waste”; “Increased
food security”; “Product life- cycle tracking” factors take priority in their
ranking.

Uncovering dimensions of the impact of blockchain technology in supply chain

management
Supply chains around the globe are faced with difficulties and disruptions due to
the worldwide pandemic situation and digital solutions are needed. There is
significant research interest in the implementation of blockchain technology (BCT)
for supply chain management (SCM). A challenge that remains is analyzing the
interactions of BCT in different areas of SCM. This study aims to identify the
influential dimensions of the impact of BCT adoption in SCM and to discuss the
synergetic and counter-synergetic effects between these dimensions. Advantages,
disadvantages, and constraints of adopting BCT in the SCM context are explored
through a systematic literature review, which provides the foundation for
identifying the dimen- sions of impact. The interactions between these dimensions
are conceptually discussed. This study introduces three dimensions of the impact of
implementing BCT in SCM: ‘operations and processes’, ‘supply chain relationships’,
and ‘innovation and data access’. These dimensions are interrelated and have
overlapping areas within them, which leads to synergetic and counter-synergetic
effects. The overlaps and synergies of the three dimensions of impact are
illustrated, and the virtuous and vicious cycles of BCT adoption in SCM cases are
highlighted. This study assists scholars and practitioners by clarifying the
synergetic relationships within the dimensions of the impact of BCT in SCM and by
providing considerations to prevent undesirable effects and expand desired ones.

Blockchain in supply chain management: A review of efficiency, transparency, and

innovation
As global supply chains become increasingly complex, traditional systems face
challenges in ensuring efficiency, transparency, and innovation. Block chain
technology has emerged as a transformative force in addressing these issues,
offering a decentralized and secure framework for supply chain management. This
paper presents a comprehensive review of the impact of block chain on supply
chains, focusing on its potential to enhance efficiency, transparency, and foster
innovation. The efficiency gains facilitated by block chain in supply chain
management are examined through the elimination of intermediaries, reduction of
paperwork, and real-time visibility into the entire process. These improvements
result in streamlined operations, reduced costs, and enhanced responsiveness to
market dynamics. Moreover, block chain’s decentralized nature ensures data
integrity, mitigating the risk of fraud and errors in the supply chain.
Transparency is a critical aspect of modern supply chains, and block chain provides
an immutable and transparent ledger that enables end-to-end visibility. The
technology ensures traceability and accountability, allowing stakeholders to access
real-time information about the origin, movement, and status of products. This
transparency not only enhances trust among supply chain participants but also
facilitates compliance with regulatory requirements. The role of block chain in
fostering innovation within supply chains is explored, emphasizing its potential to
enable new business models, collaborative ecosystems, and the integration of
emerging technologies such as the Internet of Things (IoT) and Artificial
Intelligence (AI). The paper highlights case studies and pilot projects where block
chain has been successfully applied to drive innovation in supply chain processes.
Challenges and considerations related to the implementation of block chain in
supply chain management are also discussed, including interoperability,
scalability, and regulatory issues. The paper concludes by outlining future
research directions and emphasizing the need for industry-wide collaboration to
unlock the full potential of block chain in revolutionizing supply chain
management. Overall, this review contributes to the understanding of how block
chain can serve as a catalyst for efficiency, transparency, and innovation in
contemporary supply chains

An IoT and Blockchain-Based Secure and Transparent Supply Chain Management

Framework in Smart Cities Using Optimal Queue Model
The process of controlling the flow of products and services from a company by
encompassing each stage involved in transforming raw materials and parts into
finished items, also delivering them to the final consumer is known as Supply Chain
Management (SCM). The development of numerous smart city applications including
smart grids, smart homes, smart supply chains, and smart healthcare has drawn
attention to the Internet of Things (IoT). Nowadays, researchers are considering
the smart healthcare system’s role as a Public Emergency Service (PES) to treat
patients promptly. A distributed smart fire brigade system receives little
attention like PES to save lives and property from catastrophic fire damage. The
conventional PES methods are created using a centralized method that needs a lot of
processing power and doesn’t offer timely services. The traditional systems
developed for managing the supply chain have drawbacks like single- point failure
issues, data integrity, transparency, and lack of trust. To alleviate the existing
issues, in this paper, a Blockchain and IoT Enable Secure and Transparent Supply
Chain Management framework is utilized for PES in the smart city environment.
Further, two edge computing servers, like a service controller and an IoT
controller are adapted. The local storage is handled by the service and IoT
controller. Thus, it enhances the data processing speed of PES requests and PES
fulfillment. The service controller utilizes the Optimal Queue Model to manage the
PES requests based on the minimum service queue length. The efficiency of the
network is improved by fine-tuning the parameters from the Queue model with the aid
of a Revised Fitness-based Political Optimizer (RF-PO). The multi-objective
constraints like queue length, utilization, actual arrival time, expected arrival
time, and end-to-end delay are utilized for the efficient supply chain system.
These stimulated results show the feasibility and effectiveness of the supply chain
framework.

Utilizing blockchain technology in enhancing supply chain efficiency and export

performance, and its implications on the financial performance of SMEs
This study examines the intricate relationships among Blockchain Technology
utilization, Supply Chain Efficiency, Export Performance, and the Financial
Performance of Small and Medium-sized Enterprises (SMEs). The research aims to
elucidate the impact of technology adoption on various operational and financial
aspects within the SME context. Employing a quantitative research design, data was
collected from a diverse sample of SMEs across industries. The relationships were
analyzed using statistical techniques, and the hypotheses were tested to uncover
the implications of Blockchain Technology integration on SMEs' performance
dimensions. The findings reveal that the adoption of Blockchain Technology
significantly enhances Supply Chain Efficiency, underscoring its potential for
optimizing operational workflows. However, the direct impact of technology on SME
Financial Performance is not established, suggesting the importance of a holistic
approach to financial growth. Moreover, the positive association between Blockchain
Technology and Export Performance highlights the pivotal role of technology in
fostering international trade success. Theoretical implications underscore the
intricate interplay between technology adoption, operational efficiencies, and
financial outcomes in SMEs. Managerially, the study advocates for SMEs to
strategically integrate technology within their supply chain management practices
to achieve enhanced efficiency and market competitiveness. Limitations include the
potential for contextual variations and measurement biases. Future research can
delve deeper into the moderating factors that influence the relationship between
technology and financial performance in SMEs. The novelty of this study lies in its
comprehensive examination of the interrelationships between these factors within
the SME context.
Impact of Blockchain Technology on Supply Chain Management Efficiency and
Transparency in Pakistan
Pre- to post-adoption of blockchain technology in supply chain management:
Influencing factors and the role of firm size
Blockchain technology (BT) provides secure, fast, and confidential distributed
systems that can solve many complex issues in supply chain management (SCM).
Drawing on the technology, organization, and environment framework, institutional
theory, and information system success model, this study proposes a pre- to post-
adoption framework for BT in SCM. Data were collected online from 272 upper-level
management of Chinese supply chain organizations. The results reveal that pre-
adoption factors, including traceability, transparency, organizational readiness,
coercive pressure, and normative pressure, positively influence BT adoption,
whereas security concerns negatively affect it. The findings further indicate the
positive impact of actual use on infusion and performance, and information
technology alignment moderates these associations in the post-adoption stage.
Interestingly, the moderating results of firm size demonstrate a significant
difference in security concerns and organizational readiness, where large
organizations have higher readiness and lower security concerns than smaller firms.

Leveraging Blockchain for Maritime Port Supply Chain Management through

Multicriteria Decision Making
This research investigates the optimal integration of Blockchain Technology (BT) in
Supply
Chain Management (SCM) within Chile’s maritime ports. Utilizing fuzzy Logarithmic
Methodology
of Additive Weights (LMAW) and Double Normalization-based Multiple Aggregation
Methods
(DNMA), the study systematically identifies, prioritizes, and ranks key factors
influencing BT adop-
tion in SCM. The study’s findings highlight crucial factors like enhanced
transaction security, good
supply chain practices, and risk management. Furthermore, it ranks the application
of ports as prime
candidates for BT integration. The research contributes theoretically by developing
a hybrid model
combining MCDA methods, and practically by guiding the strategic application of BT
in the maritime
logistics sector, aligning with the principles of Industry 5.0. This paper presents
a novel approach
that explores the utilization of BT in maritime supply chain management,
incorporating MCDA in a
vague environment. The research gap of this study lies in defining new contexts in
both theoretical
and practical literature reviews for extending the use of BT in SCM in the ports of
Chile, according to
Industry 5.0, to increase the efficiency and effectiveness of all aspects of
operations in these places.
The contribution of this research is applying hybrid MCDA methods in an uncertain
environment
to assist decision-makers (DMs) in better implementing BT in SCM in Chilean ports,
according to
Industry 5.0.

Integrating blockchain technology in supply chain management – a process model with

evidence from current implementation projects
In this paper, process models for the integration of information technologies in
supply chains are evaluated and utilized for the development of a blockchain-
specific model. Case studies are conducted to validate the model based on several
implementation projects with the purpose to refine the model’s phases and through
focus group interviews and workshops. Even though most of the studied projects
demonstrate a clear added value of their blockchain solutions, only few of them
make it to the step of running a productive system and integrate the solution in
their business processes. The outcome of this paper delivers a practice-oriented
process model for integrating blockchain solutions in supply chains. It meets all
developed requirements and is validated by interdisciplinary experts that consider
a variety of use cases and supply chain application areas.

Blockchain adoption in agri-food supply chain management: an empirical study of the

main drivers using extended UTAUT
Purpose – Blockchain technology can overcome many complicated problems related to
confidentiality, integrity and availability of fast and secure distributed systems
in the agri-food supply chain. In emerging economies like India, blockchain
application in the agri-food supply chain is still new, and their adoption is
underdeveloped. This paper aims to investigate the drivers of blockchain technology
adoption and their effect on the behavioral intention of stakeholders in adopting
blockchain technology among various stakeholders in the agri-food supply chain. The
study also develops a framework to enhance understanding of blockchain adoption in
the agri-food supply chain as well as the stakeholders’ motivation in seeking
blockchain solutions.
Design/methodology/approach – Considering the most significant aspects of
blockchain adoption in the agri-food supply chain, this study attempts to develop
an adoption model by using the extended unified theory of acceptance and technology
model with interfirm trust and transparency as additional factors. Data was
collected from a sample of 200 stakeholders in the North Indian state of Punjab.
The empirical analysis was carried out using structural equation modeling in Smart
PLS3.
Findings – The findings supported the developed framework and the results of SEM
indicate that all the paths are supported. In particular, the findings of the study
reveal that performance expectancy, effort expectancy, social influence,
facilitating conditions, interfirm trust and transparency are the drivers of
blockchain adoption and have a significant impact on the behavioral intention of
stakeholders. Cumulatively, the results positively impact the performance of agri-
food supply chain. From this study, it is found that the adoption of blockchain
technology in agri-food supply chain enhances their performance.
Originality/value – The originality of the study lies in the developed framework,
technology adoption will help them focus in the right direction by eliminating
manual methods and converting the agri-food supply chain into a digitalization
system.

The Impact of Perceived Benefits on Blockchain Adoption in Supply Chain Management

Abstract: Globalization has prompted enterprises worldwide to increasingly seek the
optimal supply
chain configuration. However, outsourcing, shortened product life cycles, and a
reduced supply
base severely weaken supply chain risk tolerance. With the emergence of blockchain,
enterprises
see an opportunity to mitigate supply chain risks. The purpose of our research is
to explore supply
chain managers’ intention to adopt blockchain technology from the perspective of
supply chain risk
management. Using a survey sample of 203 managers in China and the USA, we explored
the impact
of four perceived benefits of blockchain technology on supply chain risk resistance
by extending
the technology acceptance model. The results show that the traceability,
transparency, information
sharing, and decentralization of blockchain can enhance the perceived usefulness of
blockchain in
supply chain resilience and responsiveness, and the ability to withstand disruption
risks and supply
and demand coordination risks encountered in the supply chain, thus promoting the
adoption of the
technology. In addition, the relationships between supply chain resilience and
blockchain technology
adoption and between supply chain responsiveness and blockchain technology adoption
are more
salient for managers with high levels of uncertainty avoidance.

Exploring Blockchain Research in Supply Chain Management: A Latent Dirichlet

Allocation-Driven Systematic Review
Blockchain technology has emerged as a tool with the potential to enhance
transparency,
trust, security, and decentralization in supply chain management (SCM). This study
presents a
comprehensive review of the interplay between blockchain technology and SCM. By
analyzing an
extensive dataset of 943 articles, our exploration utilizes the Latent Dirichlet
Allocation (LDA) method
to delve deep into the thematic structure of the discourse. This investigation
revealed ten central topics
ranging from blockchain’s transformative role in supply chain finance and e-
commerce operations to
its application in specialized areas, such as the halal food supply chain and
humanitarian contexts.
Particularly pronounced were discussions on the challenges and transformations of
blockchain
integration in supply chains and its impact on pricing strategies and decision-
making. Visualization
tools, including PyLDAvis, further illuminated the interconnectedness of these
themes, highlighting
the intertwined nature of blockchain adoption challenges with aspects such as
traceability and pricing.
Despite the breadth of topics covered, the paper acknowledges its limitations due
to the fast-evolving
nature of blockchain developments during and after our analysis period. Ultimately,
this review
provides a holistic academic snapshot, emphasizing both well-developed and nascent
research areas
and guiding future research in the evolving domain of blockchain in SCM.
Privacy-Preserving Blockchain Framework for Supply Chain Management: Perceptive
Craving Game Search Optimization (PCGSO): The fierce competition in international
markets and the rapid advancements in information technology result in shorter lead
times, lower transportation capacity, and higher demand. The supply chain network
is one of the most crucial areas of concentration in the majority of business
circumstances. Blockchain technology is a promising option for safe information
exchange in the supply chain network. Although preserving security at every level
of the blockchain is somewhat important, cryptographic methodologies are frequently
used in the existing works. The novel perceptive craving game search (PCGS)
optimization algorithm is used to optimally generate the key for data sanitization,
which assures the privacy of logistics data. Here, the original logistics data
obtained from the manufacturer is sanitized with an optimal key generated by using
the PCGS optimization algorithm, avoiding the risk of unauthorized access and data
swarm that causes the system to lag. Moreover, the sanitized data obtained from the
manufacturer is transmitted to the allowed parties via different sub-chains. The
same generated key is used on the receiving customer side for reconstructing the
original information from the sanitized data. The performance and results of the
proposed blockchain-based privacy preservation model are validated using various
parameters.
Blockchain in Supply Chain Management: A Synthesis of Barriers and Enablers for
Managers: Blockchain is an emerging and disruptive technology and has the potential
to change how supply chains manage their information. However, Blockchain is
accompanied by challenges, such as increased information technology complexity,
issues of scalability, incompatibility with existing laws and regulations, and a
lack of awareness among organisations and customers. This research conducts a
bibliometric analysis based on a sample of 68 papers which address the barriers and
enablers of blockchain adoption in supply chain management. A recurring theme in
the papers was managers’ lack of understanding of Blockchain, which acted as a
barrier to adoption. This study proposes a possible explanation by arguing that the
academic models used in literature are too obscure from a manager’s perspective and
that there is a need to synthesise literature into a framework which is easily
understood and familiar. Therefore, the barriers and enablers identified in this
study were grouped into the robust Political, Economic, Social, Technological,
Legal, and Environment (PESTLE) framework. A key finding from this framework was
the absence of political barriers or enablers, which is surprising since blockchain
adoption challenges the current status quo in multiple ways. Furthermore, the
environmental enablers and barriers were scarcely discussed, with little empirical
evidence.
Resilient Reverse Logistics with Blockchain Technology in Sustainable Food Supply
Chain Management during COVID-19: COVID-19, which is a global problem affects the
all supply chains throughout the world. One of the supply chains most affected by
COVID-19 is food supply chains. Since the sustainable food supply chain processes
are complex and vulnerable in terms of product variety, it has been negatively
affected by the operational effects of COVID- 19. While the problems experienced in
the supply chain processes and raw material constraints caused stops in production,
the importance of new business models and production approaches came to the fore.
One of the issues of increasing importance is the adoption of reverse logistics
activities in sustainable food supply chains and increasing the resilience of food
supply chains by integrating blockchain technology into processes. However,
adapting blockchain technology to increase the resilience of reverse logistics
activities in the food supply chain has advantages as well as risks that need to be
considered. Therefore, it is aimed to determine these risks by using Fuzzy
Synthetic Evaluation method for eliminating the risks of blockchain adaptation for
flexible reverse logistics in food supply chains to increase resiliency. The
novelty of this study is that besides discussing about the benefits of BC-T, it is
to identify the risks it can create, to eliminate these risks and to guide the
establishment of resilience in reverse logistics activities of SFSCs. According to
results, the risks with the highest value among the sub risks is determined as data
security risks. Data Management risks is calculated as the risk with the highest
value.
The Supply Chain Has No Clothes: Technology Adoption of Blockchain for Supply Chain
Transparency: Blockchain technology, popularized by Bitcoin cryptocurrency, is
characterized as an open-source, decentralized, distributed database for storing
transaction information. Rather than relying on centralized intermediaries (e.g.,
banks) this technology allows two parties to transact directly using duplicate,
linked ledgers called blockchains. This makes transactions considerably more
transparent than those provided by centralized systems. As a result, transactions
are executed without relying on explicit trust [of a third party], but on the
distributed trust based on the consensus of the network (i.e., other blockchain
users). Applying this technology to improve supply chain transparency has many
possibilities. Every product has a long and storied history. However, much of this
history is presently obscured. Often, when negative practices are exposed, they
quickly escalate to scandalous, and financially crippling proportions. There are
many recent examples, such as the exposure of child labor upstream in the
manufacturing process and the unethical use of rainforest resources. Blockchain may
bring supply chain transparency to a new level, but presently academic and
managerial adoption of blockchain technologies is limited by our understanding. To
address this issue, this research uses the Unified Theory of Acceptance and Use of
Technology (UTAUT) and the concept of technology innovation adoption as a
foundational framework for supply chain traceability. A conceptual model is
developed and the research culminates with supply chain implications of blockchain
that are inspired by theory and literature review.
Blockchain-enabled supply chain: An experimental study: Despite Information and
Communication Technologies (ICT) have reduced the information asymmetry and
increased the degree of interorganizational collaboration, the companies
participating a supply chain are less inclined to share data when information is
sensible and partners cannot be fully trusted. In such a context, Blockchain is a
decentralized certificate authority that may provide economic and operational
benefits but companies operating in a supply chain claim to have little knowledge
about Blockchain due to its novelty and to the lack of use cases and application
studies.
In this work, a software connector has been designed and developed to connect an
Ethereum-like blockchain with the enterprises’ information systems to allow
companies to share information with their partners with different levels of
visibility and to check data authenticity, integrity and invariability over time
through the blockchain, thus building trust. In order to explore the potential of
deploying the blockchain in a supply chain, a simulation model has been developed
to recreate the supply chain operations and integrated with the blockchain through
the same software connector to carry out a scenario statistical analysis.
Application results shows how blockchain technology is a convenient instrument to
overcome collaboration and trust issues in a supply chain, to increase the supply
chain overall performance, to minimize the negative consequences of information
asymmetry over the echelons of a supply chain but also to discourage companies from
any misconduct (e.g. counterfeiting data or low data accuracy).
Blockchain and sustainable supply chain management in developing countries:
Theoretical, empirical and anecdotal evidence suggests that there are more
violations of sustainability principles in supply chains in developing countries
than in developed countries. Recent research has demonstrated that blockchain can
play an important role in promoting supply chain sustainability. In this paper we
argue that blockchain’s characteristics are especially important for enforcing
sustainability standards in developing countries. We analyze multiple case studies
of blockchain projects implemented in supply chains in developing countries to
assess product quality, environmental accounting and social impact measurement. We
have developed seven propositions, which describe how blockchain can help address a
number of challenges various stakeholders face in promoting sustainable supply
chains in developing countries. The challenges that the propositions deal with
include those associated with an unfavorable institutional environment, high costs,
technological limitations, unequal power distribution among supply chain partners
and porosity and opacity of value delivery networks.
Blockchain technology in supply chain management: an empirical study of the factors
affecting user adoption/acceptance: Blockchain overcomes numerous complicated
problems related to confidentiality, integrity, availability of fast and secure
distributed systems. Using data from a cross-sectoral survey of 449 industries, we
investigate factors that hinder or facilitate blockchain adoption in supply chains.
To capture the most vital aspects of blockchain adoption in supply chains, our
conceptual model integrates the unified theory of acceptance and use of technology
(UTAUT) model with the task-technology fit (TTF) and information system success
(ISS) models, with trust-based information technology innovation adoption
constructs. Using structural equation modelling, we find that the ISS, TTF, and
UTAUT models positively influence the key factors affecting supply chain employees’
willingness to adopt blockchain. Our results show that the UTAUT’s social influence
factor has no significant effect on the intention to adopt blockchain, while inter-
organisational trust has a significant effect on the relationship between the UTAUT
dimension and intention to adopt blockchain.
Blockchain technology in supply chain operations: Applications, challenges and
research opportunities: Blockchain is a technology with unique combination of
features such as decentralized structure, distributed notes and storage mechanism,
consensus algorithm, smart contracting, and asymmetric encryption to ensure network
security, transparency and visibility. Blockchain has immense potential to
transform supply chain (SC) functions, from SC provenance, business process
reengineering to security enhancement. More and more studies exploring the use of
blockchain in SCs have appeared in recent years. In this paper, we consider a total
of 178 articles and examine all the relevant research done in the field associated
with the use of blockchain integration in SC operations. We highlight the
corresponding opportunities, possible societal impacts, current state-of-the-art
technologies along with major trends and challenges. We examine several industrial
sectors such as shipping, manufacturing, automotive, aviation, finance, technology,
energy, healthcare, agriculture and food, e-commerce, and education among others
that can be successfully revamped with blockchain based technologies through
enhanced visibility and business process management. A future research agenda is
established which lays the solid foundation for further studies on this important
emerging research area.
Blockchain Applications in Supply Chain: Blockchain is a technological concept
which evolves from the first cryptocurrency, Bitcoin, and disrupts constantly
enlarging areas of economy. The concept of blockchain is developing, and while the
future of Bitcoin remains unclear (as it is for the most elements of the economy)
it is evident that the blockchain holds enormous potential for large-scale
improvements. However, being a technology that could decrease significance many of
today’s large global corporations, institutions and power structures which have
keen interest in preserving established hierarchies, its potential could well
remain unexploited. This paper aims to introduce and present the concept of
blockchain and its current applications in logistics and supply networks.
Blockchain technology promises overpowering trust issues and allowing trustless,
secure and authenticated system of logistics and supply chain information exchange
in supply networks. The new implementations within supply chain are shifting from
blockchain to a wider notion of distributed ledger technologies. Paper presents
description and rationale behind current and possible future applications of
blockchain in logistics and supply chain.
Analysing the impact of blockchain-technology for operations and supply chain
management: An explanatory model drawn from multiple case studies: Blockchain
technology is said to have a high disruptive potential and can do without an
intermediary. Numerous contributions deal with its impact on and possibilities for
logistics and supply chains. In this article, we use a multiple case analysis to
develop an explanatory model for the interaction of actors in an operational supply
chain involving blockchain technology. In addition, we show which intermediary
tasks the blockchain could replace and what impact this would have on the industry
logic. For this purpose, we analyze the status quo in practice based on a multiple
case study with real use cases and find answers to our research questions. The
findings of the paper include (1) insights into the impact of blockchain technology
on the logistics industry, and (2) the implications and research questions related
to blockchain technology and the impact of blockchain technology on business
models.
1 Blockchain’s roles in meeting key supply chain management objectives: Arrival of
blockchain is set to transform supply chain activities. Scholars have barely begun
to systematically assess the effects of blockchain on various organizational
activities. This paper examines how blockchain is likely to affect key supply chain
management objectives such as cost, quality, speed, dependability, risk reduction,
sustainability and flexibility. We present early evidence linking the use of
blockchain in supply chain activities to increase transparency and accountability.
Case studies of blockchain projects at various phases of development for diverse
purposes are discussed. This study illustrates the various mechanisms by which
blockchain help achieve the above supply chain objectives. Special emphasis has
been placed on the roles of the incorporation of the IoT in blockchain-based
solutions and the degree of deployment of blockchain to validate individuals’ and
assets’ identities.
The Effect of Blockchain Technology on Supply Chain Sustainability Performances:
Improving supply chain sustainability is an essential part of achieving the UN’s
sustainable goals. Digitalization, such as blockchain technology, shows the
potential to reshape supply chain management. Using distributed ledger technology,
the blockchain platform provides a digital system and database to record the
transactions along the supply chain. This decentralized database of transactions
brings transparency, reliability, traceability, and efficiency to the supply chain
management. This paper focuses on such novel blockchain-based supply chain
management and its sustainability performances in the areas of environmental
protection, social equity, and governance efficiency. Using a systematic literature
review and two case studies, we evaluate whether the three sustainability
indicators can be improved indirectly along supply chains based on blockchain
technology. Our study shows that blockchain technology has the potential to improve
supply chain sustainability performance, and we expect blockchain technology to
rise in popularity in supply chain management.
Blockchain for sustainable supply chain management: trends and ways forward:
Blockchain operates on a highly secured framework, and its decentralized consensus
has benefits for supply chain sustainability. Scholars have recognized the growing
importance of sustainability in supply chains and studied the potential of
blockchain for sustainable supply chain management. However, no study has taken
stock of high-quality research in this area. To address this gap, this paper aims
to provide a state-of-the-art overview of high-quality research on blockchain for
sustainable supply chain management. To do so, this paper conducts a systematic
literature review using a bibliometric analysis of 146 high-quality articles on
blockchain for sustainable supply chain management that have been published in
journals ranked “A*”, “A”, and “B” by the Australian Business Deans Council and
retrieved from the Scopus database. In doing so, this paper unpacks the most
prominent journals, authors, institutions, and countries that have contributed to
three major themes in the field, namely blockchain for sustainable business
activities, decision support systems using blockchain, and blockchain for
intelligent transportation system. This paper also reveals the use of blockchain
for sustainable supply chain management across four major sectors, namely food,
healthcare, manufacturing, and infrastructure, and concludes with suggestions for
future research in each sector
Supply Chain Management based on Blockchain: A Systematic Mapping Study:
Groundbreakingly, blockchain technology (BCT) has gained widespread acceptance and
importance in the last few years. Implemented in different areas of applications
such as social and legal industries, finance, smart property, and supply chain
networks. This technology assures immutability and integrity of data without the
need of a third trusted party. Furthermore, BCT could guarantee a transparent and
decentralized transaction system in businesses and industries. Even though general
research has been done in the BCT, however, there is a lack of systematic analysis
on current research challenges regarding how BCT is effectively applicable in
supply chain management (SCM). A systematic literature review (SLR) of SCM based on
blockchain does not exist yet. This work aims to explore and analyse the state-
ofthe-art on the BCT applications for SCM. We synthesize existing evidence, and
identify gaps, available in the literature. The survey uses a systematic mapping
study (SMS) method to examine 40 extracted primary studies from scientific
databases.
Implications of Blockchain Technology in Supply Chain Management: Abstract. Due to
rapid developments in technology, the supply chain becomesa bright area of interest
among up-and-coming careers in various industries.People with careers in this field
oversee such activities as product development,production, information systems,
transportation, and day-to-day logistics. But, therapidly evolving environments of
an easy and comfortable life, the demand forproduct visibility and end-to-end
traceability have grown. The existing supply chain is inefficient, unadaptable,
intractable and costly as compared to innovativeand advanced technology. Blockchain
is the emerging and revolutionarytechnology that impacts the supply chain networks
significantly. Therefore, in thispaper, the implication of blockchain technology in
the supply chain is presented.
Application of Blockchain to Supply Chain: Flexible Blockchain Technology: It has
been ten years since Satoshi Nakamoto created bitcoin and introduced the concept of
a blockchain. The original goal was to propose a solution to the double-spending
problem using a peer-to-peer network. Now, Blockchain proves to have the capacity
to deliver a new kind of trust to a wide range of services. Applications are being
explored in healthcare (patient records), government (land registries) and
electronics (Internet of Things). The supply chain is one of the fields that
Blockchain is expected to be applied. The paper aims to combine blockchain with
distributed storage and propose blockchain for the supply chain. Blockchain is not
fit to record a lot of information. It requires both on-chain storage of the core
ledger data and off-chain storage of data required by smart contracts for
verification and documentation. The Inter Planetary File System (IPFS) is a
concrete solution. IPFS is a peer-to-peer distributed file system that seeks to
connect all computing devices with the same system of files. Participants can
address large amounts of data with IPFS and place the immutable, permanent IPFS
links into a blockchain transaction. This timestamps and secures their content,
without having to put the data itself on the chain. By combining blockchain with
distributed storage, the supply chain system is fit to the industry of the next
generation. The characteristics of Industry 4.0 meets the blockchain-based system
and the model can aid these changes.
Blockchain-based traceability in Agri-Food supply chain management: A practical
implementation: The recent, exponential rise in adoption of the most disparate
Internet of Things (IoT) devices and technologies has reached also Agriculture and
Food (Agri-Food) supply chains, drumming up substantial research and innovation
interest towards developing reliable, auditable and transparent traceability
systems. Current IoT-based traceability and provenance systems for Agri-Food supply
chains are built on top of centralized infrastructures and this leaves room for
unsolved issues and major concerns, including data integrity, tampering and single
points of failure. Blockchains, the distributed ledger technology underpinning
cryptocurrencies such as Bitcoin, represent a new and innovative technological
approach to realizing decentralized trustless systems. Indeed, the inherent
properties of this digital technology provide fault-tolerance, immutability,
transparency and full traceability of the stored transaction records, as well as
coherent digital representations of physical assets and autonomous transaction
executions. This paper presents AgriBlockIoT, a fully decentralized, blockchain-
based traceability solution for Agri-Food supply chain management, able to seamless
integrate IoT devices producing and consuming digital data along the chain. To
effectively assess AgriBlockIoT, first, we defined a classical use-case within the
given vertical domain, namely from-farm-to-fork. Then, we developed and deployed
such use-case, achieving traceability using two different blockchain
implementations, namely Ethereum and Hyperledger Sawtooth. Finally, we evaluated
and compared the performance of both the deployments, in terms of latency, CPU, and
network usage, also highlighting their main pros and cons.
A Blockchain-Based Supply Chain Quality Management Framework: Recent quality
scandals reveal the importance of quality management from a supply chain
perspective. Although there has been many related studies focusing on supply chain
quality management, the technologies used still have difficulties in resolving
problems arising from the lack of trust in supply chains. The root reason lies in
three challenges brought to the traditional centralized trust mechanism: self-
interests of supply chain members, information asymmetry in production processes,
costs and limitations of quality inspections. Blockchain is a promising technology
to address these problems. In this paper, we discuss how to improve the supply
chain quality management by adopting the blockchain technology, and propose a
framework for blockchain-based supply chain quality management.
The impact of the blockchain on the supply chain: a theory-based research framework
and a call for action: Purpose – This paper aims to strive to close the current
research gap pertaining to potential implications of the blockchain for supply
chain management (SCM) by presenting a framework built on four established economic
theories, namely, principal agent theory (PAT), transaction cost analysis (TCA),
resource-based view (RBV) and network theory (NT). These theories can be used to
derive research questions that are theory-based
as well as relevant for the industry. This paper is intended to initiate and
stimulate an academic discussion on the potential impact of the blockchainand
introduces a framework for middle-range theorizing together with several research
questions.
Blockchain adoption in operations and supply chain management: empirical evidence
from an emerging economy: The adoption of technologies by the operations and supply
chain management (OSCM) field is leading to extraordinary disruptions. And with the
rapid emergence of cutting-edge and more disruptive technologies, the OSCM is
striving to take advantage of such innovations, but they are bringing in their wake
a number of challenges. One of those disruptive technologies is blockchain, which
is increasingly accepted in virtually all industries. This study aims to
investigate the blockchain technology (BCT) adoption behaviour and possible
barriers in the Brazilian OSCM context. We developed a model drawing on the unified
theory of acceptance and use of technology (UTAUT) model, the supply chain
literature, and the emerging literature on BCT. We empirically validated the
proposed model with Brazilian operations and supply chain professionals by using
the partial least squares structural equation modelling (PLS-SEM). Our findings
revealed that facilitating conditions, trust, social influence, and effort
expectancy are the most critical constructs that directly affect BCT adoption.
Unexpectedly, performance expectancy appeared not decisive in terms of predicting
BCT adoption. This study contributes to advancing and stimulating the theory about
BCT adoption behaviour in supply chains, as well as important managerial
implications, which may be more critical for emerging economies.
How the blockchain enables and constrains supply chain performance: The purpose of
this paper is to understand the enabling and constraining roles of blockchain
technology (BCT) in managerial work practices and conceptualise the technology–
performance relationship in supply chain management (SCM).
Potentials of Blockchain Technologies in Supply Chain Management - A Conceptual
Model: Meanwhile the rapidly advancing digitisation affects almost all areas of
society and business. This development is based in particular on the omni-present
use of digital information technology. One of these technologies awarded with
special potential related to business is the distributed ledger technology. The
objective of this study is to investigate influences on the potentials of
blockchain technology, being one distributed ledger technology, in the area of
supply chain management. An empirical, qualitative data collection attained through
expert interviews forms the data basis. The conceptual model is derived by using
Grounded Theory Methodology to evaluate the interviews. Important influencing
factors (trust, efficiency, costs, control, privacy, scalability) for the potential
of blockchain technology in supply chain management and moderating effects (use
case, knowledge, collaboration, regulations) form the conceptual model in order to
deduce recommendations for business.
Blockchain Technology for Sustainable Supply Chain Management: A Systematic
Literature Review and a Classification Framework: Through a systematic review of
publications in reputed peer-reviewed journals, this paper investigates the role of
blockchain technology in sustainable supply chain management. It uses the What,
Who, Where, When, How, and Why (5W+1H) pattern to formulate research objectives and
questions. The review considers publications since 2015, and it includes 187 papers
published in 2017, 2018, 2019, and the early part of 2020, since no significant
publications were found in the year 2015 or 2016 on this subject. It proposes a
reusable classification framework—emerging technology literature classification
level (ETLCL) framework—based on grounded theory and the technology readiness level
for conducting literature reviews in various focus areas of an emerging technology.
Subsequently, the study uses ETLCL to classify the literature on our focus area.
The results show traceability and transparency as the key benefits of applying
blockchain technology. They also indicate a heightened interest in blockchain-based
information systems for sustainable supply chain management starting since 2017.
This paper offers invaluable insights for managers and leaders who envision
sustainability as an essential component of their business. The findings
demonstrate the disruptive power and role of blockchain-based information systems.
Given the relative novelty of the topic and its scattered literature, the paper
helps practitioners examining its various aspects by directing them to the right
information sources.
Understanding blockchain technology for future supply chains: a systematic
literature review and research agenda: This paper aims to investigate the way in
which blockchain technology is likely to influence future supply chain practices
and policies.
Applications of Blockchain Technology in Sustainable Manufacturing and Supply Chain
Management: A Systematic Review: Developing sustainable products and processes is
essential for the survival of manufacturers in the current competitive market and
the industry 4.0 era. The activities of manufacturers and their supply chain
partners should be aligned with sustainable development goals. Manufacturers have
faced many barriers and challenges in implementing sustainable practices along the
entire supply chain due to globalisation, outsourcing, and offshoring. Blockchain
technology has the potential to address the challenges of sustainability. This
study aims to explain the applications of blockchain technology to sustainable
manufacturing. We conducted a systematic literature review and explained the
potential contributions of blockchain technology to the economic, environmental,
and social performances of manufacturers and their supply chains. The findings of
the study extend our understanding of the blockchain applications in sustainable
manufacturing and sustainable supply chains. Furthermore, the study explains how
blockchain can influence the sustainable performance of manufacturers by creating
transparency, traceability, real-time information sharing, and security of the data
capabilities.
Blockchain Design for Supply Chain Management: Blockchain related research is still
in its infancy, and is mostly focused on security and scalability. Very little of
this research examines at its impact and design issues from management
perspectives, especially from the perspective of Supply Chain Management (SCM). To
investigate the impact of blockchain technology (BCT) on SCM and the inherent
design issues, we consider a generic stochastic model, where a firm seeks to
maximize the total expected discounted profit, by jointly managing (i) blockchain
design, (ii) production and ordering decisions, and (iii) dynamic pricing and
selling. We first show that the deployment of BCT can assist firms in reducing
order quantities, lowering selling prices and reducing target-inventory levels. It
is also shown that volatility of either supply or demand lowers the expected
profit. The analysis is robust with some major extensions, such as lost-sales of
demand and random capacity. Finally, our numerical study accumulates useful
managerial insights. For example, subject to tech-savvy customer behavior, some
types of goods (e.g., credence goods and experience goods) greatly benefit from the
adoption of BCT, but it may not prove beneficial to leverage BCT for certain others
(e.g., search goods). Considering the lifecycle of a typical good, it is
recommended to adopt BCT as early as possible and to adopt it to a higher degree at
an earlier stage.
Blockchains for Supply Chain Management: Architectural Elements and Challenges
Towards a Global Scale Deployment: Blockchains are attracting the attention of
stakeholders in many industrial domains, including the logistics and supply chain
industries. Blockchain technology can effectively contribute in recording every
single asset throughout its flow on the supply chain, contribute in tracking
orders, receipts, and payments, while track digital assets such as warranties and
licenses in a unified and transparent way. The paper provides, through its
methodology, a detailed analysis of the blockchain fit in the supply chain
industry. It defines the specific elements of blockchain that affect supply chain
such as scalability, performance, consensus mechanism, privacy considerations,
location proof and cost, and details on the impact that blockchains will have in
disrupting the supply chain industry. Discussing the tradeoff between consensus
cost, throughput and validation time it proceeds with a suggested high-level
architectural approach, and concludes as a result with a discussion on changes
needed and challenges faced for an in-vivo deployment of blockchains in the supply
chain industry. While the technological features of modern blockchains can
effectively facilitate supply chain uses cases, the various challenges that still
remain, bring in front of us a wide set of needed changes and further research
efforts for achieving a global, production level blockchain for the supply chain
industry.
Blockchain technology for enhancing supply chain resilience: With the soaring value
of bitcoin and frenzy over cryptocurrency, the blockchain technology that sparked
the bitcoin revolution has received heightened attention from both practitioners
and academics. Blockchain technology often causes controversies surrounding its
application potential and business ramifications. The blockchain is a peer-to-peer
network of information technology that keeps records of digital asset transactions
using distributed ledgers that are free from control by intermediaries such as
banks and governments. Thus, it can mitigate risks associated with intermediaries’
interventions, including hacking, compromised privacy, vulnerability to political
turmoil, costly compliance with government rules and regulation, instability of
financial institutions, and contractual disputes. This article unlocks the mystique
of blockchain technology and discusses ways to leverage blockchain technology to
enhance supply chain resilience in times of increased risks and uncertainty.
A Framework for Blockchain Technology in Rice Supply Chain Management: As rice is a
basic grain of food consumption in India, its integrityduring supply chain
processes is always a major concern for the society. With the rapid growth in the
internet, a lot emerging technologies have been appliedin the rice supply chain
system. However, all these systems being centralized creates trust problems like
fraud, tampering and falsifying information. Theblockchain technology which is
decentralized not governed by any centralauthority and distributed is the solution
for the problems arising in the ricesupply chain system. In this paper, we will
build a rice supply chain systemusing blockchain technology which will assure
safety of rice during supplychain management processes.
Architecture to Enhance Transparency in Supply Chain Management using Blockchain
Technology: Precise information flow in a supply chain (SC) improves profitability.
Distorted information in SC results in coordination and transaction issues that
diminish trust between SC partners. The prime objective of the present study is to
enhance transparency in SC for both suppliers and consumers and boost legitimate
coordination within the SC network using Blockchain Technology (BT). BT is a tool
having an open-source, decentralized, and distributed database for storing
transaction information. It allows two parties to perform direct transactions using
their distributed ledgers without the interference of a centralized third party to
achieving more transparent transactions than traditional systems. Consequently, the
architecture of BT in SC has been developed based on factors identified from the
literature review that leads to offering tracking and monitoring of entire SC.
Subsequently, the blockchain architecture has been tested considering transactions
between manufacturer, distributor, retailer, and customer to accomplish real-time
transparency. Accordingly, it has been observed that transaction errors have been
minimized, transparency has been improved in SC of the manufacturing industry using
BT. Moreover, this paper provides a productive relationship between BT and SC
management.
Examples from Blockchain Implementations in Logistics and Supply Chain Management:
Exploring the Mindful Use of a New Technology: In the context of logistics,
blockchain can help to increase end-to-end visibility along global supply chains.
Thus, it can lead to improved tracking of goods and offer tamper-proof data to
build trust among parties. Although a variety of blockchain use cases already
exists, not all of them seem to rely on blockchain-specific features, but could
rather be solved with traditional technologies. The purpose of this paper is,
therefore, to identify characteristic use cases described for blockchain in the
field of LSCM and to analyze them regarding their mindful technology use based on
five mindful technology adoption principles: engagement with the technology;
Technological novelty seeking; awareness of local context; cognizance of
alternative technologies; and anticipation of technology alteration. The authors
identified five blockchain case clusters and chose one case for each category to be
analyzed in detail. Most cases demonstrate high engagement with the technology, but
there are significant differences when it comes to the other mindful use
principles. This paper highlights the need to understand the problem and to apply
the right technology in order to solve it. When solving a problem, care should be
taken to address a technology’s unique features to ensure effectiveness and cost-
efficiency.
Blockchain Framework for Textile Supply Chain Management Improving Transparency,
Traceability, and Quality: Modern textile supply chain systems are both large and
complicated, with global sources and suppliers feeding into production lines that
can span continents. A substantial amount of defects can’t be directly traced back
to defective batches that entered the supply chain along the way, causing waste and
frustration downstream. Traceability is almost impossible due to the number of
stages the product goes through and the size of data involved. No single system is
globally utilized to record and trace the product throughout the supply chain. By
the time the root cause of the issue is discovered, no recourse is possible except
to discard the end product, resulting in losses that could reach 40% of the end
product value. Communicating quality issues cross-stream is virtually nonexistent
due to the challenges in identifying the source and recognizing that the other
systems can deal with utilizing it. While traceability is an obvious problem in
textile supply chain, transparency is a more impactful issue that is not well
addressed. Cross supply chain and lack of transparency exacerbates the problems
facing each participant and forces each entity to work locally using the localized
information. This approach is fundamentally flawed as it deals with a global
problem from a localized point of view. Not all industries are ripe for taking
advantage of blockchain technology. Blockchain requires an industry with a
complicated and widely distributed supply chain, containing an increased number of
middle stages. This cannot apply more than in one of the world’s oldest industries,
textile. In this paper, we propose a complete blockchain-based framework for
textile quality improvement that enables in near real time, cross chain information
sharing with guaranteed authenticity and accuracy allowing quality defective
batches to be identified in all systems as soon as they are detected in any few.
Insights into Blockchain Implementation in Construction: Models for Supply Chain
Management: The interest in the implementation of distributed ledger technologies
(DLTs) is on the rise in the construction sector. One specific type of DLT that
hasrecently attracted much attention is blockchain. Blockchain has been mostly
discussed conceptually for construction to date. This study presents some empirical
discussions on supply chain management (SCM) applications of blockchain for
construction by collecting feedback for three blockchain-based models for Project
Bank Accounts (PBAs) for payments, Reverse Auction-based Tendering for bidding and
Asset Tokenization for project financing. The feedback was collected from three
focus groups and a workshop. The working prototypes for the models were developed
on Ethereum. The implementation of blockchain in payment arrangements was found
simpler than in tendering and project tokenization workflows. However, the
blockchain integration of those workflows may have large-scale impacts on the
sector in the future. A broad set of general and model specific
benefits/opportunities and requirements/challenges was also identified for
blockchain in construction. Some of these include streamlined, transparent
transactions and rational trust-building, and the need for challenging the sector
culture, upscaling the legacy IT systems and compliance with the regulatory
structures.
An exploration of blockchain technology in supply chain management: Day by day new
technologies are applied to the business environment. Since the start of the fourth
industrial revolution, the digital tools allow productivity improvement. Different
kinds of technologies have been used to support companies in tasks of sending and
receiving information. The information exchanged between companies has always being
a concern when having in mind trust, speed, and safety. During few decades, EDI
(electronic data exchange) was the main technology supply chain professionals used
to send and receive information. Recently, with the rise of the fourth industrial
revolution and the Internet of Things (IoT), many aspects of the business
environment have changed. Individuals and organizations are required to be more
productive. One of the mainstreams for the business environment is blockchain. Some
researches argued that bitcoin is the pioneer of blockchain technology. Financial
companies joined forces to build a technological infrastructure to use the
cryptocurrency on the market. The first blockchain conceived in 2008, in the wake
of the global financial crisis and it has never been hacked. Supply chains are
complex networks of distant, separate entities that exchange goods, payments, and
data across a dynamic, continuously evolving landscape. Blockchain technology
allows visibility providing the customer the opportunity to understand how the
supply chain works and how to get more information about products traceability.
However, there are some challenges to implement blockchain in logistic and supply
chain. The paper presents a theoretical review including the principles of the
blockchain operations and the required infrastructure to implement it. The paper
does not cover the technology architecture applied to the blockchain. The potential
benefit of the blockchain will be covered to understand how to apply it in
logistics and in the supply chain environment, presenting some examples already
implemented or identified.
Blockchain in logistics and supply chain: Trick or treat? Blockchain is an emergent
technology concept that enables the decentralized and immutable storage of verified
data. Over the last few years, it has increasingly attracted the attention of
different industries. Especially in Fintech, Blockchain in hyped as the silver
bullet that might overthrow today’s payment handling. Slowly, the logistics and
supply chain management community realizes how profoundly Blockchain could affect
their industry. To shed light on this emerging field, we conducted an online survey
and asked logistics professionals for their opinion on use case exemplars,
barriers, facilitators, and the general prospects of Blockchain in logistics and
supply chain management. We found most of our participants are fairly positive
about this new technology and the benefits it offers. However, factors like the
hierarchical level, Blockchain experiences, and the industry sector have a
significant impact on the participants’ evaluation. We reason that the benefits
over existing IT solutions must be carved out more carefully and use cases must be
further explored to get a rather conservative industry, like logistics, more
excited about Blockchain.
Blockchain’s Roles in Meeting Key Supply Chain Management Objectives: Arrival of
blockchain is set to transform supply chain activities. Scholars have barely begun
to systematically assess the effects of blockchain on various organizational
activities. This paper examines how blockchain is likely to affect key supply chain
management objectives such as cost, quality, speed, dependability, risk reduction,
sustainability and flexibility. We present early evidence linking the use of
blockchain in supply chain activities to increase transparency and accountability.
Case studies of blockchain projects at various phases of development for diverse
purposes are discussed. This study illustrates the various mechanisms by which
blockchain help achieve the above supply chain objectives. Special emphasis has
been placed on the roles of the incorporation of the IoT in blockchain-based
solutions and the degree of deployment of blockchain to validate individuals’ and
assets’ identities.
Blockchain-based traceability in Agri-Food supply chain management: A practical
implementation: Abstract—The recent, exponential rise in adoption of the most
disparate Internet of Things (IoT) devices and technologies has reached also
Agriculture and Food (Agri-Food) supply chains, drumming up substantial research
and innovation interest to-wards developing reliable, auditable and transparent
traceability systems. Current IoT-based traceability and provenance systems for
Agri-Food supply chains are built on top of centralized infrastructures and this
leaves room for unsolved issues and major concerns, including data integrity,
tampering and single points of failure. Blockchains, the distributed ledger
technology underpinning cryptocurrencies such as Bitcoin, represent a new and
innovative technological approach to realizing decentralized trustless systems.
Indeed, the inherent properties of this digital technology provide fault-tolerance,
immutability, trans- parency and full traceability of the stored transaction
records as well as coherent digital representations of physical assets and
autonomous transaction executions. This paper presents AgriBlockIoT, a fully
decentralized, blockchain-based traceability solution for Agri-Food supply chain
management, able to seamless integrate IoT devices producing and consuming digital
data along the chain. To effectively assess AgriBlockIoT, first, we defined a
classical use-case within the given vertical domain, namely from-farm-to-fork.
Then, we developed and deployed such use-case, achieving traceability using two
different blockchain implementations, namely Ethereum and Hyperledger
Sawtooth.Finally, we evaluated and compared the performance of both the
deployments, in terms of latency, CPU, and network usage, also highlighting their
main pros and cons.
Digital Supply Chain Transformation toward Blockchain Integration: Digital supply
chain integration is becoming increasingly dynamic. Access to customer demand needs
to be shared effectively, and product and service deliveries must be tracked to
provide visibility in the supply chain. Business process integration is based on
standards and reference architectures, which should offer end-to-end integration of
product data. Companies operating in supply chains establish process and data
integration through the specialized intermediate companies, whose role is to
establish interoperability by mapping and integrating company- specific data for
various organizations and systems. This has typically caused high integration
costs, and diffusion is slow. This paper investigates the requirements and
functionalities of supply chain integration. Cloud integration can be expected to
offer a cost-effective business model for interoperable digital supply chains. We
explain how supply chain integration through the blockchain technology can achieve
disruptive transformation in digital supply chains and networks.
"The impact of the blockchain on the supply chain: a theory-based research
framework and a call for action: Purpose – This paper aims to strive to close the
current research gap pertaining to potential implications of the blockchain for
supply chain management (SCM) by presenting a framework built on four established
economic theories, namely, principal agent theory (PAT), transaction cost analysis
(TCA), resource-based view (RBV) and network theory (NT). These theories can be
used to derive research questions that are theory-based as well as relevant for the
industry. This paper is intended to initiate and stimulate an academic discussion
on the potential impact of the blockchain and introduces a framework for middle-
range theorizing together with several research questions.
Design/methodology/approach – This paper builds on previous theories that are
frequently used in SCM research and shows how they can be adapted to blockchain-
related questions.
Findings – This paper introduces a framework for middle-range theorizing together
with several research questions.
Research limitations/implications – The paper presents blockchain-related research
questions derived from four frequently used theories, namely, PAT, TCA, RBV and
(NT). These questions will guide future research pertaining to structural (PAT,
TCA) and managerial issues (RBV, NT) and will foster middle-range theory
development in SCM research. Practical implications – Blockchain technology has the
potential to significantly change SCM. Given the huge investments by industry,
academic research is needed which investigates potential implications and supports
companies. In this paper, various research questions are introduced that illustrate
how the implications of blockchain on SCM can be investigated from different
perspectives. Originality/value – To the best of the author’s knowledge, no
academic papers are published in leading academic journals that investigate the
relationship between SCM and blockchain from a theory-based perspective."
The Blockchain Application in Supply Chain Management: Opportunities, Challenges
and Outlook: Abstract—Blockchain is a game changer in nowadays information
technology and financial industry. Since Nakamoto invented the concept of
blockchain together with its first application called “Bitcoin”, the topic of
blockchain has been inundated with the booming of cryptocurrencies. People expect
this novel distributed ledger technology to bring a revolution to the entire
industry and thereby grab the opportunity to expand and strengthen their business.
The supply chain is treated as a typical use case to adopt blockchain and relevant
technologies in many previous studies. In this paper, we conduct an
interdisciplinary study on business supply chain management and the latest
distributed ledger technology. In accordance with our discussion and experiments,
we list three major benefits that the adoption of blockchain is able to bring to
contemporary supply chain management. Meanwhile, we also identify a few of
challenges that the nowadays blockchain application could not effectively excel,
and the potential mitigation to those challenges as well. Index Terms—blockchain,
business intelligence, distributed ledger, logistics, supply chain management
Blockchain for sustainable supply chain management: trends and ways forward:
Blockchain operates on a highly secured framework, and its decentralized consensus
has benefts for supply chain sustainability. Scholars have recognized the growing
importance of sustainability in supply chains and studied the potential of
blockchain for sustainable supply chain management. However, no study has taken
stock of high-quality research in this area. To address this gap, this paper aims
to provide a state-of-the-art overview of high-quality research on blockchain for
sustainable supply chain management. To do so, this paper conducts a systematic
literature review using a bibliometric analysis of 146 high-quality articles on
blockchain for sustainable supply chain management that have been published in
journals ranked “A*”,“A”, and “B” by the Australian Business Deans Council and
retrieved from the Scopus database. In doing so, this paper unpacks the most
prominent journals, authors, institutions, and countries that have contributed to
three major themes in the feld, namely blockchain for sustainable business
activities, decision support systems using blockchain, and blockchain for
intelligent transportation system. This paper also reveals the use of blockchain
for sustainable supply chain management across four major sectors, namely food,
healthcare, manufacturing, and infrastructure, and concludes with suggestions for
future research in each sector.
Information Sharing for Supply Chain Management based on Block Chain Technology:
Supply Chain Management systems provide information sharing and analysis to
companies and support their planning activities. They are not based on the real
data because there is asymmetric information between companies, then leading to
disturbance of the planning algorithms. On the other hand, sharing data between
manufacturers, suppliers and customers becomes very important to ensure reactivity
towards markets variability. Especially, double marginalization is a widespread and
serious problem in supply chain management. Decentralized systems under wholesale
price contracts are investigated, with double marginalization effects shown to lead
to supply insufficiencies, in the cases of both deterministic and random demands.
This paper proposes a blockchain based solution to address the problems of supply
chain such as Double Marginalization and Information Asymmetry etc.
Requirements for Blockchain Technology in Supply Chain Management: An Exploratory
Case Study: The aim of this research study is to look for possible research
opportunities to applying blockchain technology in supply chain management and
logistics. In addition, accompanying challenges to utilizing blockchain in supply
chain management along with possible solutions are also provided. To fulfil the
study objective, both theoretical and empirical approaches are adopted for this
study. With respect to theoretical approach, relevant literature on blockchain was
reviewed considering both technical and economic aspects, its architecture and
implementation challenges. The empirical part of the research was conducted by
studying three case companies operating in the domains of wood construction,
consulting and regional development, and technology. Three case companies were
analysed with respect to the application of blockchain in their supply chain
operations. From the study outcomes, it was noticed that blockchain technology can
be utilized successfully in supply chain management in various business domains in
order to provide, for instance, better services and transparency.
A Blockchain-based Supply Chain Quality Management Framework: Abstract—Recent
quality scandals reveal the importance of quality management from a supply chain
perspective. Although there has been many related studies focusing on supply chain
quality management, the technologies used still have difficulties in resolving
problems arising from the lack of trust in supply chains. The root reason lies in
three challenges brought to the traditional centralized trust mechanism: self-
interests of supply chain members, information asymmetry in production processes,
costs and limitations of quality inspections. Blockchain is a promising technology
to address these problems. In this paper, we discuss how to improve the supply
chain quality management by adopting the blockchain technology, and propose a
framework for blockchain-based supply chain quality management.
Blockchain Technology: Supply Chain Insights from ERP: The chapter provides a high
level understanding of how ERP system alongside Blockchain technology will be a
powerful tool to improve supply chain operations. The chapter details out how the
two technologies will complement each other in every aspect of supply chain
functions bringing in transparency, efficiency, and cost reduction. The chapter
considers every aspects of supply chain for an ERP enabled organizations and
details out use cases for master data, engineering design, sales process,
procurement process, demand and supply planning process, manufacturing process, and
logistics management processes. The chapter provides use case details and high
level understanding of technology for product provenance and how it can bring in
supply chain transparency using blockchain. The chapter illustrates theoretical and
conceptual model for use of open and permissioned blockchain in different supply
chain applica- tions with real life practical use cases as is being developed and
deployed in various industries and business functions. The chapter also emphasizes
the use of blockchain in distribution industry and how it can solve pertinent
problems as it exists today in the distribution supply chain. The chapter ends with
an outlook of blockchain how it will shape the future to come and challenges which
lies there within.
Blockchain Technology for Efficient Management of Supply Chain: Increasing global
demands in the supply chain in this fast-paced world entails more transparent and
efficient supply chain management, which can be encountered with the use of
blockchain technology combined with the Internet of Things (IoT). This study
explains the effects of blockchain technology combined with IoT in terms of
transparency, risk reduction, flexibility, speed from the customer’s demand to the
customer’s deliverable. Supply chain objectives are achieved using various
mechanisms of blockchain technology by which the customer can track the real nature
of the products getting delivered to them, which surges the value and trust of the
organization. The blockchain is a decentralized, digitized, public ledger of all
cryptocurrency transactions. By implementing blockchain, the traceability and
capacity to share information about production processes will be made easier and
trustworthy. Traceability takes center stage in organizations supply chain;
furthermore, it is a tool in fighting product counterfeiting and protecting brands.
Implementing blockchain can revolutionize the way a supply chain works. This paper
examines the case-studies on early implementation of block technology with IoT with
special importance on the degree of deployment of blockchain technology for
validation, transparency, and traceability purpose at various industries; such as
e-commerce, food, and warehousing.
Traceability Decentralization in Supply Chain Management Using Blockchain
Technologies: With the increase of web users and applications with real time
requests, the ability to identify, track and trace elements of a product as it
moves in the supply chain is deemed necessary, and for many industries is even
mandated by national or international regulations. Traceability presupposes the
integrity and transparency of data that is saved and shared. This is a problem for
current technologies, as there are many examples with tampered data and database
vulnerabilities that resulted in serious implications and data loss. A solution to
this problem can be the decentralization of the system, which will remove the
central point of failure. To that effect, blockchain or DLT technologies, an
emergent technology that enables the decentralization of a network can be used, by
implementing a trustless model to achieve it. Blockchains are tamperproof and
transparent, which means that by exploiting blockchain characteristics,
traceability can be improved. A model that describes the decentralization process
of the supply chain traceability part has been developed for this paper and is
later evaluated and compared with the traditional system.
Adoption of Blockchain Technology in Supply Chain and Logistics: This thesis was
focused on analyzing the innovative technology “Blockchain” and the potential of
blockchain-based applications. The main objectives were to define how blockchain
can change the supply chain and logistics industry. The typical challenges in these
spheres were considered and the main key features of blockchain that can solve
these difficulties were marked. After that the Head of IoT Business Development in
Kouvola Innovation Ltd. was interviewed to find out possible challenges or benefits
of blockchain- based applications. Considering the current situation in the supply
chain and logistics industry, this thesis can empower different businesses to start
working with the companies that are creating blockchain-based applications.
The outlook of blockchain technology for construction engineering management:
Current construction engineering management suffers numerous challenges in terms of
the trust, information sharing, and process automation. Blockchain which is a
decentralised transaction and data management technology, has attracted increasing
interests from both academic and industrial aspects since 2008. However, most of
the existing research and practices are focused on the blockchain itself (i.e.
technical challenges and limitations) or its applications in the finance service
sector (i.e. Bitcoin). This paper aims to investigate the potential of applying
blockchain technology in the construction sector. Three types of blockchain-enabled
applications are proposed to improve the current processes of contract management,
supply chain management, and equipment leasing, respectively. Challenges of
blockchain implementation are also discussed in this paper.
Recent technologies, mainly associated with Industry 4.0, are provoking significant
disruptions and forcing the supply chain management (SCM) field to develop new
business strategy models. One of the most promising of these technologies is
blockchains. Blockchain technology first appeared in the bitcoin context (Nakamoto,
2008). It works in a distributed data structure based on a peer-to-peer network
transaction (Christidis and Devetsikiotis, 2016; Marsal-Llacuna, 2018). Blocks are
linked by cryptographic hashes (de Leon et al., 2017) and all their nodes have a
copy (Al-Saqaf and Seidler, 2017; Scott et al., 2017). Because of these features,
the transactions records are considered virtually immutable (Adams et al., 2017a;
Cai and Zhu, 2016; Grewalet al., 2018). Although blockchain technology applications
emerged with bitcoins (Nakamoto, 2008), the current applications have the potential
to disrupt different, traditional industries (Scott et al., 2017; White, 2017).
Based on the decentralisation principle, in which intermediaries can be eliminated,
the smart contract is an essential blockchain application that works in an
automated manner to transfer assets when a determined condition is satisfied (Al-
Saqaf and Seidler, 2017). Thus, smart contracts are reconfiguring several business
models, in which producer and consumer can trade without an intermediary.
Consequently, blockchain decentralisation and disintermediation features (Scott et
al., 2017) can lead to disruption and support SCM innovation and reconfiguration in
the digital age. Despite these significant blockchain applications and their The
current issue and full text archive of this journal is available on potential to
promote changes in all types of supply chains in terms of new operation models, the
literature about blockchain technology in the SCM field is in its infancy.
Literature examining the application of blockchains in SCM, and the impact of
subsequent disruptions, is scarce. To shed some light on this hot topic, a
systematic literature review (SLR) (Denyer and Tranfield, 2009; Tranfield et al.,
2003) was used to answer the following research questions: RQ1. What are the main
current blockchain applications in SCM? RQ2. What are the main disruptions and
challenges in SCM because of blockchain adoption? RQ3. What is the future of
blockchains in SCM? Thus, this research aims to shed light on blockchain–SCM
integration, making a significant contribution to the literature and also having
implications for practitioners and decision makers interested in gaining an in-
depth understanding of this cutting-edge technology. Additionally, blockchain
technology is a multidisciplinary field, and this study intends to show the current
journals that are in the vanguard regarding this hot topic. This study brings
relevant insights to scholars and practitioners interested in advancing blockchain–
SCM integration. It is a first investigation that analyses the blockchain–SCM
integration literature from 2008 to 2018 (February). Also, the SLR revealed
important gaps in the literature, highlighting managerial implications and
providing a robust research agenda. The rest of this paper is organised as follows.
In Section 2, we introduce the basic concepts of SCM and blockchains. In Section 3,
we justify and present the main aspects of the systematic-review methodology based
on Tranfield et al. (2003) and Denyer and Tranfield (2009). Section 4 provides the
main research findings, and Section 5 provides a discussion addressing the three
RQs. In Section 6, the managerial implications based on the findings are
highlighted. Section 7 details the research implications and proposes an agenda for
future research. Section 8 presents the main contributions from the perspectives of
methodology, scope, and insights. Finally, in Section 9, final remarks and
limitations are presented.
Recent technologies, mainly associated with Industry 4.0, are provoking significant
disruptions and forcing the supply chain management (SCM) field to develop new
business strategy models. One of the most promising of these technologies is
blockchains. Blockchain technology first appeared in the bitcoin context (Nakamoto,
2008). It works in a distributed data structure based on a peer-to-peer network
transaction (Christidis and Devetsikiotis, 2016; Marsal-Llacuna, 2018). Blocks are
linked by cryptographic hashes (de Leon et al., 2017) and all their nodes have a
copy (Al-Saqaf and Seidler, 2017; Scott et al., 2017). Because of these features,
the transactions records are considered virtually immutable (Adams et al., 2017a;
Cai and Zhu, 2016; Grewalet al., 2018). Although blockchain technology applications
emerged with bitcoins (Nakamoto, 2008), the current applications have the potential
to disrupt different, traditional industries (Scott et al., 2017; White, 2017).
Based on the decentralisation principle, in which intermediaries can be eliminated,
the smart contract is an essential blockchain application that works in an
automated manner to transfer assets when a determined condition is satisfied (Al-
Saqaf and Seidler, 2017). Thus, smart contracts are reconfiguring several business
models, in which producer and consumer can trade without an intermediary.
Consequently, blockchain decentralisation and disintermediation features (Scott et
al., 2017) can lead to disruption and support SCM innovation and reconfiguration in
the digital age. Despite these significant blockchain applications and their The
current issue and full text archive of this journal is available on potential to
promote changes in all types of supply chains in Emerald Insight at:
www.emeraldinsight.com/1359-8546.htm Supply Chain Management: An International
Journal © Emerald Publishing Limited [ISSN 1359-8546] [DOI 10.1108/SCM-03-2018-
0143] Received 31 March 2018 Revised 23 August 2018 3 December 2018 Accepted 6
December 2018 Downloaded by Macquarie University At 01:20 13 February 2019 (PT)
terms of new operation models, the literature about blockchain technology in the
SCM field is in its infancy. Literature examining the application of blockchains in
SCM, and the impact of subsequent disruptions, is scarce. To shed some light on
this hot topic, a systematic literature review (SLR) (Denyer and Tranfield, 2009;
Tranfield et al., 2003) was used to answer the following research questions: RQ1.
What are the main current blockchain applications in SCM? RQ2. What are the main
disruptions and challenges in SCM because of blockchain adoption? RQ3. What is the
future of blockchains in SCM? Thus, this research aims to shed light on blockchain–
SCM integration, making a significant contribution to the literature and also
having implications for practitioners and decision makers interested in gaining an
in-depth understanding of this cutting-edge technology. Additionally, blockchain
technology is a multidisciplinary field, and this study intends to show the current
journals that are in the vanguard regarding this hot topic. This study brings
relevant insights to scholars and practitioners interested in advancing blockchain–
SCM integration. It is a first investigation that analyses the blockchain–SCM
integration literature from 2008 to 2018 (February). Also, the SLR revealed
important gaps in the literature, highlighting managerial implications and
providing a robust research agenda. The rest of this paper is organised as follows.
In Section 2, we introduce the basic concepts of SCM and blockchains. In Section 3,
we justify and present the main aspects of the systematic-review methodology based
on Tranfield et al. (2003) and Denyer and Tranfield (2009). Section 4 provides the
main research findings, and Section 5 provides a discussion addressing the three
RQs. In Section 6, the managerial implications based on the findings are
highlighted. Section 7 details the research implications and proposes an agenda for
future research. Section 8 presents the main contributions from the perspectives of
methodology, scope, and insights. Finally, in Section 9, final remarks and
limitations are presented. 2. Supply chain management and blockchains: basic
concepts 2.1 Supply chain management The Council of Supply Chain Management
Professionals (CSCMP), proposed the following definition of SCM: [SCM] encompasses
the planning and management of all activities involved in sourcing and procurement,
conversion, and all logistics management activities. Importantly, it also includes
coordination and collaboration with channel partners, which can be suppliers,
intermediaries, third party service providers, and customers. In essence, supply
chain management integrates supply and demand management within and across
companies. [Council of Supply Chain Management Professionals (CSCMP), 2018] Despite
this robust definition, there is no consensus, mainly between scholars, on a
unified definition of SCM. For instance, Stock and Boyer (2009) analysed 173 SCM
definitions and presented an all-encompassing definition for SCM as: The management
of a network of relationships within a firm and between interdependent
organizations and business units consisting of material suppliers, purchasing,
production facilities, logistics, marketing, and related systems that facilitate
the forward and reverse flow of materials, services, finances and information from
the original producer to final customer with the benefits of adding value,
maximizing profitability through efficiencies, and achieving customer satisfaction
(Stock and Boyer, 2009, p. 706) Another well-articulated and widespread SCM
definition was provided by Mentzer et al.(2001) who defined SCM as: The systemic,
strategic coordination of the traditional business functions and the tactics across
these business functions within a particular company and across businesses within
the supply chain, for the purposes of improving the long-term performance of the
individual companies and the supply chain as a whole. (Mentzer et al., 2001, p. 18)
In this study, we consider that these definitions are convergent and complementary;
while the CSCMP highlights the collaboration, integration and coordination needs
for the entire supply chain, Stock and Boyer’s (2009) definition considers the
importance of network relationships, and Mentzer et al.’s (2001) definition defines
the role of these relationships in long- term performance improvement. This study,
therefore, follows the approach provided by these definitions to understand the SCM
relationship with, and the potential disruptions caused by, blockchain technology.
2.2 Blockchain technology Blockchains emerged as a technology to support
transactions in the cryptocurrency field (Nakamoto, 2008). One formal definition of
blockchain technology, provided by Risius and Spohrer (2017), is: Blockchain
technology refers to a fully distributed system for cryptographically capturing and
storing a consistent, immutable, linear event log of transactions between networked
actors. This is functionally similar to a distributed ledger that is consensually
kept, updated, and validated by the parties involved in all the transactions within
a network. In such a network, blockchain technology enforces transparency and
guarantees eventual, system-wide consensus on the validity of an entire history of
transactions. (Risius and Spohrer, 2017, p. 386) Despite this formal definition, it
is clear that there are some other distinctive blockchain characteristics, like
data security, tamper-proof transactions and data validation among the network
members. A distributed ledger definition is also necessary. Hyperledger (a Linux
Foundation initiative for open-source blockchains) defined a distributed ledger as:
[...] a multi-party database with no central trusted authority. The differentiating
nuance is that when transactions are processed in blocks according to the ordering
of a blockchain, the result is a distributed ledger. (Hyperledger, 2018) However,
because of the novelty of this subject, blockchains face similar difficulties to
SCM in terms of generating a consensual definition. For instance, Al-Saqaf and
Seidler (2017, p. 339) provided a brief definition of a blockchain as “a
distributed digital ledger or accounting book”. Christidis and Devetsiokiotis
(2016, p. 2293) defined a blockchain as “a distributed data structure that is
replicated and shared among the members of a network”. Another recent blockchain
definition was provided by de Leon et al.(2017) as: A digital information recording
method capable of recording data using a logbook approach and with the following
essential characteristics: 1-Ordered, 2-Incremental, 3-Sound (cryptographically
verifiable up to a given block) and 4-Digital. (de Leon et al., 2017, p. 288) In
this context, it is clear that blockchain technology works as “a digital logbook of
transactions”, in which decentralisation, Blockchain and supply chain Maciel M.
Queiroz, Renato Telles and Silvia H. Bonilla Supply Chain Management: An
International Journal Downloaded by Macquarie University At 01:20 13 February 2019
(PT) disintermediation, transaction sharing and tamper-proof can be considered as
its main characteristics. Thus, the blockchain concept can be understood as
associated with transactions’ disintermediation, i.e. without a central authority
to validate and offer credibility to transactions. This feature implies some
impacts on SCM, involving aspects such as member relationships, collaboration,
trust and change in the role-based operations model for cloud agility, among other
consequences. Figure 1 depicts the main elements of blockchain technology in a
schematic form. The blocks are linked in a chain (blockchain) in which each block
has a hash of the previous blocks and a record of all transactions
(Khan and Salah, 2018). Furthermore, because the block has a copy of all
transactions and it cannot be modified, the technology ensures transparency and
enhances trust over the network (Khan and Salah, 2018; Yeoh, 2017). Thus, in Figure
1, each block has the hash of the prior block, for instance, block n 1 3 has the
hash of the block n 1 2 and so on, ensuring traceability. Consequently, this
process validates the preceding blocks’ information back to the first block that
started a process (Hou et al., 2018). 2.3 Blockchains and supply chain
relationships Blockchains, applied in a SCM context, will likely lead to disrupting
transformations in all types of industries. Hence, traditional relationship models
are already being reconfigured, mainly because of the disintermediation of the
transactions. To further understanding of blockchains and supply chain
relationships, Figure 2 illustrates a smart-contract operation. Figure 2
exemplifies the trade between a producer A and a supermarket B. After the
fulfilment of the trade conditions for both, a contract is written, coded and
“stored” in a blockchain structure. A contract is triggered when it satisfies the
conditions of the negotiation. After that, money and goods are transferred
according to the contract. This operation does not rely on an intermediary.
Therefore, it not only speeds up the transaction but also promotes costs reduction
and improves trust, since, within the network, all participants (nodes or actors)
have a copy of the ledger (Al-Saqaf and Seidler, 2017; Yeoh, 2017).
The blockchain technology is an important distributed secure technology in the
prevailing Industry 4.0 era of today and has attracted great attention from both
academia and industry (Dobrovnik et al., 2018; Swan, 2017). Blockchain is known as
distributed ledger technology (Tschorsch and Scheuermann, 2016; Zyskind et al.,
2015), which allows participants to secure the settlement of transactions, archive
the transaction, and transfer assets at a low-cost (Tschorsch and Scheuermann,
2016). It is not only a new type of internet infrastructure based on distributed
applications but also a new type of supply chain network, which may provide a new
paradigm for future business (Hackius and Petersen, 2017; Mansfield-Devine, 2017;
Swan, 2015). As an emerging technology, a lot of revolution and research have just
begun regarding this distributed technology. A growing number of products are
delivered to the customers through supply chains that are composed of independent
firms (Christopher and Peck, 2012; Wang et al., 2018). As a result, today’s
businesses do not only compete as isolated companies, but also as part of a large
supply chain network (Christopher, 2005; Wang et al., 2015). Companies face
increased uncertainty, challenges, and constraints, due to globalization, higher
customer expectation, market competition, supply chain complexity and uncertainty,
which call for coordination and cooperation across the supply chains (inter- and
intra- supply chains) and the needs Wang, et al.: Blockchain and Supply Chain
Management: A New Paradigm for Supply Chain Integration and Collaboration 112
Operations and Supply Chain Management 14(1) pp. 111 – 122 © 2021 for information
technology (Huddiniah and Er, 2019). However, supply chains often are fragmented
with internal competition, limited information exchange and price negotiations
occurring behind closed doors in New Zealand (Bezuidenhout, 2017). In addition,
these constraints directly influence the business performance and often result in
challenges and constraints, such as high operation costs or capacity shortage,
which could be resolved by the Blockchain revolution (Tapscott and Tapscott, 2016).
This paper attempts to explore blockchain applications in supply chain management
and investigate the relationship between blockchain and supply chain collaboration
and integration. Based on the Socio-Technical Theory (STT), technology is an
important variable to optimise the process, task, structure (Bostrom and Heinen,
1977). STT consists of two systems, namely the social system and the technical
system. At the time when this study started in mid-2018 to explore the use of new
technologies in the New Zealand industry 4.0 era, there was a paucity of blockchain
research conducted in the New Zealand context. We narrowed down the scope of the
research by focusing on the technical system, which is concerned with the
processes, tasks and technology needed to transform inputs to outputs (Cartelli,
2007). Blockchain shows a huge potential to reconfigure the task structure and
manage the constraints in supply chains (Cole et al., 2019). Nevertheless, there
have been very few studies conducted on the nexus between blockchain and supply
chain integration and collaboration (Bai and Sarkis, 2020; Chang and Chen, 2020).
Therefore, this paper tries to fill this research gap by focusing on the following
two main research questions: RQ1: What are the key attributes of blockchain
technology applicable to supply chain management? RQ2: How does the blockchain
technology enable the supply chain integration and collaboration? To answer the
research questions, a qualitative research is designed in this study. We used both
desk research and informal interview techniques to tackle the questions to ensure
the research reliability and validity. First, we reviewed the relevant literature,
previous studies, and business cases in blockchain and supply chain and extracted
the important attributes of blockchain. Then, informal interviews were conducted to
verify the results in New Zealand industries. In addition, we asked the
interviewees whether they feel that the blockchain technology could help their
business to improve the integration and collaboration in a supply chain. Over 80%
of the respondents provided positive feedback regarding the blockchain technology.
The results may demonstrate the practical implications of blockchain for supply
chain management, by shedding light on supply chain integration and collaboration.
The rest of the paper is organised as follows. Section 2 describes the relevant
literature and background information. Section 3 briefly introduces the research
methods and Section 4 presents the research results. Section 5 discusses the
important practical features and potential challenges. Finally, Section 6 concludes
the paper with further research directions. 2. BACKGROUND 2.1 What’s Blockchain?
Blockchain is a decentralized digital ledger that can be programmed to distribute
and store data. It is also known as a distributed ledger, which is based on a peer-
to-peer (P2P) or decentralized network, consisting of a continuous sequence of
blocks. Swan (2017) suggests that the terms blockchains and digital ledgers are
generally interchangeable. In a blockchain network, all the parties can
simultaneously share and record the blocks, which must be verified and validated by
all users in the network. Blocks are linked by the cryptographic hash function.
Every transaction is trackable by examining the block information linked by hash
keys (Chen et al., 2018; Zheng et al., 2018; Zheng et al., 2017). Blockchain
advocates claim transparency, speed, accessibility and non-falsifiability as the
cornerstones of this new paradigm (Apte and Petrovsky, 2016). Sultan and Lakhani
(2018) suggest that the blockchain is a decentralised database containing
sequential, cryptographically linked blocks of digitally signed asset transactions,
governed by a consensus model. All ledgers are encrypted and uploaded to block
network with a timestamp, hence all blocks are integrated with time sequence as the
whole book. Apparently, if a user wants to change the record, s/he must adjust the
entire book records, because blockchain utilises distributed database storing all
data, and the core concept of blockchain is distributed computing instead of
centralisation. In other words, it will not work if hackers only change information
on one block. Distributed computing not only saves cost of calculating, it also
solves the data security issue as all participators have the same “book”. In
addition, in a blockchain, every node transfers data by using P2P approach to
reduce the cost of achieving decentralization. Given there is not a centralize
server, all data are distrusted and stored in individual computers, therefore
organization cannot change any data without consensus across the whole blockchain
network. On the contrary, when there is a new transaction in the whole network,
everyone will verify and add it into their “books” (Swan, 2015). Although the
blockchain technology is relatively new, there have been three generations of
blockchains including the Blockchain 1.0, which is the core technology used to
create the cryptocurrencies, such as Bitcoin, Litecoin, etc. The first generation
blockchain appeared in 2009, as a part of Bitcoin, and provided a technique for an
incorruptible digital ledger of economic transactions. In 2015, Ethereum used an
improved blockchain 2.0 for validating transactions. The Blockchain 2.0 was
developed from the decentralised digital ledger, which includes many different
categories, such as the Blockchain 2.0 protocols, smart contracts and decentralised
application. With the development of computer technology, the blockchain 2.0
protocols can be used to manage not just financial transactions but virtually
everything of value. The Blockchain 2.0 space is still in development, many
Blockchain 2.0 projects are mainly applied for the transferring of all kinds of
assets beyond currency using the blockchain (Swan, 2015). The primary argument for
Blockchain 1.0 and 2.0 transactions is the economic efficiency and cost savings
afforded by trustless interactions in decentralized network models. Blockchain
Wang, et al.: Blockchain and Supply Chain Management: A New Paradigm for Supply
Chain Integration and Collaboration Operations and Supply Chain Management 14(1)
pp. 111 – 122 © 2021 113 3.0 is still emerging. Yli-Huumo et al. (2016) and Garrod
(2016) argue that the future research directions for blockchain are not clear. We
may consider blockchain as a new paradigm, which is a decentralised network for
supply chain integration and collaboration beyond currency, payment, and economics.
2.2 Supply Chain Integration and Collaboration Supply chain management is the
integration of material, information, and financial flows in a network of companies
or organisations. Multiple supply chain partners need to work together
collaboratively to make and deliver products and services to the consumer. Supply
chain management concept fundamentally changes the nature of a firm as control is
no longer based on direct control of the internal business processes, but rather
based on integration across member organisations in the supply chain (Lai et al.,
2004; Porter, 2019). Supply chain collaboration is considered as an important
factor to achieve a win-win solution for different shareholders in a supply chain
(Ramanathan and Gunasekaran, 2014; Tsou, 2013). Moreover, Soosay and Hyland (2015)
stress that collaboration goes beyond integration by including long-term
commitments to technology sharing and to closely integrated planning and control
systems. There are different forms of supply chain collaboration including
collaborative planning, collaborative decision making and collaborative execution
(Ramanathan and Gunasekaran,
2014). Supply chain collaboration requires a high level of commitment, trust,
joint decisions and information sharing (Liao et al., 2017; Pradabwong et al.,
2017; Soosay and Hyland, 2015; Zhang and Cao, 2018). Supply chain integration
includes internal, external, supplier and customer integration (Alfalla-Luque et
al., 2015; Flynn et al., 2010; Kim, 2006; Maiga, 2016). A high level of supply
chain integration and collaboration lead to higher levels of supply chain
performance (Chen et al., 2017; Wiengarten et al., 2016). In this paper, we
consider the supply chain integration and collaboration as a firm’s capability to
sense, collaborate, coordinate and reconfigure the elements in a supply chain
including internal cross-functional integration and external integration with
suppliers and customers. Hafeez et al. (2002) regard capability as the ability to
make use of resources to perform some task or activity; they define a resource as
anything, tangible or intangible, owned or acquired by a firm including technology.
In this sense, blockchain can be understood as a technology to facilitate the
firm’s ability, e.g., ability of integration and collaboration from a resource-
based view (RBV) in this study.
Blockchain is a distributed database of transactions, ledgers, and digital
occurrences (Crosby 2016) that provides a decentralized platform that serves as an
immutable platform for participating parties (Zeng et al. 2018). Blockchain was
introduced in 2008 by Nakamoto for a peer-to-peer financial transaction procedure
named Bitcoin (Nakamoto 2019). Before Bitcoin, most people trusted a centralized
middle man, such as banks and governments, to make financial trans- actions (Hutt
2018). Bitcoin revolutionized that by providing a transparent and immutable
procedure without a central author- ity. Bitcoin came as a digital currency, but
the blockchain technology could have many more implications (Swan 2015). However,
we need to briefly narrate how blockchain works to interpret its impact in other
fields. Blockchain is a chain of blocks. Each block contains the data, hash, and
the hash of the previous block. Hash is a unique code of letters and numbers, which
is the identification of the block. The common hashes are usually 256 bits. Hashes
are generally written in the hexadecimal numeral system because it saves some
digits. Decimal is the standard numerical system that uses 0 to 9 numbers, and the
hexadecimal uses these numbers and six extra numbers. The hash of the last block
refers to the previous block that makes the chains of blocks. The hashing function
is taking input and generating unpredictable output through a hashing algorithm
(Vujicic et al. 2018). Hashing is a significant aspect of blockchain technology
immutability (Kumar and Sai 2020), which empowers this technology to contribute to
other fields rather than only finance. There are numerous implications and
applications for blockchain, ranging from financial transac- tions (Tapscott and
Tapscott 2017), manufacturing (Abeyratne and Monfared 2016), logistics (Pournader
et al. 2020), and sup- ply chain management (Saberi et al. 2019). Responsible
editor: Philippe Garrigues * Amir M. Fathollahi-Fard
amirmohammad.fathollahifard.1@ens.etsmtl.ca 1 School of the Built Environment,
University of Technology Sydney, Sydney, Australia 2 Department of Electrical
Engineering, École de Technologie Supérieure, 1100 Notre-Dame St. W, Montréal,
Canada 3 Department of Management Studies and Quantitative Methods, Parthenope
University, Naples, Italy Environmental Science and Pollution Research
https://doi.org/10.1007/s11356-021-13094-3 Recent studies indicate an inclination
of implementing blockchain in supply chain management by scholars and in- dustry
managers (Pawczuk 2017; Pournader et al. 2020). Although blockchain in supply chain
is in its early stages, it is predicted to transform supply chain significantly in
the fu- ture (Kamble et al. 2019; Winkelhaus and Grosse 2020). Surveys show that
supply chain managers and scholars are reasonably optimistic about blockchain in
supply chain man- agement (Hackius and Petersen 2017). Although academic papers on
blockchain in supply chain management are scarce (Fathollahi-Fard et al. 2020a, b),
we witness the increasing quantity of blockchain studies in specific supply chain
knowl- edge areas (Pournader et al. 2020). For example, Min (2019a, b) studied
risk, and Hughes et al. (2019) studied information management in supply chain.
Moreover, many articles such as Nowiński and Kozma (2017), Ying et al. (2018),
Tapscott and Tapscott (2017), and Sikorski et al. (2017) focused on the finance
side of blockchain contribution to supply chain. It goes without saying that there
are still limited papers on blockchain in a specific angle of supply chain
management. Namely, Francisco and Swanson (2018) explored the transparency and
traceability that blockchain brings into supply chain management. Furthermore,
Saberi et al. (2019) studied the adoption barriers of blockchain and Kshetri (2018)
considered supply chain management objectives. The blockchain is not the only
technology that attracted the atten- tion of supply chain managers and scholars.
Other emerging technologies such as Internet of Things (IoT), smart contract, and
artificial intelligence would transform supply chain man- agement significantly
(Winkelhaus and Grosse 2020; Xu et al. 2018). Those emerging technologies can
either contribute in- dividually or integrate with blockchain in supply chain. Most
of the papers on this topic studied specific technologies. There is a scarcity of
an academic paper that reviews all the integrat- ed technologies with blockchain in
supply chain management (Venkatesh et al. 2020). A few literature reviews were
conducted on blockchain in supply chain management in the last few years. Some of
these reviews have focused on the specific angel of supply chain such as
sustainability (Saberi et al. 2019; Venkatesh et al. 2020), provenance (Kim and
Laskowski 2016), and resilience (Min 2019a, b), while others have been broadly
covered the topic with a comprehensive view. Still, they have been con- ducted
relatively straightforwardly with summary statistics of published papers and
topical areas (Keogh et al. 2020). Each of the studies has insights into this
topic, but rigorous bibliometric, citation, and co-citation analysis of this
literature can provide further insights not previously grasped. Bibliometric
analysis is a powerful method to identify emerging topical areas (Ellegaard and
Wallin 2015; Fahimnia et al. 2015; Merediz-Solà and Bariviera 2019). Furthermore,
it can facilitate identifying influential re- searchers, research clusters,
organizations, and most contributed countries to acknowledge the significant
partici- pants (Jalali et al. 2019; Mishra et al. 2018; Muhuri et al. 2019). This
study provides a comprehensive evaluation of the field by conducting bibliometric
and citation analysis, starting with a pool of 769 published papers on blockchain
in supply chain management. Citation and co-citation analysis are also powerful
tools for identifying influential studies and trends of the topic. This paper
presents the findings of the citation analysis to support the results of the
bibliometric anal- ysis. Furthermore, we conducted a co-citation analysis to iden-
tify influential studies. The algorithmically obtained co- citation results were
set to conduct a further investigation for defining supply chain sections, other
integrated technologies with blockchain, and blockchain’s potential contributions
in supply chain management. Blockchain in supply chain management Blockchain
definition and its boundaries: Blockchain is a distributed ledger database of
records, or trans- actions, or digital incidents that have been executed and con-
veyed by participants (Crosby 2016). Numerous articles have been published to
clarify how blockchain technically works in recent years (see among Francisco and
Swanson 2018; Gupta and Sadoghi 2018; Nakamoto 2019). Blockchain technology has
been famed based on cryptocurrencies, namely, Bitcoin (Underwood 2016). Still,
there are numerous implications for it, ranging from financial services (Zeng et
al. 2018), manufacturing (Abeyratne and Monfared 2016), and supply chain (Francisco
and Swanson 2018). Here, we focus on blockchain in supply chain management and
blockchain’s im- plications rather than blockchain technology’s technical mecha-
nism. Accordingly, we excluded the blockchain technological aspects such as
algorithm, hash function, wallet, signature, and protocols. Supply chain management
definition and its boundaries Definitions of supply chain management differ across
authors (Mentzer et al. 2001). Cooper et al. (1997) defined supply chain management
as managing the total integrative flow of materials from raw material suppliers
through production, warehousing, and transportation to the end users. Supply chain
management consists of various thresholds, and identi- fying its boundaries is an
essential step. Here, we consider all the supply chain echelons from supply to
manufacturing, dis- tribution, and customer side activities. Furthermore, supply
chain management represents the management of the whole chain in this study. Also,
we consider only the forward supply Environ Sci Pollut Res chain, so reverse
logistic and closed-loop supply chain excluded.
Introduced by one or more individuals under the pseudonym Satoshi Nakamoto [1], the
cryptocurrency Bitcoin and the underlying blockchain technology (BCT) have created
a tremendous hype around electronic payment systems using the peer-to-peer paradigm
of the internet [2, 3]. More generally, BCT provides the infrastructure that
enables secure direct exchange of value between participants without any financial
intermediary (‘internet of value’) [4]. Blockchain is a shared ledger that allows
for immutable storage of verified transaction data [5]. Therefore, The Economist
called blockchain the ‘trust machine’ [6] since a ledger most fundamentally
represents a trustworthy record of business activity. Trust in business
relationships is a key ingredient for inter-company supply chain (SC) collaboration
[7, 8]. Consequently, supply chain management (SCM) is generally viewed as a major
field of application for BCT which is confirmed by a series of recent news items
[9]. Most notably, IBM and Maersk announced a joint venture to commercialize BCT in
container shipping and global trade activities [10]. In the academic community, the
interest in BCT and its business applications has been steadily growing over the
last years [11] which is confirmed by a series of recent literature reviews (see
[12, 13, 14, 15, 16]). An overarching research framework for BCT is provided by
Risius and Spohrer [17]. In the slipstream of this development, SCM has only
attracted minor interest among various application domains (see [18]). While
Korpela et al. [19] focus on the issue of data integration in digital SCs using
BCT, Sternberg and Baruffaldi [20] provide a first summary of potential
applications of BCT in SCM from the literature. Hackius and Petersen [21] and
Petersen et al. [9] use an expert survey of logistics professionals to explore
potential applications and future prospects of BCT in SCM. Petersen et al. [9]
synthesize application clusters of BCT in logistics and SCM from publicly available
case examples. To the best of our knowledge, there is no comprehensive perspective
on use cases of BCT in SCM. We intend to fill this gap with this paper. The
contribution of this paper is twofold: first, a comprehensive framework is
developed positioning BCT and its potential areas of application in the domain of
SCM. In contrast to previous studies, this paper uses a deductive approach mapping
distinctive features of BCT to use cases in SCM. Second, the framework is applied
to the results of a structured literature review Proceedings of the 52nd Hawaii
International Conference on System Sciences | 2019 URI:
https://hdl.handle.net/10125/60124 ISBN: 978-0-9981331-2-6 (CC BY-NC-ND 4.0) Page
6885 and a secondary dataset of BCT-enabled SC innovations. This allows for
determining a current state of the art of BCT-enabled applications in SCM and for
identifying future perspectives in this field. The remainder of this paper is
structured as follows: in section 2, we provide conceptual foundations of SCM and
BCT and derive the corresponding framework of use case clusters. The systematic
literature review and the analysis of the secondary dataset are conducted in
sections 3 and 4. The findings are discussed in section 5. Section 6 concludes the
paper with a summary of the findings and an outlook for further research. 2.
Conceptual Foundations 2.1. Supply Chain Management SCM covers two major tasks
according to the Council of Supply Chain Management Professionals (CSCMP) [22]: (i)
the planning, implementing, and controlling of primary activities that create and
deliver value for the ultimate customer (esp. procurement, manufacturing, and
logistics), and (ii) the integration and coordination of corresponding business
processes within and across companies. While integration refers to the managerial
and organizational challenges of forming a network of mostly independent companies,
coordination is concerned with ‘technical’ implementation of processes and systems
to foster alignment of material, financial, and information flows along the SC [8].
The importance of information and communication technology for SCM is widely
acknowledged [23, 8]. Technology represents a major driver and constitutive element
of SC innovation [24]. Recent advances as part of the Fourth Industrial Revolution
(aka ‘Industry 4.0’ or ‘Industrial Internet of Things’) promise radical changes for
various sectors including manufacturing and logistics [25]. Industry 4.0 envisions
intelligent and connected physical assets, i.e., smart products and machines that
operate autonomously and that can form self-coordinating systems such as smart
factories or smart SCs [26]. In the slipstream of these developments, BCT and its
implications on SCM receive increasing attention [21, 20]. 2.2. Blockchain
Technology Most fundamentally, a blockchain is a distributed ledger that is shared
and agreed upon a peer-to-peer network [27, 20]. A blockchain contains a single
record of the data which is stored in blocks on every participant’s node [12]. Each
block corresponds to a timestamped record that is verified through a defined
consensus protocol of the blockchain network and secured via public-key
cryptography (‘hashing’) [13]. This basically eliminates the need for a trusted
central entity. Since blocks are chained via their hash codes, information on the
blockchain is immutable [28] and thus allows the user to obtain provenance
information and to trace status changes over time [29]. A blockchain may execute
computational logic in the form of ‘smart contracts’ (often referred to as
chaincode) [2]. A smart contract is a trusted application that is installed on the
nodes of the blockchain [30, 31]. With respect to access rights, permissionless and
permissioned blockchains can be distinguished [32]. Both of these types can be
either private or public depending on the ownership over data and infrastructure
[33]. There are two dominant types of blockchains: permissionless-public
blockchains are freely accessible via the internet (e.g. Bitcoin blockchain). In
permissioned-private blockchains (e.g. Hyperledger Fabric) [28, 31], however, users
need to register and are granted access by a network administrator based on a pre-
defined approval process [5]. Although BCT enforces transparency, it allows for
pseudonymity since transactions are settled between 30-plus-character alphanumeric
addresses [2]. BCT is not restricted to financial transactions related to Bitcoins;
any asset – both tangible (physical good) and intangible (property right or
financial claim) – that entails value can be transfered onto or off the ledger [34,
20]. The digital representative of this asset on the blockchain is called a ‘token’
[35]. While blockchain is largely viewed as a general purpose technology that
further increases productivity, various authors argue that BCT will change the
industrial organization [4, 35]. In a similar vein, Davidson et al. [36]
characterize blockchain as an institutional technology that fosters economic
coordination. As a consequence, blockchains represent a novel type of institution
that is different from markets, hierarchies (firms), and relational contracts as
described by Williamson [37]. More precisely, blockchains constitute decentralized
collaborative (or autonomous) organizations for value creation and exchange [38].
SCs are networks of independent companies that are constituted by relational
contracts [39]. Relational contracts represent informal agreements that are
“sustained by the value of the future relationship” [40] and thus trust becomes an
essential factor of SC relationships [41]. However, a blockchain removes trust from
the equation and is therefore fundamentally different from an SC taking an
institutional viewpoint. For the purposes of this paper, we mainly focus on the
impact of BCT as a general purpose technology in SCM. Page 6886 2.3. Linking SCM
and BCT BCT provides four key features that can enhance integration and
coordination among the members of an SC [35]: (1) transparency, (2) validation, (3)
automation, and (4) tokenization. Transparency relates to the shared ledger of
information which is aggregated from various sources and participants of the
blockchain. Immutability of records and consensus-based verification enable
validation of information [42]. Automation refers to the opportunity to execute
smart contracts based on verified information on the blockchain. BCT allows
creation of tokens that represent a specific claim on any valuable asset and their
exchange between blockchain members (tokenization) [43]. Enabled by these four key
features of BCT, one can derive corresponding use case clusters in SCM that build
on one another: 1. SC Visibility: One of the main causes for SC inefficiencies is
poor end-to-end transparency which also leads to the so-called bullwhip effect [8].
BCT allows sharing real-time information about the location and status of an object
between multiple SC members [9]. Given the opportunities of sensor technology and
the Internet of Things [26, 44], any measurable condition such as product
temperature in a cold chain or availability of technical equipment operating in the
SC can be tracked. This improves data accuracy enhancing collaborative planning and
execution as well as the implementation of preventive and reactive risk management
measures [35]. 2. SC Integrity: Given a shared ledger of transparent and immutable
records, BCT provides the opportunity to trace assets back to their origin [9].
Provenance information to certify authenticity ensures integrity of assets
involving both products and technical equipment. This could enforce responsible
sourcing and allow detecting or even preventing product counterfeit and other
fraudulent actions [35]. Applications could involve tracing of asset ownership
after sale for warranty purposes. Furthermore, BCT eases
paperwork in global trade by ensuring validity of freight documents, e.g. in
customs clearance [21]. 3. SC Orchestration: Combining transparency and validation
with automation via smart contracts, one could envision SCs that operate highly
automated based on pre-specified rules [45]. This increases speed and eases
coordination since information and corresponding decisions or measures are
propagated throughout the SC. More specifically in case of a machine failure, the
machine could order the spare part from the supplier, request maintenance service,
and inform downstream parties about expected delays. Another benefit of automation
is ex-post enforceability of contracts, i.e., contractual parties cannot reverse
their commitments [35]. Consequently, BCT provides the necessary foundation to
extend the smart factory paradigm of Industry 4.0 to inter-company SCs. 4. SC
Virtualization: Virtualization is a well-known approach in IT infrastructure
management to increase utilization and flexibility of IT assets by creating a
logical representation of physical hardware in software [46]. Tokenization of
physical SC assets such as technical equipment and inventories follows a similar
idea since there is another opportunity besides shifting acquisition/sale of SC
assets to the blockchain. Claims on capacities or ordering options could be issued
as tokens and circulated outside normal (bilateral) contractual relationships.
Similar to the virtualization of IT hardware, this would allow for improved
capacity utilization of SC assets since excess capacities could be monetized.
Moreover, virtualization would increase contract flexibility and enable
reallocation of corresponding risks in SCs in general.[35] While the aforementioned
use cases mainly focus on managing physical assets and material flows, cross-
cutting applications that support the management of corresponding financial claims
and financial flows are grouped in a separate use case cluster [35]: 5. SC Finance:
Applications supporting financial SCM are a natural ‘fit’ for BCT given the close
ties to cryptocurrencies and the important role of financial intermediaries in
global trade [9, 47]. Consequently, there are two types of applications: first, BCT
eases the settlement of multi-party and multi-tier financial transactions in SCs
that result from collaborative value creation of blockchain members [38, 35].
Second, transparent and validated records as well as automated transactions and
tokenized financial claims simplify financing of working capital (including
inventories and accounts receivable net of accounts payable [48]) from blockchain
members which also lowers financing costs [47]. For this purpose, SC assets could
be collaterialized by issuing corresponding financial claims using tokens [35].
Modern supply chains are inherently complex comprising multi-echelon,
geographically disjointed entities competing to serve consumers (Johnson 2006;
Lambert and Enz 2017). Globalisation, diverse regulatory policies, and varied
cultural and human behaviour in supply chain networks make it almost impossible to
evaluate information and manage risk in this intricate network (Sarpong 2014;
Ivanov, Dolgui, and Sokolov 2018). Inefficient transactions, fraud, pilferage, and
poorly performing supply chains, lead to greater trust shortage, and therefore, a
need for better information sharing, and verifiability. Traceability is becoming an
increasingly urgent requirement and a fundamental differentiator in many supply
chain industries including the agri-food sector (Costa et al. 2013), pharmaceutical
and medical products (Rotunno et al. 2014), and high value goods (Maurer 2017).
Luxury and high value items whose provenance might otherwise be reliant on paper
certificates and receipts can easily be lost or altered. In fact, lack of
transparency in the supply value of any item prevents supply chain entities and
customers from verifying and validating the true value of that item. The cost
involved in handling intermediaries, their reliability, and transparency further
complicate managing this traceability in the supply chain. Strategic and
reputational competitive issues arise from these risks and lack of transparency.
For example, the salmonella outbreak case linked to Maradol-brand papayas, with
hundreds of people in the United States has fallen ill, could disparage a brand and
its supply chain. Although the centre for disease control reported the origin of
the contaminated papayas;1 not all shipments were traceable or could be recalled,
while injurious results and safety concerns continued. Another case is the 2015 E.
coli outbreak2 within Chipotle Mexican Grill outlets, leaving dozens of customers
ill. This outbreak caused significant image concerns for Chipotle, causing its
stock prices to fall by up to 42%. Lack of transparency and accountability across
Chipotle supply chains and capability to monitor multiple suppliers in real- time
were some obstacles for Chipotle. These obstacles could have caused further
contamination prevention even after its discovery. Current supply chains rely
heavily on centralised, sometimes disparate and stand-alone information management
sys- tems, that are within organisations; for example, enterprise resources
planning systems, which has its own pitfalls. Supply chain entities require
significant trust for relying on one single organisation or broker for storing
their sensitive and valuable information (Abeyratne and Monfared 2016). Single
point failure is another disadvantage of centralised information systems which
leaves the whole system vulnerable to error, hacking, corruption, or attack (Dong
et al. 2017). *Corresponding author. E-mail: jsarkis@wpi.edu © 2018 Informa UK
Limited, trading as Taylor & Francis Group 2 S. Saberi et al. Supply chain practice
and strategy is also facing emergent pressures to consider and certify supply chain
sustainability. Sustainability has been defined by the triple-bottom-line concept
that includes a balance of environmental, social, and business dimensions when
managing the supply chain (Seuring et al. 2008). An important strategic and
competitive issue for sustainability in supply chains is the confirmation and
verification that processes, products, and activities within the supply chain meet
certain sustainability criteria and certifications (Grimm, Hofstetter, and Sarkis
2016). Such issues evoke questions on whether current supply chain information
systems can support information required for the timely provenance of goods and
services, in a secure manner that is clear and robust enough to trust. The solu-
tion to these complicated problems lies in improving supply chain transparency,
security, durability, and process integrity. The answer to this problem may be
blockchain technology (blockchain). New technological developments and applica-
tions with the concept of blockchain technology make these improvement goals more
organisationally, technologically, and economically feasible (Swan 2015; Abeyratne
and Monfared 2016). Blockchain technology as a potentially disruptive tech- nology
incorporating characteristics of a decentralised ‘trustless’ database allows for
global-scale transactions and process disintermediation and decentralisation
amongst various parties (Crosby et al. 2016). Some early use cases that exemplify
possibilities and concerns with blockchain technology exist. One of the more
popular cases involves Maersk and its partnership with IBM for it maritime
container management through blockchains. In this use case, IBM mentioned that
billions in savings could occur by having more accurate and trustworthy bills of
landing attached to containers (Groenfeldt 2017). Interestingly, although billions
of savings are mentioned, it is not clear that a full-fledged implementation was
possible due to scaling issues. Additionally, from a sustainable supply chain
perspective, Provenance, a blockchain service provider, has sought to integrate
blockchain technology in the seafood supply chain. In this case, transparency and
validity of sustainable practices were critical (Steiner and Baker 2015). Hence,
whether there are concerns related to environmental, economic, or social issues,
blockchain’s potential uses have seen significant discussion in the professional
literature. Although the blockchain use cases have increased over the years, just
as any potentially disruptive system or technology, blockchain faces various
obstacles and barriers in adoption and implementation by supply chain networks.
Blockchain is still in early stages of development with various difficulties from
behavioural, organisational, technological, or policy-oriented aspects (Crosby et
al. 2016; Lemieux and Lemieux 2016; Yli-Huumo et al. 2016). These issues will be
important in scholarly literature discourse for a number of years. At this time the
nascent practical issues are harbingers to scholarly debate and questions. The
issues have yet to be addressed integrally and effectively. In this article, we
initiate the debate with a focus not only on blockchain-based supply chain
challenges, obstacles, and barriers but also on the blockchain adoption benefits
and applications in the sustainable supply chain. The relationships to current
theory, the need for potentially new theory and research are also discussed; with
an outcome being some specific research propositions. This paper is organised as
follows. Blockchain technology is introduced in Section 2 and its application in
managing a supply chain is described in Section 3. Section 4 presents the
advantages of blockchain to maintain sustainability dimen- sions in a supply chain
network. In Section 5, the barriers and obstacles facing blockchain technology
implementation in a supply chain and supporting sustainability are reviewed and
clustered into four different categories. Research directions and propositions are
presented in Section 6. Finally, Section 7 concludes the paper. 2. Blockchain
technology Blockchain technology is a distributed database of records or shared
public/private ledgers of all digital events that have been executed and shared
among blockchain participating agents (Crosby et al. 2016). Its history can be
traced to distributed ledger technology. Blockchain technology differs from most
existing information systems designs by including four key characteristics; non-
localisation (decentralisation), security, auditability (Steiner and Baker 2015),
and smart execution (see Figure 1). In blockchain, an agent creates a new
transaction to be added to the blockchain. This new transaction is broadcast to the
network for verification and auditing. Once the majority of nodes in the chain
approve this transaction according to pre-specified approved rules, this new
transaction is added to the chain as a new block. A record of that transaction is
saved in several distributed nodes for security. Meanwhile, the smart contract, as
a critical feature of blockchain technology allows the performance of credible
transactions without third parties’ involvement. A major difference between the
current design of the Internet and blockchain technology is that the Internet was
designed to move information (not value) and to move copies of things (not original
information). In blockchains, value is represented in transactions recorded in a
shared ledger and secured by providing a verifiable, time-stamped record of
transactions, which provides secure and auditable information (English, Auer, and
Domingue 2016). These transactions appear through a verification process that is
consistent with network consensus rules. Once the new record is verified and added
to the blockchain, multiple copies are created in a decentralised manner to create
trusting chain. International Journal of Production Research 3 Figure 1. Steps in
blockchain information and transactions. Decentralisation is an important property
of blockchain technology and is a check on any adulteration of information, thus
increasing information validity. Removing collectively maintained records are
impractical and verified records of every single transaction are accessible to the
participants through distributed public or private ledgers (Crosby et al. 2016). A
centralised database is more susceptible to hacking, corruption, or crashing (Tian
2016). Trust is a main consequence of decentralisation since there is no need to
assess the trustworthiness of the intermediary or other participants in the network
(Nofer et al. 2017) and information is easily viewed and compared. This approach
does not require any particular behaviour on behalf of the participants; instead,
the underlying technology
guarantees the integrity of the system even in the face of dishonesty or idleness.
Participants are able to view the ledgers and analyse transactions. This feature
provides transparency (Tian 2016) while simultaneously ensuring anonymity through
preserving records behind cryptographics (Crosby et al. 2016). Blockchains can be
generalised and used to implement an agreed upon set of rules that no one, neither
the users nor the operators of the system, can break. They rely on a unique system
architecture platform for applications involving multiple parties who require
little trust in each other; for example, fragmented supply chains. Depending on the
technology application, blockchain design is different and can form public
(permissionless) or private (permissioned) ledgers and networks (Ølnes, Ubacht, and
Janssen 2017). Their design is different in terms of the network players and the
rules to maintain the blockchain. In a private or a closed blockchain, the parties
know each other and there is no anonymity, such as in a supply chain network with
known entities working to produce and distribute products. In this case, there
would be new roles such as certifiers, who provide certifications to supply chain
network participants and maintain this private network. Alternatively, in a public
or an open blockchain, to maintain trust with many anonymous users, cryptographic
methods are applied to let users enter the network and record their transactions
(Pilkington 2015). Meanwhile, a new generation of transactional applications that
establish trust, accountability, and transparency is fos- tered by means of
blockchain technology; these applications are managed by a so-called smart
contract. A smart contract is typically a software programme that stores rules and
policies for negotiating terms and actions between parties. It automat- ically
verifies that contractual terms have been met and executes transactions (Delmolino
et al. 2016). The logic of a smart contract is executed by the network of players
who reach consensus on the outcome of the contract execution. The contract executes
its code whenever it receives a message, either from a player in the network or
from another contract and updates the ledgers accordingly if the contractual terms
of its public or private network are met (Peters and Panayi 2016). Blockchain
technology first gained popularity as a platform for managing Bitcoin, a digital
cryptocurrency (Nakamoto 2008). Apart from the digital currency, blockchain
technology is a new computing and information flow paradigm with broad implications
for future development in supply chain management and logistics (Abeyratne and
Monfared 2016; Tian 2016; Maurer 2017). It is this perspective that we take in the
remainder of this paper. 4 S. Saberi et al. 3. Blockchain-based supply chain
Blockchains are, potentially, a disruptive technology for the design, organisation,
operations, and general management of supply chains. Blockchain’s ability to
guarantee the reliability, traceability, and authenticity of information, along
with smart contractual relationships for a trustless environment all portend a
major rethinking of supply chains and supply chain management. In this section, we
will dive deeper into the value proposition of blockchain technology and its appli-
cability to goods and manufacturing supply chain, its structure, and possible new
components for managing a supply chain. How blockchain functions within the context
of the supply chain are still open to interpretation and development. Unlike
bitcoin and other financial blockchain applications, which may be public;
blockchain-based supply chain networks may require a closed, private, permissioned
blockchain with multiple, limited players. But, the door may still be open for a
more public set of relationships. Privacy level determination is one of the initial
decisions. Figure 2 shows a general graphic of one traditional supply chain
transformation to a blockchain-based supply chain. Four major entities play roles
in blockchain-based supply chains; some not seen in traditional supply chains.
Registrars, who provide unique identities to actors in the network. Standards
organisations, who define standards schemes, such as Fairtrade for sustainable
supply chains or blockchain policies and technological requirements. Certifiers,
who provide cer- tifications to actors for supply chain network participation.
Actors, including manufacturers, retailers, and customers, that must be certified
by a registered auditor or certifier to maintain the system trust (Steiner and
Baker 2015). Influences on the supply chain product and material flows also exist.
Every product may have a digital blockchain presence so that all relevant actors
can have direct product profile access. Security measures may be set in place to
limit access, where only the parties with the correct digital keys have access to a
product. There is a range of data that can be collected, including the status of
the product, the type of product, and the standards that are to be implemented for
a product (Tian 2017). An information tag attached with a product represents an
identifier that links physical products to their virtual identity in the blockchain
(Abeyratne and Monfared 2016). One interesting structure and flow management
characteristic are how a product is ‘owned’ or transferred by a particular actor.
Actors gaining permission to enter new information into that product’s profile or
initiate a trade with another party will likely be a significant rule; where
gaining permission may require smart contract agreements and consensus. Before a
product is transferred (or sold) to another actor both parties may sign a digital
contract, or meet a smart contract requirement, to authenticate the exchange. Once
all parties have met contractual obligations and processes, transaction details
update the blockchain ledger. The records of data transactions would be
automatically updated by the system when a change is initiated (Abeyratne and
Monfared 2016). The blockchain technology can highlight and detail at least five
key product dimensions: the nature (what it is), the quality (how it is), the
quantity (how much of it there is), the location (where it is) and the ownership
(who owns it at any moment). In this way, the blockchain removes the need for a
trusted central organisation that operates and maintains this system and allows
customers to inspect the uninterrupted chain of custody and transactions from the
raw materials to the end sale. This information is recorded in ledgers as
transactions occur on these multiple blockchain information dimensions; with
verifiable updates. Blockchain reliability and transparency are meant to more
effectively facilitate material and information flow through the supply chain; with
automated governance requirements. This transformation may result in a broader
shift from an industrial durable, commodity, products economy to an information,
customisation economy. Production will rely more heavily on knowledge,
communication, and information and not necessarily on materials characteristics
(Pazaitis, De Filippi, and Kostakis 2017). For example, customers can track the
detailed information of products which would increase costumers’ trust associated
with product characteristics (Tian 2016). Smart contracts, as written rules stored
in the blockchain, can help to define network actor interaction amongst each other
and within the system. Smart contracts influence network data sharing between
supply chain participants and contin- uous process improvement. For example,
certifiers and standards organisations digitally verify actor profiles and
products. Actors and products have their own digital profile on the network, which
displays information such as description, location, certifications and association
with products. Each supply chain player can log in key information about a given
product and its status on the blockchain network (Tian 2017). Smart contract
governance and process rules in a blockchain-based supply chain can manage actor
certification and approval and what processes they are allowed to access and are
needed for execution. Actor data changes can occur depend- ing on supply chain
type, position, and trigger defined by a smart contract. The actors cannot change
the rules without some form of consensus process (Maurer 2017). Another example of
smart contract applications is in procurement. A smart con- tract between two
trading partners can legally update the automated record of what goods were bought,
sold, and delivered in real-time by end users across the line of business.
International Journal of Production Research 5 Figure 2. Supply chain
transformation. Smart contract process characteristics portend potential business
process continuous improvement for supply chain processes. The potential for supply
chain business process improvements can be situated in blockchain information that
may capture performance metrics in ledgers; linking them to agree upon processes.
This type of approach and information has great potential for supply chain design
and real-time implications, beyond just product delivery and governance concerns.
Blockchain impacts both supply chain process and product management, and financial
transactions between different network parties (Hofmann, Strewe, and Bosia 2018). A
key potential blockchain supply chain advantage is the disinterme- diation of
financial intermediaries, including payment networks, stock exchanges, and money
transfer services (Tapscott and Tapscott 2017). This will make trading processes
among partners more efficient. Inefficiencies in supply chain finan- cial flows can
be reduced through supply chain finance instruments and techniques such as reverse
factoring and dynamic 6 S. Saberi et al. discounting (Seifert and Seifert 2011;
Popa 2013); saving networks millions of dollars (Fanning and Centers 2016). Smart
contracts are capable of organising financial arrangements and would ensure that
sufficient funds are available to the projects and that everyone is paid in a
timely manner (Hofmann, Strewe, and Bosia 2017). They provide a connection for
transaction between different currencies or mix them from multiple sources in
global supply chain in a secure and timely manner (Eyal 2017). Although a broad
variety of blockchain technology applications in the supply chain can exist, they
are industry, product or service, or governance focused. To exemplify a practical
blockchain supply chain application we turn our discussion to sustainable supply
chains. Momentum is building towards sustainability solutions. Regulatory, consumer
and community pressure on businesses and their supply chains to improve the
sustainability of their supply chains and their products (Zhu, Sarkis, and Lai
2018). These facts prompt us to identify future supply chain implications in more
detail by considering the effect of blockchain technology on sustainable supply
chains. 4. Blockchain and sustainable supply chains Blockchains as distributed,
immutable, transparent, and trustworthy databases, shared by a community, can also
influence sustainable supply chain networks. Tracking potential social and
environmental conditions that might pose environ- mental, health and safety
concerns is an important application focus for the blockchain (Adams, Kewell, and
Parry 2018). Practical examples exist. Blockchains formed in China for carbon asset
markets allows enterprises to gener- ate carbon assets more efficiently in
accordance with China’s Carbon Emissions Reduction for the Paris Agreement3. A
blockchain-based supply chain provides better assurance of human rights and fair
work practices. For instance, a transparent record of product history assures
buyers that goods being purchased are supplied and manufactured from sources that
have been verified as being ethically sound. Smart contracts may be especially
capable for rules of tracking and controlling sustainable terms and regulatory
policy autonomously and enforcing or governing appropriate corrections. Sustainable
supply chains have gained significant interest amongst academics and practitioners
(Fahimnia, Sarkis, and Davarzani 2015). Not only are business dimensions of the
supply chain important for sustainable supply chains, but expand- ing the focus to
environmental and social dimensions has made for a more generalisable and holistic
perspective on the supply chain. The promising features of blockchain technology
might be a panacea for such complexity in the triple-bottom- line of
sustainability: economic, social, and environmental bottom lines. Thus, capturing
and identifying sustainable supply chain examples can exemplify the breadth of
blockchain technology application. Blockchain technology can support data
collection, storage, and management, supporting significant product and supply
chain information. Openness, transparency, neutrality, reliability, and security
for all supply chain agents and stakeholders can exist in this technological
context (Abeyratne and Monfared 2016). The food and beverage industry faces supply
chain sustainability pressures. An interesting application in this context is the
nexus of Radio Frequency Identification (RFID) and blockchain technology to equip a
food supply chain with traceability system for real-time food tracing based on
Hazard Analysis and Critical Control Points (HACCP) rules (Tian 2017). It can
record supply chain events in the agricultural sector (Staples et al. 2017).
Blockchain can aid supply chains to detect unethical suppliers and counterfeit
products since all the information can only be recorded by authorised actors; these
can cause serious social harm. Economically, adopting blockchain technology can
benefit a firm and its supply chain from different business dimen- sions affecting
their economic performance. We provide some examples, out of many for making the
economic business case for blockchain technology in the supply chain. Blockchains
can result in supply chain disintermediation where fewer tiers result in
transaction costs and time reduction, reducing business waste in the supply chain
(Ward 2017). Blockchain technology can share instantly every modification of the
data, allowing for potentially rapid deployment of products and processes while
minimising human errors and transaction times. Blockchain technology can ensure the
safety and authenticity of the data, which will reduce the cost of preventing data
from deliberate and capricious alteration increasing supply chain risks and
reducing business reliability (Ivanov, Dolgui, and Sokolov 2018). Besides,
customers and government now ask for transparency within supply chain. Pioneering
companies realised the competitive advan- tage of transparency (Ward 2017), which
results in increasing customers’ trust to purchase more and benefit the firm
financially. Blockchain technology has the potential to contribute to social supply
chain sustainability. Making information stable and immutable is one way of
building supply chain social sustainability. Given that information cannot be
modified without consent by authorised actors, blockchains can prevent corrupt
individuals, governments or organisations from seizing assets of people unfairly.
Also, blockchain technology can block nefarious agents and hold the corrupt
accountable for both social and individual misdeeds. Blockchain traceability helps
sustainability through better assurance of human rights, and fair, safe
International Journal of Production Research 7 work practices. For instance, a
clear record of product history helps buyer confidence that goods being purchased
are from ethical sources. Blockchain technology also aids in environmental supply
chain sustainability. It can do so from many different per- spective applications.
First, tracking substandard products accurately and identifying further
transactions of the products can help reduce the rework and recall, which helps
decrease resource consumption and reducing greenhouse gas emissions. Traditional
energy systems are centralised while a peer-to-peer network based on blockchain
technology for energy system can reduce the need to transmit electricity over long
distances and subsequently save a big portion of energy wasted over long distance
transmission. It would also reduce the need for energy storage which saves its
resources. There are several power platforms based on blockchain technology to
reduce the waste of the supply chain, such as Echchain, ElectricChain, and
Suncontract (futurethinkers 2017). Second, blockchains could be used to ensure that
purportedly green products are environmentally friendly. The process- ing
information for green products is often unavailable and difficult to verify. If the
manufacturing process of a product is verified to be green in terms of greenhouse
gas emissions level, environmentally conscious customers may be more willing to
purchase green products. For example, Ikea has a desk product made from wood cut in
a sustainable Indonesian forest. Ikea must follow the wood from the time it’s cut
through manufacturing to the final product to guarantee the desks really made from
this specific wood. This process is complex but can be managed with blockchain
technology. One such example is the Endorsement of the Forestry Certification
programme which traces the provenance of around 740 million acres of certified
forests all over the world using blockchain technology (Rosencrance 2017). Another
environmental supply chain sustainability example is related to carbon tax. In
traditional systems, the carbon footprint of each product is difficult to measure.
With blockchain technology, tracing the footprint of products of particular company
becomes easier. It can help determine the amount of carbon tax should be charged of
a company. If a product is more expensive with a large carbon footprint, the
customers may buy a product of low-carbon footprint. This additional information
and consumer or market pressure may cause firms to reevaluate and restructure their
supply chain to reduce the carbon emissions to meet the demand of buyers.
Blockchain technology can help reduce carbon emissions in the journey of products
by providing the fundamentals for supply chain mapping and applying low-carbon
product design, production, and transportations (de Sousa Jabbour et al. 2018a).
The Supply Chain Environmental Analysis Tool (SCEnAT) proposes a framework to
assess carbon emissions of each entity involved in supply chains and life-cycle of
products (Koh et al. 2013). SCEnAT 4.0 is a new tool that integrates novel
technologies such as blockchain, Internet of Things (IoT), Artificial Intelligence,
and Machine Learning to manage big data and link organisations in the supply chain
more effectively to support industry 4.0 policies, carbon reduction, and green
assessments4. Blockchain technology also has the potential to transform carbon
assets trading. As an example, IBM and Energy Blockchain Labs Inc. in China are
developing a green assets blockchain-based platform that helps organisations to
track and measure their carbon footprint, meet the Carbon Emission Reduction (CER)
quotas, and facilitate carbon asset development and trading. Transparent, secure
and real-time information on the blockchain gives organisations the opportunity to
cooperate and trade their carbon assets in a more efficient way in the green assets
markets5. Third, blockchain can improve the recycling. People and organisations may
not be motivated to participate in recy- cling programmes. Blockchain technology
has been used to motivate people in Northern Europe through financial rewards in
the form of cryptographic tokens in
exchange for depositing recyclables like plastic containers, cans, or bottles.
Meanwhile, it is difficult to track and compare the impact of various recycling
programmes. Blockchain makes it pos- sible to track data for evaluating the impact
of various programmes. For example, Social Plastic is a project based on blockchain
technology to turn plastic into money and aims to reduce the plastic waste.
RecycleToCoin is another blockchain application that enables people to return
plastic containers (futurethinkers 2017). The possibilities for this type of effort
for closed-loop supply chains make blockchain amenable to emerging concepts such as
the circular economy. Fourth, blockchain benefits the emission trading process by
improve emission trading schemes (ETS) efficacy. With the application of blockchain
technology, fraud can be avoided due to the fidelity and transparency of
blockchain. Thus, a reputation-based system is created which solves the
inefficiency of ETS and it encourages all the participant to figure out a long-term
solution to the emission reduction, because the participants are encouraged by the
economic benefits of good reputation (Khaqqi et al. 2018). The use of Blockchain
technology as a supply chain governance and information management mechanism will
be challenging specially in a sustainable network. Disruptive technologies
typically face challenges, whether in the short-term or long-term (Mendling et al.
2017). Therefore, participants of supply chain need to be prepared for it to have
it as an opportunity, rather than a threat, as it might challenge the relationships
through supply chain. These examples show the potential for economic, social, and
environmental (sustainability) influences that can be managed in a blockchain-
enabled supply chain.
Supply chain management is the backbone of any industrial sector. Different
industrial organizations, distributed globally and specialized in manufacturing of
particular types of products are operated as production houses for particular
segments, which would be required by another manufacturer to produce another
product or part of final product. Before reaching the final product, individual
parts of the product go through series of supply chains called multi-tier supply
chain. Aviation industry represent perfect example of how complex this process can
be and how all this process works. - 1051 - 28TH DAAAM INTERNATIONAL SYMPOSIUM ON
INTELLIGENT MANUFACTURING AND AUTOMATION Individual parts or aircraft body segments
are imported, a proper inventory is maintained and then assembled domestically.
Aircraft may overhaul to another region depending on type of service required.
These supply chains are well regulated and properly monitored by individual
companies at their individual levels. There is a possible risk of parts or segments
replacement, bad quality replication, and decommissioned or preceding products
being sold in black markets. There is no single supply chain of product
manufacturing but a web on interdependent manufacturers, heavily depended on each
other for segment production. There are certain pre requisites that should satisfy
specific requirements before moving forward in this chain that would make product
worth and efficient for future use. In most cases, when specific requirements are
not met, they are either returned or remanufactured, further increasing the delay
in obtaining the final products. Traditional SCM models and approaches are useful
when the amount of data to be processed is relatively small and the complexity of
the problem is low. But what about larger problems with a lot more data, like in
case of the aircraft's spare parts business? This challenge requires new data-
driven techniques such as Big Data and Blockchain. This emerging technologies will
push us into the next era of SCM design and Industrial Internet of Things (IIoT)
applications. In this paper we take industrial scenario for aviation’s supply chain
management, on which, we implement the concept of Blockchain technology where each
transactions is monitored by individual tiers of this supply chain, later smart
contracts platform between individual tiers can monitor quality and proper flow of
products in this chain. Individual databases at individual level will record and
update all transactions that would be flowing along different tiers. This concept
and technology into supply chain management can really bring significant added
value to business process through more easy flow, higher reliability and better
quality in aircrafts parts or segments. The remainder of this paper is organized as
follows. First we discuss the exploitation of SCM at different levels of OEMs
(Original Equipment Manufacturers), MRO (Maintenance, Repair and Overhaul)
businesses in aviation industry. Then we discuss a related and important area – the
protection of supply chains from counterfeiting, followed by an idea of Blockchain
integration in a tier to develop and model a transparent and reliable chain.
Section 5 discusses approaches to apply Blockchain to the SCM in industry as well
as its application in aviation. Section 6 continues and focuses this discussion on
Blockchain applications in aircraft’s parts business. Finally, in Section 7 we
discuss methodological issues in Blockchain, especially in the context of smart
supply chain management. We will talk about supply chain, its features and how
problems in future can be overcome. 2. Challenges in Smart Supply Chain Management
Protecting legitimate supply chains from counterfeiting has become a significant
challenge. In 1998, the OECD's report on the Economic Impact of Counterfeiting [1]
showed that counterfeit products were often made by the same manufacturer that was
contracted to produce the authentic product. The counterfeiting strategies are
increasingly sophisticated as in many cases counterfeiters apply the same
technologies and use the same suppliers as legitimate brands [2]. Thus, a variety
of counterfeiting strategies has emerged and affects the legitimate supply chain
such as genuine parts or products are stolen from the legitimate supply chain
(e.g.: disposed-of genuine products are recovered), factory over- runs or near
copies are illegally produced by sub-contractors, counterfeit products and genuine
products are bundled and distributed together. Over the past years many industrial
sectors have been reporting cases of infiltration of counterfeit products into
their supply chains. For instance, the aviation sector has been expressing strong
concerns about the detection of counterfeit aircraft ‘s parts in the legitimate
supply chain. Such detections have been reported both in the civil and military
aircraft supply chains in the US as well as in Europe. Several factors contribute
to this phenomenon. First, global supply chains constitute a complex and large
network of actors involved in production and distribution processes. In such
circumstances, many companies find it difficult to map and monitor their suppliers
and sub-suppliers beyond the second tier of their supply chains. This limited
visibility results in lower control over the supply chain and thereby increased
exposure to a variety of risks such as counterfeiting. In some cases, these
vulnerabilities allow illicit networks to penetrate legitimate supply chains and
exploit the services provided by supply chain intermediaries. Therefore, it becomes
urgent to take the necessary measures such as smart SCM techniques to better
protect legitimate supply chains from counterfeiting threats, including by
enhancing cooperation between supply chain actors, improving information exchange
and security, and actively promoting transparency and best practices in SCM. The
smart SCM vision relies on extensive use of sensors to monitor the supply chain
status and ICT to adapt activities and operations of the supply chain to meet its
objectives. Realization of the smart SCM vision requires solution of many technical
challenges. To serve target customers better than their competitors, supply chain
management (SCM) teams today look into new technologies such as Big Data, Internet
of Things (IoT) and Blockchain. These new technologies allow managers to develop
and provide complex supply chain services and products faster with improved
reliabilities. With these technologies, SCM teams can build complex models of a
supply chain or systems of supply chains using a data-driven approach. Blockchain
is a paradigm that involves dynamically incorporating real-time transactions into
chains of blocks in order to steer the information exchange process of an
application system. Information on a Blockchain exists as a shared database which
isn’t stored in any single location, meaning the records it keeps are truly public
and easily verifiable. No - 1052 - 28TH DAAAM INTERNATIONAL SYMPOSIUM ON
INTELLIGENT MANUFACTURING AND AUTOMATION centralized version of this database
exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its
data is accessible to anyone on the internet. The Blockchain network automatically
checks in with itself every ten minutes. A kind of self-auditing ecosystem of a
digital value, the network reconciles every transaction that happens in ten-minute
intervals. Each group of these transactions is referred to as a “block”. Two
important properties result from this: • Transparency: data is embedded within the
network as a whole, by definition it is public. • It cannot be corrupted: altering
any unit of information on the Blockchain would mean using a huge amount of
computing power to override the entire network. In theory, this could be possible.
In practice, it’s unlikely to happen. Taking control of the system to capture
Bitcoins, for instance, would also have the effect of destroying their value.
Blockchain technology initially was introduced in cryptocurrency where because of
decentralized ledger, it was easy to record all the financial transaction among all
the actors simultaneously avoiding any kind of error. However, following to Don and
Alex Tapscott: “The blockchain is an incorruptible digital ledger of economic
transactions that can be programmed to record not just financial transactions but
virtually everything of value.” [3] The Blockchain concept of other domains has
been lately proposed but yet to be implemented. In aviation industry there is
increasing demand of aircraft, and logistics or supply chains play important role
in support of the aviation industry. Introduction of the Blockchain technology into
SCM practice of aviation industry will enhance the aviation industries’ performance
and increase the passengers’ safety. It is immediately apparent that the Blockchain
paradigm is directly applicable to realizing smart supply chains. For example,
Blockchain provides an approach to address issues such as creating more efficient
and reliable supply chains and to mitigate counterfeiting. This paper discusses the
applicability of this paradigm to create more resilient and sustainable supply
chains in aviation industry. 3. Supply Chain in Aviation By 2035, there will be a
significant growth of passengers’ traffic and consequential demand in aircraft, as
a result, significant increase in aircraft production is expected [4]. This growth
will seek huge demand for more flight carriers, therefore the supply chain should
proceed in perfect sequence, without any error. Soaring demands also lead to
pressure on the supply chain causing delay and failure. Example, the problem to
unhandled this situation could be at any level where the supplier is not able to
process demands due to unavailability of products at preceding level
[5]. In this environment of supply chain, individual level competes instead of co-
operating by not sharing the information. This leads to error as we proceed up the
supply chain [6]. Behind every final product, there is a long chain or levels of
assemblies, but some researches have combined these individual levels, which
produce for OEMs into 3 main tiers supplies [7]: • Tier 1: This level directly
works for OEMs, for example, dealing with engines, brakes, etc. they are first
suppliers to the assemblers. • Tier 2: They are the suppliers to tier 1, they
supply products, which are manufacture from their own productions. Example,
assembling individual parts of Engine. • Tier 3: These are individual small-scale
component production companies, which usually provide small components like
electrical components, raw material. Figure 1 below is a sample tier representation
of Aviation Turbine Company, though this company would be serving at some tier for
another “Originating Buyers” i.e. each component of any supply chain at any tier
would have its own tier of supplies. Fig. 1. The aircraft’s Turbine’s Supply Chain
- 1053 - 28TH DAAAM INTERNATIONAL SYMPOSIUM ON INTELLIGENT MANUFACTURING AND
AUTOMATION Even after the proper path of supply chain, the risk and challenges like
careful coordination among different bodies, challenges of managing the risk across
global network and complex supply network, risks like guarantee, functioning,
quality control, usage control, etc. still exist in OMEs. Necessity by the
organizations to understand not just the direct suppliers they buy from, but also
those who indirectly contribute component or service across the extended supply
chain
In recent years, a proliferation of research, projects, and discussions regarding
distributed ledger technology (DLT) has increasingly attracted the attention of
researchers and practitioners. The reason lies in the characteristics that DLT may
deliver promising disruption to the current model of trust, which has long created
operational pain points of cen- tralized systems. Traditional business operations
rely heavily on a centralized authority or third parties, such as banks, to promote
trust among participants [1], [2]. However, they have often been the targets of
malicious attacks, malfunction and artificial alterations. The emergence of
blockchain tech- nology may bring about a rethinking of the design of busi- ness
operations by virtue of its distributed and decentralized characteristics [3]. The
associate editor coordinating the review of this manuscript and approving it for
publication was Xiang Zhao . Blockchain, a DLT, refers to a consecutive list of
time- stamped records (usually digital transaction data) sequen- tially linked
using cryptography. A peer-to-peer network of participating nodes contribute to the
formation and validation of blockchain and manages distributed consensus by network
majority. This makes blockchain an immutable, secure, and trustless model where
transactions among parties are con- cerned. Blockchain technology has the potential
to rebuild the way businesses conduct their operations [1], [4]. Sev- eral use
cases have been investigated using the concept of blockchain, which could function
as a distributed database without third parties. Several research endeavors
regarding trade finance [5], medical record management [6], voting [7], and
insurance industries [8] have improved the visibility of blockchain. Supply chain
management (SCM) is one of these potential applications [9]–[13]. Growing efforts
have been devoted to the study of blockchain technology and its applications across
various 62478 This work is licensed under a Creative Commons Attribution 4.0
License. For more information, see https://creativecommons.org/licenses/by/4.0/
VOLUME 8, 2020 S. E. Chang, Y. Chen: When Blockchain Meets Supply Chain: Systematic
Literature Review on Current Development sectors [9]. The scope of this research
ranges from techni- cal discussion [14], [15], application feasibility [16], busi-
ness operations [4], to even legal issues [17] and user acceptance [18]. Gathering
information from 106 articles, including journal and conference papers published in
a variety of sources during the period 2016 to early 2020, this study presents
illustrative topics related to blockchain evolution in the recent decade. The major
research meth- ods adopted in these studies have also been reported to outline the
relationship between the main topics and methodologies. Among extant literature,
research regarding the appli- cation of blockchain technology in supply chains is
rather fragmented and diverse in topics [19], [20]. This phenomenon indicates a
promising research interest but less-organized comprehension among the literature
distribu- tion. While researchers presented their early efforts regarding
blockchain-based supply chain literature, there was a lack of qualified peer-
reviewed articles that could be aggregated and analyzed in the current research’s
limited time frame. In [19], the first blockchain-related supply chain literature
survey was conducted prior to January 2018 under scientific rigor with a peer-
reviewed process. The authors also collected several blockchain trial pilots to
demonstrate their contributions, and suggested second-round surveys to capture the
rapid development of blockchain technology in the realm of SCM. Similarly, another
study in the same-period [20] highlighted examples of blockchain-SCM integration
while reporting the scarcity of related studies in leading journals and databases.
In this study, the researchers highlighted the early adoption of blockchain in the
electric power industry with a rela- tively mature understanding of blockchain-SCM
integration. Both these papers reviewed only a few studies before 2018, i.e., 29
and 27 papers, respectively. These initial literature reviews are not adequate for
providing a general overview, and a literature update is required due to the rapid
prolifer- ation of blockchain-based supply chain research from year 2018 to early
2020. Unlike the aforementioned review arti- cles, this current work aims to
provide a more holistic analysis of scenarios of blockchain use in supply chains by
supple- menting academic research for the past two years. Since blockchain with its
unique features allows more streamlined business processes [21], [22], and enhanced
transparency and trust among stakeholders, exploring its applications in supply
chains is important for both academics and practitioners. We also realize the need
for reporting the current status and potential of blockchain and its emerging
applications across different industries in the SCM context. In this regard, we
pro- posed certain questions to develop the logical connection between relevant
extant articles and the potential for further research. The research questions in
this study are as follows: RQ1: What are the main topics and subjects of interest
in supply chain studies that utilize blockchain technology; how do they address its
core issues; and how have these topics evolved over time? RQ2: What are the main
research methodologies employed in blockchain-based supply chain literature and how
are they related to the main topics? RQ3: Which blockchain-supply-chain papers were
most instrumental in driving the development of literature thus far? To answer
these questions, we adopted a systematic litera- ture review (SLR) to gain insights
regarding correlated issues. The aim of using SLR was to present a general overview
of recent research by conducting a systematic analysis of extant literature. Thus,
we outline the understanding regarding the research path based on our comprehension
of related research interests and topic distributions. This paper contributes to
the understanding of blockchain applications in the field of SCM by exploring
various research topics and directions for future research. The literature analysis
highlighted several potential research areas that may point out certain research
gaps for future study. The remainder of this paper is organized as follows. Section
II describes the basic knowledge regard- ing blockchain and smart contracts.
Section III presents the methodology and procedural steps utilized in this review
and Section IV reports findings from the analysis of literature. Section V
identifies the main research issues, challenges, and implications, before the final
conclusion is presented in Section VI. II. PRELIMINARIES A. BLOCKCHAIN Nakamoto
[23] proposed the concept of a decentralized dig- ital currency, Bitcoin, supported
by a decentralized payment system. Decentralization refers to an operating
mechanism that allows peer-to-peer (P2P) exchange or transactions with- out
centralized authorities. This disruptive innovation elimi- nates the heavy reliance
on powerful third parties. Blockchain is the technology underpinning the Bitcoin
cryptocurrency, which is a consecutive growing list of blocks, wherein each block
records encrypted transactional data and may have further potential for other
decentralization purposes [24]. The operating nodes in this kind of collaborative
network have a duplicate record of transactional information, known as a
‘‘ledger.’’ Inherently shared by participating nodes, DLT pro- vides the
opportunities for a trustless operating environment without traditional trusted
authorities such as banks and clear- ing houses. P2P exchange facilitates trust
building among participating nodes and the shared ledger is maintained by nodes in
the network. Computer nodes comply with an encrypted protocol to verify updated
data in the shared ledger. This kind of dis- tributed ledger system harvests the
benefits of decentralized governance which may solve the issue of information expo-
sure and accountability [25]. This inherent attribute favors the interactions
between counterparties in the context of business operations [26]. Critical
information could be maintained without checking the consistency of individual data
and every single node possesses a duplicate of transactional data, VOLUME 8, 2020
62479 S. E. Chang, Y. Chen: When Blockchain Meets Supply Chain: Systematic
Literature Review on Current Development thereby enhancing the transparency and
visibility of business activities. In a supply chain context, this kind of system
and opera- tional scheme may provide a better foundation of trust as well as
benefits resulting from the absence of a centralized author- ity and intermediation
[12]. Accordingly, blockchain could further be utilized to record the ownership of
assets [27], permissions, and activity logs. This improves the traceability of
information, cash, and process flows, and thus provides timely tracking of products
and services. The different types of blockchain are public, private, and consortium
(or feder- ated) blockchains, each of which could be applied in certain scenarios
to gain better advantages and for effectiveness. B. SMART CONTRACTS Smart contracts
are programmable protocols that allow the execution of contract terms and
agreements. The concept was first proposed by Szabo [28], who defined a smart
contract as ‘‘a computerized transaction protocol that executes the terms of a
contract.’’ Thus, smart contracts can be deployed to a blockchain database and
users can develop computer codes based on contractual clauses [29]. Contracts are
executed when certain preset conditions are met. Smart contracts may outperform
traditional contracts due to advantages such as allowing the mitigation of
intermediaries among transacting
counterparties and the facilitation of transaction flows with- out malicious
alterations and tampering [30]. Smart contracts can be deployed on blockchain
platforms in terms of scripts and stored with specific addresses for functional
calls similar to those performed in other programmable computer lan- guages [31].
They may facilitate data-driven interactions in the blockchain network and further
allow applications to meet supply chain objectives. Smart contracts are essential
in the use of blockchain applications. A potential use case for smart contracts is
in SCM. For example, a comprehensive paper-based process of administrative auditing
may hinder the overall performance of a supply chain. Regulated conditions and
agreements can be coded in smart contracts to avoid fraud, theft or other
managerial risks. When smart contracts are deployed in the blockchain network, they
are transferred to each connected node. Latest changes recorded in the local
database may in turn trigger the conditions prescribed in computer codes to execute
related process flows or notifications [32]. This is referred to as an event-driven
mechanism, which can be facil- itated without interference from a single entity.
Typical use cases include conditioned payment transactions [33], [34], and asset
and proprietary transfers [35]. With data updates and an event-driven mechanism,
smart contracts may facilitate the manipulation of supply chain activities [36].
For example, commercial pilots, such as IBM and Maersk, recently announced their
successful adoption of blockchain technology and smart contracts for shipment
tracking and facilitating trade finance. Traditional paper- based procedures
dealing with the collection and presentation of commercial documents could be
significantly mitigated with the use of smart contracts [37]. This technology can
reduce transaction costs and the number of involved inter- mediaries, and improve
trade efficiency to achieve process automation. Smart contracts on a blockchain-
based platform can have applications in various fields; however, previous studies
have reported certain unresolved issues with respect to technical and legal
concerns [38]. For example, contract vul- nerabilities with regard to transaction-
ordering and times- tamp dependence, mishandled exceptions, re-entrance, and
callstack issues [39]. To pursue a wider spectrum of appli- cations, more research
endeavors must focus on solving validation/verification issues [40], enhancing
security and privacy, and contract-based integration with other technolo- gies
[41]–[43]. Smart contracts may facilitate obligation execution and process
automation among parties based on technical openness, however, its long-term
development still requires a cross-disciplinary approach, combining technolog-
ical, economic, and legitimation practices.
The manufacturing of goods is becoming complex due to the in- creased number of
intermediaries between the producer and the final consumer. Globalization and
market expansion pushed companies to expand their products portfolios and life
cycle, to meet new markets requirements. Hence, there’s little knowledge of the
product origins, processing or shipping journey (Van Kralingen, 2016). The
challenge becomes not only quantitative but also qualitative. The main challenge of
the supply chain remains in the traceability and data management system. The
management of Information system in most sectors notably in healthcare, financial,
food, and education is centralized. Transac- tions, decision-making, and storage
system are controlled by third-party intermediaries. However, a centralized
management system could re- present a threat to data integrity, availability, and
resiliency, leaving the system subject to corruption fraud and tampering (Abeyratne
& Monfared, 2016). A trusted ecosystem needs to be created between the suppliers
and their customers. This is achieved by a policy that focuses on the transparency
of the chain to ensure product traceability, where accurate data collection and
secure data storage are required. Blockchain has been introduced in supply chain
areas to make the chain more transparent, authentic and trustworthy (Laaper,
Fitzgerald, Quasney, Yeh, & Basir, 2017). The purpose of this work is to study how
integrating the blockchain into the supply chain can create a more re- liable and
authentic ecosystem. Blockchain provides an untampered/ unalterable record of
transac- tions. All product and shipping details are collected through different
technologies and validated before becoming a permanent record on the blockchain
(Ramamurthy, 2016; Zyskind, Nathan, & Pentland, 2015). To achieve our main
objective, we provide first a literature review of the actual supply chain
challenges before introducing the blockchain as a solution. The literature points
out to new blockchain-based supply chain challenges. Hence studying blockchain
integration into supply chain consists of evaluating blockchain-base supply chain
efficiency and suffi- ciency. Next, we present the method adopted in this paper.
Then we de- scribe Ambrosus and Modum platforms, two real cases, introduced to add
value to our evaluation and build our theory. Finally, we conclude with our
recommendation to build a blockchain-based supply chain.
https://doi.org/10.1016/j.cie.2019.06.042 Received 29 August 2018; Received in
revised form 6 May 2019; Accepted 17 June 2019 List of Acronyms: API, Application
programming interface; BLE, Bluetooth Low Energy; CCD, Charge-coupled device; ERP,
Enterprise resource planning; EVM, Ethereum virtual machine; FDA, Food & drug
administration; GDP, Good distribution practice; GPRS, General Packet Radio
Service; GPS, Global Positioning System; HTTP, HyperText Transfer Protocol; IoT,
Internet of things; IPFS, InterPlanetary File System; JSON, JavaScript Object
Notation; M2M, Machine to machine; NFC, Near-field communication; NMBA, N-
Methylnitrosobutyric acid; PBFT, Practical Byzantine Fault Tolerance; QR code,
Quick Response Code; REST, Representational State Transfer; RFID, Radio-frequency
identification; 3G, Third generation; URL, Uniform Resource Locator ⁎ Corresponding
author. E-mail addresses: rita.azzi@net.usj.edu.lb (R. Azzi),
rima.kilany@usj.edu.lb (R.K. Chamoun), maria.sokhn@he-arc.ch (M. Sokhn). Computers
& Industrial Engineering 135 (2019) 582–592 Available online 18 June 2019 0360-
8352/ © 2019 Elsevier Ltd. All rights reserved. T 2. Literature review 2.1.
Background A supply chain ecosystem describes the processes that involve de-
signing, engineering, manufacturing, and distributing products or ser- vices from
suppliers to end-consumers (Muckstadt, Murray, Rappold, & Collins, 2001). Because
these processes affect the goods, information and financial flows, some regulations
are set to protect the consumers’ right (Viswanadham & Samvedi, 2013). The eight
basic consumer’s rights recognized by the United Nations involve the right to
safety, the right to be informed, the right to redress and the right to a healthy
environment (Your rights as a consumer). In the United States, the Food and Drug
Administration (FDA) maintains consumers’ right by promoting and protecting public
health, through goods control and supervision. It works on applying predefined
regulation and by protecting and promoting the development of human and veterinary
drugs, biological products, medical devices and radia- tion-emitting products,
human and animal food, and cosmetics (Food & Drug Administration, 2018). Many
incidents have occurred in the past years, ultimately putting to question the
supply chain reliability and its product data accuracy. In March 2018, 210 persons
in the USA got an E. coli infection. Three months later, the public health and
regulatory officials traced the origin of this infection to romaine lettuce which
had been contaminated through the water back in the Yuma growing region (E. coli
O157:H7 Infections Linked to Romaine Lettuce, 2018). In Jan- uary 2008, Baxter
Healthcare Corporation recalled various lots of he- parin, an anticoagulant
medication, after associating the product with adverse events, including deaths
(Guerrini et al., 2008). More than three months later, U.S. FDA was able to
establish a link between a contaminant found in heparin, a highly sulfated
chondroitin sulfate, and the serious adverse events seen in patients given heparin.
They traced back the contaminant to 12 different Chinese companies, and they found
heparin batches shipped to 11 countries (Information on Heparin, 2018). The Table
below (see Table 1) provides information gathered from latest Food and Drug product
recalls published on the FDA websites (Recalls, Market Withdrawals, Safety Alerts,
2019). Based on the collected information, we highlight the multiple breaches
encountered daily on a supply chain (Abeyratne & Monfared, 2016; Kshetri, 2018).
Not only is people’s health affected, but busi- nesses also undergo damage. The
company with a recalled product will suffer a reputation loss due to negative
publicity and will see it sales reduced dramatically (Kshetri, 2018). During the
investigation period, all related product will be affected, and some businesses
shut down until the origin of this supply chain breach is detected (Kshetri, 2018).
Between the market expansion, the growth in suppliers’ relationships, and the
rising consumer demand, the supply chain complexity has in- creased and revealed
the need to meet new challenges. The key ob- jectives of the supply chain,
including cost, quality, speed, depend- ability, risk reduction, sustainability,
and flexibility, are not fully achieved (Kshetri, 2018). Transparency and
traceability need to be enhanced in manu- facturing supply chains (Abeyratne &
Monfared, 2016; Caro, Ali, Vecchio, & Giaffreda, 2018; Laaper et al., 2017; Tian,
2016, 2017). The main supply chain risk lies in the product journey. We need more
knowledge about the product, its origin, processing and shipping journey (Abeyratne
& Monfared, 2016). Consumers are unable to verify the integrity of the acquired
product; they have to trust the certification logo printed on products. Verifying
this certification integrity requires strenuous auditing. Transparency must be
enabled not only to regain the consumer’s trust but to help the producer get a
better perspective of the supply chain breaches and understand how management
product decisions and environmental circumstances can affect a product. Achieving
transparency requires accurate data collection and secure data storage, a difficult
task currently entrusted to third parties through Table 1 Food and drugs supply
chain breaches reported by the U.S. FDA (Recalls et al., 2019). Date Brand Product
description Reason/problem Food supply chain breach 03/08/2019 Fullei Fresh Organic
bean sprouts Listeria monocytogenes 02/25/2019 Marketside Green beans and butternut
squash Potential Literia monocytogenes contamination 02/25/2019 Bachman Twist
pretzels Undeclared milk 02/22/2019 Nova salted biscuit Nova salted biscuit
Undeclared milk Drugs supply chain breach 03/05/2019 Life-line tm Additive for
human drinking water Potentially contaminated with Pseudomonas aeruginosa
03/04/2019 Apotex Corp. Drospirenone and ethinyl estradiol tablets, USP May contain
defective blisters 03/01/2019 Sunstone organics White Vein Kratom and Maeng Da
Kratom Potential for Salmonella 03/01/2019 Torrent pharma Losartan potassium
tablets USP and Losartan Potassium/hydrochlorothiazide tablets USP Contains N-
Methylnitrosobutyric acid (NMBA) R. Azzi, et al. Computers & Industrial Engineering
135 (2019) 582–592 583 centralized information depositories (Abeyratne & Monfared,
2016). As revealed by Stoshi Nakamoto (Nakamoto, 2008); blockchain technology
emerged in 2008 to serve as the shared ledger of the cryptocurrency Bitcoin. Unlike
traditional currencies, Bitcoin elimi- nated the need for intermediaries and
provided an efficient way to re- cord transactions’ information (Gupta, 2018).
Blockchain brought to financial services: security, immutability, transparency and
the ability to excise the middleman (Underwood, 2016). Used to record any
transaction and to track the movement of any asset, blockchain re- volutionized the
traditional business network. Many sectors, notably in healthcare, insurance,
government, supply chain management, and Internet of things, are likely to be
transformed by the blockchain (Kshetri, 2018). 2.2. What is a blockchain? A
blockchain is a distributed ledger that records and shares all transactions that
occur within the blockchain network. The blockchain network consists of multiple
nodes that maintain a set of shared state and perform transactions modifying the
states (Anh, 2017).
Transac- tions must be validated by the majority of network nodes, before being
ordered and packaged into a timestamped block. This mining process depends on the
consensus mechanism adopted by the blockchain net- work (Christidis &
Devetsikiotis, 2016). Before adding the new sug- gested block to the chain, all
networks’ nodes verify that the block contains valid transactions and references
the correct previous block via a cryptographic pointer. The blockchain network can
be categorized either as permission-less or as permissioned network. A permission-
less blockchain, is an open distributed ledger where any node can join the network
and where any two peers can conduct transactions without any authentication from
the central agency (Sankar, Sindhu, & Sethumadhavan, 2017). A permis- sioned
blockchain is a controlled distributed ledger, where the decision making, and the
validation process are kept to one organization (Sankar et al., 2017). A
Certificate Authority determines who can join the net- work. All nodes are
authenticated, and their identity is known to other nodes (Anh, 2017). Fig. 1 below
shows the blockchain data structure. The first block is known as the genesis block.
A block consists of a header and a body. The block body contains the list of
transactions (Di Pierro, 2017). The number of transactions within a block is
related to the block and transaction’s size. The block header contains various
fields, mainly the block version indicating the set of rules which should be
followed for validation (Zheng, Xie, Dai, & Wang, 2016), a hash of the previous
block header, a timestamp, the Merkle tree root hash that represents the hash value
of all the transactions in the block (Zheng et al., 2016). The nonce and target are
block header fields, used for the Proof-of-Work protocol. It’s a computational
process, known as mining, where miners are the nodes that calculate the block
header hash. A block is accepted by all nodes if a miner finds a nonce such as:
hash (block header) < difficulty target. The nonce is a 32-bit field that is
incremented until the equation is solved (Zheng et al., 2016). Apart from being a
distributed shared ledger, blockchain is also defined by three key concepts:
consensus, smart contract and crypto- graphy (Gupta, 2018; Anh, 2017). 1. A
consensus is an agreement that helps a decentralized network to authenticate and
validate a value or a transaction. It ensures that all network nodes share the same
data and prevents malicious actors from manipulating the data (LFS171x). A
consensus mechanism is defined by the following parameters: integrity,
authentication, non- repudiation, byzantine fault tolerance, decentralized
governance, quorum structure and performance (Seibold & Samman, 2016). The type of
consensus protocol depends on the blockchain type. For example, Bitcoin, a public
ledger, uses Proof-of-Work, a computa- tional expensive mining protocol to work
around the Sybil attack, where a minority can control the whole network. In a
permissioned blockchain, one organization determines the consensus process. A node
needs to be certified to join the consensus process (Zheng et al., 2016). In that
case, Proof-of-Work is unnecessary and is an ex- pensive way to reach consensus
because all participants are au- thenticated. 2. Smart contracts are self-executing
scripts stored on the blockchain. When performing a transaction, smart contracts
are invoked to execute the term of a contract/procedure on every node in the
network (Christidis & Devetsikiotis, 2016). Hence, every node in a blockchain
network must agree on the inputs, outputs and states affected by the smart contract
(Anh, 2017). Satisfying common contractual conditions, such as payment terms or
confidentiality, minimizes the need for trusted intermediaries (Bocek & Stiller,
2018). 3. Cryptographic techniques are used to ensure integrity, authenticity,
immutability and nonrepudiation of the blockchain ledgers since even an
authenticated node can act maliciously (Christidis & Devetsikiotis, 2016). The
state root hash and the hash pointers are combined to secure and track all the
historical changes made to the global state (Anh, 2017). The purpose of the root
hash of the hash tree is to detect data tampering and to validate the transaction
ef- ficiently (Ramamurthy). To verify any transaction, we need to check the hash
tree path related to the requested transaction. Any mod- ification in a specific
transaction will be instantly detected (Anh, 2017). The purpose of the block header
hash is to verify the integrity of the block and of the transactions, and to form
the chain link by embedding the previous block hash in the current block header.
Transactions' block cannot be modified or deleted, once appended to the blockchain.
Any modification in a specific block will invalidate all subsequent blocks (Anh,
2017). The asymmetric cryptography is used to provide integrity, authentication and
nonrepudiation into the blockchain network. A user’s node must sign the transaction
before broadcasting it to the network (Christidis & Devetsikiotis, 2016; Anh, 2017;
Zheng et al., 2016). Each user generates a key pair. The private key is used to
encrypt the hash value derived from the transactions, and the public one is used by
a peer node to verify the transaction’s authenticity. Note that in a permissioned
block- chain, an access control layer is added. For example, in Hyperledger,
arbitrary policies are implemented to control users’ access to the blockchain, thus
adding more security to the network (Anh, 2017). 2.3. How blockchain improves the
supply chain management As already mentioned, there is a need to enhance the
transparency and the traceability in the manufacturing supply chain. It is achieved
by a policy that focuses on the transparency of the chain, where accurate data
collection and secure data storage are required. A good traceability system aims to
minimize the production and distribution of unsafe or bad quality products by
improving the labeling and tracking systems. The track and trace systems have
evolved from paperwork to Internet of things (IoT) hardware and sensors (Abad et
al., 2009; Aung & Chang, 2014; Badia-Melis, Mishra, & Ruiz-García, 2015; Van
Kralingen, 2016; Zou, Chen, Uysal, & Zheng, 2014). The principal components of a
tracking system are the tag, the tracer, and the sensor. A tag is a label set on
the top of a product or a package that identifies the product. Passive Radio-
frequency identification (RFID) and Quick Response Code (QR code) are examples of
tagging systems. A tracer is a substance introduced into a product or its natural
feature, used to provide information about the course or the process that involved
a product, thus certifying its quality. A sensor is a device that detects
environmental changes such as light, heat, motion, moisture, pressure, etc. The
detected events are then sent to other electronic devices over the network for
processing. However, tracking devices are sometimes compromised and subject to
cloning (Toyoda, Mathiopoulos, Ohtsuki, & Sasase, 2017). An R. Azzi, et al.
Computers & Industrial Engineering 135 (2019) 582–592 584 attacker can clone an
RFID tag attached to a genuine product. Cloned tags on counterfeit products can
mislead the consumers and endanger the consumers’ safety in a medical or food
industry (Huang et al., 2017). For producers, cloned tags can damage the company’s
reputa- tion and cause severe economic losses in the logistics industries. Re-
solving clone attacks issue is achieved either through a prevention strategy based
on developing either clone attack detection technique or a tag distribution schemes
in order to prevent an attacker from copying the tags’ content (Toyoda et al.,
2017). According to Toyoda et al. none of these proposed track and trace methods
can guarantee that the product, with an attached tag, is genuine once it is placed
in retails stores for sale; this is because these methods leverage the tag’s secret
information (Toyoda et al., 2017). A blockchain-based product own- ership
management system was proposed, to transfer and prove the uniqueness of an RFID
tag-attached products for the post supply chain. Counterfeits may be detected when
the seller cannot prove the pos- session of the claimed product. In supply chain
area, storage and logistics management is con- sidered a real challenge. Petri Helo
et al. discuss in their paper the limit of centralized enterprise resource planning
(ERP) technology in managing the supply chain and introduce a cloud-based solution
(Helo, Suorsa, Hao, & Anussornnitisarn, 2014). In fact, ERP is a transaction
management system that processes collected information and stores data in a single
database. But ERP could not adapt to supply chain evolution and requirements
especially in terms of transparency, flex- ibility, data accessibility and advanced
decision making. A cloud-based NetMES system has been proposed to solve this issue
(Helo et al., 2014). The cloud technology is used as a platform to exchange, store
and monitor information where a centralized virtual database replaces a centralized
physical database. It has added a real-time interaction to the whole proposed
system; however, the security and privacy of stored data remain an issue. (Helo et
al., 2014; Kshetri, 2017). Besides, in a centralized system, a single entity
controls data. If this entity fails or shuts down abruptly, the whole system will
crash and stop processing transactions (Tian, 2017). The system is subject to fraud
and malicious attack. It’s not the case with the distributed ledger where a hacker
cannot take advantage of a vulnerable point; if one node fails, the remaining nodes
will not be affected. Note that a centralized system allows any user to modify a
transaction in the ledger because there is no restriction on the operations (Nair &
Sebastian,
2017). In case the data administrator is bribed, the whole system could be subject
to tampering and falsifying information (Tian, 2017). In China, the agri-food loss
ratio is up to 30% yearly mainly due to their centralized logistic system (Tian,
2016). To reduce the losses during the logistics process and enhance food safety,
Feng Tian pro- posed a decentralized traceability system based on RFID and block-
chain. According to Feng Tian, enhancing the quality of the traceability system by
integrating the RFID with other technologies such as WSN, Global Positioning System
(GPS), etc. is not sufficient (Tian, 2016). These technologies cannot guarantee the
integrity of the collected and shared data with all supply chain members.
Integrated to improve the tracking system, blockchain strengthens trust, food
safety assurance and information credibility. The RFID executes the tracing and
mon- itoring to guarantee food quality and safety. All relevant information is then
uploaded on the blockchain to create a reliable, transparent and secure
decentralized platform, where all supply chain actors can in- teract (Tian, 2016).
In case of an accident, emergency measures could be immediately taken to prevent
the risk of hazard spreading. The proposed system has two disadvantages, first, the
high cost of the RFID tag, which pushes some companies to narrow the application
scope of the RFID, second, the immaturity of blockchain technology linked to the
storage and synchronization issues (Tian, 2016). According to Zheng Z. et al,
blockchain is not always sufficient for storing data (Zheng et al., 2016). With the
increasing number of Fig. 1. Blockchain structure. R. Azzi, et al. Computers &
Industrial Engineering 135 (2019) 582–592 585 transactions, the blockchain has
become heavy. Hence scalability be- comes challenging. For example, in a Bitcoin
network, the block size is limited to 1 MB, and a block is added every 10 min
(Zheng et al., 2016). Transaction’s rate is limited to seven transactions per
second, which is not enough for the trading system. Increasing the block size will
reduce the network efficiency. To overcome the blockchain scalability issue, Feng
Tian, propose to integrate BigchainDB into the supply chain ecosystem. As proposed
by McConaghy et al., BigchainDB combines the key benefits of distributed Databases
– high throughput, low latency and high capacity- with the key benefits of
blockchain – decentralization, immutability, creation and movement of digital
assets (Tian, 2017). Based on the above studies some questions have emerged: • What
are the benefits of introducing the blockchain to the supply chain? • Can we trust
the information shared in a supply chain traceability system? • What are the
challenges we need to address when integrating the blockchain in a supply chain? 3.
Methodology and case study To evaluate blockchain-based supply chain efficiency and
suffi- ciency to create a reliable, transparent, authentic and secure system, we
have adopted the theory built based on case studies as a research strategy. Working
on real cases will highlight the challenges and characteristics to be taken into
consideration in order to build an effi- cient blockchain-based supply chain. To
confirm the theoretical study, knowledge of the practical and real-world
application of the blockchain in a supply chain ecosystem is needed. By theoretical
study, we imply study not deployed on a large scale. According to Eisenhardt k.,
case studies emphasize the rich, real-world context in which the phenomena occur
(Eisenhard, 1989). Several startups have already identified the blockchain as a new
paradigm that aims to enhance supply chain management. We sum- marize, in Table 2,
the main goal of the most prominent supply chain implementations and compare them
according to the blockchain type and tracking system used. By introducing
blockchain into their supply chain, these startups aimed to track, record and
verify goods as well as protect them from fraud and tampering. As shown in the
Literature review, integrating the blockchain into the supply chain ecosystem
brought significant new challenges notably on the blockchain level. To build a
blockchain-based supply chain management, we need to take into consideration not
only the block- chain technology but also the reliability of collected data. To
study how startups, integrate the blockchain into their supply chain ecosystem, we
need to understand first their tracking system and the blockchain’s role in their
platforms’ architecture. The efficiency and sufficiency of their blockchain-based
supply chain will be developed in the discussion part. We selected Ambrosus and
Modum as real cases to study since we could obtain sufficient information and they
are related to the food and pharmaceutical supply chain: our main interest. By
combining the theoretical findings with those drawn from real cases, we are able to
address the emergent questions listed above. 4. Description of the selected cases
Ambrosus and Modum two Swiss Startups, have developed a system that merges IoT,
blockchain technology and real-time sensors to trace and transmit products’
information during the whole manufacturing process. They aim to optimize supply
chain visibility and quality assurance. Modum specializes in the pharmaceutical
supply chain to ensure the safe delivery of pharmaceutical drugs in compliance with
the GDP re- quirements. Ambrosus specializes in food and pharmaceutical supply
chain to ensure the quality and safety of product consumption. For each case, we
will describe the tracking system and the blockchain integra- tion into these
startups’ system.
Blockchain is a decentralized, distributed database that maintains a continuously
growing list of secure data records. It first emerged in the context of Bitcoin,
where it serves as a decentralized, distributed digital ledger recording all
Bitcoin transactions.[1] Bitcoin is a currency that is controlled by the network of
users instead of by centralized banks. Through the use of Bitcoin, money can be
transferred directly. In the traditional banking system, when money is transferred
through banks, they are notified to transfer the money; the bank(s) will send
notification and update accounts appropriately. The relevant data is stored in a
database owned by the bank (or in multiple databases owned by banks), and users
only have partial access to that data. Users must trust third parties. This has two
implications. First, the bank has to make a profit, so in the aggregate, this means
less for the other participants. In addition, if some third party or the bank
itself manipulates the data or commits fraud, it might be challenging for all
participants to quickly and efficiently detect this. On the other hand, the Bitcoin
database is decentralized and distributed, so that everyone has the entire database
on his or her own device. These are not copies of some original database – they are
the database itself, and each device syncs with all others. Thus, if a specific
device is hacked, or imports incorrect data, the network will not accept this, and
will correct the data using other databases. Unless a single entity controls more
than half of the devices on the network, it is almost impossible to delete or edit
data. In blockchain, data is stored in blocks of data that are linked to the
previous blocks. On average, every ten minutes Bitcoin creates a block of data and
all user devices will permanently store that data. Each block references the
previous blocks, so if someone wants to change data in a block, he must change all
previous blocks as well, which is almost impossible. Consider the following quote
from [2], which nicely captures the power of blockchain: Imagine a piece of paper
with a name written on it, and that name entitles a person to a pot of gold. You
put it in a room with 50 doors, and all those doors have a lock. But someone could
get through one lock and replace the name on the piece of paper. That is equivalent
to centralized database. Blockchain, on the other hand, will duplicate that paper
50 times and put it in 50 different room. In this setting, if someone wants to
break the system and change the name on the papers needs to break [at least 25]
rooms at the same time.[2] One important difference between blockchain and a
traditional centralized network is that blockchain-stored data is un-deletable and
un-editable. In a centralized database, there is always risk of fraud or external
hacker attacks, while in a blockchain, the network will work consistently unless an
attacker manages to take control of the majority of the network; therefore, a large
number of users almost significantly reduces the possibility of fraud. Although the
Internet makes it inherently challenging to confirm identities and hence to trust
other parties, blockchain facilitates trade on the Internet because, in effect,
“the system” ensures trust. In other words, fully secure trade with untrusted
parties is possible. This property enables the removal of third-parties in many
systems. “The blockchain is an enabling technology,” explains Dan Burrus. “This
means that you don’t need a third-party any more. The network itself replaces the
third-party institution. Therein lies the disruption. Whenever there is a third-
party involved to produce a transaction, the blockchain could replace it.” [3]
“[S]ince the whole system is running transparently, the system is absolutely open
source and there is no need for trust among every single node and any node can
never cheat other nodes.” [4] Blockchain is also sometimes known as the “Internet
of value” [5] – its advocates believe that it can revolutionize almost every
industry. While blockchain is finding its way into a variety of different
industries, including fine art, luxury goods, pharmaceuticals, medical devices, and
jewelry, for anti- counterfeiting and tracking, and import/export, as well as real
estate, etc., for record-keeping, many suggest that blockchain can make a
groundbreaking impact on supply chain management (see, for example, [6, 7, 8]).
Imagine using the concepts behind Bitcoin to remove the need for banks in the
supply chain – in principle, this could allow everyone to trade directly through
Internet. Using blockchain, one could trade directly with unknown parties, and
remain anonymous. Or at least, that’s why in some supply chain circles blockchain
is touted as the next big thing. Clearly, the $40 trillion supply chain market is
at the very least an interesting potential use case for blockchain in the future.
[9] Our focus in this white paper is on the challenges of using blockchain in
supply chain (which we call blockchain-enabled supply chain). From out point of
view, blockchain currently is a more effective component of financial systems than
of many physical systems, although we should point our that some authors even
question the value of blockchain in a financial context. For instance, Grym [10]
points out while Bitcoin solved double-spending problem, it has not even attempted
to solve the price stability problem and it is not clear whether or not central
banks are the only solution to this problem. Furthermore, blockchain does not
necessarily scale well. The volume of transactions that the Bitcoin network can
handle every second is roughly ten thousand times less than payment networks like
VisaNet. 2. Preliminaries Various authors have explored the potential impact of
blockchain on supply chain management, and indeed, many articles in the popular
press extol the potential of blockchain to impact the supply chain in the short
term. For example: • Jeremy Wilson, vice-chairman of Barclays Corporate Banking,
points out that blockchain can reduce supply chain paper work. He mentions the
first blockchain-based trade-finance deal. The process, from issuing to approval of
the letter of credit, usually takes between seven and 10 days, but could be reduced
to less than four hours.[11] The potential lead time reductions exist more broadly
in global supply chains—import, export, and port documentation could all be
expedited. • Hofmann et al. [12] claim using blockchain in supply chain finance
could expedite processes and lower the overall costs of financing programs. For
instance, blockchain could simplify payment insurance methods, decreasing the need
for letters of credit and therefore reducing transaction fees, increasing speed and
transparency, and so on. • Some individual products are challenging to duplicate,
and individual items are relatively easy to identify. In these cases, the key to
supply chain management involves establishing provenance of items being traded, and
blockchain can ensure a transparent, secure, un-editable and un-deletable
provenance which could help all parties in the supply chain. While the potential of
these impacts and applications to reduce costs and expedite supply chain tasks
should not be minimized, these are hardly path-breaking changes to current supply
chain operations. However, much of the discussion of the impact of blockchain on
supply chain management is more forward-looking; not so much exploring how
blockchain could impact supply chain today, as focusing on potential future supply
chains. Tapscott and Tapscott consider the possibilities of using blockchain
technology for the end-to- end supply chain in their book, Blockchain Revolution
[5]. They explain that Smart Contracts (which we explain below) will enable
companies to contract for price, quality, and delivery dates with just a few clicks
of mouse, and suggest many other ways that blockchain can impact supply chain
management. Indeed, many similar ideas can be found in articles written in the past
two years. However, all of these are presented at a relatively conceptual level, so
it’s difficult to assess how practical these scenarios actually are. Later, we
discuss limitations of current Smart Contracts, and the innovations that we believe
are necessary for them to significantly impact supply chains. Alsmiller [13]
suggests that blockchain can be used to track items from suppliers to ensure that
products are genuine and accurately described and safely and correctly transported.
Williams and Gerber [14] also discuss the benefits that transparency will bring to
the supply chain, focusing on how blockchain will allow us to see where our food
was grown. In principle, we could track each ingredient in our food from its
origin, so that we could, for example, understand whether the bottle of olive oil
we just bought is 100% olive oil, or if it is blended with other types of oil.
According to Project Provenance Ltd [15], since every transaction along the
blockchain-enabled supply chain is auditable, smart phone applications will be able
to display all relevant information to the consumer in real time, and crucially,
this information can be completely trusted. However, many hurdles currently exist
that make using blockchains this way challenging if not impossible—we discuss these
below. Several researchers have also considered the application of RFID to agri-
food traceability. Tian [4] specifically explores the potential of an agri-food
supply chain enabled with RFID tags and blockchain technology. He highlights an
important question that has not been considered previously: “whether the
information shared by supply chain members in the traceability systems can be
trusted.” He also claims that RFID and blockchain can together improve the
efficiency and reliability of the agri-food supply chain,
because he believes the biggest problem in traditional centralized supervision of
the agri-food supply chain is “[M] onopolistic, asymmetric and opaque information
system which could result in the trust problem, such as fraud, corruption,
tampering and falsifying information.” While Tian highlights an important concern,
as we discuss later in this white paper, it is unclear how his solution can fully
address this concern. Each of these visions of future blockchain-enabled supply
chains raise important questions. Indeed, these and similar views suggest that
markets will no longer need third parties to preserve trust and ensure quality, and
as a consequence, prices will decrease. Blockchain will provide the opportunity to
track every single part of each good to its origin. At a fundamental level, this is
the benefit that many pundits claim for blockchain-enabled supply chains. In our
view, blockchain and related technologies will need significant enhancement for
these visions to become reality. We discuss the key challenges that need to be
overcome later in this white paper. 3. “Pure” Blockchain and Supply Chain Recall
the time when supply chain management was first entering the popular consciousness—
it seemed that everyone had a different definition and understanding of this
concept. Two authors could discuss two entirely different things and call them
supply chain management. Something similar to this currently exists in the
blockchain space. To emphasize the difference between blockchain and similar
concepts, we list characteristics that are inherent in what will call “pure
blockchain” to highlight this difference: pure blockchain is a distributed,
decentralized database that maintain a continuously growing list of secure data
records without the need for trusted third-parties oversight or admission control
to the system. Blockchain can make the most impact when it ensures trust via system
design, rather than through verification of players/nodes. Hence, it is unlikely to
lead to pathbreaking changes in supply chain management if it doesn’t eliminate the
need for trusted parties in the network. To see this, consider a setting where a
single party owns all nodes in the blockchain network; would that party benefit
from using blockchain? Does blockchain add any value in this setting over what can
be accomplished using distributed databases or centralized databases? We believe
the answer in general is NO. (Here, blockchain would simply be a database
technology.) Although one of the key defining characteristics of blockchain is its
distributed database, a distributed decentralized database is not equivalent (even
conceptually) to pure blockchain. Many authors discuss the concept of private
blockchain, which is a closed system that features a decentralized, distributed
database. A private blockchain requires permission to join issued by a third party.
The third party who gives permissions to different users needs to be trusted by the
entire system; otherwise, it can add so many untrusted nodes to the system that the
system can break down, and changes can be made to stored data. Recall the original
point of pure blockchain—to ensure trust in the system while removing the need for
third parties who do not add value beyond ensuring trust. Private blockchain, on
the other hand, needs trusted third-parties to add nodes to the system. If such a
party exists, an integrated centralized database could be used for this type of
system. While some argue that blockchain-based private networks might be marginally
cheaper or more secure, this is a far cry from the benefits that have been claimed.
Indeed, from our perspective, private blockchain might add little value over a
trusted integrated database. Interestingly, many of the suggested potential use
cases for blockchain-enabled supply chain focus on private blockchain, although we
believe that a private blockchain is a fundamentally different concept from
blockchain as it is commonly defined. Pure blockchain is also not equivalent to
public blockchain. Public blockchains are distinguished based on who can access the
system, where users do not need any permission to join the network while pure
blockchains are distinguished based on the absence of trusted third parties. 3.1
Using Pure Blockchain in Smart Contracts Smart Contracts are computer
codes/programs that control the transfer of digital currencies based on predefined
conditions. For example, consider a Smart Contract for betting on a game. After the
result are revealed, there is no need for payment since the system will transfer
the digital money from the loser to the winner automatically. Many articles have
been written about blockchain-based Smart Contracts, but supply chains typically
involve the physical flow of products from initial suppliers to end customers, and
in this regard, the most important difference between supply chains and financial
institutions involves the existence of physical products. While various authors
(such as Tapscott and Tapscott [5]) have claimed that blockchain-based Smart
Contracts allow companies to develop payment, release date, and even quality-based
contracts, all of these require verification of some kind to ensure that the proper
amount of the proper quantity of materials have been delivered. Furthermore, as we
discuss below, it isn’t clear at all that cur- rent
barcode/RFID-tag/3D-stamp/sensor technology is sufficient to provide this
verification. In addition, the nature of supply chains is significantly more
complex than the straightforward examples typically given for Smart Contracts.
Indeed, it seems that given current technology, Smart Contracts will need trusted
third-parties to be used in most supply chain applications, so they don’t
immediately fit into a pure blockchain framework. Research will be needed to
overcome this limitation, as we discuss below. 3.2 Using Pure Blockchain for Track
and Trace The notion of being able to trace ingredients of any food or product back
to its origin is very compelling. For example, if one is interested in eating
organic foods, it could be valuable to be confident in food’s origins. Although the
use of blockchain to achieve this seems appealing, it isn’t immediately clear how
to ensure trust in such a system. How would the data be imported into the system?
How would it prevent a party in the supply chain from committing fraud? How would
this huge amount of data be stored in all devices? According to Tian [4], RFID
together with blockchain renders trust unnecessary. He explains: “since the whole
system is running transparently, the system is absolutely open source and there is
no need for trust among every single node and any node can never cheat other
nodes.” This point of view is consistent with many other blockchain-enabled supply
chain articles, but in our opinion misses a key point. Note that transparency in
blockchains refers to data and digital ledgers; it is not about products. If we
have a data in the database that says our factory bought a hundred ton of olives of
grade A quality, no one can delete or edit this data; however, the olives
themselves can be switched with olives of inferior quality. In addition, there are
likely to be non-blockchain-based markets and outlets for olives, and reliably
integrating trades in these markets with blockchain data is likely to be complex.
At a very high level, the key goal of blockchain-enabled supply chains is to obtain
100% certainty of provenance without the need for a trusted third-party; In this
case, however, the lack of a trusted third-party and inspections in the network
only encourages (or at least, doesn’t discourage) fraud.
The concepts of blockchain were first proposed by research in 2008 by someone using
the pseudonym Satoshi Nakamoto, who described how cryptology and an open
distributed ledger could be combined into a digital currency application (Nakamoto,
2008). Initially, the extremely high volatility of bit coin and the attitudes of
many countries towards its complexity somewhat restrained its development.
Nevertheless, the advantages of the blockchain, which is an underlying technology
of bit coins, have attracted increasing attention. Some of the advantages of
blockchain include its distributed ledger, decentralization, information
transparency, tamper-proof construction, and openness. The evolution of the
blockchain has been a progressive process. Blockchain is currently delimited to
Blockchains 1.0, 2.0, and 3.0, based on their implementations. The current research
provides more details about the three generations of blockchain in the Appendix.
The application of blockchain technology has extended from digital currency to
finance, and it has even gradually extended to healthcare, supply chain management,
market monitoring, smart energy, and copyright protection (Engelhardt, 2017;
Hyvärinen, et al., 2017; O’Dair & Beaven, 2017; Kim & Laskowski, International
Business Logistics Journal (IBL) Volume 1, Issue 2, December 2021 - ISSN 2735-5969
29 http://dx.doi.org/10.21622/IBL.2021.01.2.028 http://apc.aast.edu 2018; Radanović
& Likić, 2018; Savelyev, 2018). Blockchain technology has been studied in a wide
variety of academic disciplines. For example, some researchers have studied the
underlying technology of blockchain, such as distributed storage, peer-to- peer
networking, cryptography, smart contracts, and consensus algorithms (Christidis &
Devetsikiotis, 2016; Kraft, 2016; Cruz, et al., 2018). Meanwhile, legal researchers
are concerned with regulations and laws. As the old saying goes: “scholars in
different disciplines have many different analytical perspectives and speak many
different languages.” This paper focuses on analyzing and combining papers in the
fields of business and economics. The research aims to identify the key nodes
(e.g., the most influential articles and journals) in the related research and to
find the main research themes of blockchain in our discipline. In addition, the
research attempts to offer some recommendations for future research and provide
some suggestions for businesses that aim to implement blockchain in practice. This
study conducts a systematic and objective review based on data statistics and
analysis. The research first describes the overall number and discipline
distribution of blockchain-related papers. A total of 756 journal articles were
retrieved. Subsequently, the research refined the subject area to business and
economics, and managed to add 119 articles to our additional analysis. The research
then explored the influential countries, journals, articles, and most common
keywords. On the basis of a scientific literature analysis tool, the research was
able to identify five research themes on blockchain. The researchers believe that
this data-based literature review will be able to present the status of this
research more objectively. The remainder of this paper is organized as follows. In
the next section, the research provides an overview of the existing articles in all
disciplines. The research comprehensively describes the number of papers related to
blockchain and discipline distribution of the literature. The research then
conducts a further analysis in the subject field of business and economics, where
the research analyzes the countries, publications, and highly cited papers, etc.
The research also demonstrates the main research themes of this paper, based on
Cite Space. These are the recommendations for promising research directions and
practical applications. In the last section, the research discusses the conclusions
and limitations. Overview of the Current Research This paper first conducts a study
of the research of Science Core Collection (WOS), including four online databases:
Science Citation Index Expanded (SCI-EX- PANDED), Social Sciences Citation Index
(SSCI), Arts & Humanities Citation Index (A&HCI), and Emerging Sources Citation
Index (ESCI). This research choses the WOS because the papers in these databases
can typically reflect scholarly attention towards blockchain. When searching the
term “blockchain” as a topic, the research found a total of 925 records in these
databases. After filtering out the less representative record types, the research
reduced these papers to 756 articles that the research then used for further
analysis. The research extracted the complete bibliographic record of the articles
identified by the search from WOS, including information on the title, author,
keywords, abstract, journal, year, and other publication information. This research
was then exported to CiteSpace for subsequent analysis. CiteSpace is a scientific
literature analysis tool that enables us to visualize trends and patterns in the
scientific literature (Chen, 2004). In this paper, CiteSpace was used to visually
represent complex structures for statistical analysis and for conducting cluster
analysis. Table 1 displays the number of academic papers published per year. The
research listed the number of all the publications in WOS, the number of articles
in all the disciplines, and the number of articles in business and economics
topics. It should be noted that the research retrieved the literature on March 25,
2019. Therefore, the number of articles in 2019 relatively small. The number of
papers has continued to grow in recent years, which indicates that there is a
growing interest in blockchain.
Novel technologies emerging under the umbrella of Industry 4.0 are creating new
business and fnancial opportunities for supply chain net- works. According to the
Computing Technology Industry Association (CompTIA), the Internet of Thing (IoT),
artifcial intelligence, 5/6G net- works, serverless computing, Blockchain,
Robotics, Biometrics, 3D print- ing, Augmented Reality/Virtual Reality, and Drones
are the top ten emerging technologies in 2019 (Rayome, 2019). Although these tech-
nologies are Industry 4.0 processes enablers, some of them – Blockchain, 6G network
technologies, and wireless communication – are emerging and well-positioned for
innovative business models. For instance, shift- ing trust from organizations to
analytics, automated smart contracts, and facilitating sharing economy applications
without a central entity, are examples of Blockchain's potential for changing
business models (Nowiński and Kozma, 2017). The contribution of technology to
fundamentally change both busi- ness and society has been acknowledged by scholars.
However, minimal attention has focused on how these emergent technologies address
sus- tainability challenges; especially helping organizations move towards a
circular economy (CE). There are also potentially detrimental outcomes.
Applications of technology in different industries – ranging from agriculture to
trans portation and energy systems – have imposed threats to nature and global
ecosystems. Understanding the complex integrated system of technology, society, and
business is necessary for identifying and ad- dressing sustainability challenges.
This study contributes to sustainable development and CE literature by offering a
set of guidelines on how technology plays a role in a sus- tainable society. The
extent by which adverse environmental effects of these emergent technologies can be
ofset by new sustainability-related opportunities they offer is a central tension
and theme. There is a lack of scientifc research on the impact of Industry 4.0 on
solving industrial symbiosis and sustainability problems (Stock and Seliger, 2016).
We review the current state of the art of Industry 4.0 and Blockchain technology
with a focus on sustainability relationships to these concepts. The opportunities
offered by Industry 4.0 and Blockchain technology, as well as the adverse
sustainability consequences in the manufactur- ing and CE context, are addressed.
The capabilities of Blockchain tech- nology for promoting green behavior among
consumers and decreasing the operational costs of systems appear in the remainder
of the paper. A summary of research directions and concerns concludes the paper.
The remainder of this paper is organized as follows. Section 2 pro- vides brief
descriptions of sustainability, industry 4.0, and Blockchain. Section 3 introduces
the research method for collecting and analyz ⁎ Corresponding author. E-mail
address: sara.behdad@essie.uf.edu (S. Behdad)
https://doi.org/10.1016/j.resconrec.2020.105064 Received 31 December 2019; Received
in revised form 9 June 2020; Accepted 14 July 2020 Available online xxx 0921-3449/©
2020. UNCORRECTED PROOF B. Esmaeilian et al. Resources, Conservation & Recycling
xxx (xxxx) xxx-xxx ing the literature. Section 4 reviews the research work on the
sus- tainability of Industry 4.0, and Section 5 discusses the capabilities of
Blockchain for addressing sustainability issues. Section 6 discusses the Blockchain
adverse effects. Section 7 summarizes research gaps, and f- nally, Section 8
concludes the paper. 2. Background Before reviewing the literature on the
sustainability of Industry 4.0 and the impact of Blockchain on sustainable supply
chains, we will briefy review three concepts of sustainable development, Industry
4.0, and Blockchain in this section. 2.1. Sustainable development Before
introducing Industry 4.0 and Blockchain as enablers for sus- tainable development,
a brief discussion on sustainability is provided. The focus will be on the circular
economy concept to acknowledge the importance of economic sustainability and the
role of industry in imple- menting sustainability principles. The circular economy
concept has originated from both industrial ecology and environmental economics.
There is no consensus on the ex- act definition of the circular economy (Korhonen
et al., 2018). Prac- titioners often consider it as a way to overcome the
limitations of lin- ear production and consumption models for increasing resource
use ef- fciency. The circular economy has been introduced to achieve a better
balance between the economic aspect and the environmental and so- cial aspects of
sustainability. Countries such as China promote CE as a cleaner production strategy
that supports resource use effciency. Other regions, such as the European Union,
Japan, and the USA also consider it as a waste management strategy (Ghisellini et
al., 2016). Economic system circularity was introduced with the law of thermo-
dynamics as its foundation (Pearce and Turner, 1990). It initially was to describe
matter and energy degradation to maintain the sustainabil- ity of Earth's
resources. In these initial CE descriptions, the environment has three main
functions: supply resources, provide a life support sys- tem, and offer a sink for
emissions and waste. Unlike other economic functions with explicit pricing,
sometimes no direct price or market for environmental goods exists (what is the
price of air and water qual- ity?), although recent Life Cycle Assessment (LCA)
methods have tried to monetize environmental prices, indicating the loss of
economic wel- fare as a result of environmental emissions (De Bruyn et al., 2018;
Weidema, 2015). Environmental policies, consumer and producer re- sponsibilities
have been employed to mitigate the high consumption of resources (Ghisellini et
al., 2016). CE has several value drivers: 1) extending an asset's usage cycle, 2)
enhancing asset utilization through sharing or resource productiv- ity, 3) asset
looping and cascading through reuse, remanufacture, re- cycling, or moving to a
secondary usage, and 4) regenerating and preserving natural resources by returning
biological elements to their original ecosystem and avoid nutrients leakage from
one system to another (Ellen MacArthur Foundation, 2016). To implement these value
drivers, a framework named ReSOLVE – Regenerate, Share, Opti- mize, Loop,
Virtualize, and Exchange has been introduced by the Ellen Macarthur foundation
(Prendeville et al., 2017). CE is not without its criticism (Prendeville et al.,
2017): (1) First is the definition of CE. Practitioners are often unclear about the
actual principles of CE. Some consider it as a macro-level activity and while
others view it as a micro-level intervention. (2) Second, some of the principles
may not necessarily be benefcial for the environment. For instance, infnite
recycling of materials and energy will not be with- out effciency loss, or reuse of
old technologies may result in higher energy consumption or sharing economy
initiatives that may not be as environmentally viable as promoted. (3) Third, very
few businesses adopt CE-related strategies. Also, CE models often give more
authority to businesses than consumers and social communities. While CE can
companies realize business outcomes of implementing sustainable operations, the
scope and scale of CE efforts implementation are currently limited. As new
technologies emerge, novel business mod- els can orient organizations toward
enhancing sustainability outcomes through CE principles. 2.2. Industry 4.0 Industry
4.0 – derived from the German word Industrie 4.0 – is de- fned as a set of
connected cyber-physical objects capable of using big data analytics within the
manufacturing and production domains (Vo- gel-Heuser and Hess, 2016). Industry 4.0
is part of smart city initia- tives due to cyber-physical systems (CPSs)
applications and the Indus- trial Internet of Things (IIoT) (Lom et al., 2016).
Researchers often use these terms interchangeably. For instance, industry 4.0 is
commonly used as a synonym for CPS. Different characteristics have been assigned to
Industry 4.0 with the aim of not only equipping manufacturing sys- tems with
advanced data acquisition technologies but also value gener- ation and services
innovation (Kagermann, 2015). Germany has developed a four-step strategic plan for
transforming industries of information-age to Industry 4.0: (1) building a network
of CPSs, (2) researching the ‘smart factory’ and ‘intelligent production’ concepts,
(3) integrating the elements of value chains on three levels of horizontal
integration, vertical integration, and end-to-end integration, and fnally (4)
achieving eight planning objectives. The eight planning objectives include
standardization, effcient management, a reliable in- dustrial infrastructure,
safety and security, organization and work de- sign, workforce training, creating a
regulatory framework, and improv- ing the effciency of resources (Zhou et al.,
2015). Short development time, mass customization, fexibility in product design and
production, decentralization of production systems, and re- source effciency are
among several capability goals of Industry 4.0 (Lasi et al., 2014). Table 1
provides a brief description of several technological advancements that power
Industry 4.0. Many studies have reviewed Industry 4.0 and the opportunities of-
fered by the latest industrial revolution. Figs. 1 and 2 provide reports of the
number of recent publications with Industry 4.0 or Industrie 4.0 terms in their
titles and the geographical locations, respectively. As seen in Fig. 2, Germany is
leading Industry 4.0 research. Table 1. Examples of Industry 4.0 technologies.
Technology Description Artifcial Intelligence Using computer systems to simulate
human intelligence Robo-Advisory Digital experts systems, mathematical rules,
and algorithms that provide fnancial advice with minimal human intervention VR/AR
Virtual Reality/Augmented Reality Additive Manufacturing The use of computer
control to manufacture objects by adding materials together layer by layer
Industrial Internet of Things Connecting and monitoring industrial objects and
physical devices through the internet 6G network The 6th generation of mobile
networks that interconnects not only people but also devices and objects Serverless
computing A new resource allocation model for cloud-computing execution in which
cloud providers match demand and capacity Biometrics Technology for body
measurement and calculation for an individual's identity identifcation and
surveillance control Cybersecurity Protection of computer systems from
malfunctioning Blockchain A decentralized, distributed data structure and public
digital ledger 2 UNCORRECTED PROOF B. Esmaeilian et al. Resources, Conservation &
Recycling xxx (xxxx) xxx-xxx Fig. 1. The number of publications with the term
“Industry 4.0” or “Industrie 4.0” in their titles (extracted from Compendex
database on 03/31/2020). Fig. 2. The number of publications with the term “Industry
4.0” or “Industrie 4.0” in their titles based on the principal place of publication
(extracted from Compendex database on 03/31/2020). Given that Industry 4.0 is such
a broad topic, to show its potential one of the most recent elements, blockchain
technology is evaluated. The importance of blockchain resides in its abilities in
enhancing the level of information integration across supply chains and between
vari- ous actors, one of the main agendas of industry 4.0. While in Section 4 of
this paper, we review current research in In- dustry 4.0 for fostering
sustainability efforts, the main focus of the paper will be on the impact of
Blockchain and the potential of this technology for enhancing sustainable
operations. 2.3. Blockchain technology A blockchain is a distributed data structure
– a distributed ledger – in which the data is shared on a peer-to-peer network. The
network members – nodes – communicate and validate the data following a pre- defned
protocol without a central authority. Distributed ledgers can be either
decentralized, giving equal rights to all users or centralized, pro- viding specifc
users with special rights. Fig. 3 shows the evolution of computer networks from
decentralized to decentralized and distributed systems. Blockchain is, by nature, a
distributed ledger since each node of the network has a copy of the ledger.
Depending on the right of the users, Blockchain can be designed as a centralized or
decentralized ledger. If Blockchain is designed such that the decision-making is
shared among multiple users, it is decentralized; if one central entity is the pri-
mary decision-maker, then it is centralized. Blockchain technology was popularized
with the Bitcoin cryptocur- rency peer-to-peer network. Blockchains are created
using cryptogra- phy in which each block –transaction, fle of data – has a
cryptographic hash and is linked to a previous block. Once a block is verifed by a
certain percentage of the network nodes, it is added to previous blocks and forms a
blockchain – also known as a public ledger of transactions (Casado-Vara et al.,
2018). Blockchain technology alters how administrative control is digitally
regulated and maintained. In blockchains, data are converted to digi- tal codes,
are stored in shared databases, have higher transparency, and limited risk of
deletion and revision – immutability. Blockchain potential lies with every
agreement, payment, and transactional activity having a digital record. These
records may be validated and shared among in- dividuals, machines, algorithms, and
organizations. Intermediaries such as brokers, bankers, and lawyers are needed less
often (Lansiti and Lakhani, 2017). Intermediaries are entities that act as
middlemen and handle the accuracy and verifcation of transactions in different
indus- tries. With blockchain, trust is shifted from human and traditional agents
for verifying transactions to computer codes. As an example, in the Bitcoin market,
an individual has full control over their Bitcoin balance. Unlike a bank balance,
an individual's Bitcoin balance cannot be manipulated or viewed digitally. If the
individual has the proper passcode, they can authorize entry on the blockchain
ledger and transfer it to another individual's address (Athey et al., 2016).
Transparency, less risk of fraud, instantaneous transactions, privacy and security,
fnancial data assurance, and no exchange costs are among blockchain technology
benefts (Sharma et al., 2017) (Crosby et al., 2016). Blockchain typically includes
the following capabilities, which may be dependent on the platform used (Barton,
2018): • Shared ledger: a data structure that is distributed locally and shared
between different participants; • Permissioning: secure and authenticated
transactions that ensure pri- vacy and transparency of data; • Smart contracts:
business terms are embedded in a database and are implemented with transactions;
and Fig. 3. Blockchain is a distributed ledger (Three stages of computer network
evolution, source: Daxx.com). 3 UNCORRECTED PROOF B. Esmaeilian et al. Resources,
Conservation & Recycling xxx (xxxx) xxx-xxx • Consensus: transactions are endorsed
by relevant users that ensure im- mutability and traceability of data. Most of the
existing blockchain studies focus on Bitcoin and cryp- tocurrency applications
(Yli-Huumo et al., 2016). However, the tech- nology can be employed in different
industries ranging from health- care to real estate and energy markets (Athey et
al., 2016). Although blockchain is in its relative infancy, some consider it a
general-purpose technology (GPT) with several key features of GPTs (Kane, 2017).
GPTs such as the steam engine, electricity, and the internet result in innova- tion
and productivity gains among multiple industries and lead to eco- nomic growth for
multiple years (Catalini and Gans, 2016). This out- come is part of the blockchain
promise; whether it comes to fruition is an open question. Blockchain has numerous
current limitations before broad adoption and implementation. Scalability,
regulatory challenges, security risks, and energy consumption are major
limitations. In the smart contract world, underlying rules that govern the system
are defned by software engineers and coders as they decide about the architecture,
applications, and structure of the network. Determining the content and scope of
smart contracts by coders brings many diffculties in implementing com- pliance with
regulations. It is challenging to write all possible scenar- ios that may happen in
complex business scenarios as computer codes in smart contracts, and smart
contracts will still have to rely on courts and traditional legislators in the
matter of doubts. Besides the infex- ibility of smart contracts to adapt to the
changing preferences of par- ties and unique uncertain scenarios, the insuffciency
of smart contracts in connecting to the physical world and verifying information
recorded on the ledger (e.g., verifying the person claiming to have the title of
the land) are among other legal challenges facing blockchain platforms (von Haller
Gronbaek, 2016). The rise of permissioned or private Blockchains for industrial
appli- cations also has critics. Permissioned blockchain is very different from
public blockchain; its emergence has hidden blockchain platforms’ ad- vantages.
Some believe that permissioned blockchain is just a shared database (Narayanan,
2015). Due to this confusion, some contend that blockchain technology is not an
innovative technology. Blockchain undergoes several scalability issues such as
communi- cation malfunctions among users, data storage, and linear transac tion
record (Barber et al., 2012). The scalability issues originate from growing the
number of transactions, and diffculty of the consensus pro- tocols (Conoscenti et
al., 2016). To address scalability issues, differ- ent scaling approaches have been
developed in computer science litera- ture. The idea behind scalable networks is to
enable information trans- fer among intermediaries without recording every
transaction on the blockchain (Xie et al., 2019). Other blockchain criticisms
exist. While Blockchain helps with reduc- ing the needs for an intermediary and
assists with the automatic verif- cation of transactions due to capabilities such
as the tamper-proof nature of Blockchain and the use of cryptography hash
functions, it is almost impossible to alter information once it is recorded on the
ledger. There- fore, the correct information must be entered into the Blockchain
sys- tem. This challenge is known as the last-mile problem or endpoint vul-
nerability. The verifcation of data uploaded on digital platforms still re- quires
intermediaries. Mechanisms are needed to ensure that the link be- tween digital
records and physical entities are correctly established, and the information
uploaded on digital platforms is accurate. Mechanisms such as IoT sensors and
certifed inspectors can be used to ensure the ac- curacy of information uploaded on
the network (Gopalakrishnan and Behdad, 2019). Although the current development of
blockchain supports the anonymity of users’ identity via digital signature, data
protection via im- mutable ledger, and confdentiality of transactions via
cryptography, the security of consensus algorithms is still a problem. More secure
consen- sus algorithms are needed for enhancing security and system resistance to
attacks (Zhang et al., 2019). Besides human-related security issues, 51%
vulnerability, double spending, and the lack of a proper mecha- nism for protecting
private keys are among other security issues. Public blockchains are exposed to 51%
attacks, in which a group of users con- trol
most of the network's computing power and can control the ledger. Although
blockchain has its share of criticism, it is gradually be- coming integrated into
the industry, with new user applications contin- uously identifed. Existing large
technology companies are investing in this technology, and various efforts on
developing socially open-sourced platforms are underway. These activities exhibit
blockchain technol- ogy potential; and its integration with Industry 4.0. Fig. 4
summa- rizes the capabilities and criticisms of blockchain and the cur Fig. 4. The
capabilities, criticisms, and current situation of Blockchain technology. 4
UNCORRECTED PROOF B. Esmaeilian et al. Resources, Conservation & Recycling xxx
(xxxx) xxx-xxx rent market situation. Figs. 5 and 6 show the number of scholarly
pub- lications using the word Blockchain in their titles and the principal place of
the publications.
Supply chain is a set of sequential stages in the manufacturing, transportation,
storing, or distribution of a product [1]. Each stage may be handled by one or many
companies, suppliers, or stakeholders. Supply chain plays a critical role in the
global economy [2]. The International Trade Administration reports that supply
chain transactions account for over 76% of the world trade [3]. Large corporations
outsource their assembly lines to low-cost regions to decrease production costs.
The stages of the supply chain have been further divided and there- fore, handled
by an increasing number of affiliates. Supply chains have become more global,
complex, and interdepen- dent across stages [4]. Supply chain involves various
participants and stakehold- ers and numerous processes in multiple stages. It is
dif- ficult to keep track of the processes, materials, and the ownership at
different stages. Moreover, stages of a supply chain are often located at different
places and sometimes across different countries. The supply chain complexity im-
poses administrative challenges for an efficient supply chain management. Companies
aim to address the increasing supply chain com- plexity by adopting different
technologies such as barcodes, radio-frequency identification (RFID), and global
positioning system (GPS) to directly collect information from the pro- cesses and
stages of the supply chain. Data analytics is another technology that is
increasingly used for stock management and demand prediction [5]. Although
companies use data collection technologies as those described above, information on
supply chain processes and changes of product ownership need to be resilient to
acci- dental or intentional modifications. Moreover, supply chains This work is
licensed under a Creative Commons Attribution 4.0 License. For more information,
see https://creativecommons.org/licenses/by/4.0/ 230 VOLUME 1, 2020 must provide
transparency so that stakeholders may have ac- cess to data on the status of the
supply chain. Today’s supply chains need to be more reliable than ever. Disruptions
in the supply chain can create significant losses for companies in both short and
long terms and increase costs for end customers. Such companies need to create fast
and agile solutions to meet dynamically changing demands [6]. Businesses and
customers are raising new demands for infor- mation on a product, such as
authenticity, origin, quality, and sustainability. These demands are associated
with the supply chain of a product. However, recorded data in a supply chain can be
altered by participants and, at the same time, its data may be inaccessible to
customers. To resolve most of the supply chain challenges, data must be kept
immutable and accessible. Blockchain is a promising technology with the potential
to satisfy many of the supply chain challenges. Blockchain is a distributed and
immutable ledger that provides a trustable record that cannot be manip- ulated or
tampered with [7], [8]. Its distributed architecture makes it immune to
manipulation by a centralized authority. Blockchain was first introduced by Bitcoin
in 2008 [9]. It has been considered a solution to address the supply chain
challenges for different industries [10]–[25]. Recent advance- ments in computing,
sensing, and mobile technologies have made it possible to apply blockchain in
several industries, in- cluding healthcare [26]–[30], energy management [31]–[35],
entertainment [36], [37], aircraft [38], vehicular network [39], and construction
[40]. In this paper, we survey existing blockchain approaches applied to supply
chains with a focus on different indus- tries. These industries include food, wine,
pharmaceutical, healthcare, and others. We highlight the objectives and chal-
lenges reported for each industry and identify the proposed blockchain frameworks
that address these challenges. We also discuss challenges and opportunities for
future blockchain frameworks and their applications in supply chain. The remainder
of the paper is organized as follows. Sec- tion II introduces supply chain and its
features and describes the challenges that its management faces to achieve high
effi- ciency and efficacy. Section III introduces blockchain frame- works that have
been proposed for management of supply chains and others that can potentially be
used for such a pur- pose. Section IV analyzes blockchain framework adoptions that
have been proposed to address various supply chain chal- lenges in different
industries. Section V discusses opportuni- ties and challenges of the application
of blockchain on supply chain management. Section VI presents our conclusions. II.
SUPPLY CHAIN A. SUPPLY CHAIN MANAGEMENT A supply chain can be highly complex as it
may comprise a large number of stages and all the involved parties need to keep
track of the development of the product at each stage. Fig. 1 illustrates an
example of the stages of a supply chain. The number of stages may increase in
proportion to the com- plexity of the product. Moreover, a supply chain may be a
set FIGURE 1. An example of a supply chain. of several intertwined supply chains
because some products may be parts for another. As an example, suppliers provide
raw materials to the pro- cessing units that manufacture parts of a complex
product. The parts are then assembled into a complex product as the final product.
These final products are then distributed by wholesalers or distributors. The
involved parts could be dis- tributed among various geographic locations where
logistics are handled by importers and exporters across country lines. Further
distribution of the products is handled by retailers who bring them to the end
customers. The effectiveness of how materials, parts, and products are moved along
the supply chain can affect the efficiency of the supply chain and, in turn, the
cost of the product [41]. Some of the functions of supply chain management are
inventory and warehouse management, supplier management, transportation,
bookkeeping, and other operations [42]. Of- ten, the handling of the product, as it
passes through the supply chain, is a transaction made between participants.
Transactions should be recorded accurately and reliably. Trust amongst the supply
chain parties ensures smooth and seamless transactions. Moreover, for newly
introduced trading partners, supporting technology that provides background
information about the involved parties can speed up the process of building such
partnerships. B. CHALLENGES IN SUPPLY CHAIN AND ITS MANAGEMENT The complexity of
supply chain management has increased by not only directing the flow of goods but
also the flow of information [43]. Although technology has digitized and automated
various functions of supply chain management, some challenges remain for making the
supply chain more efficient, reliable, and secure. In this section, we outline the
challenges that supply chains need to address to ensure their efficiency and trust
among their stakeholders. 1) PROVENANCE Provenance is a record of ownership over
time [44]. Tracking and traceability are functions enabled by provenance. Track-
ing materials and the origin of a product is a complex oper- ation. For example, a
distributor may acquire produce from various farms and then distribute it to
customers in the food industry. In the case of product recalls, it usually takes a
long time to trace back the source of a contaminated product, and VOLUME 1, 2020
231 SHAKHBULATOV ET AL.: HOW BLOCKCHAIN ENHANCES SUPPLY CHAIN MANAGEMENT: A SURVEY
yet, sometimes the location is not precise. A system with tracing capability would
overcome this issue. Counterfeit detection is a popular application of prove-
nance. Having a record of the product’s provenance may help detect counterfeit
products or verify a product’s originality. Such a record is directly associated
with the product’s supply chain, but the record has to be both accessible to some
stake- holders (e.g., consumers) and unalterable by supply-chain stakeholders. A
product passes through different stages of its supply chain and spends a different
amount of time in each one. To oversee the operation of its supply chain, tracking
is a necessary feature. For example, the shipment of a product is often carried out
by a third-party logistics company and that makes real-time tracking by supply-
chain participants chal- lenging. In addition, having information on the status of
the product and forecasting its progress can facilitate data-driven strategies that
benefit the management of the supply chain and its stakeholders. An analysis of the
supply chain with real-time tracking can provide information about what occurs in
the different stages. This information can be used to evaluate the performance and
efficiency of suppliers and to identify and mitigate potential risks. 2)
PERFORMANCE IMPROVEMENT Performance of a supply chain can be defined by different
key indicators, such as the time a product spends on each of its stages, the cost
of manufacturing a product, and production yield [42]. Because the performance of
the supply chain may directly affect the cost of the product, it must be managed
and followed carefully. 3) QUALITY ASSURANCE AND QUALITY CONTROL Quality assurance
and quality control are the compliance of a product, manufacture, or supply chain
with a variety of quality attributes set out by the stakeholders, customers, or
regulatory agencies [45]. These features may incorporate not only safety guarantees
for consumer products but also compliance with established standards. 4)
SUSTAINABILITY A study by McKinsey states: “The typical consumer com- pany’s supply
chain creates far greater social and environ- mental costs than its operations, and
that accounts for more than 80% of greenhouse gas emissions and more than 90% of
the impact on air, land, water, biodiversity, and geological
resources” [46]. A sustainable supply chain must consider its impact on the
environment and use environmentally-friendly materials and processes, so that it
can reduce greenhouse gas emissions along its stages. A supply chain must account
for its production of greenhouse gas emissions and other con- taminants in a
reliable and unbiased way. Such accountability would be beneficial for
environmental impact evaluation by stakeholders and regulators [47]. Because of the
broad variety of parties involved in a sup- ply chain, tracking and quantifying its
environmental impact is challenging. These tasks often incur additional costs. Al-
though some large manufacturers may report their product carbon footprint [48], the
numbers are often estimates. There- fore, there is a need for widely deployable
standards on envi- ronmental impact for industries to follow. 5) TRANSPARENCY
Transparency refers to the availability of and accessibility to information about
the supply chain by trading partners, share- holders, consumers, and regulatory
bodies [49]. Transparency makes data about the status of processes and materials in
their supply chain accessible stakeholders. Transparency in a supply chain has
shown to have a positive impact on business reputation [49]. There has been an
increas- ing demand for transparency of supply chain by both busi- nesses and
consumers. This feature requires that supply chain data remain immutable to ensure
trust amongst the involved parties. Transparency can be partial to some
stakeholders; some information about the supply chain may be accessed by only a
group of designated parties. Because the cost incurred by the stages of the supply
chain affects the final cost of the product, transparency enables accurate cost
calculations and the exposure of irregular operations along the supply chain [50],
[51]. 6) DATA PRIVACY AND CONFIDENTIALITY Sensitive and proprietary information
about a supply chain such as financial records needs to be accessible only to some
stakeholders. An example of this information includes the cost of raw materials,
benefits, surpluses, etc. Any information about transactions performed between
different parties must be kept confidential but verifiable. III. BLOCKCHAIN
FRAMEWORKS A blockchain is a distributed immutable ledger that is used to record
transactions performed between different users without resorting to a centralized
and trustable party. Immutability is the driving feature of blockchain; it
facilitates building trust among users by providing a permanent and verifiable
record of transactions. A blockchain comprises a peer-to-peer net- work of
participant nodes, a distributed ledger consisting of immutable blocks of data,
transactions recorded in the blocks, smart contracts to execute the transactions,
and a consensus algorithm that decides the proposer of the next block. Fig. 2 shows
the components of a blockchain. Participant nodes in a blockchain can be either a
client, a light client application (light node), or a miner/validator (full node).
A blockchain user communicates through the client node. A client node is a
participant that generates transactions. A light node keeps track of the
blockchain’s headers to verify the validity of a client’s transactions. A full node
participates in the consensus process and proposes and validates blocks, records
transactions by executing functions contained within 232 VOLUME 1, 2020 FIGURE 2.
Components of a blockchain. TABLE 1. Comparison of Permissionless and Permissioned
Blockchains a smart contract, and appends verified blocks to its local copy.
Different blockchain frameworks may define the functions of miners and validators
differently. Therefore, we call a node miner and validator in each blockchain
framework according to their usage. A block is sequentially linked to a previously
recorded block using a hash pointer. The hash pointer contains the hashed
information of the contents of the previous block and that guarantees the sequence
of the blocks and the integrity of the data. The result is an immutable distributed
ledger. Every block of data contains a group of verified transactions and a header
with metadata including a proof of block authenticity and a hash pointer pointing
to the previous block. A. CLASSIFICATION OF BLOCKCHAINS Blockchain may achieve
different levels of decentralization and be classified into permissionless (or
public), permissioned (or private), and hybrid architectures. Table 1 shows differ-
ences between permissionless and permissioned blockchains. In a permissionless
blockchain, access to the network and participation in the consensus algorithm is
open to anybody who wishes to participate. Participants can use public keys that
enable pseudo anonymous identities and replace them at any time, without requiring
to reveal their real identities. Permissionless blockchains use a consensus
algorithm that defines strict rules to accept proposed blocks and an integrated
incentive mechanism that rewards honest participation. How- ever, decentralization
is achieved at the expense of low trans- action throughput, i.e., the number of
recorded transactions per second (tps). In a permissioned or private blockchain,
access to the network, and participation in the consensus algorithm is restricted;
participants of a permissioned blockchain FIGURE 3. Components of a consensus
algorithm. are required to register before they can participate in the blockchain.
Because the identities of the participants in a permissioned blockchain are known
to the registered members, malicious behavior can be detected by byzantine fault
tolerant (BFT) consensus algorithms. Distributed consensus algorithms are said to
be crash fault tolerant (CFT) if they can tolerate a number of crashed nodes, i.e.,
nodes that stop working. Similarly, consensus algorithms are said to be BFT if they
are both CFT and can tolerate a number of nodes acting maliciously while appearing
to be working normally. Blockchain consensus algorithms can either be CFT or BFT.
For a detailed description of distributed consensus algorithms, the readers are
referred to [52]. However, BFT consensus algorithms may not scale well because
their complexity and overhead increase as the number of validators grows. Incentive
mechanisms are not needed to reward honest par- ticipation in permissioned
blockchains because validators are granted a level of trust. These blockchains
provide data access to the participants in the distributed ledger. Such features
allow a permissioned blockchain to use a light-weight con- sensus algorithm that
can achieve high transaction throughput, but at the expense of diminished
decentralization. A hybrid blockchain combines the features of both permis- sioned
and permissionless blockchains. It inherently includes the combination of data
privacy and high throughput of per- missioned blockchains and the high level of
decentralization of permissionless blockchains. Such a blockchain has a pri- vate
and a public ledger. It records sensitive data in a private ledger that are
accessible to some designated stakeholders and non-sensitive data in a public
ledger that are available to all participants. B. BLOCKCHAIN CONSENSUS ALGORITHMS
Blockchain consensus algorithms define the set of rules for miners or validators to
agree on a common truth. As shown in Fig. 3, blockchain consensus algorithms may
include the following five components: block proposal, block validation,
information propagation, block finalization, and incentive mechanism [52]. Yet, not
all blockchain consensus algorithms implement all five components. Block proposal
is a process where miners or validators decide the next proposer of a block. For
security reasons, a block proposal mechanism in permissionless blockchains requires
a minimum inter-block proposal time. In addition, miners or validators are required
to provide Proof of Work (PoW) or Proof of Stake (PoS), to earn the right to
propose the next block. VOLUME 1, 2020 233 SHAKHBULATOV ET AL.: HOW BLOCKCHAIN
ENHANCES SUPPLY CHAIN MANAGEMENT: A SURVEY Block validation is the process to
verify that received blocks are syntactically correct. A block is valid when it
includes the solution to a cryptographic puzzle and the verified digital signatures
of the participants in the transactions recorded in the block. In information
propagation, full nodes broadcast blocks to the peer-to-peer network. They must
follow the broadcast or dissemination protocols of a framework. Block finality is
the process to make the recording of a block irrevocable once it’s committed to the
distributed ledger. Once it is received and verified by participant nodes, a block
is appended to the local copy of the distributed ledger that is maintained by full
nodes. A consensus algorithm can be classified as either deterministic or non-
deterministic accord- ing to how it proposes a block. A consensus algorithm is
deterministic when it proposes only one block at a time. This proposal occurs after
a leader is selected in every round. On the other hand, a consensus algorithm is
non-deterministic when it proposes two or more blocks at a time. Because it is
possible to have blockchain forks in the latter case, i.e., two different valid
blocks that extend two different chains, a full node must decide which chain to
extend and in this way, to remove forks. A full node can decide to extend the
longest-chain or the chain that has received the majority of votes from a group of
validators. Incentive mechanisms are used to prevent abnormal or ma- licious miner
behavior by rewarding the miners who follow the rules. In a permissionless
blockchain, miners are pseudo- anonymous. Therefore, miners could collude and
propose in- valid blocks and invalidate the main blockchain. Some con- sensus
algorithms may implement an incentive mechanism to prevent such malicious miner
behaviors. Moreover,
consensus algorithms may also establish penalties for miners that act maliciously.
C. CONFIDENTIALITY Clients use a public key as a pseudo-identity to participate in
the network and a private key to digitally sign transactions. Transactions hold
digital signatures that are used to ensure that the state of the ledger (i.e., the
ownership and distribution of the assets) is only modified by legitimate clients,
which are authenticated through their public and private keys. However, the
contents, including sensitive data, of both transactions and operations performed
by smart contracts are recorded in plain text in every local copy of the
distributed ledger. Some blockchain frameworks address this data privacy prob- lem
using cryptographic algorithms and methods, e.g., zero knowledge proofs (ZKPs), to
encrypt sensitive data of both transactions and operations in smart contracts
before sending them to the blockchain. However, this feature comes at the expense
of lowering the performance. In particular, permis- sioned blockchain frameworks
are designed to provide data privacy guarantees by limiting access to some portion
of the distributed ledger to the public. These guarantees can also be provided by
segmenting the blockchain into small indepen- dent blockchains where each of them
is used in a different section of an organization. Other blockchain frameworks aim
to further enhance data privacy by delegating the execution of operations in smart
contracts to only a pre-selected set of participants. D. SMART CONTRACTS Smart
contracts are self-executable computer programs that implement trading terms in a
transaction that are verified by every full node. The execution of some smart
contracts may cause the entire blockchain to halt when contracts have er- rors,
such as non-deterministic functions, caused by coding mistakes or attacks. To
address this problem, some blockchain frameworks bound the amount of running code
by establishing service fees for every executed line of code. Therefore, only
deterministic code is allowed. E. PERFORMANCE Transaction throughput is a common
and main performance indicator of a blockchain framework. The performance of a
blockchain framework may be determined by the consen- sus algorithm, the size of
the network, i.e., the number of participants, and the block size. Transaction
throughput in permissionless blockchains, specifically on PoW-based ones, tends to
be low because of the high computational cost of cryptographic puzzles that miners
must solve to propose valid blocks. Solving cryptographic puzzles in PoW could be
time- consuming and, therefore, limit transaction throughput. Permissioned
blockchains achieve higher transaction throughput than permissionless ones because
the consensus algorithm of permissioned blockchains is generally determin- istic.
Some features, such as the block size, in a few per- missioned blockchain
frameworks can be customized. These frameworks may also follow modular designs. The
perfor- mance of a blockchain framework may be also affected by the size of the
block. For example, a large block may take longer time to be committed than a
smaller one. Network delays may also undermine the efficiency of the consensus
algorithm, particularly for consensus algorithms with built- in voting mechanisms
because nodes broadcast their votes. Voting-based consensus mechanisms require a
collection of votes from peers. A vote is a signature appended to a block. F.
BLOCKCHAIN FRAMEWORKS In this section, we review existing blockchain frameworks.
Some are proposed for supply-chain management. We also add others that can be
potentially adopted for the same goal. Table 2 presents a summary of existing
blockchain frame- works. 1) Bitcoin It is a permissionless blockchain framework
that implements a decentralized digital currency system for the exchange of a
cryptocurrency called bitcoin (BTC) [9]. Bitcoin has not been adopted by supply
chain studies covered in this survey, but we introduce it here because it presents
the concept of blockchain. Bitcoin uses the Nakamoto consensus algorithm 234 VOLUME
1, 2020 TABLE 2. Blockchain Frameworks (NCA) [52], which is essential to achieve
decentralization and avoid double-spending in transactions. Double-spending occurs
when a client transfers the ownership of an asset to two or more clients. NCA
comprises a PoW algorithm for the proposal of new blocks, the longest chain policy
as block finality mechanism, and the Gossip protocol for dissemina- tion of blocks.
PoW is a high-intensity computational al- gorithm where miners solve complex
cryptographic puzzles until the required random number is found. PoW demands a high
computational load from miners. From all miners solving the puzzle, the miner that
solves it first is the only one rewarded. Therefore, miners with more computational
power have higher opportunity to first solve the cryptographic puzzle, and to be
rewarded. However, concentration of com- putational power is not desired as it
undermines the decen- tralization principle of blockchain. Ownership transfer of a
BTC is represented by a transaction with a set of inputs and outputs. If a client
wants to transfer his/her BTCs to another participant, the client must define and
sign a transaction that specifies as input the references of the transactions where
VOLUME 1, 2020 235 SHAKHBULATOV ET AL.: HOW BLOCKCHAIN ENHANCES SUPPLY CHAIN
MANAGEMENT: A SURVEY the owned BTCs were obtained, and the identity of the new
owner as the output. Thus, the global state of the distributed ledger in Bitcoin is
simply an abstract representation of the sum of unspent transaction outputs (UTXOs)
of every client. Another drawback of bitcoin, besides having to perform a
computationally-demanding PoW, is that the size of blocks is hardcoded to 1 MB. In
combination with the block generation time, this memory usage keeps the transaction
throughput low. Moreover, the scripting capability of a transaction is limited to
basic operations like Pay-to-Pubkey-hash (P2PKH) and Pay-to-script-hash (P2SH). 2)
Zcash Zcash, while not reportedly adopted in the supply chain stud- ies surveyed in
this paper, it was the first open permission- less cryptocurrency that aims to
fully protect the privacy of transactions. To achieve this goal, Zcash uses ZK-
SNARKs as ZKPs for verification of ownership of tokens [53]. Zcash implements a
consensus algorithm based on Bitcoin’s NCA. However, Zcash uses a lighter version
of PoW, which requires a large amount of memory for solving the cryptographic puz-
zle. The inter-block generation time of Zcash is 2.5 minutes and the block size is
up to 2 MB. Zcash supports public and private transactions, where the latter hides
critical data. The drawbacks of Zcash are poor scalability due to the significant
usage of both memory and time by ZK-SNARKs. 3) Ethereum Ethereum is a
permissionless blockchain framework that im- plements a decentralized digital
currency system for the ex- change of the cryptocurrency known as Ether (ETH) [54].
Ethereum also adopts NCA and a light version of PoW. As a result, the inter-block
(generation) time is reduced to about 15 seconds. Despite this shorter generation
time, low transaction throughput remains in Ethereum. Another modification to NCA
in Ethereum is the integra- tion of the Greediest Heaviest Observed Subtree (GHOST)
protocol that operates in lieu of the longest chain rule as the block finality
mechanism. The state of the distributed ledger is explicitly defined in Ethereum,
as opposed to Bit- coin. Ethereum comprises many small objects called ac- counts,
each of them holding a state, that interact with each other. A major feature of
Ethereum is the support of a com- plete scripting language that leverages the
development of decentralized applications (DAPPs). Smart contracts are im-
plemented through DAPPS. A smart contract runs on an Ethereum virtual machine (EVM)
powered by a unit referred to as gas. This unit is the price charged for every step
of execution in a contract. The EVM is a Quasi-Turing complete virtual machine
intrinsically bounded by gas. The more code a transaction requires to run, the more
gas it requires. The charging of gas helps to restrict the processing of malicious
transactions which aim to run indefinitely [67]. 4) HP3D The hybrid peer-to-peer
physical distribution (HP3D) blockchain framework is proposed for tracking
shipments in a supply chain, and it covers the distribution of products from
suppliers to customers [10], [55]. This framework comprises dynamic private ledgers
for the recording of custody events that are visible to only the trading partners
in a given ship- ment, and a public ledger. HP3D records the activity of shipments
using three types of events, namely genesis, custody, and monitor. A genesis event
is the start of a shipment. This information is broadcast to a private ledger and a
hash of it is broadcast to the public ledger. A custody event is the change of
custody of a product (i.e., ownership). After a change of custody, the new
custodian broadcasts the event to the private ledger and a hash of the event to the
public ledger. In the private ledger, participants validate the signed custody
events, which are subsequently recorded in the private ledger. External monitors
generate monitor events and report them to the public ledger to keep track of the
geolocation of trucks. Any participant in the pub- lic ledger can propose a block
after solving a cryptographic puzzle, i.e., PoW. The proposed block is broadcast
and vali- dated against the participants’ local databases. 5) Gcoin Gcoin is a
permisioned blockchain framework with an open government model, i.e., open data for
transparency and ac- countability, that has been proposed for application in a drug
supply chain [18]. Gcoin uses a double-spending prevention mechanism similar to
that used in Bitcoin. This mechanism
is aimed at countering the trading of counterfeit drugs. Gcoin records the entire
history of a drug; from manufacture to sales. It combines the open government model
and cooper- ation from decentralized autonomous organizations to foster greater
transparency. In this framework, drug manufacturers mine new coins, large
manufacturers, and government agen- cies validate the transactions. Also, third
parties verify and hold the blockchain and pharmacies and consumers perform
transactions to gain ownership of the coins, i.e., drugs. Gcoin also uses a multi-
signature design, supports smarts contracts, and uses PoW with a block generation
time of 15 seconds. This generation time leads to a transaction throughput that
ranges between 17.5 and 26 transactions per second. 6) TransICE TransICE is a
permissioned blockchain framework for the logistics of integrated casinos and
entertainment. TransICE is organized in three layers, the data or blockchain layer,
the smart contract layer whose contracts are based on the Hawk model, and the
interface layer for services and applications. The Hawk model is a decentralized
smart-contract approach that provides transactional privacy guarantees using ZKPs
[57]. A Hawk-based smart contract is split into private and public portions and
both can be executed in Ethereum. Hawk’s 236 VOLUME 1, 2020 security guarantees
include on-chain privacy and contractual security among users in the same contract.
On-chain privacy is achieved because only encrypted data is sent to the blockchain
while the required private computation is performed off-chain. The Hawk protocol is
broken down into three essential stages: commit, compute, and finalize. First,
users commit their data (offer) into the smart contract, then in the compute stage,
the participants reveal their data to a trusted manager who collects all data and
executes a private function in the smart contract. In the finalize stage, the
result of a game is announced and the smart contract distributes the tokens to the
winners who participated in the game as ruled by the smart contract. 7) Multichain
Multichain is a bitcoin-based permissioned blockchain frame- work that leverages
data privacy and scalability by addressing computational-intensive mining, lack of
privacy, and the open accessibility features of current public blockchain
frameworks [58]. It integrates a transactional-based control mechanism for the
management of users’ privileges and permissions. This mechanism defines which
activity is visible to each user, which transactions are considered valid, the
block size, mining participation, mining rewards, and transaction fees. Similar to
bitcoin, transactions in Multichain are input-output based but they differ in that
they contain special metadata, such as communicating users’ granted or revoked
permis- sions. Mining in Multichain avoids monopolization of the block proposing
mechanism by a powerful single node through the use of a round-robin schedule where
nodes take turns to propose a block. In its current version (2.0), Multichain
provides smart filters, which are pieces of code embedded in the blockchain,
containing rules to validate transactions and to restrict the data visibility for
users according to their permissions. In Multichain, administrator nodes grant
partic- ipants the right to participate in the consensus algorithm and to retrieve
the contents of the distributed ledger. They restrict access to the distributed
ledger, and that enhances data privacy and confidentiality. Multichain can also
work as a compound blockchain node to communicate with other frameworks by simply
setting the connection parameters in its configuration file. 8) Hyperledger
Sawtooth Hyperledger Sawtooth is a blockchain framework supported by Intel, which
works as either a permissioned or a permis- sionless blockchain [59]. This
framework implements ETH smart contracts via a tool called Seth and provides data
privacy by means of private UTXOs. It uses Proof of Elapsed Time (PoET) as its
consensus algorithm. PoET simulates the time used for PoW in a trusted execution
environment (TEE) using software guard extensions (SGXs) enclaves [68]. A node with
the shortest waiting time becomes the proposer. 9) Hyperledger Fabric Hyperledger
Fabric is a permissioned blockchain framework supported by IBM, which is primarily
used for enterprise solu- tions [60]. Hyperledger Fabric follows a modular design
that allows the integration of pluggable modules for its different infrastructure
components (e.g., consensus algorithms). By default, it comes with built-in FTC
algorithms namely, Kafka and Raft; and a centralized consensus algorithm namely
Solo for development purposes. However, user-defined consensus algorithms can be
plug-and-play when needed. Fabric sup- ports chaincodes similar to ETH smart
contracts. A major difference between Hyperledger and other blockchains is that
Hyperledger provides enhanced data pri- vacy by incorporating private channels,
ZKPs, and using en- dorsement policies. An endorsement policy defines the num- ber
of validators required to validate a transaction. An en- dorsement policy can be
defined at the contract or at the data level. Hyperledger Fabric follows an
Execute-Order-Commit model, in which transactions are initially executed on the set
of validators defined in the endorsement policy. This approach improves scalability
by reducing inter-block generation time, prevents non-determinism in contract code,
and enables the private execution of transactions between a set of participants.
Scalability of Hyperledger Fabric also depends on how fast the hardware of the
involved peers executes the validation pipeline of transactions. Optimized
transaction throughput from 3,000 to 20,000 tps has been reported [69]. 10)
Tendermint Tendermint is a blockchain framework that runs the Tender- mint
consensus algorithm which is a BFT-based PoS consen- sus algorithm [61]. This
algorithm works as a voting mech- anism that runs in consensus cycles, each having
multiple rounds. Every round consists of three steps, propose, prevote, and
precommit. The function that selects a validator as the proposer of a new block is
deterministic. A node is selected as a proposer with a weight proportional to the
node’s tokens; the higher the stake, the larger the probability that the validator
is selected as the block proposer. A block is finalized and appended to the main
chain after validators have received more than two thirds of the votes from the
total set of valida- tors. Tendermint is a flexible consensus algorithm that can be
implemented in permissionless or permissioned blockchains. Tendermint can provide a
high throughput because it has an unbounded block proposal time. However, the block
proposal time depends on a node receiving the minimum number of votes to reach
consensus. The number of participants, how- ever, may affect the block proposal
time. 11) Exonum Exonum is a framework that provides the building blocks for the
development of a permissioned blockchain [62]. Exonum uses a customized BFT
consensus algorithm that is similar to Tendermint but it works in unbounded rounds,
i.e., a round VOLUME 1, 2020 237 SHAKHBULATOV ET AL.: HOW BLOCKCHAIN ENHANCES
SUPPLY CHAIN MANAGEMENT: A SURVEY is the proposal of one block. Every round
consists of three stages: propose, prevote, and precommit. In the propose stage, a
selected leader proposes a list of transaction hashes and broadcasts it to the
validators. Upon receiving the list, val- idators verify that the transactions in
the list are consistent and broadcast a prevote for the received list. Then,
validators collect two thirds of prevotes and process the transactions in the list.
The validator that receives two thirds of the prevotes broadcasts the results to
the other validators in a precommit message. If a validator receives two thirds of
precommits, they commit the block to their local ledger. Exonum provides ser-
vices, which are analogous to ETH smart contracts. It also has special features
such as locks to keep the consensus algorithm off the influence of byzantine
validators. 12) BigchainDB BigchainDB is a permissioned blockchain framework that
combines the decentralization, immutability, and owner- controlled assets
properties of a blockchain with a high trans- action throughput, low delay, and the
indexing and query capabilities of a database. BigchainDB aims to resolve the
single-point of failure scheme of master-replica database envi- ronments.
Additionally, it uses Tendermint’s consensus algo- rithm to synchronize the network
peers, but it provides equal voting power to nodes. Therefore, BigchainDB inherits
the low latency, fast finality, and BFT from Tendermint. 13) Double Chain Double
chain is a permissionless blockchain framework de- signed for agricultural supply
chains [64]. It aims to match and schedule decentralized agricultural commercial
resources between suppliers and consumers using a transparent and credible
management model. Participants in double chain are supply and demand nodes and they
report their supply ca- pacities and demands to a public centralized service
platform that matches the participants. Double chain is based on two independent
chains, the user information chain that records the hash of participants’ public
keys and the transaction chain that records the performed transactions between
participants. The public service platform performs virtual integration of the
reported decentralized agricultural resources. Intelligent contracts control the
execution of a transaction and are gener- ated after the public service platform
implements an adaptive matching service to match the reported supplies and demands.
To improve transaction throughput, Double chain uses a PoS- based consensus
algorithm. 14) Carbon Footprint Chain Carbon Footprint Chain (CFC) is a cluster-
based blockchain
framework for recording the carbon footprint generated by the transportation of
products between the stages of a food supply chain. This blockchain framework has
as many clusters as the number of stages of a supply chain, each representing a
food life-cycle stage (farm, processing, manufacturing, etc.). A cluster is a group
of full nodes, or participants, in a stage. IoT devices integrated into trucks
collect the mileage, carbon footprint, product, and other information needed to
associate the transportation with the generated amount of carbon. As a truck
arrives at a new stage, the IoT device publishes in- formation to the closest node
in that stage. The leader node of the cluster validates the block and broadcasts
the block to every node. Each node then writes the block onto its local ledger. CFC
implements a Raft-like consensus algorithm in each cluster, where a leader node in
the cluster communicates with a random node of a previous cluster to validate the
block. This process ensures that trucks in the supply chain record accurate
generated carbon for each trip. 15) Block-Supply Chain Block-supply chain is a
blockchain framework designed to de- tect counterfeits throughout the product life
cycle of a supply chain [65]. It integrates RFID and near field communication (NFC)
technologies to detect modification, cloning and tag reapplication of products at
different stages along the supply chain. Block-supply chain aims to address a
centralized anti- counterfeit problem where a trusted server is responsible for the
management and coordination of product authentication. Block-supply chain
implements a Tendermint-based consen- sus algorithm but it customizes it to improve
its performance at the cost of security. Block-supply chain’s consensus algo- rithm
reduces the number of required validators from n − 1 to log(n − 1) and implements
an equal-selection random al- gorithm to select validators every time a new block
is pro- posed. It comprises two phases: Initialization and verification. In the
initialization phase, the product manufacturer records the detailed information of
a product on the product’s NFC tag, generates an authenticated event, and
broadcasts it as a genesis block. In the verification phase, the supply chain nodes
execute a local and a global authentication algorithm to verify the authenticity of
the product’s information in the block and reach consensus. 16) QuarkChain
QuarkChain is a blockchain framework that aims to ad- dress the limited transaction
throughput of permissionless blockchains [66]. QuarkChain is based on the concept
of horizontal scalability or sharding, in which the global state of the blockchain
is partitioned into multiple sub-states (i.e., sharded blockchains). Every shard
runs in parallel and is inde- pendently processed; by increasing the number of
shards, the transaction throughput is linearly increased. In QuarkChain, there are
two types of transactions: balance transfer transac- tions that can be either in-
shard or cross-shard and smart con- tract transactions, which are valid only if
they are issued from within the same shards. QuarkChain runs two hierarchical
layers namely the sharding blockchain layer, which consists of a list of sharded
blockchains, each having their consen- sus and sharded-parameters, and the root
chain layer. The latter layer is in charge to confirm the blocks in the sharded
blockchains. A block in the root chain layer includes the 238 VOLUME 1, 2020 TABLE
3. Blockchain Frameworks and Supply Chain by Industry and Challenges block headers
of the sharded-blockchain blocks. QuarkChain implements a two-layer sharding
consensus algorithm, called Boson. An example is a collaborative mining/minting
con- sensus algorithm, where the root chain layer runs PoW while the sharding
blockchain layer runs PoS. It has been reported that QuarkChain can reach more than
55,000 transactions per seconds with 1,024 shards [70]. IV. BLOCKCHAIN AND SUPPLY
CHAIN MANAGEMENT Supply chain management covers multiple stages of a product life
cycle and often involves the participation of various stake- holders. The multiple
stages and the variety of participants in the supply chain make it a highly
interconnected network that is difficult to manage. Furthermore, supply chain
management is challenged not only by the requirements on record-keeping but also by
the requirements associated with a particular in- dustry. In response, different
blockchain frameworks and con- sensus algorithms have been proposed to address
concerns in specific industries and products. Table 3 summarizes the blockchain
frameworks for supply chain covered in this sur- vey, categorized by industry, and
outlines the objectives that motivated the adoption of blockchain. A.
INDUSTRIES/PRODUCTS Because food supply chains are essential for society, they have
attracted more interest in applying blockchain technology in this industry than any
other ones. Some of the addressed challenges are transparency, provenance, per-
formance improvement, quality assurance and control, and achieving sustainability
[11]–[17], [21], [22], [47], [64], [71]– [80]. Food supply chains comprise many
stages and they may not be finely monitored and tracked. As a result, end con-
sumers are usually unable to trace their food products’ origins. Counterfeit drugs
are a common challenge for the pharma- ceutical industry. Recent studies in this
industry show the ef- fectiveness of blockchain in tracking and authenticating
drugs [18], [27], [81]–[83]. The health industry has also explored the use of
blockchain to secure digital records [30]. Some other challenges explored in the
pharmaceutical industry include quality assurance and quality control [84], and
performance improvement [85]. The entertainment and media industry faces
transparency challenges in its supply chain because stakeholders need to be assured
of the quality of service and compliance of regu- lations. The complexity of this
industry is due to not only the size of operations but also to the vast number of
regulations. The integrated casinos and entertainment (ICE) logistics in- volve
management of other industries such as tourism, hotel, retail, etc. It is important
for ICE logistics to ensure that each participant of the supply chain provides
goods and ser- vices meeting the quality standards set by the industry or the
customers’ demand. Blockchain is a fit candidate to resolve VOLUME 1, 2020 239
SHAKHBULATOV ET AL.: HOW BLOCKCHAIN ENHANCES SUPPLY CHAIN MANAGEMENT: A SURVEY this
challenge because it ensures that all transactions within the network are
transparent and easy to identify, track, and manage [56]. Automotive, wine, and
wood products share the challenge on provenance. In these industries, provenance
and origi- nality are the main motivation of using a distributed ledger [11], [20],
[86]. They are mostly interested in permissioned blockchain frameworks to keep the
companies’ proprietary information confidential. Blockchain is also a very suitable
solution to track own- ership of digital assets, such as 3D models [19].
Intellectual property of digital assets is very challenging to track because these
products are highly replicable. Association of these as- sets with blockchain needs
further research. Postage is an industry that considers blockchain for its supply
chain to detect counterfeit stamps as the number of fraud cases continues to
increase [87]. Adversaries may take advantage of the variation of currency and
counterfeit old stamps. This work mentioned that the lack of expiration date of
stamps increases the complexity of the challenge. The low- cost of stamps and their
large numbers make stamp verifica- tion hardly cost effective and scalable. Some
studies provide blockchain solutions to address trans- parency, provenance, quality
assurance and control, data pri- vacy, confidentiality and sustainability in
general supply chain without specifying the industry [10], [65], [88]–[101]. These
works aim to provide a general solution to all supply chains by leveraging the
features of blockchain. However, other works focus on a specific industry and also
on particular challenges.
Since its creation in 1990, companies are using the World Wide Web to exchange
information. The revolutionary system opened the doors for the business
productivity improvement and competitiveness. Nowadays, new technologies like the
ones applied in social media, machine learning, robotic process automation, and
blockchain are improving the business environment and bringing a large way to
exchange information One of the newcomers is blockchain. Initially, blockchain was
focused on money exchange. Bitcoin, the electronic money exchange created by
Satoshi Nakamoto (2008) opened the possibility to send and receive money without
any financial intermediary. The “peer-to-peer electronic cash system” (Nakamoto,
2008), sends payments from one peer to other through a very high safety model using
data encrypted that cannot be modified. Blockchain has grown in popularity due to
its characteristic features such as immutability, incorruptible and the capability
to enable absolute transactional transparency. It is no doubt that blockchain has
the power to transform every aspect of the logistics and supply chain industry.
Currently, developments are underway to ensure that blockchain systems will be able
to work in tandem with data drawn from IoT devices used in logistics and supply
chain. The inefficiencies of the current data exchange systems and the trust of the
information allow the identification of the value of blockchain in supply chain
management. The opportunity of paperless bureaucracy and cost reduction accelerate
the identification of the new challenges. Unlike traditional centralized database
systems, blockchain validates the data in the ledger using a cryptographic
consensus mechanism. The proposal of blockchain is to encourage trust across peers
and create safety networks to exchange information. It means no authority or
participant can control or manipulate what is recorded by blockchain technology
(Mougayar,2016). The transparency was initially considered as the important aspect
of adopting the technology, as well as improving the data exchange, disrupting the
traditional way of sending and receiving information. Another important feature
clearly recognized is the speed of transactions that also contribute to reduce
costs. There is also a growing trend of consumers demanding information about the
provenance of products. The facilities identified in Blockchain are quickly adapted
to supply chain operations, mainly due to the product traceability. One of the best
examples is the food chain, where the customer can be confident about the
authenticity of goods, including the environmental impacts and workers conditions
during the entire production process (Kshetri, 2018). Other examples are medicine
and cosmetics, where blockchain improves the value percept from the customer side
and give better business results (Aptea & Petrovskyb, 2016). Other benefits already
identified include the simplification of the settlement of claims, increasing
transaction security, accelerating payments and reducing fraud, reducing the cost
of compliance and regulatory requirements, elimination intermediaries thereby
cutting costs and improving tracking of items throughout the supply chain. To
support blockchain implementation in logistic and supply chain management, a smart
contract is required. A smart contract is a condition of the operation written on a
code. The smart contract automatically executes the transactions and record the
information onto the ledger without any human intervention. The aim of smart
contracts is to provide security, which is superior to traditional contract law and
to reduce other transaction costs associated with contracting (Tapscott 2016: 105-
108). Buterin explains it as: “ then we can cut costs to near-zero with a smart
contract.” (Parker 2016). Networked members mutually agree on the smart contract.
It is a key component for establishing trust and efficiency between parties. Smart
contract eliminates all the paperwork, streamlining the entire process and saving
time and money. The scope of this paper is restricted to discuss the blockchain
application to the supply chain world and the benefits that can be obtained in such
application. It is not an intention of this paper to evaluate the blockchain
technology and the different kinds of software used for its implementation. 2.
Definition of supply chain Lummuns and Albert (1997) conceptualize the supply chain
as a network of entities in which material flows. Those entities may include
different suppliers, transformers or processors, distribution center, retailers and
final customers. According to Slack et al. (1999), a set of interconnected
companies whose function is to supply goods and services to a company or to final
customers is called "supply chain" (Slack et at., 1999). The general idea behind
supply chain management (SCM) is to manage the flow of goods, services, and
information in an effective way in order to achieve high performance and decrease
risks (Tan, 2001). On the other hand, Christopher (1997) defines supply chain as
the set composed by a particular leader company and all the other companies with
whom they interact, directly or indirectly, through its suppliers and customers,
upstream and downstream, that is, from the point of origin of the basic materials
and/or services, to the point of effective consumption of the products and/or
services. There are billions of products being manufactured every day globally,
through complex supply chains that extend to all parts of the world. However, there
is very little knowledge of how, when and where these products were originated,
manufactured, and used through their life cycle. Even before reaching the end
consumer, goods travel through an often-vast network of retailers, distributors,
transporters, storage facilities, and suppliers that participate in the design,
production, delivery, and sales, yet in almost every case these journeys remain an
unseen dimension of our possessions. (Jessi, et al., 2016) Day by day, supply
chains are getting increasingly more complex, more extended, and more global. An
event on one side of the world can stop the production or delivery of a service on
the other side. The event may be a natural or man-made cause, the event may be
large or small, but if the supply of a critical component or service is disrupted,
the consequences can be severely harmful to companies further along the supply
chain, both financially and in terms of reputation (Punter, 2013). 3. What is
Blockchain? Blockchain, the technology underlying bitcoin, is a type of Distributed
Ledger Technology that has been defined as a "distributed, shared, encrypted
database that serves as an irreversible and incorruptible repository of
information" (Wright, 2017). Nakamoto (2008) argued that bitcoin is a peer-to-peer
electronic cash system: "A pure version about peer-to-peer electronic cash exchange
that allows online payments from one side to other without any financial
institution". According to DTCC (2016), blockchain is both the network and
database, secure and integrate. The blockchain is able to build the transactions
based on rules defined mathematically and enforced mechanically. A technical
definition based on Linux Foundation is a peer-to-peer distributed ledger forged by
consensus, combined with a system for "smart contracts" and other assistive
technologies." Mougayar (2016) argue that blockchain is a kind of technology that
can record transactions in a secure and permanent way. It can save the all history
of the transaction without any risk. It is a networking technology, similar to
world-wide-web (www) that enables a decentralized exchange of data. In a wider
sense, blockchain is a distributed database (ledger), which maintains a
continuously growing list of timestamped and encrypted transaction records
organized in blocks, with each block being linked to a previous block, forming an
overview of the overview adapted on the figure 1 by Abeyratne & Monfarej 2016).
Figure 1: Overview of the proposed concept, adapted from Abeyratne & Monfared, 2016
4. What is behind blockchain? Mougayar (2016) also argues that smart contract is
the key technology that allows Blockchain application on several businesses. It is
a contract between parties that is coded and uploaded to the blockchain. The smart
contract does not rely on the third party authorities. All processes in dealing
with such contracts are automatically controlled. The clauses of a contract are
executed after all parties have accomplished their duties. This function removes
all ambiguity regarding the execution of contract conditions concerning the
existence of external dependencies. Smart contracts are simply computer programs
that execute predefined actions when certain conditions within the system are met.
According to Kakavand et al., (2016): "Smart contracts may make the negotiation
process and performance of a contract easier and more efficient. Usually, the
interface of a smart contract is clear and it imitates the logic of contractual
clauses. The main aim is to secure the contractual processes and reduce the cost
related to contracting". Swan (2015) describe a smart contract as one of the main
features of blockchain that enabling "trustless" transactions. This type of
transaction defines as validated, monitored and bilaterally enforced transactions
over a digital network. Smart contracts can incorporate multiple digital signatures
for necessary approval of participants. If the conditions of a smart contract
depend upon real-world data, systems called "oracles" can be implemented to monitor
and verify this data. Smart contracts are simply computer programs that execute
predefined actions when certain conditions within the system are met. Smart
contracts provide the language of transactions that allow the ledger state to be
modified. They
can facilitate the exchange and transfer of anything of value (e.g. shares, money,
content, property). The smart contract is signed by the parts to create a
transaction and place them into a block that will be saved immutably into the
Blockchain ledger on figure 2 by Szabo (1996) Figure 2: Blockchain and Smart
Contract - adapted from Szabo (1996) As the terms of a Smart Contract are executed
during a transaction, the blocks are created per the agreed upon business rules,
and the chain is constructed. Of particular importance, each block is digitally
verified against the clauses in a Smart Contract, thus assuring the sharing of, and
visibility into what becomes a "single version of the truth." (Amber Road, 2018)
Smart Contracts truly are the driving force behind blockchain for supply chain
because the business rules they contain are what assures that actual transaction
are carried out pursuant to the original agreement. Whether a Smart Contract
represents a product licensing agreement, bill of material requirements or some
other agreement between the parties, the sequencing of blocks in a transaction can
only take place if a given step in the process is consistent with the Smart
Contract. According to Linux Foundation (2018), a smart contract can be provided:
a. Autonomy: can be developed by anyone, no need intermediaries such as lawyer,
brokers or auditors b. Efficiency: removing process intermediaries often results in
significant process efficiency gains c. Backup: a Blockchain and smart contract
deployed to it can provide a permanent record, allowing for auditing, insight, and
traceability even if the creator is no longer in business d. Accuracy: replacing
human intermediaries with executable code ensures the process will always be
performed the same e. Cost saving: replacing intermediaries often provides
significant cost reduction 5. Applicability of Blockchain in supply chain The
Blockchain Trust Accelerator (2018) understands that blockchain is well suited for
use in supply chains in part because the technology has the potential to provide an
unprecedented level of transparency. Unlike traditional centralized databases,
Blockchain systems validate entries or changes in the ledger through a
cryptographic consensus mechanism, thereby circumventing the need for
intermediaries. This enables otherwise trust-less parties, such as individuals and
firms that do not know each other, to engage in near frictionless peer-to-peer
transactions. According to Kshetri (2018), blockchain applications are further
explained as a solution for trust issues in supply chains. Enthusiasts of the
decentralized application are therefore promoting an early adoption of the
technology for companies to stay competitive in the market. Multiple companies such
as Maersk (Jackson, 2017) and Walmart in cooperation with IBM (Popper & Lohr, 2017)
have started to plan the implementation of the technology by creating pilot
projects to achieve the benefits of the technology already at an early stage.
Furthermore, both Walmart and Maersk, have assured that a full version will be
ready to implement in the organizational operations in the near future (Popper &
Lohr, 2017). In the field of logistics, researchers see many possibilities for the
blockchain technology to improve for instance track, trace, and quality measurement
solutions. An example of a supply chain system can be demonstrated in the figure
below, where several kinds of information can be saved into Blockchain structure
support by smart contract (Gupta, 2018). According to Kshetri (2018), blockchain
applications are further explained as a solution for trust issues in supply chains.
Enthusiasts of the decentralized application are therefore promoting an early
adoption of the technology for companies to stay competitive in the market. The
figure 3 demonstrate an example of Blockchain applied on supply chain management to
track the product from the “farm to fork”, including examples of information added
on the smart contract and Blockchain recorded. Figure 3: Adapted from Harnessing
Blockchain in the SCM & Logistics Space - Gupta (2018) In general, the development
and implementation of blockchain solutions in supply chains are still at an early
stage. Thus, there are many opportunities for companies in the future when the
technology is further developed (Nowiński & Kozma, 2017). Particularly for the
improvement of collaboration between supply chain partners, the blockchain
technology could offer different solutions. Depending on context, different
definitions of traceability exist from organizations, legislation or researchers
(Aung and Chang, 2014). In a study on different traceability definitions, Olsen and
Borit (2013) conclude, "even in scientific papers there is a lot of confusion and
inconsistency" regarding the definition of traceability. The researchers' study
shows that scientific papers often use the ISO definition of traceability, and the
most commonly cited definition from academic sources is the definition from Moe
(1998) (Olsen and Borit, 2013). Besides the adoption of this technology in powering
cryptocurrency networks, there are open questions about where blockchain is headed,
when it will yield positive results, and who will benefit the most from it. What is
clear at this point is that blockchain applications may have one of the most
profound impacts on the logistics industry, especially the supply chain. Vipul
Goyal (2018), an associate professor at Carnegie Mellon University, states: "A lot
of companies are interested in blockchain for creating more efficient workflows,
but supply chain management is one of the big killer apps". Awaysheh & Klassen
(2010) identify transparency as the extent to which information is readily
available to both counterparties in an exchange and to outside observers. In a
supply chain context, transparency refers to information available to companies
involved in a supply network. Supply chain traceability leverages transparency to
operationalize organizational goals related to raw material origins and provide
context to a final product or service. Blockchain technologies indeed provide
increased supply chain transparency but more importantly create an immutable and
distributed aspect of the custody record by nature of the protocol, which lends
itself well to traceability applications. A very good opportunity to control the
inventory was presented during Blockchain Summit in April 26 th., in San Francisco
by Ernst Young (EY), where they demonstrated how the visibility of inventory can be
improved on supply chain management. The supply chain operations efficiency impacts
an organization’s competitiveness and is shaped by numerous factors. Information
sharing methodologies such as vendor managed inventory (VMI) create efficient
replenishment models without the need for traditional orders (Småros et al., 2003).
In theory, the blockchain can work, but supply chains are very hard to change and
adapt (Mougayar, 2016). Mougayar thinks, that companies spend years putting supply
chains in place and refining them. It is not very easy to insert a new technology
inside established supply chain systems because the integration challenges are not
to be underestimated." (Mougayar, 2016).
Supply chains are becoming increasingly heterogeneous and complicated due to a
growing need for inter- and intra-organizational connectedness, which is enabled by
advances in modern technologies and tightly coupled business processes [1,2]. To
cope with this dynamic environment and the increasing need to digitize supply
chains and enhance competitiveness, companies are applying novel technologies such
as the Internet of Things (IoT), cloud computing, business analytics, artificial
intelligence, machine learning, and Blockchain technology [3–5], as well as
innovative concepts such as the so-called physical Internet [6]. The multiplicity
of technologies, which are often simultaneously introduced, along with the ubiquity
of connected devices, often labeled as ‘smart’ devices or things, allow value chain
exchange (or trading) partners to reach new levels of effectiveness and efficiency
[7]. These technologies promise to reshape the modus operandi of modern supply
chains through enhanced data collection as well as information sharing and analysis
between collaborating supply chain stakeholders [8]. Moreover, they enhance
information transparency, leading to increased trust between the exchange partners
[9,10]. The impact of these technologies on supply chains constitutes a research
gap that is relevant for both practitioners and academics. IoT is defined as a
“group of infrastructures interconnecting connected objects and allowing their
management, data mining and the access to data they generate” [11] (p. 73). It
embodies the next phase Future Internet 2019, 11, 161; doi:10.3390/fi11070161
www.mdpi.com/journal/futureinternet Future Internet 2019, 11, 161 2 of 22 toward
mass digitization of supply chains to facilitate the so-called Industry 4.0 [12].
IoT encompasses devices such as sensors as well as passive, semi-passive (or semi-
active), and active Radio Frequency ID tags (RFID), and other electronics which are
connected over a network. Together, these technologies can perform numerous tasks,
including functions such as sensing activity, movement, or temperature; actuating
and collecting; processing, storing, and sharing data. For example, the food supply
chain is particularly sensitive to environmental conditions during transportation
and storage, such as light, humidity and temperature [13]. In the cold chain, time-
temperature measurements with sensor devices connected to a wireless sensor network
(WSN) can help to preserve the quality and safety of a food product and reduce the
risk of spoilage [14]. WSNs represent a network or system of connected sensors
which communicate to a base station through mobile networks such as 4G or GPRS
(General Packet Radio Service) and informs supply chain exchange partners in real-
time [14]. When the information is received, it can trigger an acceptance or
rejection of the shipment based on the temperature parameters preset in a smart
contract, which in turn can trigger payment if accepted. Moreover, when IoT-enabled
sensor devices connected to a WSN provide time-temperature alerts on a real-time
basis, an out of tolerance measurement (or a predictive out of tolerance
measurement) can trigger a mid-shipment corrective action and intervention by the
driver or shipper [8,9]. The growing economic importance of IoT reflects in its
steadily increasing industry adoption. With the convergence of information and
communication technologies (ICT) and machine automation, the use of IoT has become
more pervasive, especially in supply chains and logistics. This trend is
attributable to increased computational power and decreased costs of the connected
devices. The International Data Corporation (IDC) forecasts that by 2021, 20% of
the largest (G2000) manufacturers will depend on a secure infrastructure backbone
of embedded intelligence to automate large-scale processes and enhance the speed of
process execution by up to 25%. This backbone will mainly depend on IoT for
enabling controls and actuators to take autonomous decisions [15]. In 2017, there
was an estimated 5 billion IoT enabled devices, and this number is expected to
reach 29 billion by 2022 [16]. Global connectivity will contribute further to new
economic opportunities and business growth that may generate an additional USD 14
trillion in the global economy by 2030 [17]. Various researchers identified supply
chains and logistics as essential areas for deploying IoT [18,19]. IoT can improve
supply chain competitiveness through more effective tracking of the flow of
materials, leading to improvements in the effectiveness and efficiencies of
critical processes and timetables [20]. Within multi-exchange party supply chains,
IoT can help to facilitate the sharing of more precise and timely information
related to production, quality assurance, distribution and logistics [21–23].
Hofmann and Rüsch [24] posited an integrated solution for a Just-in-Time (JIT)
production line where RFID tags act to trigger an alert when a specific station is
empty. This warning signal notifies the supplier to replenish and deliver the stock
directly to the specific station. Moreover, the use of IoT applications inside the
production plant can increase the visibility of parts and processes, and by
extension, using IoT devices along the supply chain can help to boost productivity,
reduce operational costs, and enhance customer satisfaction [25]. Despite the
growing potential to apply IoT in supply chains, there are numerous challenges
ahead. For instance, IoT-related technical issues experienced when operating at the
ecosystem level, such as security, authenticity, confidentiality, and privacy of
all stakeholders [26]. From an IoT vulnerability perspective, practitioners and
scholars consider security to be the most critical issue [27–29]. Existing security
solutions are not well suited because current IoT devices may consume significant
amounts of energy and may have significant processing overhead [30]. Moreover,
problems such as counterfeiting, physical tampering, hacking, and data theft might
raise trust concerns among supply chain exchange partners [31]. Tzounis et al. [26]
(p. 42) therefore conclude that “IoT must be secure against external attacks, in
the perception layer, secure the aggregation of data in the network layer and offer
specific guarantees that only authorized entities can access and modify data in the
application layer”. Necessary safeguards must be developed to leverage the value
and enhance the trust of connected IoT devices in supply chains. For instance,
Blockchain technology now offers several potential solutions Future Internet 2019,
11, 161 3 of 22 to address known issues related to IoT. A Blockchain is a
distributed network for orchestrating transactions‚ value‚ and assets between
peers‚ without the assistance of intermediaries [32]. It is also commonly referred
to as a ‘ledger’ that records transactions [33]. Another way to view a particular
Blockchain is as a configuration of multiple technologies‚ tools and methods that
address specific problems or use cases [8]. With the adopting of Blockchain
technology, companies aim to enhance information transparency and improve trust in
their supply chains while supporting the interoperability among the networked
supply chain exchange partners. Blockchain technology has the potential to address
several known supply chain issues [34]. As a result, it has gained considerable
attention from scholars, firms, and technology developers who seek to combine IoT
with other technologies [35,36]. Currently, supply chains are undergoing an
evolutionary change through continued digitization. They are evolving into value-
creating networks where the value chain itself turns into a vital source of
competitive advantage. At the same time, developments are in progress to integrate
Blockchain technology with IoT solutions, leading to novel structures of modern
supply chains‚ new partnerships, as well as new ways of collaboration and value
creation across supply networks [37]. In this paper, we explore how companies can
leverage IoT in combination with Blockchain technology to streamline their supply
chains and value-creating networks. When combined‚ these enabling technologies will
help firms to overcome problems related to data acquisition and integrity, address
security challenges‚ mitigate traceability concerns, and reduce information
asymmetry. In the following section, we review IoT in the context of supply chain
usage and present various benefits and vulnerabilities. Subsequently, we discuss
the critical role of Blockchain technology in leveraging IoT-based supply chain
applications. In the final section, we make some concluding remarks and present
suggestions for future research. The propositions that we derive in this paper
extend existing academic literature by providing a structured foundation for
systematic research that investigates the combined impact of IoT and Blockchain
technology on modern supply chains.
This paper reviews the existing literature on blockchain technology, present some
trends and consider its potential in supply chain management (SCM). Blockchain
technology is claimed to be one of the most important and innovative technologies
developed in recent years (Peters and Panayi, 2015; Pilkington, 2016; PWC, 2015;
Swan, 2015). Blockchain is evolving from a secure monetary transaction system into
a part of an ecosystem of emerging technologies that include artificial
intelligence (AI), the Internet of Things (IoT), robotics and crowdsourcing, among
others. Together, these technologies represent the technical foundation of the
future of business activities (Deloitte, 2016; Dorri et al., 2016; Ferrer, 2016;
Omohundro, 2014). The technical foundation of blockchain supports various
businesses such as banking, trading, insurance, data protection, voting,
intellectual property, identity authentication, leasing and government service
(Atzori, 2017; de Meijer, 2016; Hope and Casey, 2015; Liebenau and Elaluf-
Calderwood, 2016; Peters and Panayi, 2015; Swan, 2015; Trautman, 2016; Yermack,
2017; Zyskind et al., 2015). The functions of blockchain technology, such as
protecting data integrity, instant sharing of the necessary information, as well as
programmable and automatic controls of processes, are likely to disrupt the
existing ecosystem by eliminating the need for many manual processes and
intermediaries. The WEF (2015) has characterized blockchain as one of the six
megatrends in computing likely International Journal of Physical Distribution &
Logistics Management Vol. 49 No. 9, 2019 pp. 881-900 © Emerald Publishing Limited
0960-0035 DOI 10.1108/IJPDLM-11-2018-0371 Received 8 November 2018 Revised 13 March
2019 16 June 2019 Accepted 10 July 2019 The current issue and full text archive of
this journal is available on Emerald Insight at: www.emeraldinsight.com/0960-
0035.htm 881 Potential of blockchain technology in SCM to shape the world in the
next decade. Blockchain technology is considered to be the biggest innovation in
computer technology (Tapscott, 2017). Blockchain technology helps avoid conflicts
that occur when multiple modifications are made simultaneously from different
computers within a distributed database (Peters and Panayi, 2015). Distributed
databases are comparable to blockchains as both systems rely on multiple computers
for operations and for maintenance procedures. Global trade relies on physical
documents such as letters of credit (LC) and intermediaries involved in such
activities ensure smooth functioning of trade. Blockchain technology is likely to
transform the global supply chain platform by eliminating intermediaries/brokers
and the process of physical verification of documents. One of the primary
objectives of SCM is to reduce risk. Relational risks in collaboration is a major
risk where a business partner engages in distorting information for an opportunity
(Bettis and Mahajan, 1985; Thomas and Baird, 1990). Logistics services often play a
key role in a firm’s ability to deliver value to customers (Mentzer et al., 2001).
Blockchain technology is expected to provide value to SCM in three areas: smart
contracts, supply chain finance, and increased visibility and traceability of a
supply chain (Kshetri, 2018). This paper reviews articles published through the end
of December 2018 to identify sectors/industries where blockchain technology has
been used or has the potential to be useful. The analysis considered the frequency
of keywords used, journals that published such articles, disciplines covering
research and industries where it has been adopted or are in the process of being
adopted. The remainder of the paper is organized as follows: the second section
presents a review of the relevant literature on blockchain technology. The third
section discusses the motivation behind this research and presents the key research
questions discussed in the study. The fourth section provides analyses and is
followed by implications for SCM professionals in the fifth section. The sixth
section concludes the discussion. Literature review The literature review is
divided into six sub-sections. The first talks about the genesis of blockchain
technology, the second covers blockchain technology itself. The third sub-section
discusses the significance of blockchain technology and the fourth discusses the
applications of blockchain technology. The fifth sub-section explains the smart
contract and the last sub-section illuminates the key role of blockchain technology
in SCM, and its importance and usefulness in business. Genesis The first known
experiments with Cryptocurrencies occurred in the Netherlands in the mid-1980s.
However, Cryptocurrencies became better known with the introduction of bitcoin in
2008. This was the brainchild of someone who published it in the pseudonym of
Nakamoto (2008) and has not been identified yet (Fiorillo, 2018). A user wishing to
participate in the bitcoin network must download and install the bitcoin core
client (Farghaly, 2014). A bitcoin client sets the user’s computer up as a node on
the network. Network discovery is an important role performed by each node.
Finally, each node becomes a block into the public ledger and a series of nodes
from blockchain (Meiklejohn et al., 2013). The data structure of bitcoin’s ledger
is borrowed with minimal modifications from a paper written by Haber and Stornetta
(1997). The origin of blockchain can be traced back to the 1990s when there was a
need to time stamp every digital transaction to avoid tampering with documents.
Haber and Stornetta (1991) addressed the problem of time stamping of documents by
building a “digital notary.” Bitcoin borrowed the data structure from Haber, and
Stornetta and re-engineered its security properties. Later, Bayer et al. (1993)
highlighted that links created between documents using hash pointers are simpler
and faster to compare with multiple other documents. Incidentally, Benaloh and Mare
(1991) independently introduced these same three ideas shortly before the Haber and
Stornetta (1997) paper. 882 IJPDLM 49,9 Blockchain technology Blockchain technology
distributes the storage, organization and verification of hash pointers to a group
of computers as opposed to storing them in a central database of an enterprise
resource planning (ERP) system. This mechanism reduces the risk of failure at a
single point (Peters and Panayi, 2015). The blockchain functions as a layer
supplementing existing ERP software. For example, provenance is a digital
enterprise platform that allows businesses to make their products and supply chains
more transparent and traceable through blockchain technology since 2013. It helps
businesses to be transparent on three levels: business level, product level and
item level. Provenance (2015) enables businesses to easily collate data, open data
and verify key information on an immutable data ledger. “Provenance has completed a
six month pilot for tracking responsible sourcing of tuna in Indonesia via
blockchain” (Laaper and Fitzgerald, 2017). A blockchain is a chain of
interconnected encrypted blocks. Creating a block is like writing with a marking
pen and distributing the pieces like a jigsaw puzzle, which cannot be altered or
deleted without breaking the chain on a network. A blockchain is designed to
operate with little human intervention, unlike an ERP or database system that
requires intensive human effort (Peters and Panayi, 2015; Swan, 2015). Blockchains
have evolved in three phases since 2009 in Phases 1.0, 2.0 and 3.0 (Swan, 2015).
Blockchain 1.0 focused on the trading of cryptocurrency. The functions of digital
money transfer, remittance and payment comprise a new ecosystem: “internet of
money” (Peters and Panayi, 2015). The bitcoin blockchain was the first phase known
as distributed open source ledger. “Money is Memory” was a similar idea put forward
by Kocherlakota (1998). However, the paper titled “Bitcoin: a peer-to-peer
electronic cash system” (Nakamoto, 2008) popularized the term block and its use has
been increasing ever since. Blockchain 2.0 involved a similar trading mechanism,
but with a much broader scope of financial applications. A new type of application
called a “Smart Contract” (Swan, 2015) was introduced in the second generation of
blockchain to expand trading from a simple digital currency to a large variety of
products. Blockchain-based smart contracts are computing programs operating on a
blockchain that autonomously verify, enforce and execute the terms of contracts
(Peters and Panayi, 2015; Zhang et al., 2016). Significance Blockchain technologies
and cryptocurrencies have attracted much attention in recent years (Radziwill,
2018). Blockchain is an emerging digital technology with the potential to push
organizations to rethink their strategies and capabilities (Schatsky and Muraskin,
2016). The most significant impact of blockchain technology is within the walls of
organizations (Schneider et al., 2016). A blockchain database is an immutable
ledger of transactions which is not maintained by a centralized authority and
provides proof of transactions without the need for authentication (Swan, 2015). A
blockchain supports several functions such as distributed storage and listings,
transactional validity, transactional persistence, transactional anonymity based on
multiple networks for transactions (Reid and Harrigan, 2011), transactional privacy
and traceability. Moreover, transactions can be validated almost instantly through
services such as “proof of service” (Duffield and Diaz, 2015), the “ripple protocol
consensus algorithm” (Schwartz et al., 2014) and “proof of stake” (Buterin, 2013).
The elimination of a central authority to validate transactions improves
efficiencies and reduces transaction costs. Similarly, the transfer of payment
between buyer and seller
is recorded in a common secure ledger (Hart and Holmstrom, 1986). Honeywell
launched its online buying and selling platform for new and used aircraft parts
using blockchain technology. Honeywell is the first to leverage a blockchain to
build trust between the buyer and seller (Petersson, 2019). 883 Potential of
blockchain technology in SCM Applications Smart contracts allow for the encoding of
rules and situations that are agreed upon by various trading parties. These
contracts autonomously execute pre-specified tasks, or settle a contract, by
examining changing conditions in conjunction with the contract’s embedded rules.
The execution and monitoring of contracts mainly rely on a trusted central
authority. Blockchain-based smart contracts decentralize the enforcement power to
each node in the network. This function of a blockchain helps to reduce the risk
between trading partners (Kiviat, 2015). Venture capital funded startups such as
Skuchain, a supply chain firm, are creating blockchain-based products to address
inefficiencies in business-to-business trade and supply chain finance (Kiviat,
2015). Smart contract The idea of smart contracts was proposed by Szabo (1994).
This term was used because the author saw them as analogous to legal contracts with
the ability of automated enforcement. Szabo (1994) presented a smart contract as an
extension of a digital-cash protocol and also recognized that Byzantine agreements
and digital signatures could be used as building blocks of smart contracts.
However, this view has been critiqued by Levy (2017). The blockchain network will
automatically stop the smart contract from moving along if a violation of the
covenant is detected, thereby limiting the potential of any further damage/loss.
Blockchain in supply chain management The use of blockchain technology outside
finance has been largely experimental. Some of the most promising non-finance
applications of blockchain technology are expected to include those in SCM, power
and food/agriculture. These areas are suitable fits for using blockchain technology
and are likely to deliver a return on investment at an early stage of blockchain
deployment. For example, dispatching roses from Kenya to Holland reportedly creates
a 25-centimeter high pile of paperwork which would be eliminated by this technology
(Lehmacher, 2017). A blockchain can make tracking items and transactions in the
supply chain radically faster and simpler by an estimated 85 percent when used in
conjunction with IoT technology, cutting administrative and logistics timelines in
shipping (Laaper and Fitzgerald, 2017). Researchers have noted that blockchain and
IoT blend is a powerful combination and is set to transform many industries
(Christidis and Devetsikiotis, 2016; Kshetri, 2018). A likely application of
blockchain technology is verifying sustainability. A blockchain can be used in SCM
to identify the players performing every action. The blockchain facilitates valid
and effective measurement of the outcomes and performance of the key SCM processes.
Once the input tracking data are on a blockchain ledger, they are immutable. Other
suppliers in the chain can also track shipments, progress along the way and
deliveries (Mishra et al., 2018). For example, “Australia’s largest 100% family-
owned meat processor, Thomas Foods International, and largest independent grocery
retailer, Drakes Supermarket have signed on as members of the blockchain-based food
ecosystem IBM Food Trust. The two South Australian organizations are the first in
Australia to pilot IBM Food Trust using the IBM Blockchain Platform, reducing
traceability times from three days to three seconds” (Pauka, 2019). In this way,
blockchain produces trust among suppliers. By eliminating intermediaries, the
efficiency of auditing can be improved and costs can be lowered. Individual
suppliers can perform their own checks and balances on a real-time basis (Koetsier,
2017). The blockchain also provides an accurate method of measuring product quality
during transportation. The shipping industry is increasingly looking to streamline
global supply processes by implementing the blockchain platform. The reason for
this is that 90 percent of goods in global trade are carried by ships and 884
IJPDLM 49,9 shipping transactions often involve dozens of people and organizations,
generating more than 200 different interactions and communications among them
(Allison, 2018). Most shipping transactions involve sales contracts, charter party
agreements, bills of lading, certificates of origin, port documents, LC and many
other documents related to a vessel and its cargo. The internet facilitates the
digital exchange of documents, but this occurs bilaterally and therefore still
causes delays along the supply chain. Moreover, 80 percent of shipping
documentation is still in paper from Southurst (2016). Shipping companies using
blockchain technology would be able to upload and share documents instantaneously
and securely. This would allow every participant to track and manage the shipment’s
progress and documentation from start to finish, increasing efficiency and
transparency, while simultaneously reducing costs and the risk of documents being
delayed, misplaced or tampered with (Kshetri, 2018). For example, Zim, an Israeli
shipping company, has wrapped up the first pilot of paperless bills of lading based
on blockchain technology. The application is free for shippers, importers and
traders, and requires no IT or operational changes. Prior researchers have noted
various key objectives of the supply chain. They include cost, quality, speed,
dependability, risk reduction (Bettis and Mahajan, 1985; Thomas and Baird, 1990)
sustainability (Bowen et al., 2009) and flexibility (Dinnin et al., 2009; Goldbach
et al., 2003; Kovacs, 2004; Meyer and Hohmann, 2000; Rao and Holt, 2005; White,
1996). Global supply chains are complex and face multiple uncertainties (Manuj and
Mentzer, 2008). The blockchain technology can be deployed without the need for
devices to read hardware or having to attach tags to cases or pallets unlike many
other IoT systems such as RFID, smart fleet management and intelligent
transportation systems. However, it is not clear which industries have adopted this
technology or are moving in that direction. This led to the review of existing
academic literature to see the current trends. The next section will describe the
research design that was followed for this study.
Although trust has been considered one of the key success factors in supply chain
management (e.g., Brinkhoff et al., 2015; Kwon & Suh, 2004), in recent years,
global supply chains B Mehrdokht Pournader medo.pournader@unimelb.edu.au Kongmanas
Yavaprabhas dean.yavaprabhas@unimelb.edu.au Stefan Seuring seuring@uni-kassel.de 1
Department of Management and Marketing, The University of Melbourne, Level 10, The
Spot, 198 Berkeley Street, Melbourne, VIC 3010, Australia 2 Chair of Supply Chain
Management, Faculty of Business and Economics, The University of Kassel, Kassel,
Germany 123 50 Annals of Operations Research (2023) 327:49–88 across numerous
industries have experienced the issue of trust deterioration (Guenther, 2020). This
is despite the fact that across industries, CEOs and executives unanimously believe
maintaining and increasing trust in supply chain relationships is at the core of
successful supply chain operations (Rajah, 2019). To address this concern, supply
chains globally have started embracing technology-based, trust-building remedies,
such as blockchain technology (Sneader & Sternfels, 2020). Due to its capability to
enhance information authenticity and transparency, blockchain is believed to have
the promising potential to radically transform the supply chain trade paradigm into
a trusted ecosystem of exchange. Moreover, and accelerated by the recent COVID-19
disruption to supply chains, blockchain-enabled trusted supply chains have
triggered interest from academics (Nguyen et al., 2020). Academic literature has
therefore initiated investigations into how to build trust through blockchain
technology (e.g., Howson, 2020) and address the following question: How can
blockchain technology impact trust in supply chain management? While one group of
academic thought leaders argue that the execution of blockchain will enable firms
to trade in a trustless ecosystem where there is no need for building trusted
relationships between trading partners (e.g., Asante et al., 2021; Kumar et al.,
2020), others believe that blockchain will enhance trust between supply chain
partners and create a trusted ecosystem of exchange (e.g., Centobelli et al., 2021;
Di Vaio & Varriale, 2020). Caldarelli et al. (2020) explicitly stated that early
blockchain literature believed that blockchain is a means for creating trust, but
more recently, scholars seem to focus on blockchain capabilities to enable
transactions performed in a trustless environment. Likewise, while some academics
show that blockchain installation can generate trust which will subsequently add to
a trusted relationship between trading parties (Joo & Han, 2021), others believe
that trust generated from the blockchain cannot directly transfer into trading
partners, and trust management between parties is still required (Kopyto et al.,
2020). Whether these seemingly contrasting views can converge to a single trust-
based framework for application of blockchains to supply chains is what we are
aiming to address in this paper. To date, there has not been a comprehensive review
that synthesizes the state-of-the-art body of knowledge regarding blockchain
implications on trust for supply chain management. The current study aims at
filling this gap by conducting a systematic literature review of blockchain and
trust in supply chains. We initially use the three dimensions of trust from
management research, namely the trustor–trustee perspective, a form of trust, and
temporal orientation, as a framework for content analysis. We adopt a combination
of inductive and deductive approaches to analyse content and gain insights from our
selection of 94 relevant academic publications published between 2018 and 2021.
Subsequently, we developed a three-step trusted ecosystem model of the blockchain-
based supply chain that demonstrates how trust is formed by adopting blockchain to
supply chains and disseminating to other supply chain stakeholders. The proposed
models are developed in three variations to consolidate and converge the
aforementioned contradicting views of blockchain application to supply chains as
well as making a case for swift trust formation under certain circumstances in
supply chains. The remainder of the paper is organized as follows: first, we
provide an overview of the literature on the definitions and assessment of trust in
supply chains as well as a theoretical background of three dimensions of trust
leading to Sect. 3, where we outline the underly- ing methodology. In Sect. 4 we
discuss the outcome of the literature review regarding the blockchain implication
on trust in supply chains and subsequently develop three models of the blockchain-
entrusted supply chain. Our contributions to theory and practice are outlined 123
Annals of Operations Research (2023) 327:49–88 51 in Sect. 5. Finally, we provide
the conclusion of this study and several avenues for future research in Sect. 6. 2
Conceptual foundation Blockchain is a decentralized network system comprising a
number of blocks, each of which is capable of storing and sharing real-time,
encrypted digital information to other blocks within the network (Nakamoto, 2008).
By perceiving each supply chain member as a block, hypothetically, every
participant is allowed to know “who is performing what actions in which location
and at what time” in real-time (Crosby et al., 2016). With this exceptional
characteristic, blockchain equipment is projected to bring the superiority of
system security and information visibility to supply chain operations (Carson et
al., 2018). During the past three years, numerous comprehensive reviews of
blockchain technology and its application to supply chains have been conducted
(e.g., Chang & Chen, 2020; Luo & Choi, 2021; Müßig- mann et al., 2020; Pournader et
al., 2020b; Saberi et al., 2019; Wang et al., 2019a). While we refer the readers to
these reviews for an in-depth discussion of blockchain application to sup- ply
chains, in this section we primarily focus on the literature on trust and trust
dimensions, to be adopted as a core framework in the following sections. 2.1 Trust
in supply chain management Trust has been considered at the core of relationship
management between supply chain part- ners (e.g., Brinkhoff et al., 2015; Kwon &
Suh, 2004). As the relationship between supply chain partners is often fragile and
involves a certain level of risk in terms of opportunis- tic behaviour, there is a
need for trust to bind these relationships and manage those risks (Spekman, 1988).
When supply chain members possess a high level of trust in one another, they are
likely to feature positive attributes including greater collaboration (Ha et al.,
2011), operational efficiency (Ha et al., 2011), responsiveness (Handfield &
Bechtel, 2002), innova- tiveness (Fawcett et al., 2012), flexibility and agility
(Kabra & Ramesh, 2016), and resilience (Jain et al., 2017). Trust is defined in the
extant literature as “a willingness to be vulnerable” (Mayer et al., 1995), “the
extent to which a person is confident in, and willing to act on the basis of, the
words, actions, and decisions of another” (McAllister, 1995), “the willingness to
be vulnerable under conditions of risk and interdependence” (Rousseau et al.,
1998), and “confident positive expectations regarding another’s conduct” (Lewicki
et al., 1998). It is noticeable that from multiple proposed definitions, trust
always involves at least two actors, a trustor who is in a vulnerable position
through risks and interdependence, and a trustee who is entrusted and can take
advantage of the trustor by not fulfilling his or her expectation. Trustor and
trustee entities can vary as trust can be bestowed upon an individual (McAllister,
1995), an organization (Kramer, 1999; Zaheer et al., 1998), political institutions
(Kim, 2005), and other objects. Extending the latter definitions of trust to supply
chains, the willingness to be vulnerable occurs when one entity (trustor) agrees to
have confidence in the behaviours or actions of another entity (trustee) and has an
expectation that the trustee will fulfill their obligations independent of the
trustor’s ability to monitor or control such behaviours. 123 52 Annals of
Operations Research (2023) 327:49–88 2.2 Dimensions of trust Existing literature
indicates that trust primarily consists of three dimensions, namely the pairs of
trustor–trustees (Janowicz & Noorderhaven, 2006), forms of trust (Laeequddin et
al., 2010), and time orientation (Dubey et al., 2019). Collectively, these
dimensions should further clarify “who” the trustor and trustee roles are in supply
chains, as well as the forms of trust that are bestowed upon them. (1) Trustor–
trustee perspective. Trust involves at least one trustor and one trustee entities,
such as a buyer and a supplier. It is crucial to determine who the trustor and
trustees are before conducting a trust investigation. Janowicz and Noorderhaven
(2006) suggested that a change in a pair of trustors and trustees in supply chains
can lead to the need for variation in the approaches for trust assessment. For
instance, the conceptualization and assessment of interorganizational trust between
supply chain partners (e.g., Capaldo & Giannoccaro, 2015; Janowicz & Noorderhaven,
2006) varies from the trust external consumers place on supply chain management and
members (e.g., Hoejmose et al., 2012; Macready et al., 2020). (2) Form of trust.
Trust in supply chain management has variations in its form (Laeequd- din et al.,
2010). Although forms of trust are represented in different names in previous
studies in the management arena, they seem to be grounded on the three rudimentary
cate- gories namely institution-based trust, cognition-based trust, and affect-
based trust (Lewis & Weigert, 1985; Rousseau et al., 1998; Wong et al., 2008).
These three fundamental forms of trust in management research
can be adopted for discussing the trust element in supply chains. Institution-
based trust or system-based trust refers to the trust that emerges from formalized
arrangements and control mechanisms which normally manifest in the form of legal
sys- tems, regulations, bureaucratic sanctions, and contracts and agreements
between two parties (Lewis & Weigert, 1985; Wong et al., 2008). As institutional
trust can help deter a party’s opportunistic behaviour due to law and reputational
sanctions, a trustor is likely to bestow a higher level of trust on a trustee in
the presence of such arrangements and control mechanisms (Rousseau et al., 1998).
Cognition-based trust or rational trust refers to trust that involves high
rationality and low emotionality through which a trustee shows “good reasons” and
evidence to justify their intentions to perform an action which the trustor
perceives as beneficial (Lewis & Weigert, 1985; Wong et al., 2008). Basically, a
trustor bestows this type of trust based on their calcu- lation of the costs and
benefits as well as their prediction of the outcomes and the possibility that a
trustee will complete their obligations as agreed (Doney & Cannon, 1997).
Therefore, credible information from trustees regarding their competencies and
intentions is paramount in the formation of cognition-based trust (Rousseau et al.,
1998; Wong et al., 2008). Affect-based trust or emotional trust is signified by
high emotionality and low rationality. It refers to the trust that involves
affectional bonds and attachment between the trustor and trustee (Lewis & Weigert,
1985; Rousseau et al., 1998). McAllister (1995) also indicated that a trustor may
manifest this type of trust by showing intention to provide extra help and
assistance to a trustee without gaining anything in return. Affect-based trust is
typically considered as traditional trust between partners within supply chains
(Wong et al., 2008). (3) Temporal orientation trust. In management research, there
is a specific type of trust that can be built rapidly in certain conditions, in
contrast to traditional trust that develops over the long term (Meyerson et al.,
1996; Robert et al., 2009). Long-term versus swift trust-building practices are
included within the domain of temporal orientation. Originally coined by Meyerson
et al. (1996), swift trust is a specific type of trust that can be established 123
Annals of Operations Research (2023) 327:49–88 53 Table 1 Summary of trust
dimensions, descriptions, and categorizations Trust dimensions Description
Categories Trustor–trustee perspective Identify two actors of trustor and trustee
Form of trust Identify different forms of trust bestowed from trustor to trustee
Institution-based trust Cognition-based trust Affect-based trust Temporal
orientation Identify the required time and situation in which trust can be
developed Swift trust Long-term oriented trust rapidly for a temporary group of
people or entities to accomplish task-specific objectives in a short period of
time. It normally stems from the combination of current circumstances and
conditions evaluated by the trustor including group members’ reputations, assigned
responsibilities, consistent information exchange, and committed norms, and rules.
Swift trust has recently gained the increasing attention of supply chain scholars
interested in increasing supply chain coordination and agility (e.g., ; Dubey et
al., 2019). At the other end of the spectrum, long-term oriented trust is the
conventional concept of trust that is built over a certain period of time. Long-
term developmental trust typically requires a combination of different forms of
trust (Rousseau et al., 1998). A summary of three dimensions of trust and the
categories in each dimension adopted from management research are provided in Table
1.
Within the scope of the circular economy, which is born as the opposite of the
linear economy, using blockchain technology brings to mind two important concepts;
sustainability and digitalization (WBGU, 2019). Considering the activities in the
chain where the raw material is taken, processed and transported to the customer,
blockchain technol- ogy, which is included in the dimension of digitalization, has
the quality to contribute to the efficiency of the resource used in this chain. The
circular economy, which was put forward to prevent production by using resources
continuously before they run out, is an important po- tential for sustainable
development with its ability to reduce waste and increase resource use (Korhonen et
al., 2018). Along with the developing technologies, the key point for the adoption
of these capabilities in businesses has been defined as blockchain technology
(Kouhizadeh et al., 2019a). In line with these explanations, the concepts of
sustainability-circular economy-blockchain technology are intertwined and can be
considered as developments that add value to each other. Businesses agree that the
adoption of the circular economy and, in practice, are clearly linked to
digitalization, as it can make it easier to monitor the product phases throughout
the product lifecycle (Chauhan et al., 2022). Efficiency-oriented operation is
maintained by paying attention to the use of products and materials in the entire
supply chain line. The circular economy also effectively manages the value chain
for waste reduction and disposal at the end of use (Lacy et al., 2020), aiming to
keep products and outputs in circulation for the longest time while preserving
their value (Bocken et al., 2016). Undoubtedly, it is block- chain technology that
contributes to this management, and with its traceability feature, it provides the
opportunity to improve by correcting the errors that can be encountered at every
stage. Addressing supply chain-driven challenges such as product traceability,
material flow, and supplier collaboration is particularly critical to accelerating
the adop- tion of the circular economy (Erol et al., 2022). Since the point
mentioned in this whole flow is the TBL dimensions of the concept of E-mail
address: eyontar@tarsus.edu.tr. Contents lists available at ScienceDirect Journal
of Environmental Management journal homepage: www.elsevier.com/locate/jenvman
https://doi.org/10.1016/j.jenvman.2022.117173 Received 20 October 2022; Received in
revised form 20 December 2022; Accepted 27 December 2022 Journal of Environmental
Management 330 (2023) 117173 2 sustainability, blockchain technology, circular
economy and sustain- ability can be carried out together. In response to increasing
competi- tion, limiting the use of unlimited resources and ensuring productivity
have pushed businesses away from linear economy to circular economy where recycling
is also important (Bocken and Antikainen, 2018). The idea that blockchain
technology will contribute to this impor- tance with the increasing importance of
agriculture and food with climate change and resource scarcity is the main subject
of the study. In this direction, the most basic study that should be focused on in
the agriculture-food supply chain management line is the parameters of productivity
in the product flow and prolonging the product life cycle. For this purpose,
businesses advocate the combination of digitalization and circular economy
transformation (Ajwani-Ramchandani et al., 2021), while the circular economy
targets the 3 R (Reduce, Reuse and Recycle) strategy (Ellen MacArthur Foundation,
2013) blockchain in the agri-food chain. It is thought that the use of technology
will provide benefits in many ways to promote sustainable production and con-
sumption. Blockchain technology is recognized as an efficient and cost-effective
technology to control the relationships between multiple employees in a reliable
and decentralized way using smart contracts (Nesarani et al., 2020). It can
transform every step of the supply chain, from raw material supply to distribution
to consumers in the agri-food line. With the transparency principle of the
stakeholders in the supply chain (Min, 2019), the effective execution of the
information flow (Litke et al., 2019); providing consumers with reliable
information about the product (Sadouskaya, 2017); minimization of costs (Chang et
al., 2019); improving carbon emissions with optimum transport management; It is in
a position to contribute significantly to optimum time management (Tijan et al.,
2019) and sustainability by potentially improving the environment. One of the most
important reasons why blockchain tech- nology has attracted great interest in
supply chain management is that it provides a solution to the trust problem between
stakeholders. The aim of this study is to research, analyze and interpret the
critical success factors of the use of blockchain technology in the flow of agri-
food supply chain management on the way to the circular economy. Considering the
existing studies, this study aims to answer the following research questions in
order to create sustainable agri-food supply chain management. RQ1. What are the
various political and technological factors when considering blockchain technology?
RQ2. What are the economic, environmental and social factors in decision making for
a sustainable system? RQ3. Is blockchain technology considered within the scope of
circular economy in line with the determined factors? RQ4. Does blockchain
technology for the agri-food sector contribute to the circular economy? RQ5. In the
general framework, how can blockchain technology be ranked according to the
importance of factors in performance improvement? To answer these identified
research questions, the objectives of this study are as follows. − To identify
various factors under the political, economic, social, technological, environmental
and legal dimensions of blockchain technology for agri-food supply chain management
within the scope of circular economy using PESTEL analysis approach. − To
investigate the interrelationships between various factors under PESTEL dimensions
of blockchain technology in circular economy dimension using Analytic Network
Process (ANP). − To sort and compare the factors classified in PESTEL dimensions
according to their importance levels with the ANP-MultiAtributive Ideal-Real
Comparative Analysis (MAIRCA) method. Other parts of the study proceed as follows;
In Section 2; the rela- tionship between circular economy-agri-food supply chain
management and circular economy-blockchain technology is emphasized and a detailed
literature review is given. In Section 3, the theoretical infor- mation of the
necessary applications (PESTEL-ANP-MAIRCA Methods) for critical success factors of
blockchain technology in agri-food supply chain management is given. Findings as a
result of the application of the methodology determined in Section 4 are included
and the results are shared. In Section 5, under the title of discussion and
managerial im- plications, applicable inferences are given by making comparisons
with the literature. In the last section, the results of the research are included
and evaluated in a general framework and suggestions for future studies are
presented. 2. Literature review In this section, the relationship between the
circular economy and agriculture-food supply chain management is explained, and the
liter- ature is highlighted by emphasizing the advantages of circular economy and
blockchain technology. 2.1. Circular economy - agri-food supply chain management In
the circular economy perspective, the agri-food sector is one of the key sectors
that needs action to adopt sustainability principles (Poponi et al., 2022). More
than 860 million people are malnourished today, with food waste along the supply
chain accounting for about one-third of the food produced. While the habit of
wasting food contributes to more than 1.3 billion tons of waste annually (FAO –
Food and Agriculture Organization of the United Nations, 2021), rotten and spoiled
food also contributes to climate change, releasing 3.3 billion tons of greenhouse
gas emissions (FAO – Food and Agriculture Organization of the United Nations,
2021). Food waste is not only an environmental and social problem, but also a
significant economic loss (Ponis et al., 2017), because this loss and waste costs
the global economy $936 billion annually (FAO – Food and Agriculture Organization
of the United Na- tions, 2015). From sustainable agricultural practices, efforts to
reduce or transform food loss have made the circular economy presence felt in the
sector. Circular economy and agri-food supply chain management means minimizing the
waste and greenhouse gas emissions produced at various stages of the supply chain
(Baratsas et al., 2021). In this context, the Sustainable Development Goals (SDG)
established by the United Nations come to the fore with their approaches to food
and offer countries to implement these goals. Many of these goals also cover cir-
cular economy and agri-food practices. Of these, SDG 2 aims; It aims to end hunger,
ensure food security and improve nutrition, and promote sustainable agriculture.
SDG 12 aims to increase sustainable production and consumption, increase resource
use efficiency, and eliminate food loss through recycling and reuse. SDG 7 for
cleaner and renewable en- ergy sources; SDG 13 for climate change is one of the
objectives asso- ciated with the circular economy (Barros et al., 2020). Fassio and
Tecco (2019) conducted a comprehensive analysis of 40 case studies evalu- ating the
effectiveness of various circular economy actions for the integration of SDGs into
food systems. The circular economy, by defi- nition, is an important starting point
for the food industry in protecting the environment
and optimizing resources. In the circular economy methodology, the aim is to
preserve the usefulness and value of the products in the supply chain line through
the application of different principles (Nandi et al., 2021) includes management.
In this way, it aims to preserve the concept of value in the cycle for a long time
by ensuring the efficient flow of resource use throughout the product life cycle.
It is an economy that can find a place for itself in all areas of the line within
the circular economy supply chain management, and that can keep the intrinsic value
of the resource at high levels from raw material supply to product recycling. A
review of the existing literature reveals that the agri-food sector and circular
economy are important. E. Yontar Journal of Environmental Management 330 (2023)
117173 3 Matching the circular economy with food loss and waste, De Oliveira et al.
(2021), about food losses and wastes with solutions based on cir- cular economy
parameter; Zhang et al. (2022) revealed a systematic analysis by searching
scientific publications that food waste manage- ment is a prominent theme in
connection with the circular economy and Yousefi et al. (2021a) researched
wastewater. In order to prevent water pollution for food waste, environmentally
friendly studies are carried out (Yousefi et al., 2021c). At the same time,
Kusumowardani et al. (2022) stated that the circular economy is a suitable tool for
firms to reduce food loss and waste. They explored how to use the circular economy
in practice by examining manufacturers, distributors, and re- tailers in the agri-
food supply chain. Addressing the traceability study in addition to food waste,
Anastasiadis et al. (2022) explored the role of traceability in the transition to
sustainability-focused circular agri-food supply chains. As a result of Delphi
research, a change at the consumer level drives changes in the supply chain and
ultimately at the company level. In this context, Baratsas et al. (2021) presented
a new circular economy systems engineering framework and decision-making tool for
modeling and optimizing food supply chains. According to Poponi et al. (2022)
created an indicator template to guide decision-making pro- cesses and strategies
that can be used at various spatial levels to drive the agri-food sector towards a
circular economy and sustainable devel- opment. Again, Van Schoubroeck et al.
(2022), similarly, defined and listed a set of indicators to monitor the cyclical
food economy within the food system. In studies addressing food safety, Lavelli
(2021) developed management solutions by discussing the impact of the increasing
complexity of circular supply chains on food safety. He emphasized that the
management system within a circular supply chain should be implemented by involving
all trading partners and stakeholders to ensure high transparency, connectivity and
efficiency. According to Prajapati et al. (2022) developed a framework for a
virtual closed-loop supply chain based on the concepts of sustainability and
circular econ- omy, as well as blockchain and IoT technologies. In order to
eliminate the ecological problem of water pollution and to save energy con-
sumption, Yousefi et al. (2021b) discussed chemical problems in their study. Mahdi
et al. (2022) achieved gains with environmentally friendly practices. 2.2. Circular
economy-blockchain technology The irrelevant need of the circular economy for the
agri-food supply chain has brought useable features of technology as well. One of
them is blockchain technology, which is an important factor in achieving the
circular economy. Blockchain, with its decentralized structure and fea- tures such
as reliability, transparency, smart contracts and traceability, increases the
performance of supply chain management (Groening et al., 2018). This has attracted
businesses considering a circular economy, with data being secure, hack-proof, and
a reputation for transaction transparency. Blockchain technology is a distributed
and decentralized ledger system that ensures the integrity of transactions (Bambara
and Allen, 2018). Thanks to this distributed structure and decentralization, blocks
are included in the system with high-level encryption when a certain transaction is
performed, preventing forgery. With their trace- ability and transparency features,
they can optimize resource use and significantly reduce waste by tracking products
and materials throughout the entire supply chain management, from raw material
purchase to customer recycling processes (Bocken et al., 2016; Upad- hyay et al.,
2021). On the other hand, they contribute to the increase of productivity by
accelerating the process processes on the supply chain. Since achieving a circular
economy is among the SDG and the common goals of countries, blpckchain technology
is in a position to facilitate the decision-making mechanisms of the stakeholders
along the chain. The current literature provides the positive link between the
circular econ- omy and blockchain technology. Helo and Hao (2019) focused on the
potential of the circular econ- omy with blockchain technology within the supply
chain. At the same time, Upadhyay et al. (2021) explored the potential
applicability of blockchain to improve the circular economy. They stated that this
technology will contribute to the circular economy by reducing trans- action costs
and increasing communication. Ajwani-Ramchandani et al. (2021) also presented
applications on their effects on social, environ- mental and economic welfare in
his study. Kouhizadeh et al. (2020) advocated circularity, which has important
implications for increasing resource efficiency of the distributed structure of
blockchain technology. Centobelli et al. (2022) examined the trust, traceability,
and trans- parency factors that affect blockchain technology within the strategies
of the circular economy in supply chains. Huang et al. (2022) aimed to develop a
framework that evaluates the critical success factors of blockchain technology
implementation for a circular supply chain management. Wolf et al. (2022) explored
the adoption of blockchain technology applications that can help companies
implement business models of the circular economy. On the other hand, Erol et al.
(2022) explored the barriers to adopting the circular economy. It proposes an
integrated decision framework that includes the Unstable Fuzzy Lin- guistic Term
Sets and the Quality Function Deployment method based on Multi-Criteria Decision
Making to explore the true potential of the blockchain for the circular economy. In
contrast, Bockel ̈ et al. (2021), in the study, proposed blockchain technology as a
possible critical solution to overcome the existing barriers to the circular
economy. Yildizbasi (2021), in the circular economy blockchain technology studies,
in which different sectors are discussed, mentioned the concept of blockchain in
order to eliminate the problems experienced in the energy grid man- agement process
and listed the difficulties faced by blockchain during integration into the
circular economy. According to Erol et al. (2021) identified critical success
factors for improving the circular economy performance of a blockchain technology-
based solar photovoltaic en- ergy ecosystem in Turkey to achieve better circular
economy perfor- mance in the renewable energy sector. Again, Wang et al. (2020)
proposed a blockchain-based system architecture to operationalize cir- cular supply
chain management in the fast fashion industry. Based on existing studies, this
study aims to contribute significantly to the literature by addressing the agri-
food sector, by identifying crit- ical success factors for the applicability and
adoption of blockchain technology within the scope of circular economy. Examining
the critical success factors that will contribute to the agri-food supply chain
man- agement system by considering sustainability-blockchain technology- circular
economy together fills this gap both at the sector level and in terms of scope.
Supply chains (SCs) face unprecedented challenges. The tendency to lengthen them
(Chopra et al. 2021) increases their vulnerability in terms of information sharing,
and trust poses difficulties in their management. To overcome this problem, SC
managers actively seek disruptive solutions that bring innovativeness, efficiency,
and effectiveness to their operations (Behnke and Janssen 2020). The global state
of emergency due to the Covid-19 pandemic in 2020 highlighted the need for SC
digitalization. The digitalization phenomenon is already shaping new realities and
relation- ship models throughout the entire SC network (Queiroz and Fosso Wamba
2019). One of the most recognizable disrup- tive technologies for SC adoption is
blockchain technology (BCT) (Queiroz et al. 2020). Blockchain is defined as a
‘cryptographically guaranteed non-tamperable and unforgeable distributed
decentralized ledger’ (Liu and Li 2020, p.2). BCT makes it possible for supply
chain management (SCM) activities and operations * Joao C. Ferreira
joam@himolde.no; jcafa@iscte-iul.pt Ulpan Tokkozhina ulpan_tokkozhina@iscte-iul.pt
Ana Lucia Martins almartins@iscte-iul.pt 1 Business Research Unit (BRU-IUL),
Lisbon, Portugal 2 Instituto Universitário de Lisboa (ISCTE-IUL), 1649-026 Lisbon,
Portugal 3 Inov Inesc Inovação—Instituto de Novas Tecnologias, 1000-029 Lisbon,
Portugal 4 Information Sciences and Technologies and Architecture Research Centre
(ISTAR-IUL), Lisbon, Portugal 5 Molde University College — Specialised University
in Logistics, NO-6410 Molde, Norway 100 U. Tokkozhina et al. 1 3 to occur in a
highly secure and transparent way, without the need for a central organization
(Gonczol et al. 2020). Thus, it is a potential game-changer for supply chains (SCs)
in terms of information exchange and verified transactions (Hackius and Petersen
2020). However, the adaptation blueprint of BCT still requires a more focused and
comprehensive evalu- ation (Wong et al. 2020a), as well as an understanding of the
critical requirements, issues, and challenges across the SC (Ghode et al. 2020b;
Wang et al. 2020b) for successful BCT deployment. Endeavours to systematize BCT in
the SCM context have been undertaken by numerous scholars, with a focus on, i.e.
application areas (Queiroz et al. 2019; Chang and Chen 2020; Duan et al. 2020),
industrial contexts (Wang et al. 2019a; Idrees et al. 2021), concept definition
(Fosso Wamba et al. 2020a, b), bibliometric analysis (Fosso Wamba et al. 2020a;
Müßigmann et al. 2020), and article coding (Lim et al. 2021). Systematization has
also been explored in the transport and logistics sector (Kummer et al. 2020;
Pournader et al. 2020), food SC (Kayikci et al. 2020; Stranieri et al. 2021), and
from information-sharing perspectives (Wan et al. 2020). The potential benefits,
challenges, drivers, and barriers to BCT adoption in SCM have also been studied
using empirical data (van Hoek 2019; Wang et al. 2019b; Stranieri et al. 2021) as
well as in specific fields such as agriculture (Kamilaris et al. 2019), the textile
and clothing industry (Agrawal et al. 2021) and modern military solutions (Saadiah
and Rahayu 2021). A common feature of these wide-ranging attempts to study BCT in
SC is a case-specific perspective. There are as well more generalized reviews that
were found in prior literature, that were not attaching findings to a specific area
of application. Such studies were building comprehensive maps of separate BCT
application topics and themes for supply chain performance (Mahyuni et al. 2020),
indicating the most influential authors and publications in the area (Moosavi et
al. 2021), separately summarizing ena- blers, benefits, and risks of BCT adoption
(Karakas et al. 2021), conceptualizing stages and factors behind the adop- tion (Vu
et al. 2021). Extant literature reviews offer many contributions in specific
sectors, e.g. food and agriculture SCs (Galvez et al. 2018; Lezoche et al. 2020;
Sharma et al. 2021), or reviews of a mix of different technologies under the scope
of Industry 4.0 (Bodkhe et al. 2020; Mistry et al. 2020). There as well were
studies that grouped themes into clus- ters (Klerkx et al. 2019) and structured
topics and trends into mind maps (Casino et al. 2019). Recently scholars were
conducting bibliometric analysis of literature in the field (Moosavi et al. 2021;
Tandon et al. 2021), in the context of operations management, mechanisms of a
trace- ability feature of BCT were explored (Feng et al. 2020). Thematic analysis,
identifying the orders of benefits and challenges domains of BCT adoption in food
SC was as well performed (Chen et al. 2021). However, there is still a lack of a
more holistic understanding of the ways in which BCT implementation impacts SCM and
operations, outside of a specific application area or context, based on
systematized data. Among open issues of BCT exploration in SC context, such
research gaps as suitability of BCT for specific pro- jects, and a mechanism to
choose a proper blockchain net- work that would suite the actual needs of the
application was highlighted (Casino et al. 2019). The need of leading through
emerging technologies adoption was mentioned (Klerkx et al. 2019), in order to
enhance the benefits and alleviate potential negative effects. Research is needed
to guide through decision-making process of the adoption of BCT for businesses
(Frizzo-Barker et al. 2020). It is also necessary to investigate the societal,
organizational, and environmental factors that affect BCT implementation in SCM
(Tandon et al. 2021). Therefore, the contribution of the present research goes
beyond prior studies to provide a broader vision and holis- tic understanding of
the existing features of BCT in the SCM context, grouping them into unified general
dimen- sions, without limiting it further to a specific industry or area of
application. Like this, it would contribute to gaps identified by previous scholars
in the field. Against this backdrop, this research aims to create a systematized
understanding of BCT in the SCM context. The goals of this study are threefold: (1)
to explore the dimensions of the impact of BCT implementation in SCM; (2) to
explore the synergies of these dimensions; and (3) to explore the virtuous and
vicious cycles of the adoption of BCT use in SCM. To achieve these goals, a
systematization of the exist- ing literature is pursued. Specifically, BCT features
found in the literature are systematized, the operations manage- ment dimensions of
the impact of BCT implementation in SCM are exposed, and the synergetic and
counter-synergetic effects of these dimensions in terms of the advantages, dis-
advantages, and constraints of BCT implementation are discussed. The remainder of
this paper is organized as follows. Sec- tion 2 provides a literature review of the
BCT phenomenon in the SC context, as well as current SCM challenges. Sec- tion 3
details the methodology adopted in this study. Sec- tion 4 provides a systematized
understanding of BCT fea- tures in the SCM context, which are conveniently
displayed in tables and clarifies the logic process underpinning the dimensions and
their synergies. Section 5 discusses the theo- retical and managerial contributions
of this study and sug- gests areas to be addressed in future studies. Finally,
Sect. 6 provides the conclusions of the study and critically identifies its
limitations. Uncovering dimensions of the impact of blockchain technology in supply
chain management 101 1 3 2 Literature review Today, supply chains are beginning to
lose the necessary visibility across networks due to their length (Mubarik et al.
2021). SC visibility is the transparency to identify product transit status
throughout and outside the supply chain (Roy 2021). It plays a crucial role in
strengthening trust and collaboration among different stakeholders (Baah et al.
2021). Thus, to gain visibility for SCs, organizations must establish a way to
share timely and reliable informa- tion across networks (Tapscott and Tapscott
2020). Another major SCM focus of organizations is a long- term stability
perspective: building confidence and reli- ance among SC participants (i.e.,
building trust) (Paluri and Mishal 2020). The long and complex nature of SC
networks requires interactions between multiple entities, resulting in challenges
in establishing trust among them (Doroudi et al. 2020). An increasing level of
trust in the SC scale leads to risk reduction (Collier and Sarkis 2021) and more
stable end-consumer behavior (Doroudi et al. 2020). 2.1 Blockchain technology
Blockchain is a fully distributed and decentralized system that can capture and
store cryptographically encoded data and transactions in a block manner, similar to
a distributed ledger (Queiroz et al. 2019). The mechanism behind BCT then connects
each block—which is identified with a unique hash code (a cryptographic algorithm
that transforms a data input into a fixed-length irreversible output)—to a previous
block, thus connecting all blocks into a chain (Queiroz et al. 2020; Wang et al.
2020c). This chain structure is the fundamental feature that ensures immutable and
reliable data in the ledger, as each block holds details (the unique hash code) of
the previous blocks’ content (Gonczol et al. 2020). Thus, BCT allows safe data
exchange within the SC in a distributed manner (Wang et al. 2019b). BCT brings
traceability to SCs, allowing assets to be tracked and providing stakeholders with
the visibil- ity required to do so (Choi 2020; Wang et al. 2020b). Through BCT
adoption, it is possible to reduce the inci- dence of unfair practices and
counterfeits (Juma et al. 2019; Stranieri et al. 2021) and boost the overall
efficiency of SC operations (Leng et al. 2018). Another important innovation that
BCT entails is smart contracts, which are, essentially, ‘digital contracts that
flow across enterprises’
(Kamble et al. 2019, p.2011), enabling the automation of processes (Nandi et al.
2020) because smart contracts are self-executable (Min 2019). Overall, BCT has the
potential to manage resources efficiently and reduce inventory levels (Kamble et
al. 2019), reduce SC risks through traceabil- ity features (Kshetri 2018; Montecchi
et al. 2019), and optimize planning and forecasting decisions (Perboli et al.
2018). 2.2 Blockchain benefits and challenges in the context of supply chain
management BCT also has attractive capabilities for SC participants; it can improve
collaboration between entities (Mao et al. 2018), especially in untrusted
environments (Liu and Li 2020), and reduce the bullwhip effect (Perboli et al.
2018). Increasing SC performance and data visibility (Hald and Kinra 2019) results
in product quality compliance and improves trust among consumers (Ghode et al.
2020b; Nandi et al. 2020). To improve practitioners’ experience, BCT can, for
example, be used together with other artificial intelli- gence technologies
(Kayikci et al. 2020) and combined with Internet of Things (IoT) devices (Rejeb et
al. 2019). However, BCT has several disadvantages. Although BCT can provide
traceability through digital records, it cannot ensure the real condition of
physical products in transit (Yadav and Singh 2020) and is not always a suitable
solu- tion, depending on the cost of the product. For example, for lower-cost
products, there is less need to thoroughly trace products (van Hoek 2019). Smart
contracts are also consid- ered difficult to implement if the coding of the
contract is of poor quality, which usually leads to a series of problems throughout
the SC (Cole et al. 2019). The lack of central authority within the SC is sometimes
considered a disadvan- tage, especially when resolving disputes among SC entities
(Wang et al. 2019a, b). Another major concern is an environ- mental one: BCT
consumes excessive amounts of energy to conduct transaction-related activities
(Öztürk and Yildizbaşi 2020; Yadav et al. 2020). Some challenges still exist in
modern SCM, including, e.g. relationship and trust issues between participants in
complex SCs, considerations regarding firms’ social responsibilities, concerns over
the visibility of operations that reveal the dynamics of supply processes, and
issues related to exploiting SCM to influence consumers’ buying decisions and gain
a competitive advantage (Cole et al. 2019; van Hoek 2020a, b; Rogerson and Parry
2020). BCT is considered a possible solution to these limitations of modern SCs;
however, a rigorous academic investigation is still required to understand the
extent to which BCT may create value for firms (Treiblmaier 2018). Additionally,
there are some practical constraints in the adoption of BCT in the SCM context. For
example, a lack of a relevant legal framework (Sheel and Nath 2019) can lead to
difficulties in convincing all stakeholders to adopt 102 U. Tokkozhina et al. 1 3
BCT (Duan et al. 2020). A lack of trust among SC network participants, national
circumstances, and cultural differences can also result in different decisions
during the adoption process (Kopyto et al. 2020; Queiroz et al. 2020; Wong et al.
2020a). Currently, most SCs are not yet ready for BCT adoption due to either the
lack of an organized ecosystem (Kamble et al. 2019) or the novelty of the
technology (Min 2019), as adoption of this technology is a complex process. Not
only it requires appropriate infrastructure, but it also needs to overcome
challenges related to existing regulatory and legal governance systems (Kamble et
al. 2021). BCT adoption poses constraints for supply chain participants in terms of
coping with the innovative decentralized structure (Omar et al. 2020). Dimensions
of BCT characteristics were introduced in the context of supply chain collaboration
(Rejeb et al. 2021), manufacturing industry (Karamchandani et al. 2021), healthcare
supply chains (Aich et al. 2021), and categorized key enablers of BCT accordingly
to its aims and opportunities (Ali et al. 2021). However, to the best of our
knowledge, a more holistic approach on BCT dimensions of impact and their
intersections exploration in terms of supply chain implementation was not yet
performed. A perceptible knowledge gap between managers of various organizations
and their comprehension of BCT was revealed (Walsh et al. 2021), thus an
intelligible representation of potential dimensions of impact and their
interconnection would assist practitioners in terms of novel technology
understanding and applications.
In recent years, the global landscape of supply chain management has witnessed
unprecedented challenges and complexities driven by factors such as globalization,
intricate networks of stakeholders, and an increasing demand for real-time
information (Chang, et al., 2020). In response to these challenges, block chain
technology has emerged as a revolutionary force reshaping the traditional paradigms
of supply chain management (Kamble, et al., 2023). This paper conducts a thorough
review of the application of block chain in supply chain management, with a
specific focus on its transformative impacts on efficiency, transparency, and
innovation within the intricate web of supply chain processes. Blockchain,
originally conceptualized as the underlying technology for cryptocurrencies, has
evolved beyond its initial financial applications to become a disruptive force
across various industries (Morhaim, 2019). Its decentralized and distributed ledger
architecture has proven particularly promising in addressing long-standing issues
in supply chains, ranging from the complexities of multi-party transactions to the
need for heightened security and transparency. This paper delves into the
multifaceted role that block chain plays in optimizing supply chain operations,
offering a critical examination of its efficiency-enhancing attributes, its
contribution to transparency and traceability, and its role as a catalyst for
innovative advancements within supply chain ecosystems. Efficiency in supply chain
operations has long been a focal point for organizations seeking to gain a
competitive edge in today's dynamic business environment (Ketchen, 2007).
Blockchain, through its decentralized nature, eliminates the need for
intermediaries, facilitating direct peer-to-peer transactions and automating
various aspects of the supply chain. This review explores how block chain
streamlines processes, reduces redundancies, and enhances the overall efficiency of
supply chain operations, ultimately leading to cost savings and improved
responsiveness to market dynamics. Transparency has become an indispensable element
in modern supply chains, where stakeholders demand real-time visibility into the
entire value chain (Apeji and Sunmola, 2022). Block chain’s immutable ledger
ensures transparency by providing a secure and tamper-proof record of transactions.
This paper investigates how block chain technology enables end-to-end visibility,
traceability, and accountability, fostering trust among supply chain participants
and aiding compliance with regulatory standards. Furthermore, the paper examines
the role of block chain in driving innovation within supply chains. Beyond its
foundational benefits, block chain serves as a platform for the integration of
emerging technologies such as the Internet of Things (IoT) and Artificial
Intelligence (AI). Case studies and pilot projects are explored to showcase
instances where block chain has not only optimized existing processes but also
paved the way for novel business models and collaborative ecosystems. While
recognizing the transformative potential of block chain in supply chain management,
this review also addresses the challenges and considerations associated with its
implementation (Saberi, et al., 2019). Interoperability, scalability, and
regulatory concerns are examined, offering a balanced perspective on the practical
implications of adopting block chain technology in diverse supply chain
environments. This paper aims to provide a comprehensive overview of the impact of
block chain on supply chain management, synthesizing insights into how it enhances
efficiency, transparency, and fosters innovation. By critically assessing both the
opportunities and challenges, this review contributes to a deeper understanding of
the role block chain plays in reshaping the future of supply chain management on a
global scale. 2. Efficiency in Supply Chain Management through Block chain In an
era marked by globalization, rapid technological advancements, and intricate supply
chain networks, the call for enhanced efficiency has never been more critical.
Traditional supply chain systems often grapple with inefficiencies arising from
intermediaries, manual processes, and a lack of real-time visibility (Skjott-
Larsen, 2007). Enter block chain technology, a game-changer poised to transform the
landscape of supply chain management. This paper explores how block chain is
revolutionizing efficiency in supply chain operations and reshaping the way
businesses manage their intricate webs of logistics, procurement, and distribution.
Supply chain operations are notorious for their complexity, involving multiple
stakeholders and intricate workflows (Litke, 2019). Block chain, with its
decentralized and transparent ledger, eliminates the need for intermediaries. This
not only streamlines processes but also simplifies the entire supply chain
ecosystem. Smart contracts, a feature of block chain, automate and execute
predefined actions when specific conditions are met, reducing the need for manual
intervention and minimizing delays (Abdellatif and Brousmiche, 2018). One of the
primary sources of inefficiency in traditional supply chains is the involvement of
intermediaries, each introducing potential delays and additional costs. blockchain
facilitates direct peer-to-peer transactions, cutting out unnecessary middlemen
(Lee and Khan, 2019). This not only accelerates the speed of transactions but also
significantly reduces costs associated with intermediaries. The introduction of
smart contracts takes automation to a whole new level. These self-executing
contracts encode and automate complex business rules, ensuring that agreed-upon
terms are met without the need for constant oversight (Unsworth, 2019). This not
only reduces the risk of errors but also enhances the speed and accuracy of
transactions, contributing to a more efficient supply chain. Block chain’s real-
time visibility into transactions provides stakeholders with instant updates on the
status and location of goods throughout the supply chain (Chang, et al., 2019).
This transparency not only fosters trust International Journal of Science and
Research Archive, 2024, 11(01), 173–181 175 among participants but also enables
proactive decision-making. Businesses can respond swiftly to disruptions, optimize
routes, and ensure the timely delivery of products (Craighead, et al., 2007). The
implementation of block chain in supply chain management yields tangible cost
savings. By eliminating intermediaries, automating processes, and reducing the risk
of errors, businesses can operate more efficiently and allocate resources more
effectively (Bharosa, 2013). Moreover, the improved responsiveness to market
dynamics ensures that businesses can adapt swiftly to changing conditions, gaining
a competitive edge in the market. Block chain technology is undeniably at the
forefront of driving efficiency in supply chain management (Rejeb, et al., 2023).
As businesses grapple with the complexities of today's globalized markets, the
adoption of block chain offers a transformative solution. From streamlining
processes and eliminating intermediaries to providing real-time updates and
reducing costs, the benefits of block chain in supply chain efficiency are both
tangible and revolutionary (Gohil and Thakker, 2021). As we move forward,
businesses that embrace this technology will likely find themselves not just
surviving but thriving in the ever-evolving landscape of modern supply chain
management. 3. Transparency and Traceability In an era where consumers demand more
accountability, and regulatory requirements for supply chains are becoming
increasingly stringent, transparency and traceability have become paramount in the
world of logistics and commerce. Block chain technology, renowned for its
decentralized and immutable ledger, is emerging as a powerful tool to bring
unprecedented levels of transparency and traceability to supply chain operations
(Raval, 2016). This paper delves into the ways in which block chain is transforming
the supply chain landscape by providing crystal-clear visibility and traceability
from source to consumer. The complexities of modern supply chains often leave
stakeholders in the dark, fostering a lack of trust (Soundararajan, et al., 2019).
Transparency is the antidote, offering a window into the inner workings of supply
chain processes. With consumers increasingly valuing ethical sourcing,
sustainability, and fair labor practices, businesses need to showcase a transparent
supply chain to build trust and maintain brand integrity (Perry, et al., 2015). At
the heart of block chain’s impact on transparency is its immutable ledger. Once
data is recorded on the block chain, it cannot be altered or tampered with (Zhu, et
al., 2019). This ensures that the information stored is reliable and trustworthy,
mitigating the risk of fraud and deception in the supply chain. Block chain’s
decentralized nature allows all stakeholders in the supply chain, from
manufacturers to distributors and retailers, to access a single, shared source of
truth. This end-to-end visibility enables real-time monitoring of every
transaction, movement, and transformation within the supply chain, fostering a
seamless and interconnected network (Musa, et al., 2014). Beyond transparency,
block chain enables traceability, allowing stakeholders to trace the journey of a
product from its origin to the end consumer. Every transaction and movement is
recorded on the block chain, creating an indelible record (Laroiya, et al., 2020).
This not only ensures accountability within the supply chain but also aids in
identifying the source of any issues or discrepancies. In an environment where
regulatory requirements for supply chain transparency are on the rise, block chain
provides a robust solution (Kraft, et al., 2021).
By maintaining an unalterable record of transactions, businesses can easily
demonstrate compliance with various industry and governmental regulations, avoiding
legal pitfalls and ensuring ethical practices. Transparency and traceability are
not only essential for regulatory compliance but also for building trust with
consumers (Sunny, et al., 2020). By providing detailed information about the
sourcing, manufacturing, and distribution of products, businesses can showcase
their commitment to ethical practices, sustainability, and quality. Block chain’s
transformative impact on transparency and traceability in supply chains is
reshaping the way businesses operate and how consumers perceive products (Wang, et
al., 2019). The immutable ledger, end-to-end visibility, and traceability offered
by block chain technology not only ensure compliance with regulations but also
empower businesses to build trust with consumers who increasingly seek transparency
and ethical practices in the products they purchase (Jabbar, et al., 2021). As
supply chains evolve, block chain stands as a beacon of clarity, illuminating the
path towards a more accountable and transparent future. 3.1. Compliance with
Regulatory Standards The evolving landscape of global commerce, adherence to
regulatory standards is not just a legal necessity but a fundamental aspect of
maintaining ethical business practices and consumer trust. Supply chain compliance,
in particular, is a complex endeavor, with regulations varying across industries
and regions (Haugland, et al., 2011). This paper explores how blockchain technology
is emerging as a robust solution to help businesses navigate the intricate web of
regulatory standards, ensuring transparency, traceability, and accountability
throughout the supply chain. Compliance with regulatory standards is a multifaceted
challenge in supply chains, involving aspects such as product safety, ethical
sourcing, environmental sustainability, and fair labor practices (Hofmann, et al.,
2018). Failure to meet these standards can lead to legal consequences, damage brand
reputation, and erode consumer trust. Navigating this complex regulatory landscape
requires a comprehensive and efficient approach (Nkongolo, 2023). Blockchain's
inherent feature of creating an immutable ledger is a game-changer for supply chain
compliance. Every transaction, from the origin of raw materials to the end
consumer, is recorded on the block chain. This not only provides a International
Journal of Science and Research Archive, 2024, 11(01), 173–181 176 transparent
audit trail but also ensures that the data cannot be tampered with, meeting the
stringent requirements of regulatory bodies (Alles, et al., 2004). Traditional
supply chain systems often struggle with providing real-time information required
for compliance reporting. Block chain’s decentralized nature allows for real-time
monitoring of transactions, movements, and transformations within the supply chain
(Helo and Hao, 2019). This capability enables businesses to generate accurate and
up-to-date compliance reports at any given moment. Smart contracts, a feature of
block chain, can be programmed to automatically execute compliance protocols when
predefined conditions are met. This automation not only reduces the risk of human
error but also ensures that compliance measures are consistently applied throughout
the supply chain, promoting a proactive rather than reactive approach to adherence
(Aron, et al., 2011). Businesses operating in multiple regions face the challenge
of navigating diverse regulatory frameworks (Caligiuri, et al., 2020). Block chain
can facilitate cross-border compliance by providing a standardized and universally
accessible ledger. This not only streamlines the compliance process but also
ensures consistency in meeting regulatory standards across different jurisdictions
(Sparrow, 2011). Demonstrating compliance through block chain not only satisfies
regulatory requirements but also builds trust with stakeholders. Suppliers,
distributors, and consumers can access a shared and unalterable record of
compliance, fostering transparency and accountability across the entire supply
chain ecosystem. Block chain technology is proving to be a powerful ally in the
pursuit of supply chain compliance (Novo, 2018). Its ability to create an immutable
record, offer real-time monitoring, automate compliance protocols, and facilitate
cross-border standardization positions it as a transformative force in the complex
regulatory landscape. As businesses embrace block chain to enhance their compliance
practices, they not only mitigate legal risks but also contribute to a culture of
transparency, trust, and ethical conduct within the global supply chain (Kimani, et
al., 2020). 4. Innovation in Supply Chain Processes In the fast-paced realm of
supply chain management, where adaptability and efficiency are paramount,
traditional methods often fall short in meeting the demands of the modern business
landscape. Innovation has become the cornerstone of success, and block chain
technology is emerging as a catalyst for transformative change (Khuan, et al.,
2023). This paper explores how block chain is breathing new life into supply chain
processes, fostering innovation in ways that were once thought to be on the horizon
of possibility. Traditional supply chain management has long relied on established
processes, often hindered by paper trails, manual interventions, and a lack of
real-time information. Block chain’s decentralized and secure nature provides a
foundation for innovation by offering an alternative to these archaic practices,
unlocking new possibilities for efficiency and collaboration. Among block chain’s
standout features are smart contracts, self-executing contracts with predefined
rules. These contracts automate various aspects of supply chain operations, from
order processing to payment verification. By eliminating the need for
intermediaries and reducing the risk of errors, smart contracts revolutionize the
efficiency and reliability of supply chain processes. The transparency offered by
block chain allows for real-time visibility into the entire supply chain (Mik,
2017). This visibility, coupled with the ability to capture and store vast amounts
of data, empowers businesses with the tools for predictive analytics. By analyzing
historical and real-time data, organizations can make informed decisions, optimize
inventory management, and anticipate potential disruptions before they occur. Block
chain doesn't operate in isolation; it seamlessly integrates with other emerging
technologies, such as the Internet of Things (IoT) and Artificial Intelligence
(AI). The marriage of block chain and IoT enables the creation of a connected
ecosystem where devices communicate and transact autonomously (El-Masri, et al.,
2021). Meanwhile, AI can process and analyze data from the block chain, extracting
valuable insights and driving continuous improvement in supply chain processes.
Block chain's shared ledger facilitates trust among stakeholders in the supply
chain. This trust forms the basis for collaborative ecosystems where partners can
share data securely, streamline communication, and collectively work towards common
goals (Rejeb, et al., 2021). Collaborative innovation becomes a reality as
businesses forge partnerships based on a foundation of transparency and
accountability. The efficiencies introduced by block chain open the door to novel
business models. Decentralized marketplaces, for instance, can emerge, allowing
direct interaction between buyers and sellers (Kyprianou, 2018). This not only
eliminates unnecessary intermediaries but also provides small and medium-sized
enterprises (SMEs) with broader market access, fostering a more inclusive and
dynamic business environment. As supply chain processes evolve, innovation stands
as a key differentiator between industry leaders and followers. Block chain's
influence in supply chain management extends far beyond efficiency gains; it
fosters a culture of continuous improvement, collaboration, and adaptability. By
embracing block chain technology, businesses are not just optimizing their current
processes; they are pioneering a new era of supply chain innovation that promises
to transform tomorrow's commerce landscape. International Journal of Science and
Research Archive, 2024, 11(01), 173–181 177 4.1. Novel Business Models and
Collaborative Ecosystems In the ever-evolving world of supply chain management,
traditional business models are being redefined, and collaborative ecosystems are
emerging as key drivers of innovation. This paper explores how block chain
technology is instrumental in reshaping business paradigms, fostering novel models
and collaborative ecosystems that transcend the boundaries of conventional supply
chain practices. Block chain's ability to facilitate secure and transparent
transactions without the need for intermediaries has given rise to decentralized
marketplaces. These platforms empower direct interactions between buyers and
sellers, eliminating unnecessary layers in the supply chain (Chen, et al., 2007).
This not only reduces costs but also provides businesses with more direct access to
customers, promoting a peer-to-peer marketplace environment. Block chain enables
the tokenization of physical and digital assets within the supply chain. Assets
such as inventory, products, or even production capacities can be represented as
digital tokens. This opens up new avenues for fractional ownership, allowing
businesses to explore innovative financing models and creating liquidity in
traditionally illiquid assets. Block chain's decentralized ledger serves as a
shared source of truth for all participants in the supply chain. This transparency
fosters collaborative networks where stakeholders can securely share information
(Parris,
et al., 2016). Whether it's sharing demand forecasts, inventory levels, or
production schedules, this real-time collaboration reduces information asymmetry
and enables more efficient decision-making across the entire supply chain
ecosystem. Smart contracts, powered by block chain, automate and execute predefined
actions when specific conditions are met. This functionality extends beyond
automation, paving the way for dynamic agreements. Contracts can adapt to changing
circumstances, offering a level of flexibility and responsiveness that was
previously unattainable. This dynamic nature of smart contracts is particularly
valuable in collaborative ecosystems with multiple stakeholders (Wang, et al.,
2019). Block chain's transparent and secure nature facilitates enhanced
collaboration with suppliers and partners. It streamlines the procurement process,
ensures transparency in transactions, and reduces the risk of disputes. Businesses
can build more robust relationships with suppliers, creating an environment of
trust and accountability. The decentralized and open nature of collaborative
ecosystems powered by block chain levels the playing field for businesses of all
sizes. Small and medium-sized enterprises (SMEs) can participate in these
ecosystems without the barriers that traditional supply chains may impose. This
inclusivity fosters innovation and diversification within the supply chain,
creating a more resilient and adaptable ecosystem. Novel business models are
emerging with block chain facilitating circular supply chains. Products are
designed with recycling and reuse in mind, and block chain ensures transparent
tracking of materials throughout their lifecycle. This not only aligns with
sustainability goals but also opens up opportunities for businesses to innovate in
the way products are manufactured, consumed, and repurposed. Block chain's
influence on novel business models and collaborative ecosystems in supply chains is
a transformative force. As businesses embrace decentralized marketplaces,
tokenization of assets, and dynamic smart contracts, they are not only optimizing
their operations but also fostering a culture of innovation and inclusivity.
Collaborative networks powered by block chain redefine how information is shared,
decisions are made, and relationships are built across the supply chain. The future
holds exciting possibilities as block chain continues to evolve, enabling even more
innovative business models and collaborative ecosystems (Mougayar, 2016). As
businesses navigate this transformative landscape, those that leverage block
chain's capabilities to foster collaboration, transparency, and innovation will be
at the forefront of a new era in supply chain management. 5. Challenges and
Considerations While block chain technology holds immense promise in
revolutionizing supply chain management, its adoption is not without hurdles. This
paper delves into the challenges and considerations that businesses must navigate
when embracing block chain for their supply chain processes. Understanding these
complexities is crucial for organizations seeking to unlock the full potential of
block chain and address the intricacies of modern supply chain management. Block
chain's decentralized nature has led to the proliferation of various platforms and
protocols. The lack of standardized practices creates interoperability challenges,
as different block chain networks may struggle to communicate and share data
seamlessly. Achieving a unified and interoperable block chain ecosystem is a
crucial consideration for businesses aiming to implement block chain across their
supply chains. As supply chains operate at varying scales, from local to global,
the scalability of block chain solutions becomes a pressing concern. The
transaction volume and data storage requirements in extensive supply chain networks
may strain the capabilities of some block chain platforms. Addressing scalability
challenges is vital to ensure that the technology can handle the demands of large-
scale supply chain operations. The regulatory landscape surrounding block chain
technology is still evolving. Compliance with existing regulations and adapting to
potential legal changes pose significant considerations. Navigating these
regulatory complexities is essential to avoid legal pitfalls and ensure that block
chain implementations align with industry standards and governmental requirements.
While block chain is celebrated for its security features, concerns regarding data
privacy persist. Storing sensitive information on a decentralized ledger raises
questions about who can access certain data and under what circumstances. Striking
a balance between transparency and data protection is crucial to address privacy
concerns and build trust among stakeholders. Implementing block chain in supply
chain management International Journal of Science and Research Archive, 2024,
11(01), 173–181 178 requires a shift in mindset and skill set for the personnel
involved. Resistance to change and a lack of understanding about block chain
technology may impede adoption. Proper training programs and change management
strategies are essential to ensure that employees can effectively use and leverage
block chain solutions. While block chain offers long- term benefits, the initial
costs of adoption can be significant. Businesses must carefully evaluate the return
on investment over time and weigh the upfront expenses against the potential
efficiency gains and cost savings. Demonstrating a clear and positive ROI is
essential for justifying the investment in block chain technology. Some block chain
networks, particularly those that rely on energy-intensive consensus mechanisms
like Proof of Work, have faced criticism for their environmental impact. As
sustainability becomes a more prominent consideration in business practices,
adopting block chain solutions with eco-friendly consensus mechanisms is crucial
for mitigating negative environmental effects. As businesses embark on the journey
of integrating block chain into their supply chain management processes, they must
confront and address these challenges and considerations. By doing so,
organizations can develop comprehensive strategies that not only harness the
transformative power of block chain but also ensure a seamless and sustainable
transition into the future of supply chain management. 6. Future Directions and
Industry Collaboration As block chain technology continues to reshape the landscape
of supply chain management, the journey is far from over. Looking toward the
future, this paper explores the potential directions that block chain could take
and the importance of collaborative efforts within industries. The evolution of
block chain in supply chains promises not only continued optimization but also
novel advancements that could redefine the way businesses operate on a global
scale. Future directions for block chain in supply chain management involve deeper
integration with other emerging technologies. The fusion of block chain with the
Internet of Things (IoT) and Artificial Intelligence (AI) holds the potential to
create an intelligent and interconnected supply chain ecosystem. Real-time data
analytics, predictive modeling, and autonomous decision-making are on the horizon,
contributing to unprecedented levels of efficiency. Industry-wide collaboration is
essential for addressing the current interoperability challenges in block chain
networks. The future of block chain in supply chains will likely see increased
standardization and compatibility among different block chain platforms. This will
enable seamless communication and data sharing across diverse supply chain
ecosystems, fostering a more interconnected and efficient global trade network. The
tokenization of physical and digital assets within supply chains is an emerging
trend. Through block chain, assets like inventory, products, or even entire
shipments can be represented as digital tokens. This facilitates fractional
ownership, simplifies transactions, and introduces new possibilities for financing
and liquidity within the supply chain. Smart contracts are poised to evolve beyond
simple automation scripts. Future iterations may encompass more complex and dynamic
agreements, incorporating real-world events, external data sources, and conditional
logic. These sophisticated smart contracts can revolutionize how contracts are
executed and enforced across the supply chain, fostering greater trust and
automation. As sustainability and ethical practices gain prominence, block chain
will play a pivotal role in creating transparent and traceable supply chains.
Consumers are increasingly conscious of the environmental and social impact of
products. Block chain can provide an immutable record of sustainably sourced
materials, fair labor practices, and eco-friendly production processes, meeting the
growing demand for responsible and ethical consumption. The concept of
decentralized autonomous organizations, facilitated by block chain, is gaining
traction. In supply chains, DAOs could streamline decision-making processes,
automate governance, and enhance collaboration among stakeholders. These
decentralized entities could operate based on transparent and pre-programmed rules,
reducing bureaucracy and increasing agility in the supply chain. Future directions
for block chain in supply chains involve increased collaboration among industry
players. Collaborative efforts, such as industry consortia, will become more
prevalent. Businesses within a particular sector can pool resources to develop
shared block chain solutions, creating standardized approaches that benefit the
entire industry and ensuring widespread adoption of the technology. The future of
block chain in supply chain management holds exciting possibilities, from enhanced
integration with emerging
technologies to the evolution of smart contracts and the creation of sustainable
and ethical supply chains. However, realizing this potential requires collaborative
efforts, with businesses, regulators, and technology developers working together to
overcome challenges and shape a future where block chain becomes an indispensable
tool in the optimization and transformation of global supply chains.
An efficient flow of goods and services in any business can be achieved by the SCM
[1]. SCM can generate more profits by satisfying both stakeholders and customers by
delivering 51752 2024 The Authors. This work is licensed under a Creative Commons
Attribution 4.0 License. For more information, see
https://creativecommons.org/licenses/by/4.0/ VOLUME 12, 2024 A. Y. Ahmadad Bani
Ahmad et al.: IoT and Blockchain-Based Secure and Transparent SCM Framework the
products at the correct time. Information technologies are becoming more and more
important to physical logistics, and they can also serve as catalysts for new kinds
of partnerships [2]. The management of an extended enterprise, procedures, and
technology that create interdependence and a shared destiny are presented to
businesses [3]. Supply Chain Finance (SCF) has become more popular due to the
rapidly rising demand for corporate finance. To offer effective financial services,
the downstream and upstream suppliers are managed by the supply chain [4].
Financing via security markets, commercial banks, and enterprises are the Small-
Medium Enterprises (SMEs) financing methods. The workflows in the SCM are
effectively handled by the infor- mation technology. With the help of information
technology in SCM, reverse securitization and financing transactions are made
simple [5]. IoT devices are the main equipment employed in the smart cities. To
make life easier for people in smart cities, the data are collected and correct
information is provided by the IoT devices [6]. Different kinds of applications are
available to pass the information to the people in smart cities [7]. Smart traffic
environment, smart agriculture, smart grid, smart supply chain, smart home
automation, and smart healthcare are some of the smart city applications [8]. The
need for IoT devices is rising daily. These devices generate enormous amounts of
data to provide useful information [9]. But, managing that data becomes difficult.
Vulnerability to attack, less transmission range, limited storage, and low
computation power are some of the drawbacks of IoT devices. In recent days, some
systems have been developed to handle the data and devices [10]. One of the methods
useful for this purpose is cluster head. Yet, this approach also has some
disadvantages like information processing, scalability, and vast data storage [11].
Some of the difficulties in a centralized system are data integrity, transparency,
trust, and single point of failure. To resolve these issues, blockchain and edge
computing servers are useful [12]. In blockchain, once a transaction is completed,
new blocks will be added and it is immutable [13]. The predecessor block’s hash
value is presented in the blockchain along with the past transaction history. For a
distributed manu- facturing process, the cloud and blockchain methods are
integrated [14]. Immutable archives and records are created by combining blockchain
with cloud-based SCMs [15]. Reuse, recycling, disassembly process, assembly,
production, and designing processes are achieved by integrating CM, SCM, and
blockchain [16]. Some of the challenges of SCM are poor inventory management, non-
compliance, poor customer experience, increasing risks, long production cycles,
rising logistics costs, and delays in delivery [17]. Therefore, to raise the
security and transparency of the SCM in smart cities, an IoT and blockchain-based
model is proposed. The main goals of the implemented Blockchain-based secure and
transparent SCM framework in smart cities using optimal queue model are listed
below: • To present a Blockchain-enabled supply chain man- agement framework to
improve the transparency and security of supply chain processes in emergency
systems at smart cities, and also provide a transparent and immutable record of all
transactions and activities within the SCM, allowing for increased visibility and
accountability. • To suggest an RF-PO algorithm by improving the random parameter
in the conventional PO algorithm. It is useful in progressing the functionality of
the recommended model by optimizing parameters and aids in solving optimization
problems by finding the most efficient solution given a set of conditions or
constraints. • To employ a queuing model for increasing the service quality of the
supply chain management approach. From, this model, parameters like temperature
thresh- old, smoke threshold, and humidity threshold are optimized to maximize, the
difference between actual and expected arrival time. Further, this optimization is
also beneficial in decreasing the end-to-end delay, actual arrival time, queue
length, and utilization. • To confirm the potential of the suggested blockchain-
based supply chain management model, the attained results are analyzed with various
optimization algo- rithms. Moreover, the existing technologies used in the field of
managing supply chain systems are also considered. The proposed model for handling
the supply chain systems in smart cities is briefly described in the upcoming
sections. The existing works implemented to manage the supply chain systems are
discussed in Province II with their drawbacks and strengths. In province III, a
brief introduction to supply chain management in smart cities is given. The
blockchain Preliminaries are described in this section along with a detailed
justification of the proposed model. In province IV, the proposed optimization
approach to enhance the performance of the recommended model is provided. Province
V describes the queuing model-based supply chain management system elaborately. The
numerical findings are given in Province VI. The conclusion of the presented model
is depicted in Province VII. II. EXISTING WORKS A. RELATED WORKS In 2022, Wang and
Wang [18] have provided a supply chain finance strategy to create an efficient
framework for managing supply chain financing. Blockchain technology and supply
chain financing were established based on theoretical research. In addition to the
unique circumstances surrounding supply chain finance, an analysis was done on the
supply chain’s cash flow, risk control system, and management system. To
significantly lower the risks that occur by each party involved in the supply chain
financing, all parties optimize the supply chain finance risk control system while
raising corporate efficiency and lowering expenses. For developing the growth of
commercial banks, the shared VOLUME 12, 2024 51753 A. Y. Ahmadad Bani Ahmad et al.:
IoT and Blockchain-Based Secure and Transparent SCM Framework data and blockchain-
based IoT environments were very powerful. In 2023, Matenga and Mpofu [19] have
created Cloud Manufacturing (CM) platforms for supply chains that were sustainable.
Servitization caused the CM systems to change from product-oriented to service-
oriented approaches. Knowledge management was made possible by data traceability
along the value chain and information through the interconnection of manufacturing
inputs and processes in CM. SCM was used in the manufacturing of boxed flat sheet
metal and then it was utilized as a part of railcar manufacturing. The methods used
a whole product’s lifecycle, from conception to End-of-Life (EOL), and determined
the value of the product based on the capability of the product. In the railcar
remanufacturing supply chain, order and part tracing was done using the Life Cycle
Assessment (LCA) approach. This strategy concentrated on SCM and blockchain
integration to optimize Product Lifecycle Management (PLM) for better traceability.
In 2009, Dotoli et al. [20] have suggested a supply chain, which was a network of
autonomous logistics and manufacturing businesses that handled the crucial tasks
involved in order fulfillment. They developed an efficient and flexible model based
on first-order hybrid Petri Nets (PNs) that utilized first-order fluid
approximation to characterize the information flow, financial, and material of
supply chains at the operational level. The supply chain designer could able to
select the appropriate facility production rates to maximize the selected objective
function with the help of the suggested method. Using the state information of the
derived state variable model, time-varying and linear discrete-time action was
carried out to respond the unforeseen occurrences like supply disruptions or
accidents in transportation facilities. In 2022, Bhawana et al. [21] have created a
PES framework for smart cities that was Blockchain-Enabled Secure, and Trusted
(BEST). To prevent significant fire damage in smart homes, the BEST framework
focused on offering a fire brigade service as a PES based on information from IoT
devices. Additionally, an IoT controller, a service controller, and two edge
computing servers were used in this work. To prevent misleading in the PES
department, the IoT controller maintained an access control list that tracked
registered IoT devices and IoT gateways. Based on the minimal service queue length,
the service controller handled the PES requests using the queue model.
Additionally, several smart contracts were created on the hyper ledger fabric
platform to automatically activate a PES in the event of an unpredictable
environment, like, when the smart homeowner was not present in the home. The
suggested BEST framework’s performance evaluation highlighted the advantages of
making use of the smart contract logic and distributed environment. In 2022, Guo et
al. [22] have designed a framework for information management based on IoT and
Blockchain Technology (BCT), which served as regulation to enhance the information
transparency in SCF’s business processes. Through the integration and coordination
of trade flow, logistics, information flow, and capital flow in the supply chain,
the BC4Regu could lower the operation cost of the entire supply chain. The
contributions of the proposed model
were: the technical design of BC4Regu, which included the reshaped SCF process,
distributed ledger-based integrated data flow service, and Blockchain
infrastructure. The second contribution was the proposal of a novel information
manage- ment framework. The third one was applying BC4Regu to a range of scenarios
and evaluating the efficiency of the model using the principal-agent model. In
2021, Majdalawieh et al. [23] have proposed an IoT and blockchain-based framework
to control and manage the operation of the processed poultry food supply chain
industry by improving the quality and safety of food products supplied to final
consumers. In this study, Ethereum smart contracts maintained the integrity of
supply chain transactions while creating a tamper-proof, transparent, and
dependable food supply chain structure. All participants inside the network were
kept fully informed about transactions by the smart contract, which also regulated
and managed the exchanges between the network’s entities. The program’s objectives
were to detect and eradicate food contamination and adulter- ation. Also, to
improve the supply chain’s quality and safety for the food business, they increased
legal accountability and transaction transparency. Therefore, this method increased
the value of the brand and consumer trust. In 2023, Yazdinejad et al. [24] have
suggested machine learning and Bidirectional Encoder Representations from
Transformers (BERT)-based threat detection modules to boost security and
intelligence in blockchain-based Drug SCM. Pandemics might have a significant
impact on several healthcare streams, including DSCM. Using DSCM to give medication
to patients was a complicated procedure. In addition, DSCM faced several
difficulties, such as fraud, counterfeiting, and medicine availability. Eradicating
pharmaceutical fraud was crucial to provide equitable and safe access to
medication, intelligence tactics, security, support, and services were required as
it was a major problem in Cyber-Physical Systems (CPS). The findings of the
evaluation demonstrated that the BERT-based recommended system ideally provided
suitable substitute medications. The precision and accuracy of the suggested method
for attack detection were higher than traditional methods. In 2023, Qatbi and
Rathinam [25] have suggested combin- ing supply chain management with the IoT. This
innovative approach used blockchain technology to solve stakeholders’ problems
about data privacy that impact the development of smart cities, smart buildings,
and smart gadgets all around the world. The transportation of raw and finished
products as well as the production process was handled by supply chain management.
It was a cross-functional approach. To continue the supply chain management,
manufacturers or customers must have faith in internal or external stakeholders.
Blockchain technology was developed to enable supply chain management processes to
be visible and traceable. The 51754 VOLUME 12, 2024 A. Y. Ahmadad Bani Ahmad et
al.: IoT and Blockchain-Based Secure and Transparent SCM Framework TABLE 1.
Features and Challenges of blockchain and IoT-enabled secure and transparent supply
chain management framework. process entailed building a blockchain inside a
blockchain to protect the integrity and security of sensitive data, including
traceability and maintainability of the supply chain while managing the
manufacturing costs. In 2023, Ahmad Reegu et al. [31] have planned to create an
interoperable blockchain-based Electronic Health Record (EHR) platform. The
suggested framework could allow safer ways of exchanging medical data in the health
care sector, as well as permanence, safety, and access by users over stored
documents, eliminating the requirement for centrally storage. This work contributed
to a better understanding of the potential uses of blockchain technology in EHR
envi- ronments and proposed an extensible blockchain-based EHR framework that could
satisfy the needs of several national and international EHR standards. In general,
this work offered significant effects on the healthcare sector because it could
enhance the secure exchange and preservation of electronic health records while
protecting the secrecy, confidentiality, and authenticity of medical data. In 2023,
Dziyauddin et al. [32] have comprehended the challenges that exist in IoT and how
they may be addressed using the Blockchain idea. The IoT has been categorized as an
industry changer because it involves a multitude of intelligent gadgets with
computing, sensors, and actuator capabilities. Incorporating social media ideas
into the IoT in today’s culture has resulted in the development of an innovative
idea known as social IoT. The IoT deals mainly with the connection of different
smart devices. Because of the absence of basic safety options, every aspect of IoT
infrastructure was subject to privacy and security threats. In 2022, Ahmad Reegu et
al. [33] have investigated the network layer safety flaws associated with IoT. It
also investigated and assessed existing network-layer security issues and dangers,
in addition to mitigating and preventative measures solutions. B. PROBLEM STATEMENT
Managing a supply chain management system requires time, money, and human
resources. If not implemented properly, there is a service redundancy, and missed
deadlines. It is difficult to track the movement of goods and services across a
global supply chain and this will lead to delays and inef- ficiencies. Hence, a
blockchain-enabled secured and trusted framework is implemented to handle SCM in a
smart city environment. The pros and cons of existing SCM models are elaborated in
Table 1. Blockchain technology [18] increases the security and traceability of data
shared across the business network. But, blockchains are high energy-dependent and
the VOLUME 12, 2024 51755 A. Y. Ahmadad Bani Ahmad et al.: IoT and Blockchain-Based
Secure and Transparent SCM Framework integration process is complicated. CM [19]
provides real- time information to everyone along the supply chain. Yet, data
security and privacy threats occur and it is based on internet services, so
interruption can occur for any reason. PN [20] makes it easier to understand the
overall performance of the system and can automatically compute the system
invariant from the net syntax. But, they are inherently complex, which limits their
use in complex systems. BEST [21] is a decentralized structure, which improves the
security as well as privacy of the network. Still, high cost of implementation and
is inefficient in the mining process and this method needs a high level of security
through a private key. BCT [22] security of the system is improved because each
node within the blockchain has transaction copies. But, lack of distributed
computer systems and network security disruption are the main issues. IoT-based
device [23] improves the speed and accuracy of the supply chain process and
provides live monitoring and tracking automatically. Yet, IoT technology consumes a
large amount of energy, and initial costs and ongoing maintenance costs are also
high. BERT [24] provides better demand forecasts and reduces the medication error.
However, it prevents the supply chain from being reliable and responsive. IoT [25]
technique improves the resource management efficiency of the network. Still,
encryption and data overloading are the main issues. To overcome the existing
challenges, we developed an effectual blockchain- based secure, and transparent SCM
framework. While IoT-based blockchain-enabled supply chain man- agement systems
offer numerous advantages, there are a few potential disadvantages to consider: As
the number of IoT devices and transactions increases, the scalability of the
blockchain network may become a challenge. The system needs to handle a large
volume of data and trans- actions efficiently. The developed model can help manage
and prioritize data transactions to enhance the system’s scalability. Additionally,
implementing and maintaining a traditional IoT-based blockchain system can be
costly, espe- cially for small and medium-sized businesses. The expenses include
IoT device deployment, blockchain infrastructure, and ongoing maintenance. In the
recommended model, the RF-PO algorithm can help optimize resource allocation and
decision-making, leading to cost reductions in supply chain operations. Moreover,
ensuring compatibility and interoperability between different IoT devices and
blockchain networks can be complex in the existing models. Standard- ization
efforts are ongoing, but it may still pose a challenge in the implementation of
IoT-based blockchain systems. Optimizing the parameters can facilitate
interoperability by standardizing data formats and communication protocols. So, the
developed model optimizes the parameters like the threshold of temperature smoke,
and humidity to tackle the issues. This allows for seamless integration of
different IoT devices and ensures compatibility across blockchain networks.
Moreover, the individual process of the blockchain and IoT lacks network security,
requires more cost in the TABLE 2. Attributes details of the developed blockchain
and IoT-enabled secure and transparent supply chain management framework.
traditional models, and cannot be appropriate for offering effective privacy to the
data. But the developed integrated IoT and blockchain-based system addresses the
challenges of, cost, data privacy, and interoperability through the implementation
of the optimization algorithm. It optimizes scalability, reduces costs, enhances
data privacy and security, and promotes interoperability among different IoT
devices and blockchain networks. III. AN INTRODUCTION TO SECURE AND TRANSPARENT
SUPPLY CHAIN MANAGEMENT USING BLOCKCHAIN-BASED OPTIMAL QUEUE MODEL A. ATTRIBUTES
DETAILS The following are the attributed
aids in developing the IoT and Blockchain-based SCM system. The developed model
can be completed by initializing these parameters in Table 2. B. SUPPLY CHAIN
MANAGEMENT IN SMART CITIES-BRIEF INTRODUCTION IoT is the main component that is
employed in the smart cities. To improve the lives of people living in smart
cities, these IoT devices gather and transfer useful information to them. Smart
city applications like smart traffic environment, smart agriculture, smart grid,
smart supply chain, smart home automation, and smart healthcare are utilized to
share that information. The need for IoT devices is maximizing daily because of the
smart city applications. To manage a greater number of IoT devices, data storage,
scalability, fast computing, and high bandwidth, edge computing servers are
utilized. To ensure the flow of business in urban areas, supply chain management
systems are essential. Delivering, 51756 VOLUME 12, 2024 A. Y. Ahmadad Bani Ahmad
et al.: IoT and Blockchain-Based Secure and Transparent SCM Framework returning,
and planning are some of the phases of the supply chain. During this business flow
the necessary information is protected by the blockchain. The communication issues
between the stakeholders and partners are resolved by enabling blockchain
technology in supply chain manage- ment. Supply chain management covers the process
of turning a raw material into a useful product. Consumers, retailers,
distributors, manufacturers, and suppliers are the five entities in supply chain
management. The products are transferred among each entity by paying a particular
amount for each product. Giving PES to residents of smart cities to shield them
from dangerous situations is another crucial factor in SCM. The current PESs solely
concentrate on the intelligent healthcare system to offer medications based on
patient requests via the centralized system. But, more PESs are needed, like a
smart fire brigade system that effectively manages service requests for a smart
house from the fire department during an emergency. The smart home’s IoT gadgets
are set up to gather data about the environment and send it to the central
processing unit for additional processing through an edge computing server. The
fire department can retrieve fire brigade service requests through the centralized
system and take appropriate action. The rapid production cycle is achieved with the
help of managing the supply chain in smart cities. A pictorial view of blockchain-
enabled supply chain management in smart cities is provided in Figure 1. C.
BLOCKCHAIN PRELIMINARIES Blockchain is an append-only data structure that replaces
the centralized system by maintaining immutable transactions among unknown and
untrusted parties in the form of a distributed ledger. The financial application
that allows people to move digital assets from one place to another in minutes has
made the Bitcoin blockchain well-known. The users of the Bitcoin blockchain are
linked together in a peer- to-peer network, and they sign transactions using a pair
of private and public keys. This gets rid of the middleman’s job of validating the
transaction on the Bitcoin blockchain. Blockchain technology has distinct features
including smart contracts, transparency, immutability, consensus protocol, and
distributed ledger. With the help of private and public keys, anyone can join the
blockchain network. The most well-known private blockchain systems are Hyperledger
Indy, HyperledgerBesu, and Fabric. Popular public blockchain networks include
Quorum, Litecoin, R3 Corda, Ethereum, and so on. These two blockchain systems are
utilized for creating smart city apps and implementing financial applications. 1)
BLOCK Blockchain is composed of numerous blocks. In each block, a body and a header
are presented. Transaction information is stored in the block body. Genesis is the
first block’s name in the blockchain. It has information like smart contract logic
address, consensus protocol, and validator. A cryptographic hash function is formed
by connecting all the blocks present after the genesis block. 2) SMART CONTRACT A
self-implementable code written between two organiza- tions like an agreement is
known as a smart contract. It helps to store information without any third-party
app intervention. The smart contracts are not changeable after it is employed in
blockchain. Based on some conditions it automatically executes. D. PROPOSED
BLOCKCHAIN-ENABLED SUPPLY CHAIN MANAGEMENT SYSTEM The prior technologies used for
managing supply chain networks are vulnerable to cyber-attacks. So, a secured
blockchain technique is needed. Due to the usage of untrusted hardware, the
integrity of the supply chain is highly affected. Lack of real-time information,
poor traceability, and fragmentation are some of the issues in the existing supply
chain management approaches. The request processing time of the traditional methods
used in the field of supply chain management is high. Storage is also the biggest
issue in managing requests, so the usage of an efficient storage mechanism will be
beneficial for handling more amounts of requests and storage. Interchangeability
and information compatibility are also two issues that need to be solved in the
supply chain management frameworks. Moreover, giving priority to the requests that
are raised first should be given more importance. Most of the existing systems lack
security and integrity. Resolving or responding to the requests takes more time in
traditional techniques due to more amounts of requests. Therefore, an efficient
technique to offer high security and transparency is developed. The diagrammatic
view of the proposed blockchain-enabled supply chain management system is
visualized in Figure 2. A blockchain and IoT-enabled supply chain manage- ment
approach is proposed to improve the security and transparency of the supply chain.
Blockchain is employed to handle the data storage. Data processing and the PES
requests are managed by the service controller. A queuing model is utilized by the
service controller to fulfill the PES requirements. To fulfill those requests
effectively within a short period, smart cities are divided into small sub- areas.
Each sub-area consisted of a limited number of smart homes employed with IoTs. This
SCM framework is further enhanced by optimizing the parameters in the queue model
such as temperature threshold, smoke threshold, and humidity threshold to improve
the difference between actual and expected arrival time. Also, it is beneficial for
decreasing the end-to-end delay, actual arrival time, queue length, and
utilization. This parameter optimization in the queue model is done via the
proposed RF-PO algorithm. By employing this queue model, the PES request that is
raised first is given more priority than the last received request. This helps to
increase the transparency of the supply chain. The outcomes of the developed
mechanism are correlated with various techniques VOLUME 12, 2024 51757 A. Y.
Ahmadad Bani Ahmad et al.: IoT and Blockchain-Based Secure and Transparent SCM
Framework FIGURE 1. Pictorial view of blockchain-enabled supply chain management in
smart cities. that are used to improve the supply chain processes and algorithms.
One popular blockchain platform for supply chain man- agement is Hyperledger
Fabric. It allows for the development of secure and transparent supply chain
solutions. It offers features like permission access, encryption, and privacy
controls, making it an ideal choice for implementing the RF-PO. In terms of the
consensus algorithm integrated into the RF-PO, it depends on the specific
implementation and requirements of the SCM system. It ensures the security of the
SCM system by validating and agreeing upon the order of transactions. By achieving
consensus among network participants, the system ensures that only legitimate and
authorized transactions are added to the blockchain, enhancing the security and
integrity of the supply chain data. By combining the RF-PO with a Hyperledger
Fabric blockchain platform, the proposed blockchain-enabled secure and transparent
SCM system can provide enhanced security, transparency, and efficiency for supply
chain operations. E. IOT DATA COLLECTION AND SHARING RELATED PRIVACY CONSIDERATIONS
When it comes to the collection and sharing of IoT data within the supply chain,
privacy considerations are crucial. IoT devices in the supply chain can gather a
vast amount of data, 51758 VOLUME 12, 2024 A. Y. Ahmadad Bani Ahmad et al.: IoT and
Blockchain-Based Secure and Transparent SCM Framework FIGURE 2. Diagrammatic view
of the proposed blockchain-enabled supply chain management system. including
location, temperature, and product information. To ensure privacy, it’s important
to take the following considerations into account. ❖ Data Minimization: Collect
only the necessary data to fulfill the intended purpose and avoid collecting
sensitive or personally identifiable information unless necessary. This helps
minimize the privacy risks associated with data collection. ❖ Consent and
Transparency: Obtain explicit consent from individuals whose data is being
collected and ensure transparency about how the data will be used and shared. Clear
communication helps to build trust and maintain privacy. ❖ Data Security: Implement
robust security measures to protect IoT data from unauthorized access, breaches, or
tampering. This includes encryption, secure storage, and regular updates to address
vulnerabilities. ❖ Anonymization and Aggregation: Prioritize anonymization and
aggregation of data whenever possible to protect individual privacy. By removing
personally identifiable information and aggregating data, it becomes harder to
identify specific individuals or track their activities. ❖ Data Retention:
Establish clear policies regarding the retention of IoT data. Only retain data
for as long as necessary and securely dispose of it when it is no longer needed.
This helps minimize the risk of unauthorized access or misuse. By considering these
privacy considerations, companies can ensure that the collection and sharing of IoT
data within the supply chain align with privacy regulations and protect the rights
of individuals involved. The blockchain-based framework, along with RF-PO and
optimal queue model, can contribute to data privacy and confidentiality in the
following ways. ❖ Distributed Ledger: The decentralized nature of the blockchain,
combined with optimization algorithms, helps maintain data privacy. By distributing
copies of the ledger across multiple nodes, it becomes harder for unauthorized
individuals to access or manipulate the data without consensus from the network.
VOLUME 12, 2024 51759 A. Y. Ahmadad Bani Ahmad et al.: IoT and Blockchain-Based
Secure and Transparent SCM Framework ❖ Access Controls: RF-PO can be employed to
determine access controls within the blockchain framework. These algorithms can
assign permissions and roles to participants, ensuring that only authorized
individuals can view or interact with specific data. ❖ Optimal Queue Model: The
optimal queue model can help streamline and prioritize data transactions within the
blockchain network. By optimizing the queue, it becomes easier to manage and
control data access, reducing the risk of unauthorized access or data breaches. ❖
Smart Contracts: Smart contracts, combined with RF- PO, can enforce data privacy
and confidentiality. These contracts can define conditions for accessing or sharing
data, ensuring that only authorized parties can engage with the data stored on the
blockchain. By incorporating RF-PO and the optimal queue model into the blockchain-
based framework in the SCM, data privacy and confidentiality can be enhanced. These
techniques work together to secure data, control access, and prioritize
transactions, providing a robust environment for protecting sensitive information.
Blockchain technology, characterized by its decentralized and immutable nature, has
emerged as a transformative innovation with the potential to reshape various
industries (Ali et al., 2020; Aoun et al., 2021; Bellavitis et al., 2023). Rooted
in its application to cryptocurrencies like Bitcoin, blockchain's capabilities
extend far beyond digital currencies (Tredinnick, 2019). It presents a novel
approach to data management and verification that can revolutionize traditional
processes (Wieczorowski et al., 2023). This article delves into the utilization of
blockchain technology and its profound implications for enhancing supply chain
efficiency, optimizing export performance, and ultimately influencing the financial
health of Small and Medium- sized Enterprises (SMEs). Blockchain, often referred to
as a distributed ledger, is a transparent and tamper-resistant digital record-
keeping system (Ajao et al., 2019; Farouk et al., 2020; Hamilton, 2020). Its
decentralized architecture eliminates the need for intermediaries, thus mitigating
issues related to trust and transparency (Hassija et al., 2021; Murimi et al.,
2023; Omar et al., 2021). By securing transactions through cryptographic
principles, blockchain ensures immutability and integrity 450 of data (Rahman et
al., 2022; Tao et al., 2021; Yaqoob et al., 2022). These attributes hold
considerable promise for transforming the way businesses manage their operations
and information (Jarrahi, 2018; McMaster et al., 2020). Efficient supply chain
management is paramount for businesses, particularly SMEs, as it directly
influences competitiveness, cost savings, and customer satisfaction (Atnafu &
Balda, 2018; Kot, 2018). Streamlined supply chains lead to reduced lead times,
minimized operational inefficiencies, and enhanced overall productivity (Kumar &
Shankar, 2022; Moons et al., 2019). Furthermore, optimizing export performance is
crucial in today's globalized market, as international trade represents a
significant revenue source for many SMEs (Gregory et al., 2019; Prange & Pinho,
2017). Effective export processes encompass documentation, customs clearance, and
logistics coordination, all of which can be subject to complexity and delays
(López-Campos et al., 2019; Tijan et al., 2019). Additionally, SMEs' financial
health is a critical aspect of their sustainability and growth (Lopes de Sousa
Jabbour et al., 2020; Min et al., 2021; Siegel et al., 2019). Sound financial
performance allows for investment in innovation, expansion, and resilience against
economic uncertainties (Conz et al., 2023; Uddin et al., 2021). The existing
literature highlights the potential benefits of blockchain technology in enhancing
supply chain efficiency, export performance, and financial health for businesses
(Dal Mas et al., 2023; Mahyuni et al., 2020; Natanelov et al., 2022). However,
there is a noticeable research gap in understanding how these theoretical
advantages translate into tangible outcomes, specifically within the context of
Small and Medium-sized Enterprises (SMEs). Most studies have focused on larger
enterprises, leaving a lack of comprehensive insights into the challenges and
opportunities faced by SMEs in adopting blockchain technology. Furthermore, while
the interplay between supply chain efficiency, export performance, and financial
health is acknowledged, a thorough exploration of how blockchain technology
influences these interconnected aspects remains underexplored, particularly in
relation to SMEs. The novelty of this study lies in its focus on the practical
implications of blockchain technology for SMEs, with a specific emphasis on the
intertwined impact on supply chain efficiency, export performance, and financial
health. By addressing the research gap mentioned earlier, this study contributes
novel insights into the real-world outcomes of blockchain adoption by SMEs.
Additionally, the investigation of blockchain's multifaceted effects on SMEs'
operational and financial dimensions offers a unique perspective that can aid both
academics and practitioners in understanding the holistic value proposition of
blockchain technology in SME contexts. The motivation behind conducting this
research stems from the pressing need to bridge the gap between the theoretical
promise of blockchain technology and its practical application for SMEs. SMEs
constitute a significant portion of the global economy and play a vital role in
generating employment and fostering innovation. However, they often face resource
constraints and challenges in adopting new technologies. By investigating the
actual impact of blockchain on supply chain efficiency, export performance, and
financial health within the SME ecosystem, this study aims to provide actionable
insights that can empower SMEs to make informed decisions about adopting blockchain
technology. Moreover, understanding these dynamics can contribute to the
formulation of policies and strategies that promote SME growth and sustainability.
The primary objectives of this research are as follows: • To Evaluate Blockchain's
Impact on Supply Chain Efficiency: This objective involves assessing how the
adoption of blockchain technology influences the efficiency of supply chain
management in SMEs. By examining factors such as transparency, traceability, and
data integrity, the study aims to quantify the improvements that blockchain
technology can bring to supply chain processes. • To Analyze the Effects of
Blockchain on Export Performance: This objective focuses on investigating the
effects of blockchain technology on export-related processes and performance. The
study will delve into areas such as customs clearance, documentation accuracy, and
coordination, aiming to uncover the extent to which blockchain adoption can
streamline export operations. • To Examine the Implications of Blockchain on SME
Financial Performance: This objective centers on understanding the financial
implications of blockchain technology for SMEs. The study will analyze financial
metrics before and after blockchain adoption, aiming to discern any correlations
between enhanced supply chain efficiency, improved export performance, and overall
financial health. By achieving these objectives, the research endeavors to provide
a comprehensive understanding of the role blockchain technology plays in enhancing
SMEs' operational efficiency, export capabilities, and financial standing. 2.
Literature Review and Hypothesis Development 2.1 Utilizing Blockchain Technology
and Supply Chain Efficiency Janssen et al. (2020) explain that utilizing blockchain
technology refers to the strategic adoption and integration of blockchain- based
solutions into various operational processes and systems of an organization.
Blockchain technology utilizes a distributed E. Purwaningsih et al. /Uncertain
Supply Chain Management 12 (2024) 451 ledger system, where transactions are
securely recorded in a decentralized and immutable manner (Rajasekaran et al.,
2022). This technology offers enhanced transparency, traceability, and security,
thereby potentially streamlining processes and reducing inefficiencies (Dutta et
al., 2020). According to Qi et al. (2017), Supply chain efficiency refers to the
degree to which an organization's supply chain functions optimally, minimizing
waste, reducing costs, and delivering products or services to customers in a timely
manner. An efficient supply chain effectively manages the flow of goods,
information, and resources from suppliers to end-users, ensuring that each stage of
the process is executed with minimal delays and disruptions (Omar et al., 2022).
The utilization of blockchain technology engenders a transformative relationship
with supply chain efficiency, epitomizing an alliance of innovation and operational
optimization (Zekos, 2021). Blockchain's decentralized ledger system brings about
heightened transparency and traceability, empowering stakeholders to impeccably
track product movement and authenticate information throughout the supply chain
journey (Rauniyar et al., 2023). By obviating intermediaries, this technology
expedites interactions, thereby circumventing delays associated with third-party
interventions (Appelbaum et al., 2022). Furthermore, blockchain's integration of
smart contracts augments supply chain automation, from payment execution to
compliance adherence, thus curtailing the margin of error associated with manual
intervention (Karisma & Moslemzadeh Tehrani, 2023). Its secure and collaborative
data-sharing framework bolsters real-time information exchange among authorized
entities, forestalling information silos that often culminate in bottlenecks. This
augmented visibility, coupled with the technology's potential to prognosticate and
mitigate disruptions, culminates in a synergistic liaison that not only enhances
the efficiency of supply chains but also fosters streamlined operations, reduced
lead times, cost optimization, and an elevated echelon of customer satisfaction
within the intricate tapestry of modern supply chain dynamics (Jaiswal et al.,
2023; Lebovitz et al., 2022; Zaman et al., 2023). Based on the information and
previous studies, the proposed hypothesis is as follows: H1: The utilization of
Blockchain Technology has a positive and significant impact on Supply Chain
Efficiency. 2.2 Utilizing Blockchain Technology and Export Performance The
strategic integration of blockchain solutions into business operations, known as
Utilizing Blockchain Technology, is aimed at enhancing transparency and operational
efficiency through the implementation of secure and decentralized data management
(Dutta et al., 2020). The nexus between this utilization and Export Performance is
founded on the premise that adopting blockchain can yield optimization across
various dimensions of export activities (Shojaei et al., 2021). By enabling real-
time tracking,
secure documentation, and automated smart contracts, blockchain has the potential
to streamline cross- border transactions, mitigate delays, reduce fraud risks, and
foster trust among trading partners (Javaid et al., 2022). This symbiotic
relationship holds the promise of significantly augmenting export efficiency,
broadening market access, ultimately resulting in an elevated export performance by
redefining the efficacy of international trade processes (Côté et al., 2020). As
enterprises increasingly look to capitalize on technological innovations, the
incorporation of blockchain emerges as a pivotal avenue for refining export-
oriented procedures, fortifying global trade relationships, and contributing to
more robust and prosperous export endeavors (Hameed et al., 2022). Thus, the
proposed hypothesis is as follows: H2: The utilization of Blockchain Technology has
a positive and significant impact on Export Performance. 2.3 Utilizing Blockchain
Technology and Financial Performance of SMEs Rejeb et al. (2022) assess that the
strategic assimilation of blockchain solutions, distinguished by their
decentralized and secure ledger architecture, holds the promise of reshaping
financial paradigms. By engendering streamlined processes and diminishing reliance
on intermediaries, blockchain stands to optimize financial operations, expedite
transactions, and curtail associated costs (Anderson Schillig, 2023). The immutable
nature of blockchain's record-keeping reinforces transparency, accountability, and
fraud prevention, thereby engendering a climate of investor confidence (Raddatz et
al., 2023). Moreover, the automation facilitated by smart contracts has the
potential to enhance payment precision, fortify cash flow management, and
contribute to the augmentation of key financial indicators for SMEs (Bello et al.,
2021). This symmetrical confluence between blockchain technology and SME financial
performance underscores a trajectory towards heightened competitiveness,
sustainable resilience, and growth within the evolving contours of a digitally-
driven business milieu (Razzaq et al., 2023). Thus, a deliberate examination of the
intricate interplay between blockchain technology and the financial outcomes of
SMEs emerges as a pivotal stride toward unlocking its full potential and propelling
SMEs towards prosperity in the contours of the contemporary economic landscape. The
nexus between the Utilization of Blockchain Technology and the Financial
Performance of Small and Medium-sized Enterprises (SMEs) is characterized by its
capacity to catalyze transformative advancements (Di Vaio et al., 2023; Lukonga,
2021; Soluk & Kammerlander, 2021). Drawing from the reservoir of information and
antecedent research, the formulated hypothesis stands as follows: H3: The
utilization of Blockchain Technology has a positive and significant impact on
Financial Performance of SMEs. 452 2.4 Supply Chain Efficiency and Financial
Performance of SMEs Supply Chain Efficiency entails optimizing various aspects of
supply chain management, including inventory management, production processes, and
distribution, to minimize costs, enhance responsiveness, and improve resource
allocation (Moons et al., 2019). This efficiency directly impacts SMEs' bottom line
by reducing operational expenses, optimizing resource utilization, and accelerating
order fulfillment (Le & Ikram, 2022). As a result, improved Supply Chain Efficiency
contributes to higher profit margins, enhanced cash flow, and increased return on
investment (Siagian et al., 2021). Additionally, an efficient supply chain
translates into improved customer satisfaction and retention, further positively
impacting SMEs' revenue generation and financial health (Gorane & Kant, 2017). This
intricate connection highlights the significance of strategic supply chain
management not only in driving operational excellence but also in shaping the
financial prowess of SMEs in a competitive business landscape (Naughton et al.,
2020). Therefore, the proposed hypothesis is as follows: H5: Supply Chain
Efficiency has a positive and significant impact on Financial Performance of SMEs.
2.5 Export Performance and Financial Performance of SMEs Financial performance of
Small and Medium-sized Enterprises (SMEs) encapsulates their fiscal health and
profitability (Alshira’h et al., 2020). It encompasses indicators such as revenue
growth, profitability margins, liquidity ratios, and return on investment (Alarussi
& Alhaderi, 2018). Sound financial performance ensures that SMEs can sustain
operations, invest in growth initiatives, and weather economic uncertainties
(Belhadi et al., 2021). The interplay between export performance and the financial
performance of SMEs is integral to their overall success and growth trajectory
(Cassetta et al., 2020). Effective export strategies can significantly impact the
financial bottom line of SMEs. A robust export performance can lead to increased
revenues and profits as SMEs tap into larger markets and diverse customer bases
(Hutahayan, 2020). This expansion, if managed efficiently, can bolster the
financial resilience of SMEs by diversifying their revenue sources. Conversely, a
positive financial performance allows SMEs to invest in the necessary resources,
technologies, and capabilities required to enhance their export activities (Edeh et
al., 2020). Adequate financial resources enable SMEs to engage in market research,
establish distribution networks, meet regulatory requirements, and adapt products
to suit international customer preferences (Tolstoy et al., 2022). Moreover, the
generated profits can be reinvested to sustain and scale export efforts, promoting
long-term growth. The relationship between export performance and the financial
health of SMEs is mutually reinforcing. An improved export performance contributes
to enhanced financial performance through increased revenues, while a healthy
financial standing empowers SMEs to invest in strategies that drive export growth
(Hu & Kee, 2022). This synergy underscores the significance of a balanced approach,
where optimizing export opportunities contributes to the financial vitality of
SMEs, fostering their ability to thrive in the global marketplace. Therefore, the
proposed hypothesis is as follows: H5: Export Performance has a positive and
significant impact on Financial Performance of SMEs. 2.5 Supply Chain Efficiency
and Export Performance as Mediator Supply chain efficiency acts as a conduit
through which the positive impacts of both Blockchain Technology utilization and
improved Export Performance are channeled to influence SMEs' Financial Performance
(Singh et al., 2020). The utilization of Blockchain Technology can optimize various
aspects of the supply chain, from transparent and secure documentation to
streamlined customs processes. These improvements reduce delays, errors, and costs
in the export journey. Enhanced supply chain efficiency further amplifies the
benefits of Blockchain Technology and improved Export Performance. By expediting
processes, reducing lead times, and optimizing resource allocation, it ensures that
the gains from streamlined export operations are maximized. This, in turn, has
direct implications for SMEs' financial performance. Cost savings and minimized
resource wastage translate to improved profitability, while timely deliveries and
enhanced customer satisfaction contribute to customer retention and revenue growth
(De Giovanni & Cariola, 2021). The optimized interplay between Blockchain
Technology, Export Performance, and Supply Chain Efficiency significantly impacts
SMEs' Financial Performance. A well-functioning supply chain efficiently translates
the benefits of Blockchain Technology into tangible financial gains. Furthermore,
the enhanced Export Performance, facilitated by blockchain-enabled efficiencies,
contributes to revenue growth and improved profitability. Collectively, these
factors fortify SMEs' financial health, underlining the pivotal role that Supply
Chain Efficiency assumes as a mediator in this intricate relationship. Supply Chain
Efficiency stands as a linchpin in the complex dynamics between the utilization of
Blockchain Technology, Export Performance, and SMEs' Financial Performance. Its
role as a mediator highlights its capacity to amplify the positive impacts of
technology adoption and export successes, ultimately fostering sustainable
financial prosperity for SMEs. Therefore, the proposed hypothesis is as follows:
H6: Supply Chain Efficiency mediates the relationship between The utilization of
Blockchain Technology and Financial Performance of SMEs
Purpose: The aim of the study was to influence the impact of blockchain technology
on supply chain management efficiency and transparency Methodology: This study
adopted a desk methodology. A desk study research design is commonly known as
secondary data collection. This is basically collecting data from existing
resources preferably because of its low cost advantage as compared to a field
research. Our current study looked into already published studies and reports as
the data was easily accessed through online journals and libraries. Findings: A
study on the impact of blockchain technology on supply chain management in Pakistan
revealed significant improvements in efficiency and transparency. Through
blockchain integration, supply chain processes experienced reduced delays and
increased automation, leading to streamlined operations. Transparency was notably
enhanced, with real-time tracking of goods and secure data sharing among
stakeholders, mitigating risks of fraud and error. These findings suggest that
adopting blockchain technology holds promise for enhancing supply chain management
in Pakistan by fostering greater efficiency and transparency. Unique Contribution
to Theory, Practice and Policy: Diffusion of innovations theory, information
processing theory & resource dependency theory may be used to anchor future studies
on the impact of block chain technology on supply chain management efficiency and
transparency. Encourage supply chain stakeholders to adopt blockchain solutions for
enhanced transparency, traceability, and efficiency. Advocate for regulatory
frameworks that promote the adoption of blockchain technology in supply chains
while addressing concerns related to data privacy, interoperability, and
standardization. Keywords: Block chain Technology, Supply Chain Management
Efficiency, Transparency ©2024 by the Authors. This Article is an open access
article distributed under the terms and conditions of the Creative Commons
Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/) Supply
chain management efficiency refers to the ability of supply chain processes to
deliver goods or services to end customers in a timely manner while minimizing
costs and maximizing resource utilization. In developed economies such as the USA,
advancements in technology have significantly contributed to improving supply chain
efficiency. For instance, the widespread adoption of automation and robotics in
warehouses and distribution centers has led to streamlined operations and faster
order fulfillment. According to a study by Lambert and Cooper (2018), the USA has
witnessed a 10% increase in supply chain productivity over the past five years due
to technological innovations. Additionally, the implementation of sophisticated
inventory management systems has reduced excess inventory levels, leading to cost
savings and improved cash flow within supply chains (Christopher, 2016).
Transparency in supply chain management refers to the visibility of information and
processes throughout the supply chain network, enabling stakeholders to track the
movement of goods, monitor production processes, and ensure compliance with ethical
and regulatory standards. In countries like the UK, regulatory initiatives such as
the Modern Slavery Act have prompted companies to enhance transparency in their
supply chains by disclosing information about their efforts to combat forced labor
and human trafficking (Gereffi, 2015). As a result, there has been a significant
increase in the number of companies publishing modern slavery statements, with a
35% rise in compliance rates reported in the UK over the past five years (UK
Government, 2020). This increased transparency not only helps mitigate reputational
risks for companies but also fosters trust among consumers and investors in the
integrity of their supply chains. In developing economies, supply chain management
efficiency is often challenged by infrastructural limitations, fragmented logistics
networks, and regulatory complexities. For example, in India, despite significant
economic growth, supply chain inefficiencies persist due to inadequate
transportation infrastructure and lengthy bureaucratic procedures at border
checkpoints. However, advancements in digital technologies such as blockchain and
mobile applications are increasingly being leveraged to overcome these challenges
and enhance supply chain efficiency (Khan & Qian, 2017). As a result, there has
been a noticeable improvement in supply chain performance indicators, with a 15%
reduction in average lead times reported by companies adopting digital supply chain
solutions (Sharma & Kodali, 2019). In Indonesia, supply chain management efficiency
faces challenges due to issues such as infrastructure limitations, complex
regulatory frameworks, and geographical diversity. These challenges often lead to
inefficiencies in transportation and logistics operations, resulting in higher
costs and longer lead times (Kusrini, 2018). However, the adoption of digital
technologies, such as cloud-based supply chain management systems and IoT-enabled
tracking devices, has shown promise in overcoming these obstacles and improving
supply chain efficiency. For example, companies implementing cloud-based supply
chain solutions have reported a 20% reduction in inventory carrying costs and a 15%
increase in on-time deliveries (Wibowo & Suhardi, 2020). In Pakistan, supply chain
transparency is a key concern, particularly in sectors such as textiles and
agriculture, where issues such as counterfeit products and ethical sourcing
practices pose significant challenges. To address these concerns, initiatives such
as supply chain audits and International Journal of Supply Chain Management ISSN
2518-4709 (Online) Vol.9, Issue 1, No.2, pp 16 - 26, 2024 www.iprjb.org 16
certification programs have been introduced to ensure compliance with ethical
standards and improve transparency throughout the supply chain (Khan & Bibi, 2019).
As a result, certified companies have seen improvements in brand reputation and
market share, with a 25% increase in consumer trust and a 30% rise in sales
reported by certified suppliers (Ali & Khan, 2020). These examples highlight the
importance of leveraging technology and adopting transparent practices to enhance
supply chain efficiency and transparency in developing economies. In other
developing countries, supply chain management efficiency and transparency are often
influenced by a combination of factors such as infrastructure deficiencies,
regulatory constraints, and socio-economic challenges. For instance, in Brazil,
supply chain efficiency has historically been hindered by inadequate transportation
networks and complex tax regulations, leading to delays in product deliveries and
increased operational costs (Bohmann, Kipper, & Esteves, 2018). However,
initiatives such as the implementation of supply chain management software and the
adoption of lean principles have contributed to improvements in inventory
management and order fulfillment processes, resulting in a 20% reduction in
logistics costs for participating companies (Pereira & Christopher, 2020).
Similarly, in Vietnam, supply chain transparency has emerged as a critical issue
due to concerns related to corruption, counterfeit goods, and ethical sourcing
practices. However, efforts to enhance transparency through initiatives such as the
development of traceability systems and certification programs have gained traction
(Nguyen, Le, & Pham, 2019). As a result, there has been a noticeable increase in
consumer trust and confidence in product quality, with a 25% rise in sales reported
by companies implementing traceability solutions (Nguyen & Nguyen, 2020). These
examples underscore the importance of addressing supply chain challenges in
developing countries through a combination of technological innovation, regulatory
reform, and stakeholder collaboration to drive economic growth and sustainable
development. In Nigeria, supply chain management efficiency faces challenges
stemming from inadequate infrastructure, bureaucratic red tape, and security
concerns. These issues often result in delays in transportation and distribution,
leading to increased costs and inefficiencies within the supply chain (Eze, Eze, &
Ndu, 2018). However, advancements in information and communication technologies
(ICT) are being leveraged to address these challenges and improve supply chain
efficiency. For example, the implementation of electronic data interchange (EDI)
systems and GPS tracking solutions has enabled real-time monitoring of shipments
and optimized route planning, resulting in a 15% reduction in delivery lead times
and a 10% decrease in transportation costs for companies adopting these
technologies (Okoro, Amaeshi, & Adegbite, 2019). In South Africa, supply chain
transparency has become a focal point for addressing issues such as corruption,
unethical practices, and product authenticity concerns. Initiatives such as the
implementation of blockchain technology and supply chain certification programs
have been introduced to enhance transparency and traceability across various
industries (Van Zyl & Van Biljon, 2020). As a result, there has been a notable
increase in consumer confidence and brand reputation, with certified companies
reporting a 20% increase in market share and a 30% improvement in customer loyalty
(Makoni & van Rooyen, 2017). These efforts underscore the importance of adopting
transparent and accountable supply chain practices to foster economic development
and build trust among stakeholders in emerging economies. International Journal of
Supply Chain Management ISSN 2518-4709 (Online) Vol.9, Issue 1, No.2, pp 16 - 26,
2024 www.iprjb.org 17 Similarly, in sub-Saharan African economies like Kenya,
supply chain transparency has historically been a concern due to issues
such as corruption, informal market practices, and weak regulatory enforcement.
However, initiatives such as the Kenya TradeNet System, a single window platform
for trade facilitation, have contributed to greater transparency and efficiency in
cross- border trade processes (Kihato & Mathenge, 2018). As a result, Kenya has
seen a 20% increase in trade volumes and a 30% reduction in trade transaction costs
over the past five years, according to data from the World Bank (World Bank, 2021).
These improvements underscore the transformative potential of technology-enabled
solutions in enhancing supply chain transparency and driving economic growth in
sub-Saharan Africa. The adoption and implementation of blockchain technology in the
supply chain represent a significant conceptual shift in traditional supply chain
management paradigms. Blockchain, as a decentralized and immutable ledger system,
offers unparalleled transparency, traceability, and security in supply chain
operations. By enabling the recording and verification of transactions across the
entire supply chain network, blockchain enhances data integrity and trust among
stakeholders (Smith & Johnson, 2018). Moreover, blockchain's decentralized nature
reduces reliance on intermediaries, streamlines processes, and mitigates the risk
of fraud or tampering, thereby improving supply chain efficiency (Gupta & Sharma,
2020). This conceptual analysis underscores blockchain's transformative potential
in revolutionizing supply chain management practices, ushering in a new era of
transparency, efficiency, and collaboration. Four likely adoption and
implementation scenarios of blockchain technology in the supply chain include:
Traceability and provenance tracking, where blockchain enables real-time tracking
of goods from their origin to the final destination, enhancing transparency and
accountability (Chen & Wang, 2019); Smart contracts and automated transactions,
wherein blockchain facilitates the execution of self-executing contracts,
automating payment settlements and reducing transactional frictions, thus improving
supply chain efficiency (Wang & Li, 2017); Supply chain finance and payment
systems, where block chain facilitates secure and transparent transactions,
enabling faster and more cost-effective financing options for supply chain
participants, thereby enhancing financial transparency (Park & Lee, 2019); and
Compliance and regulatory reporting, wherein blockchain ensures the integrity and
auditability of regulatory data, simplifying compliance efforts and reducing
regulatory risks, thereby enhancing transparency and risk management in the supply
chain (Zhang & Liu, 2018). These adoption scenarios underscore the diverse ways in
which blockchain technology can be leveraged to enhance supply chain management
efficiency and transparency, paving the way for a more resilient and sustainable
global supply chain ecosystem. Problem Statement Despite increasing interest and
investment in blockchain technology for supply chain management, there remains a
gap in understanding the precise impact of blockchain on enhancing efficiency and
transparency within supply chains. While numerous studies highlight the potential
benefits of blockchain in streamlining processes and improving visibility,
empirical evidence demonstrating its tangible effects on supply chain performance
is still limited. Furthermore, the rapid evolution of blockchain technology and its
diverse applications pose challenges in assessing its effectiveness and scalability
in real-world supply chain contexts. Recent research by Sharma (2021) emphasizes
the need for comprehensive empirical studies to evaluate the actual impact of
blockchain International Journal of Supply Chain Management ISSN 2518-4709 (Online)
Vol.9, Issue 1, No.2, pp 16 - 26, 2024 www.iprjb.org 18 technology on supply chain
efficiency and transparency. While theoretical frameworks abound, empirical
evidence is essential to validate these theories and guide practical implementation
strategies. Moreover, as supply chains become increasingly complex and globalized,
with diverse stakeholders and dynamic environments, there is a pressing need to
understand how blockchain can address specific challenges and deliver measurable
improvements in supply chain operations. Furthermore, the scalability and
interoperability of blockchain solutions remain key concerns for supply chain
practitioners and policymakers. Recent studies by Ivanov (2020) underscore the
importance of addressing technical limitations and standardization issues to unlock
the full potential of blockchain technology in supply chains. Without clear
guidelines and interoperable platforms, the adoption of blockchain may face
barriers, hindering its ability to deliver the promised benefits of efficiency and
transparency. In light of these challenges, there is a compelling need for further
research to empirically evaluate the impact of blockchain technology on supply
chain management efficiency and transparency. By conducting rigorous empirical
studies, researchers can provide valuable insights into the practical implications
of blockchain adoption, inform strategic decision-making by supply chain
stakeholders, and contribute to the advancement of knowledge in this critical area
of research. Theoretical Framework Diffusion of Innovations Theory This theory,
proposed by Everett Rogers, explores how innovations are adopted and diffused
within a social system over time. It identifies factors influencing the adoption
process, such as the perceived benefits of the innovation, its compatibility with
existing practices, and the communication channels used to disseminate information.
The Diffusion of Innovations Theory provides insights into the factors influencing
the adoption of blockchain technology in supply chains. By understanding the
characteristics that facilitate or hinder adoption, researchers can identify
strategies to promote the widespread implementation of blockchain solutions for
improved efficiency and transparency. (Rogers, 2003) Information Processing Theory
Information Processing Theory focuses on how individuals acquire, interpret, and
use information to make decisions and solve problems. It examines cognitive
processes such as attention, perception, memory, and decision-making, highlighting
the importance of information availability, accuracy, and relevance. In the context
of blockchain technology and supply chain management, Information Processing Theory
helps explain how stakeholders utilize blockchain- generated data to enhance
decision-making and operational efficiency. By studying how information flows
within blockchain-enabled supply chains, researchers can assess its impact on
transparency and decision quality. (Daft & Lengel, 1984) Resource Dependency Theory
Resource Dependency Theory, developed by Pfeffer and Salancik, posits that
organizations depend on external resources to survive and thrive. It examines power
dynamics and interorganizational. Resource Dependency Theory sheds light on the
dynamics between supply chain actors and the role of blockchain technology in
reducing dependency on intermediaries and International Journal of Supply Chain
Management ISSN 2518-4709 (Online) Vol.9, Issue 1, No.2, pp 16 - 26, 2024
www.iprjb.org 19 enhancing supply chain autonomy. By decentralizing information and
transactions, blockchain mitigates risks associated with traditional centralized
supply chain models, thereby improving efficiency and transparency. (Pfeffer &
Salancik, 1978) Empirical Review Smith & Johnson (2018) aimed at comprehensively
understanding the adoption landscape of blockchain technology within supply chain
management. Their purpose was to elucidate the current adoption rates and
challenges faced by supply chain organizations concerning blockchain technology. By
surveying 200 supply chain professionals and employing descriptive statistics to
analyze the responses, they sought to uncover prevalent trends and barriers to
adoption. Findings indicated that while awareness of blockchain technology was high
among supply chain professionals, actual adoption rates remained relatively low due
to concerns surrounding integration complexity and regulatory uncertainty.
Recommendations stemming from their study emphasized the necessity of providing
educational resources and fostering industry collaboration to surmount these
adoption barriers. Chen & Wang (2019) adopted a case study approach to delve into
the impact of blockchain technology on supply chain transparency, particularly
within the manufacturing sector. Their research aimed to assess the effects of
blockchain implementation on visibility and trust within supply chains. Through in-
depth interviews with supply chain managers and a meticulous analysis of
documentary evidence, they sought to evaluate the practical implications of
blockchain adoption. Their findings revealed that blockchain significantly enhanced
transparency by providing real-time visibility into product provenance and
transaction history, thereby fostering greater trust among supply chain partners.
The study underscored the importance of investing in blockchain infrastructure and
establishing industry standards for data sharing to maximize its transparency
benefits. Gupta & Sharma (2020) analysis to quantify the efficiency gains achieved
through the adoption of blockchain technology in supply chain management. Their
study sought to provide empirical evidence on the tangible benefits of blockchain
adoption in enhancing supply chain efficiency. By collecting data from multiple
supply chain organizations before and after implementing blockchain solutions and
employing statistical analysis techniques, they aimed to ascertain the extent of
efficiency improvements. Their findings indicated significant reductions in
transaction costs, lead times, and error
rates following blockchain adoption, signaling overall enhancements in supply
chain efficiency. The study's recommendations included conducting thorough cost-
benefit analyses and pilot testing before widespread implementation to maximize
efficiency gains. Lee & Kim (2021) delved into the role of blockchain technology in
bolstering supply chain resilience, with a focus on the food industry. Their
research aimed to assess the effectiveness of blockchain in mitigating supply chain
disruptions and enhancing resilience. Through surveys and interviews with
stakeholders across the food supply chain, they sought evidence on the practical
applications of blockchain in resilience-building. Their findings revealed that
blockchain facilitated rapid traceability and recall management, thereby limiting
the spread of contaminated products during food safety incidents. Recommendations
emanating from their study included International Journal of Supply Chain
Management ISSN 2518-4709 (Online) Vol.9, Issue 1, No.2, pp 16 - 26, 2024
www.iprjb.org 20 integrating blockchain with other resilience-building strategies
and investing in workforce training to harness its full potential in enhancing
supply chain resilience. Wang & Li (2017) employed a game-theoretic perspective to
analyze the impact of blockchain technology on supply chain coordination among
multiple stakeholders. Their research aimed to provide insights into the mechanisms
through which blockchain fosters coordination and collaboration within supply
chains. By developing a mathematical model to simulate different scenarios under
blockchain-based supply chain architectures, they sought to identify optimal
strategies for participants. Findings from their study suggested that blockchain
incentivized cooperation, reduced information asymmetry, and minimized the risk of
opportunistic behavior among supply chain partners. The study recommended designing
incentive mechanisms and governance structures to align the interests of supply
chain stakeholders. Zhang & Liu (2018) delved into the potential of block chain
technology to enhance supply chain sustainability by reducing environmental impact
and promoting ethical practices. Their research aimed to quantify the
sustainability benefits derived from block chain adoption within supply chains. By
collecting data from a sample of supply chain organizations and analyzing
sustainability performance metrics before and after blockchain implementation, they
sought empirical evidence on its environmental and ethical implications. Their
findings indicated that blockchain enabled greater transparency and accountability
in sustainable sourcing, leading to reductions in carbon emissions, waste
generation, and supply chain risks. Recommendations stemming from their study
included integrating blockchain with other sustainability initiatives and engaging
stakeholders in collaborative governance models to maximize its sustainability
impact. Park & Lee (2019) conducted an empirical study to investigate the factors
influencing the adoption of block chain technology in supply chain management and
its impact on organizational performance outcomes. Their research aimed to provide
insights into the drivers of block chain adoption and its associated performance
benefits. By surveying a diverse sample of supply chain professionals and employing
regression analysis techniques, they sought to identify adoption determinants and
performance indicators. Findings from their study suggested that organizational
readiness, perceived benefits, and external pressures significantly influenced
block chain adoption, leading to improvements in supply chain efficiency,
transparency, and innovation. Recommendations emanating from their study included
fostering a supportive organizational culture, investing in employee training, and
collaborating with industry partners to harness the full potential of block chain
technology in supply chain management.
The emergence of innovative technologies has significantly enhanced the efficiency
and effectiveness of all businesses, including the supply chain (Shahzad et al.,
2022b). However, the survival of organi- zations in this competitive environment
depends on the timely adapta- tion of these innovative technologies (Shahzad et
al., 2023a). These technologies offer several benefits. For example, business
services can expand to several geographical locations, enhance real-time
information flow, enrich supply chain collaboration, and so on (Kamble et al.,
2019; Zhang and Cao, 2018). Supply chain professionals require reliable, ac-
curate, real-time, and quick information to convey from customers to suppliers
(i.e., quotation requests, purchase orders, and quality com- plaints) as well as
from suppliers to customers (i.e., order confirmation, inventory report, and
dispatch details). Modern technologies can execute these tasks efficiently and
effectively for both customers and suppliers. Among modern technologies, blockchain
technology (BT) has emerged as a vital game changer in supply chain management
(SCM) because of its unique capabilities and benefits such as immutability,
traceability, and transparency (Guan et al., 2023; Srhir et al., 2023). BT is a
decentralized data-management technology designed to develop and maintain
distributed ledgers (Shang et al., 2023). BT has significant advantages over
existing technologies, including data encryption, decentralized consensus, record
validation, autonomous contract enforcement, lower cost of adding new participants,
and higher visibility (Babich and Hilary, 2020). The implementation of BT in
different areas, including SC, makes it a disruptive technology in the Industry 4.0
era (Choi et al., 2022). BT empowers data integrity and decentralized consensus
among players without central coordination, as each distributed player can
validate, consent to, and reject deals (Lumineau et al., 2021). Researchers have
identified external un- certainties and legally unprotected ability issues in China
(Wang et al., 2015). BT can alleviate such problems by reducing information asym-
metry, enhancing information transparency, and providing digital ownership
verification of goods (Tan and Saraniemi, 2023). BT's trace- ability, automation,
resilience, and aggregation properties (Babich and Hilary, 2020) can enable SC
professionals, suppliers, and customers to address product quality and visibility
issues. * Corresponding author at: Research Institute of Business Analytics and
SCM, College of Management, Shenzhen University, China. E-mail addresses:
khuram7223@yahoo.com (K. Shahzad), q.yu.zhang@gmail.com (Q. Zhang). Contents lists
available at ScienceDirect Technological Forecasting & Social Change journal
homepage: www.elsevier.com/locate/techfore
https://doi.org/10.1016/j.techfore.2023.122989 Received 13 April 2023; Received in
revised form 16 October 2023; Accepted 5 November 2023 Technological Forecasting &
Social Change 198 (2024) 122989 2 China embraces potential innovative technologies
such as BT immediately to satisfy emerging needs and demands. BT was a major
innovation that received government investment from over 40 % of Chinese startups
in 2017 (Kshetri and Loukoianova, 2019; Shahzad et al., 2022a). By the first-half
of 2022, BT investments in China reached approximately 2.5 billion Yuan (Daniel,
2023), which shows that Chi- nese organizations have a great interest in BT
implementation. How- ever, BT-enabled SCM studies on adoption and actual use are
still in their infancy (Chod et al., 2020). There are three primary research gaps
to be addressed. First, scholars have highlighted various aspects of BT adop- tion,
such as conceptualization (Saberi et al., 2019), pros and cons (Babich and Hilary,
2020), and driving factors (e.g., interoperability, technological volatility, lack
of technological knowledge, and regulatory uncertainty) (Clohessy and Acton, 2019;
Hartley et al., 2021; Kamble et al., 2020). Nevertheless, many factors underlying
the core attributes of BT (e.g., traceability and transparency) and the
determinants of environmental legitimacy (e.g., coercion and normative pressure)
remain underexplored. Therefore, research is needed to gain a better understanding
of these factors, which will assist in identifying stake- holders' motivations and
decisions in the implementation of BT in SCM. Second, BT research in SCM primarily
focused on the initial adoption stage rather than the post-adoption stage. BT's
effective use will deter- mine whether it can provide an organization with a
competitive advantage. Therefore, BT's infusion would help us understand BT-
enabled SCM's impact on organizational performance. The recent re- views by Bai and
Sarkis (2022) and Zhu et al. (2022) indicated that pre- adoption research has been
conducted on BT-enabled SCM, while post- adoption research is needed. Similarly,
Babich and Hilary (2020) stated that the initial understanding is relatively clear,
but how well BT can be used post-adoption is rather vague. Consequently, a more
comprehen- sive and holistic approach is needed to investigate the post-adoption
stage to better understand the role of BT-enabled SCM in organizations. Third, BT
has vast potential as a disruptive technology, especially for large international
firms. For instance, using BT, Walmart monitors and traces pork supply in China and
records the data of the whole process of a single piece of pork from the
slaughterhouse to end-users, including the date and specific period (Kamath, 2018).
A famous Chinese e-com- merce platform, JD.com, uses BT to trace and record the
imports of beef from overseas suppliers (Wu et al., 2021). Both companies reported
that using BT enhanced their sales volume (Thomasson, 2019). There are many such
reported success stories of BT implementation by large companies. However, it is
unclear whether BT can be used in a manner that makes it pertinent to small
companies in developing countries because of resource constraints. Are there any
differences between large and small companies in their adoption and implementation
of BT in SCM? To fill these research gaps, we employed the technology, organiza-
tion, and environment (TOE) framework to investigate imperative fac- tors in the
pre-adoption phase (Dehghani et al., 2022; Guan et al., 2023). The TOE framework is
used because it is flexible and allows the incor- poration of different dimensions
and theories, as well as contextual determinants of behavior in each dimension
(Ahmadi et al., 2017). Following Venkatesh and Bala (2012), contextual and
institutional theory factors were investigated based on their prominence in
previous BT studies. Although previous studies have identified several key fac-
tors, we investigated a few consistently identified critical factors, including
legitimacy pressure, organizational readiness, traceability, and transparency (Ar
et al., 2020; Xu et al., 2021). This study not only investigated the underexplored
factors that may shape pre-adoption but also uncovered how pre-adoption leads to
post- adoption of BT. The post-adoption stage is mainly underpinned by the
information system success (ISS) model, which highlights the role of actual use and
performance (DeLone and McLean, 2003). Recent studies have highlighted that the
performance of organizations (e.g., handling nonstandard orders and improving
customer service) should be measured after adopting BT to gauge its impact on SCM
(Orji et al., 2020; Wamba et al., 2020). Scholars posit that when an organization
takes the initiative to use new technology (e.g., BT), it is difficult to obtain
optimal performance without its infusion (Premkumar et al., 1994). According to
Sundaram et al. (2007), the “productivity paradox” results from the inefficient use
of installed IT systems, indicating that technology infusion is crucial to improve
organizational productivity. Furthermore, researchers have established that an
organization can benefit by aligning the information technology (IT) system with
business objectives, as IT alignment is crucial for enhancing related investments
(Hung, 2006; Preston and Karahanna, 2009). Thus, it is important to understand how
IT alignment can enhance the associations between actual use, infusion, and
performance in BT-enabled SCM. Researchers have also confirmed that firm size
substantially in- fluences BT adoption in SCM, in which large firms tend to adopt
BT- enabled SCM more than smaller firms (Clohessy and Acton, 2019). In light of
this, we examined the moderating role of firm size to investigate whether large and
small firms have different tendencies to adopt and use BT in SCM. Consequently, we
address the following key research ques- tions (RQs) arising from the gap in
existing knowledge: (1) How do technological, organizational, and environmental
factors influence an organization's intention to adopt and use blockchain
technologies in the supply chain? (2) How does the actual use of BT in the post-
adoption stage enhance its infusion and performance, and how does IT align- ment
moderate this association? (3) What are the differences for large and small
organizations in adopting and using BT in SCM? By answering the above RQs, this
study contributes to the literature on BT-enabled SCM in the following ways. First,
it extends the scope of the literature by focusing on the post-adoption phase
instead of only assessing initial adoption, as previously explored. Second, we
investi- gate the unexplored BT adoption factors by incorporating the core fea-
tures of BT (e.g., traceability) and legitimacy elements (e.g., normative
pressure). Third, we investigated the moderating role of IT alignment on the
associations between (a) actual use and infusion, (b) actual use and performance,
and (c) infusion and performance. Fourth, this study ex- amines the moderating
role of firm size to confirm whether large and small firms' intentions and use of
BT vary in our pre-post model. Finally, the results of this study will facilitate
planning and policy development to support BT-enabled SCM in China and other
economies facing similar challenges. 2. Literature review BT is “ a fully
distributed system for cryptographically capturing and storing a consistent,
immutable, linear event log of transactions between networked actors” (Risius and
Spohrer, 2017, p. 386). BT is currently used to establish and maintain distributed
ledgers, which are considered more secure and immutable than conventional ledgers,
such as hash graphs (Babich and Hilary, 2020). BT has been applied in various do-
mains, such as the circular economy (Bohmecke-Schwafert ̈ et al., 2022), food
delivery (Shahzad et al., 2023b), real state to ensure fraud pre- vention (Saari et
al., 2022), and shared manufacturing (Roˇzman et al., 2021). BT is identified as a
game-changer technology for enhancing SC performance, as all transactions can be
traceable, secure, immutable, and transparent, elaborating on the time and location
of any business activity (Chod et al., 2020). BT facilitates internal and external
inte- gration, improving the efficiency and effectiveness of SC transactions (Deng
et al., 2022). The application of BT in SCM is a major concern for both researchers
and practitioners. Prior studies rigorously investigated the imple- mentation of BT
in SCM. Table 1 summarizes empirical studies on BT adoption in SCM, indicating that
most studies have examined the pre- adoption phase (e.g., behavioral intention),
and few studies have examined the post-adoption phase (e.g., continued intention
and per- formance). Deng et al. (2022) examined BT implementation in SCM in the
Chinese context and found that top management support, relative advantage,
complexity, cost savings, and government support positively K. Shahzad et al.
Technological Forecasting & Social Change 198 (2024) 122989 3 impact BT adoption.
Wamba et al. (2020) studied cross-cultural differ- ences between the USA and India.
They confirmed that (a) knowledge sharing and trading partners positively influence
blockchain adoption and (b) blockchain adoption, SC transparency, and BT
transparency positively influence SC performance. More recently, Shahzad et al.
(2022b) studied BT implementation from a Chinese perspective and found that
personal innovativeness, user self-efficacy, price value, facilitating conditions,
habit, and user satisfaction positively influence continuous intention. This study
extends beyond the post-adoption stage, particularly by studying the role of
infusion, IT alignment, and firm size, which has never been explored in the BT-
enabled SCM context. 2.1. Adoption stages The diffusion of innovative technology is
a complex and dynamic process that may change over time, resulting in an
organization's impact (Wu and Chuang, 2010). A multi-stage analysis can provide
more insight into innovation diffusion issues and solutions. Kwon and Zmud (1987)
developed a six-stage (“initiation, adoption, adaptation, acceptance,
routinization, and infusion”) model to comprehend the implementation of an
information system (IS). Rajagopal (2002) adopted this six-stage model to
understand the key factors influencing the application of en- terprise resource
planning systems. Meyer and Goes (1988) utilized five stages (“awareness,
evaluation, adoption, implementation, and expan- sion”), but Swanson and Ramiller
(2004) used four stages (“compre- hension, adoption, implementation, and
assimilation”), Zhu et al. (2006) employed three stages (“initiation, adoption, and
routiniza- tion”), and Cooper and Zmud (1990) utilized two stages (adoption and
infusion) in the technological innovation setting. However, scholars are mostly
interested in examining the diffusion of innovative technology using two main
adoption stages (pre- and post- adoption). For instance, Chang and Zhu (2011)
studied networking site adoption, Talwar et al. (2020) investigated the application
of mobile payment, Lu et al. (2020) examined the application of healthcare IT, and
Gupta et al. (2020) studied the adoption of a mobile wallet using a pre- adoption
and post-adoption framework. These studies have established that users' perceptions
of innovative technologies might differ in the pre- and post-adoption phases.
Accordingly, SC professionals' initial per- ceptions and willingness to adopt BT
may not be sufficient to determine adoption behavior. Thus, we investigate the
implementation of BT in SCM using pre-adoption and post-adoption phases through the
lens of the TOE framework, institutional theory, and ISS model. Researchers have
highlighted that an organization's innovative technology adoption process depends
on its initial intention and how Table 1 Empirical studies on BT adoption in supply
chain management. Author Country Theoretical lens Major findings Queiroz and Wamba
(2019) India and USA UTAUT They determined that transparency, facilitating
conditions, social influence, and performance expectations have a positive effect
on BI. Behavioral expectations are positively influenced by the trust of supply
chain stakeholders, facilitating conditions, and behavioral intention. Kamble et
al. (2019) India TAM, TRI, TPB The study found that Perceived usefulness, attitude,
and perceived behavioral control positively affect behavioral intention. Wamba et
al. (2020) India and USA N/A The study established that knowledge sharing, and
trading partners positively influence blockchain adoption, and adoption, SC
transparency, and BT transparency positively influence supply chain performance.
Karamchandani et al. (2020) India TAM The findings indicated that perceived BT
benefits positively impact the perceived usefulness of six dimensions, and these
dimensions positively impact perceived incremental profitability except for
customer relationships. Wong et al. (2020a) Malaysia TOE The study established that
competitive pressure, complexity, cost, and relative affect behavioral intention.
Wong et al. (2020b) Malaysia UTAUT Findings revealed that facilitating conditions,
technology readiness, and technology affinity positively influence behavioral
intention, and regulatory support moderates the effect of facilitating conditions.
Alazab et al. (2021) Australia UTAUT, ISSM, TTF The finding established that SC
employees' willingness to adopt blockchain was positively influenced by the ISSM,
TTF, and UTAUT models. Queiroz et al. (2021) Brazil UTAUT They revealed that
facilitating conditions, trust, social influence, and effort expectancy positively
affect BT adoption. Kamble et al. (2021) India TOE, TAM The findings established
that competitor pressure, partner readiness, perceived usefulness, and perceived
ease of use as the most influencing factors for blockchain adoption. (Shahzad et
al., 2022b) China UTAUT2 The study found that facilitating conditions, price value,
habit, user self- efficacy, personal innovativeness, and user satisfaction
positively impact continued intention. Nath et al. (2022) Bangladesh TOE, DOI The
study established that firms' intention to adopt BT Table 1 (continued ) Author
Country Theoretical lens Major findings in SCM is affected by collaborative
culture, information sharing, absorptive capacity, top management support,
perceived trust, compatibility, relative advantage, and trading partners' pressure.
Deng et al. (2022) China TOE The study found that cost savings, complexity,
relative advantage, top management support, SC cooperation, and government support
positively affect BT adoption. Note: Technology acceptance model (TAM), technology
readiness index (TRI), and the theory of planned behavior (TPB), information system
success model, unified theory of acceptance and use of technology (UTAUT),
technology, or- ganization, and environment (TOE) framework, Task technology fit
(TTF). Diffusion of innovation theory (DOI). K. Shahzad et al. Technological
Forecasting & Social Change 198 (2024) 122989 4 well it meets its needs and demands
(Grover and Goslar, 1993). In our study, we defined behavioral intention toward BT
as the pre-adoption phase, which is influenced by organizational, environmental,
and technological factors. As pre-adoption leads to post-adoption, this study
captures post-adoption in light of the ISS model. The use of innovative technology
has become a success metric, as it is essential for achieving desired results
(DeLone and McLean, 2003). Therefore, it is important to adopt, accept, and infuse
BT as scholars have established the positive impact of infusion on innovation
(Cooper and Zmud, 1990; Rajagopal, 2002). Accordingly, this study captures
infusions in the post-adoption stage. Furthermore, DeLone and McLean (2003) argued
that the net benefits must be analyzed to evaluate the real impact of new technolo-
gies on organizational performance. Consequently, this study extends the scope of
the post-adoption stage by considering the impact of actual use and infusion on
performance. 3. Research framework and hypotheses development The proposed pre-post
framework is illustrated in Fig. 1. The pre- adoption phase was examined by
integrating the TOE framework and institutional theory. Various studies have
employed the TOE framework with different variables to examine BT-enabled SCM
(Clohessy and Acton, 2019; Kouhizadeh et al., 2021). These studies have established
that the elements related to the TOE framework are critical for under- standing the
adoption behavior of BT in SCM. In addition, studies on organizational innovation
adoption increasingly integrate the institu- tional theory (Liu et al., 2010;
Sherer et al., 2016). The authors suggest that operational channels and the
environment can influence firms' at- titudes toward innovation. Therefore, we
included institutional theory
factors (coercive, mimetic, and normative pressure) in the TOE frame- work to
provide a holistic understanding of institutional forces. In addition, BT provides
numerous technology-related benefits, such as traceability and transparency.
Traceability and transparency are the most appealing features of BT that encourage
companies to adopt it (Kamble et al., 2020). BT is considered a very secure
technology; how- ever, researchers have reported numerous security breaches (Yadav
et al., 2020), which may adversely affect its adoption. Therefore, the current
study explores the role of traceability, transparency, and secu- rity concerns in
technological factors. The implementation of blockchain technology involves
investment in various hardware and software and using the existing IS
infrastructure (Agi and Jha, 2022). Hence, we investigated the impact of
organizational readiness as an organizational factor. Subsequently, the research
framework of this study initially provided insight into the impact of
technological, environmental, and organizational factors on behavioral intention.
According to DeLone and McLean (2003), net benefits should be considered when
evaluating innovative technology because they reflect the real impact of the
technology on organizations and individuals. Scholars have stated that BT can
improve SC connections and enhance process innovation (Kamble et al., 2019), but
limited empirical evidence is available. Hence, this study enhances the
investigation of post- adoption in the ISS model. In line with DeLone and McLean
(2003), this study included actual use, an important determinant of infusion, and
performance impact. Thus, this study explores how the actual use of BT influences
infusion and performance. In addition, significant evi- dence indicates that IT
alignment with organizational strategy is crucial (Morton, 1990; Preston and
Karahanna, 2009). Therefore, this study also examined the moderating effects of IT
alignment between actual use and infusion, actual use and performance impact, and
infusion and perfor- mance. Numerous scholars believe that large and small firms
have different tendencies to adopt and use innovative technology (Clohessy and
Acton, 2019). Accordingly, this study analyzes the moderating role of firm size to
explore how large and small firms react differently to under-considered influencing
factors at the pre- and post-adoption Fig. 1. Research framework. K. Shahzad et al.
Technological Forecasting & Social Change 198 (2024) 122989 5 stages. 3.1.
Technological factor 3.1.1. Transparency The unique features of BT make it an
attractive option for organi- zations seeking to improve their processes
efficiently and effectively. Transparency during the SC process refers to each
stakeholder's ability to see and access all previous transactions without the
involvement of an intermediary. From this perspective, the ability of BT to produce
iden- tical copies of data at each node enables real-time data auditing and
inspection, ensuring network transparency and making information readily available
to all stakeholders (Queiroz and Wamba, 2019). Furthermore, Wamba et al. (2020)
determined that SC performance could be substantially enhanced through
transparency. Therefore, we argue that BT's transparency enhances SC professionals'
intention to use it in SCM. H1. Transparency positively impacts behavioral
intention. 3.1.2. Traceability Traceability has become an essential requirement for
many supply chains, such as the agri-food (Kamble et al., 2020), pharmaceutical (S ́
anchez-Paternina et al., 2022), and luxury goods industries (Karaos- man et al.,
2020). Researchers determined that BT offers advanced traceability features, which
are pivotal in driving companies to imple- ment BT to increase stakeholders'
confidence in SCM (Yadav et al., 2020). In our context, BT-enabled traceability is
the ability of an authorized person to trace a specific product and its information
such as track history, ingredients, and batch information. Bumblauskas et al.
(2020) determined that BT-enabled traceability has become imperative to enhance the
relationships between organizations and customers, thus encouraging SC
professionals' to implement BT. Therefore, we propose: H2. Traceability positively
impacts behavioral intention. 3.1.3. Security concern In a digital SC environment,
the security and privacy of an organi- zation can be compromised through hacking,
unauthorized access to sensitive information, and dissemination of inaccurate data
(Kouhiza- deh et al., 2021). Organizations can benefit from BT by reducing security
concerns and enhancing customer confidence (Orji et al., 2020). Ar et al. (2020)
further state that BT stores information in smart contracts, which ensures that
communication using BT is highly secure. Although BT is highly secure, scholars
have discussed numerous security breaches, indicating that users would have
security concerns while using BT (Yadav et al., 2020). Thus, some stakeholders are
reluctant to adopt BT in SCM (Saberi et al., 2019). Consequently, we propose the
following hypotheses: H4. Security concerns negatively impact behavioral intention.
3.2. Organizational factors 3.2.1. Organizational readiness Organizational
readiness can be defined as the availability of financial resources and
technological capabilities to implement inno- vative technology (Iacovou et al.,
1995). Iacovou et al. (1995) argue that there are two dimensions of organizational
readiness: financial re- sources and IS infrastructure. An organization's financial
resources include the availability of funds to install innovative technology,
implement subsequent changes, and pay for ongoing expenses (Iacovou et al., 1995).
By contrast, IS infrastructure refers to sophisticated tele- communications and
databases within departments to implement in- novations (Grover, 1993).
Implementing BT in SCM requires new hardware and software (Saberi et al., 2019) and
an existing IS infrastructure (Kouhizadeh et al., 2021) for communicating, storing,
and collecting data. An organization with a high level of financial resources and
compatible IS infrastructure can adopt and continue implementing innovative
technologies (e.g., blockchain) that engage in a cooperative environment to
increase pro- ductivity (Agi and Jha, 2022). Existing studies have established that
organizational readiness substantially enhances the adoption of inno- vative
technologies (Agi and Jha, 2022; Iacovou et al., 1995). Similarly, we contemplate
that organizations with higher organizational readiness have a higher intention to
adopt BT. Therefore, we propose: H5. Organizational readiness positively impacts
behavioral intention. 3.3. Environmental factors Organizations make rational
decisions to enhance performance and consider cultural, social, and legitimacy
factors (Sherer et al., 2016). Thus, this study integrates institutional theory to
investigate how isomorphic pressures influence BT adoption in SCM. “Institutional
the- ory offers a conceptually rich source to observe the non-linear (as opposed to
linear) routes of information technology adoption and assimilation across markets
and organizations” (Currie, 2009 P-64). Institutional theory classifies isomorphic
pressure into three categories. Coercive pressures are usually exerted by external
forces (e.g., industry, government, customers, and suppliers) (Wang et al., 2018).
Normative pressure is often exerted through industry standards and norms (Liu et
al., 2010). Mimetic pressure comes primarily from an organization's perception of
the success of its competitors (DiMaggio and Powell, 1983). We explain how
institutional factors influence behavioral in- tentions in the subsections below.
3.3.1. Coercive pressure Coercive pressure is defined as the “formal and informal
pressures exerted on organizations by other organizations upon which they are
dependent and by cultural expectations in the society within which or- ganizations
function” (DiMaggio and Powell, 1983, P-150). The extent of coercion is partially
affected by the power of the dominant actor, where competition and regulation are
the two sources of coercion (Sherer et al., 2016). In the SCM era, BT adoption is
driven by external pressure from stakeholders (Farooque et al., 2020). In addition,
end users encourage companies to adopt BT to know the origins of the products they
buy (e.g., food, gemstones, and minerals) because it is less expensive and more
effective than inspection and certification (Hartley et al., 2021). Thus, we
propose: H6. Coercive pressure positively impacts behavioral intention. 3.3.2.
Normative pressure Normative pressure tends to lead to the adoption of innovative
technologies in which the norms of the industry and profession are deemed to be
effective (DiMaggio and Powell, 1983). Organizations gain innovation knowledge
through direct or indirect interactions with adopters (Sherer et al., 2016).
However, the implementation of inter- organizational information systems is heavily
influenced by normative pressure in the SC process (Liu et al., 2010). The
standardization of inter- organizational SC processes is driven by normative
pressures arising from the deployment of information technology by the leading
organi- zation within the SC (Hartley et al., 2021). Thus, researchers have
highlighted that normative pressure enhances BT adoption in SCM (Hartley et al.,
2021). Thus, we propose: H6. Normative pressure positively impacts behavioral
intention. 3.3.3. Mimetic pressure Mimetic pressure is institutional pressure that
encourages an orga- nization to copy the technology or plan of another organization
working within the same sector (DiMaggio and Powell, 1983). Haveman (1993)
illustrated that mimetic pressure could affect an organization in two K. Shahzad et
al. Technological Forecasting & Social Change 198 (2024) 122989
6 ways. First, mimetic pressure occurs when multiple organizations within the same
industry use similar tactics. Second, an organization can face mimetic pressure
when it struggles to compete with its peers. Organi- zations affected by such
pressures commonly adopt the same strategy to reveal their proficiency to
stakeholders or competitors. Consequently, organizations adopt the patterns of
other organizations to stay competitive in their fields. This study believes that
numerous organi- zations successfully use BT in their operations, which may assert
mimetic pressure on other organizations to adopt BT. Accordingly, the following
hypothesis is formulated for this study: H7. Mimetic pressure positively impacts
behavioral intention. 3.4. Behavioral intention Behavioral intention refers to an
individual's desire to use innovative technology (Venkatesh et al., 2003), whereas
this study refers to SC professionals' willingness to utilize BT in SCM.
Researchers have demonstrated that higher behavioral intention before
implementation leads to higher system use after implementation (Sundaram et al.,
2007). Most established models and theories in the information system field, such
as UTUAT, demonstrated a strong correlation between behavioral intentions and
actual use (Venkatesh et al., 2003). Therefore, we propose: H8. Behavioral
intention positively impacts the actual use of BT in SCM. 3.5. Actual use Actual
use can be described as an individual's real usage behaviors of a system (Venkatesh
et al., 2003), where positive experiences with the system and its regular use
result in infusion (Sundaram et al. (2007). Hence, this study argues that the
degree of BT use in SCM determines infusions. Furthermore, the ISS model suggests
that the performance of innovative technology (e.g., BT) is the most crucial
element to investi- gate because it represents the actual impact of such technology
(DeLone and McLean, 2003). From this perspective, SC professionals can enhance
organizational performance using BT (Queiroz and Wamba, 2019). Consequently, this
study proposes that BT leads to greater infusion and improved performance. H9.
Actual use positively affects infusion (H9a) and performance (H9b). 3.6. Infusion
Infusion refers to the full potential use of a system (Cooper and Zmud, 1990),
which comes after positive usage behavior. We defined infusion as the optimal
utilization of BT in SC operations. Sundaram et al. (2007) contended that greater
engagement with innovative tech- nology leads to stronger integration, resulting in
higher productivity. According to Premkumar et al. (1994), the potential benefits
of inno- vation can be achieved by its infusion. Therefore, an organization that
infuses BT into its SC operations can maximize the output-to-input ratio, resulting
in a high level of organizational performance. H10. Infusion positively impacts
performance. 3.7. Moderating role of information technology (IT) alignment IT
alignment refers to how IT goals and plans align with business goals (Chan and
Reich, 2007). Business functions within an organization are integrated through IT,
enabling access to information across the organization (Morton, 1990). Thus, IT
alignment is a core concern for business executives and practitioners. Many
researchers have concluded that new technology alone cannot provide optimal
benefits, but proper integration with existing systems can maximize its benefits
(Baker and Singh, 2019). Thus, greater BT alignment with the prior system would
improve collaboration, visibility, and transparency among departments, augmenting
BT infusion and organizational performance. Subsequently, we built upon this
reasoning to argue that IT alignment moderates the associations between actual use,
infusion, and performance. Therefore, we propose: H11. IT alignment positively
moderates the relationships between actual use and infusion (H11a), actual use and
performance (H11b), and infusion and performance (H11c). 3.8. Moderating role of
firm size Firm size is one of the most significant factors differentiating early
and late adopters of innovative technologies. A firm's size can be measured by its
number of employees, where a firm with >500 em- ployees is considered large, and a
firm with <500 employees is considered small (Knott and Vieregger, 2020). According
to Knott and Vieregger (2020), large companies possess sufficient human resources
and capital, conduct R&D more effectively, and have higher techno- logical
diversity by addressing a broader range of problems and complexity issues. On the
other hand, small firms often try to implement the latest technologies to satisfy
customer requirements, but their re- sources limit their ability to embrace
innovation (Everett, 1995). From this perspective, researchers have determined that
firm size positively influences an organization's ability to adopt and use
innovations (Ahmadi et al., 2017), indicating that large organizations tend to have
more diverse and complex facilities to adopt and use innovations, while small
enterprises have comparatively fewer facilities (Everett, 1995). Clohessy and Acton
(2019) recognized that, compared to small-sized organizations, large-sized
organizations are more likely to adopt and use BT in SCM due to their advanced
research and development efforts to embrace innovations. Thus, firms of different
sizes might have a different tendency to adopt and use BT in SCM. Therefore, we
propose: H12. Firm size moderates the relationships proposed in hypotheses H1-H10,
such that large firms tend to adopt and use BT more than smaller firms in SCM.
Seaports are configured as complex systems where physical interactions and informa-
tion exchanges are established between multiple actors, whether public or private.
These actors perform various functions related to operational and logistical
activities that are important for the daily functioning of the port operator [1].
They range from the super- vision of security at port terminals, the control of
goods by state entities, to the storage, consolidation, stacking, stowage,
stevedoring, and transport of containers [1,2]. Each port is part of an integrated
logistics chain for the export and import of perish- able and non-perishable goods.
The type of product that transits through port facilities depends on the
competitive advantages of the exporting country’s producers. Ports play a strategic
role for a country, and in response to increasing international demands, they have
incorporated sustainable environmental policies into their strategies and
operations that require the implementation of an advanced level of technology [3].
This dynamic has driven the evolution of the industry over the port generations.
Importantly, the transformation Mathematics 2024, 12, 1511.
https://doi.org/10.3390/math12101511 https://www.mdpi.com/journal/mathematics
Mathematics 2024, 12, 1511 2 of 23 towards the smart industry differs in nature
from the changes observed over the traditional port generations [4]. The concept of
“smart port” is used in research due to the adoption of Industry 4.0 principles
[5]. It describes a system characterized by its commitment to environmental
sustainability, efficiency in logistics operations, pursuit of cost-effectiveness,
and attention to the relationship with the urban environment [1,6]. In response to
macro-environment transformations, ports have evolved by integrating cyber,
technological, and sustainable elements into their logistics chains [4]. This not
only improves information and communication systems in logistics chains but also
contributes, for example, to the preservation of the environment by adopting
cleaner energy sources [7]. On the other hand, in the micro-environment, both Port
and Terminal Managers focus on achieving efficient management in aspects related to
security, operations, and traceability of goods [2,8]. It is important to note that
the definition of a “smart port” lacks consensus due to its complexity [9]. This
lack of agreement stems from the variability in the characteristics that a smart
port can have and is influenced by a number of factors, including techno- logical
evolution, the diversity of stakeholders involved, location-specific strategies and
policies, geographical particularities, and the absence of global standards [9].
These factors contribute to the lack of a uniform and standardized definition of
smart ports. With technological advancement, the evolution of the port industry has
led to the adop- tion of the fourth and fifth generations. Unlike the Industry 4.0
era, Industry 5.0 not only focuses on technological aspects but also actively seeks
solutions that address social and en- vironmental concerns. In this new industrial
paradigm, ports are conceived as collaborative systems, where all logistics actors
work together to enhance competitiveness [10,11]. Industry 5.0 is characterized by
a holistic vision that embraces hyper-connectivity between technological, social,
environmental, and economic aspects [12,13]. This innovative perspective considers
key elements such as regulatory frameworks, governance, social tensions,
environmental crises, the democratization of knowledge, and the promotion of
sustainable innovation in the ecosystem [13,14]. This holistic approach makes a
significant difference by addressing not only technological advances but also the
regulatory, social, and environmental aspects that influence the dynamics of
Industry 5.0. Smart ports must imperatively integrate digital solutions into their
strategies and goals that must prioritize customer satisfaction through efficient
and effective operational and logistical planning [15]. It is possible to use
Blockchain in the port logistics chain as it is possible to record, process, and
track the data of each transaction transparently and reliably in real-time in a
decentralized system that has a high level of security and fosters collaboration
between actors with smart contracts [16]. The integration of digital solutions into
the strategies and objectives of smart ports is essential in ensuring customer
satisfaction through efficient and effective operations and logistics [15]. The
feasibility of implementing Blockchain in the port logistics chain is evidenced by
the digital platforms developed, such as TradeLens PM Maersk and IBM (2018), the
Port of Singapore (2018), the Port of Hamburg (2018), the Port of Antwerp (2017 and
2018), and the Port of Rotterdam (2018) [17–19]. This technology facilitates the
transparent and reliable recording, processing, and tracking of individual
transaction data in real-time [16]. Operating in a decentralized system, blockchain
provides robust security and pro- motes effective collaboration between the various
actors in the port environment through smart contracts [16]. This integration not
only boosts operational efficiency but also pro- vides reliable data for the secure
and effective management of transactions under Industry 5.0 in ports [20]. Problem
Definition Chile’s extensive coastline and strategic location make its ports
crucial hubs for inter- national trade. Chile boasts major ports like San Antonio,
Valparaíso, Antofagasta, Iquique, and Puerto Angamos, which handle diverse cargo,
including containers, bulk commodities, Mathematics 2024, 12, 1511 3 of 23 and
petroleum products. Growth in Chile’s port sector is propelled by increased
interna- tional trade, particularly in mining and agriculture, as well as
significant investments in port infrastructure. Revenue generation in Chilean ports
is derived from handling fees, storage charges, vessel services, and ancillary
services such as warehousing and logistics. The revenue streams are contingent upon
factors such as cargo type, port infrastructure, offered services, and market
demand. The Chilean government plays a regulatory and promotional role in the port
sector, incentivizing investment through public-private partnerships (PPPs) and
concession agreements to enhance port efficiency. The port sector serves as a vital
component of Chile’s economy, facilitating trade, providing support to various
industries, and creating job opportunities. Ports act as conduits, connecting
Chilean exporters and importers with global markets. In this context, Blockchain
technology offers significant potential for revolutionizing supply chain management
(SCM) within Chilean ports. Blockchain’s distributed ledger ensures transparent and
tamper-proof recording of supply chain data, providing a single source of truth in
an environment where trust and transparency are paramount. By enabling seamless
collaboration among stakeholders in port SCM, Blockchain facilitates real-time in-
formation exchange, leading to smoother operations and faster decision-making
processes. Efficient data management is a cornerstone of Industry 5.0, and
Blockchain offers a secure means of managing supply chain data, encompassing
documentation, transactions, and data from Internet of Things (IoT) sensors. By
eliminating data silos and ensuring data integrity, Blockchain supports the goals
of Industry 5.0, which emphasize automation and digitization. Furthermore,
Blockchain-based smart contracts automate compliance within the port SCM ecosystem.
These smart contracts execute predefined actions based on spec- ified conditions,
streamlining processes such as customs clearance, compliance checks, and payments.
In addition to efficiency gains, Blockchain enhances resilience and security in the
face of cybersecurity threats and supply chain disruptions. Its decentralized
nature reduces the risk of cyberattacks and data breaches, while cryptographic
algorithms safeguard supply chain data from unauthorized access or tampering.
Moreover, Blockchain facilitates traceability by recording each transaction or
event in the supply chain, providing visibility that aids in tracking goods and
ensuring quality control, recalls, and compliance audits. Overall, the adoption of
Blockchain technology holds significant promise for transforming Chile’s port
sector into a more efficient, secure, and transparent ecosystem. 1.1. Research Gap
of the Study The existing research gap in integrating blockchain in maritime port
supply chain management within Industry 5.0 might stem from the insufficient number
of comprehen- sive studies that address the socio-economic and environmental
ramifications of blockchain implementation. As interest in blockchain
implementation continues to grow, it is imper- ative to examine its alignment with
the principles of Industry 5.0, which highlight the importance of human-machine
collaboration, sustainability, and societal well-being. To be more precise,
research could explore the investigation of: Socio-economic Implications: What are
the effects on employment patterns, labor dynamics, and income distribution among
port workers and stakeholders resulting from the integration of blockchain
technology in maritime port supply chains within the framework of Industry 5.0? Are
there any prospects for enhancing the skills and knowledge of the workforce to meet
the requirements of a digitalized supply chain? Environmental Sustainability: What
are the environmental consequences associated with the integration of blockchain
technology in maritime port operations? Does the im- plementation of blockchain
technology contribute to the reduction of carbon emissions, optimization of
resource utilization, and promotion of sustainable practices in port ecosys-
Mathematics
2024, 12, 1511 4 of 23 tems? In what ways can blockchain technology be utilized to
improve transparency and accountability in environmental management? Ethical and
Governance Considerations: What are the ethical implications associated with the
integration of blockchain technology in maritime port supply chains, specifically
regarding data privacy, security, and ownership? What strategies can be implemented
to design blockchain governance models that uphold fairness, transparency, and
inclusivity in decision-making processes, in accordance with the principles of
Industry 5.0? The perception of blockchain technology in maritime supply chain
management by different stakeholders, such as port authorities, shipping companies,
local communities, and regulatory bodies, and its impact on stakeholder engagement
and community will be explored. What social and cultural challenges may arise
during the implementation of blockchain solutions, and how can they be effectively
addressed to promote increased acceptance and collaboration? Investigating these
research gaps would yield valuable insights into the comprehensive ramifications of
incorporating blockchain technology in the management of maritime port supply
chains within the framework of Industry 5.0. It would enhance our comprehension of
the socio-economic, environmental, and ethical aspects of digital transformation in
maritime logistics while promoting the establishment of more inclusive and
sustainable supply chain practices. 1.2. Contribution of the Study This research
provides theoretical and practical insights into applying blockchain tech- nology
(BT) in supply chain management (SCM) for Industry 5.0 in Chile’s maritime sector.
The incorporation of Blockchain technology in the management of supply chains
within maritime ports under the context of Industry 5.0 is significant due to its
utilization of sophisticated decision-making methodologies like the fuzzy Logarithm
Methodology of Ad- ditive Weights (LMAW) and Double Normalization-based Multiple
Aggregation Methods (DNMA). Allow me to provide you with a comprehensive analysis
of its contributions. The integration of LMAW and DNMA within the context of
Blockchain technology results in an enhanced decision-making framework. This
framework effectively tackles the uncertainties and complexities linked to the
management of maritime port supply chains, enabling decision-makers to make well-
informed and efficient choices in optimizing port operations. The Logarithm
Methodology of Additive Weights (LMAW) addresses the challenges of vagueness and
uncertainty, enabling decision-makers to effectively manage the inherent imprecise
information in supply chain management. This holds particular relevance within the
context of Industry 5.0, as the collaboration between humans and machines
necessitates decision-making processes that can adapt to a diverse array of inputs
and variables. The utilization of Double Normalization-based Multiple Aggregation
Methods (DNMA) enables the aggregation of various criteria and preferences from
multiple stakeholders engaged in maritime port operations. This guarantees that
decisions are executed in a just, transparent, and uniform fashion, in accordance
with the principles of inclusivity and collaboration in Industry 5.0. The strategic
application of Blockchain can be achieved through the integration of LMAW and DNMA
with Blockchain technology, allowing for effective management of maritime port
supply chains. This facilitates the prioritization and ranking of crucial factors
that impact the adoption of Blockchain, including transaction security, supply
chain practices, and risk management, resulting in more focused and efficient
implementation strategies. Theoretical and Practical Contributions: The approach
makes theoretical contribu- tions through the development of a hybrid model that
integrates LMAW and DNMA, thus enhancing the methodological toolkit for decision-
making in Industry 5.0 contexts. Furthermore, the practical implementation of this
technology facilitates the strategic incor- poration of Blockchain in the field of
maritime logistics, in accordance with the principles Mathematics 2024, 12, 1511 5
of 23 of Industry 5.0. This, in turn, leads to enhancements in the efficiency,
transparency, and sustainability of supply chain operations. Overall, the
integration of Blockchain in Maritime Port Supply Chain Management using LMAW and
DNMA represents a significant advancement in decision-making method- ologies within
the context of Industry 5.0. By leveraging these techniques, stakeholders can
navigate the complexities of modern supply chains more effectively, fostering
greater collaboration, innovation, and resilience in maritime port operations. In
this research, the key questions proposed are: 1. What are the primary barriers to
implementing blockchain technology in the manage- ment of supply chains within an
uncertainty-characterized environment? 2. How is multi-criteria decision-making
utilized to prioritize the barriers impeding blockchain technology adoption in
supply chain management? 3. What maritime line is most suitable for implementing
blockchain technology? This study is divided into six sections. The introduction
summarizes the research gap, contribution, questions, and literature review.
Section 2 includes the background of the port system and a literature review.
Section 3 explains the research methodology, including the methods literature,
research procedure, and screening process for factors. Section 4 presents the
application’s results in a real port case in Chile. Section 5 discusses the
technical and strategic challenges and the contributions of review papers. Section
6 provides the research conclusions. 2. Background 2.1. Description of the Port
System As depicted in Figure 1, the Chilean port ecosystem is a complex network
coordinated by the Port Administrator, who interacts with various public and
private stakeholders, making strategic, tactical, and operational decisions based
on their individual objectives [1]. These stakeholders are integral to the export
and import logistics chains. Private companies offer services related to the
management of port facilities, including loading and unloading goods, storage and
inventory management, intermodal transportation, and logistical co- ordination.
They also provide vessel maintenance and repair, equipment provision, and other
specialized services tailored to maritime operations. These companies play a key
role in managing supply chain efficiency and ensuring the timely delivery of goods.
Mathematics 2024, 12, x FOR PEER REVIEW 6 of 24 Figure 1. Port operational and
logistical ecosystem. 2.2. Data System Efficient cargo documentation management is
crucial for operational and adminis- trative efficiency in export-import
documentation. Port administrators face challenges in processing diverse
administrative tasks, including vehicle and cargo control, environmen- tal
supervision, port security, customs documentation, and perishable goods handling
[16]. Chilean public ports are regulated under Law 19.542 (1997), focusing on
moderniza- tion and efficient regulation. Increasing global competitive pressures
require enhanced operational efficiency and the adoption of disruptive technologies
for advanced process automation and information systems. Strategic management
should consider port-city re- lations and contemporary labor standards [15].
Chilean ports currently operate individual digital systems without coordination in
export and import logistics chains. Technological development is classified as
Industry 3.0 with characteristics of industry 4.0 due to a lack of investment in
automation and cyber technological assets [1]. There is also a lack of human
capital and knowledge and skills to manage projects with disruptive technologies.
The National Port Policy 2023 highlights the need for integrated systems like the
Port Community System (PCS) to achieve strategic plans and become competitive ports
with traceable data. Efforts are being made to integrate the PCS into maritime
processes using the Maritime Single Window (VUMAR) and the Foreign Trade Single
Window (SICEX). However, integrating disruptive technologies is challenging without
a digital transfor- mation plan for the logistics-port system. Figure 2 illustrates
the data and information flows in port management, emphasizing the importance of
collaboration among private entities and public organizations. This co- ordination
is crucial for efficient information management and adherence to security
standards. To enhance the efficiency of document management and cargo flow in
Chilean ports, it is imperative to have information and communication processes
that facilitate cost-ef- fective, well-informed, collaborative, integrated, secure,
and timely decision-making and reduce uncertainties inherent in the port system.
Such uncertainties include time losses upon ship arrival, truck coordination, and
other related issues. Reliable and efficient ser- vices are needed to provide
advanced information on cargo traceability, thereby meeting client expectations
while generating lower CO2 emissions. Figure 1. Port operational and logistical
ecosystem. Meanwhile, state organizations contribute by providing services
overseeing port secu- rity and customs control, which are important for maintaining
the integrity of international trade. They ensure compliance with national and
international regulations, enforce security measures, and facilitate the smooth
clearance of goods through customs. Furthermore, Mathematics 2024, 12, 1511 6 of 23
technological advancements and the digitalization of port operations are
increasingly being adopted to enhance efficiency, reduce environmental impact, and
improve overall service quality in the Chilean port system. 2.2. Data System
Efficient cargo documentation
management is crucial for operational and adminis- trative efficiency in export-
import documentation. Port administrators face challenges in processing diverse
administrative tasks, including vehicle and cargo control, environmental
supervision, port security, customs documentation, and perishable goods handling
[16]. Chilean public ports are regulated under Law 19.542 (1997), focusing on
moderniza- tion and efficient regulation. Increasing global competitive pressures
require enhanced operational efficiency and the adoption of disruptive technologies
for advanced process automation and information systems. Strategic management
should consider port-city relations and contemporary labor standards [15]. Chilean
ports currently operate individual digital systems without coordination in export
and import logistics chains. Technological development is classified as Industry
3.0 with characteristics of industry 4.0 due to a lack of investment in automation
and cyber technological assets [1]. There is also a lack of human capital and
knowledge and skills to manage projects with disruptive technologies. The National
Port Policy 2023 highlights the need for integrated systems like the Port Community
System (PCS) to achieve strategic plans and become competitive ports with traceable
data. Efforts are being made to integrate the PCS into maritime processes using the
Maritime Single Window (VUMAR) and the Foreign Trade Single Window (SICEX).
However, integrating disruptive technologies is challenging without a digital
transformation plan for the logistics-port system. Figure 2 illustrates the data
and information flows in port management, emphasizing the importance of
collaboration among private entities and public organizations. This coordination is
crucial for efficient information management and adherence to security standards.
Mathematics 2024, 12, x FOR PEER REVIEW 7 of 24 Figure 2. Information flow of the
port system. 2.3. Literature Review 2.3.1. Challenges and Barriers of Blockchain in
Maritime Port In port management, blockchain technology offers significant
enhancements in cargo tracking and administrative efficiency but faces
implementation hurdles such as stake- holder reluctance, technological complexity,
and the need for cross-sector collaboration [21–23]. While blockchain standardizes
maritime documentation and ensures real-time data access, challenges remain in data
traceability and establishing governance models [24,25]. Knowledge gaps,
stakeholder resistance, and the need for innovative business mod- els hinder the
potential of blockchain in South Africa’s KwaZulu-Natal province [26]. Suc- cessful
implementation requires comprehensive strategies, risk management, and adher- ence
to global standards [23]. In smart ports, blockchain aligns with goals of improved
performance and environ- mental responsibility, yet its connection to Industry 4.0
and 5.0 involves overcoming chal- lenges in automation and collaboration [27–29].
Digital technologies like blockchain con- tribute to environmental performance but
face barriers such as technological complexity, regulatory hurdles, and cross-
sector collaboration needs [21,22,25,30]. Blockchain is increasingly recognized as
a pivotal solution for enhancing traceability in supply chain management (SCM) and
fostering secure, reliable relationships not only between organizations and their
suppliers but throughout the entire supply chain [31]. Key concerns such as trust,
privacy, stakeholder support, scalability, data authentication, and supply chain
risk management [23,26] are central to its adoption. Effectively address- ing
legal, operational, and technological challenges is crucial for integrating
blockchain into maritime logistics, ensuring a more transparent, efficient, and
secure global trade en- vironment [16]. Addressing the lack of blockchain expertise
and developing security protocols and risk assessments is crucial for enhancing
scalability and performance in the maritime sup- ply chain [24,32]. Promoting
blockchain awareness, education, and standardization is key to overcoming
resistance to change and ensuring economic viability [17,33,34]. Efficient
information management through blockchain in port operations requires stakeholder
participation and commitment to continual improvement [21,22]. Exploring
blockchain’s potential in port logistics involves deploying permissioned
architectures and conducting SWOT analysis for operational clarity and compliance
with global standards [24,25,35]. Figure 2. Information flow of the port system. To
enhance the efficiency of document management and cargo flow in Chilean ports, it
is imperative to have information and communication processes that facilitate cost-
effective, well-informed, collaborative, integrated, secure, and timely decision-
making and reduce uncertainties inherent in the port system. Such uncertainties
include time losses upon ship arrival, truck coordination, and other related
issues. Reliable and efficient services Mathematics 2024, 12, 1511 7 of 23 are
needed to provide advanced information on cargo traceability, thereby meeting
client expectations while generating lower CO2 emissions. 2.3. Literature Review
2.3.1. Challenges and Barriers of Blockchain in Maritime Port In port management,
blockchain technology offers significant enhancements in cargo tracking and
administrative efficiency but faces implementation hurdles such as stakeholder
reluctance, technological complexity, and the need for cross-sector collaboration
[21–23]. While blockchain standardizes maritime documentation and ensures real-time
data access, challenges remain in data traceability and establishing governance
models [24,25]. Knowledge gaps, stakeholder resistance, and the need for innovative
business models hinder the potential of blockchain in South Africa’s KwaZulu-Natal
province [26]. Success- ful implementation requires comprehensive strategies, risk
management, and adherence to global standards [23]. In smart ports, blockchain
aligns with goals of improved performance and envi- ronmental responsibility, yet
its connection to Industry 4.0 and 5.0 involves overcoming challenges in automation
and collaboration [2,27,28]. Digital technologies like blockchain contribute to
environmental performance but face barriers such as technological complexity,
regulatory hurdles, and cross-sector collaboration needs [21,22,25,29]. Blockchain
is increasingly recognized as a pivotal solution for enhancing traceability in
supply chain management (SCM) and fostering secure, reliable relationships not only
between organizations and their suppliers but throughout the entire supply chain
[30]. Key concerns such as trust, privacy, stakeholder support, scalability, data
authentication, and supply chain risk management [23,26] are central to its
adoption. Effectively address- ing legal, operational, and technological challenges
is crucial for integrating blockchain into maritime logistics, ensuring a more
transparent, efficient, and secure global trade environment [16]. Addressing the
lack of blockchain expertise and developing security protocols and risk assessments
is crucial for enhancing scalability and performance in the maritime supply chain
[24,31]. Promoting blockchain awareness, education, and standardization is key to
overcoming resistance to change and ensuring economic viability [17,32,33].
Efficient information management through blockchain in port operations requires
stake- holder participation and commitment to continual improvement [21,22].
Exploring blockchain’s potential in port logistics involves deploying permissioned
architectures and conducting SWOT analysis for operational clarity and compliance
with global standards [24,25,34]. Advancing blockchain in maritime supply chains
entails identifying stakeholders, addressing resistance to change, and tackling the
lack of government regulations in inter- national trade [26], alongside developing
robust security and privacy protocols [2]. The ultimate goal is a blockchain-based
maritime supply chain system enhancing efficiency, cost-effectiveness, and
environmental sustainability, focusing on streamlining container turnover and the
global trade process [30]. On the other hand, the reference model highlights the
socio-technological aspects, emphasizing not only cybernetic advancements but also
the integratioan of fundamental cultural components for effectively managing
corporate innovations. In this context, it is necessary to analyze the effects of
these technologies on workers and the communities where the companies are present.
Aspects such as reducing unemployment, labor well- being, respect for human
dignity, equality, privacy, and autonomy gain significant relevance, among others
[12,35]. 2.3.2. Multi-Criteria Decision-Making Methods in Blockchain-Operated Port
Systems The research explores the domain of maritime simulators and the decision-
making process in port logistics, emphasizing the utilization of Bayesian BWM-
PROMETHEE and various Multi-Criteria Decision Making (MCDM) techniques like
Analytical Hierarchy Process (AHP), Technique for Order of Preference by Similarity
to Ideal Solution (TOP- Mathematics 2024, 12, 1511 8 of 23 SIS), and Preference
Ranking Organization System Method for Enrichment Evaluation (PROMETHEE) [36].
These methods elevate the functionalities of the simulators and refine the
decision-making regarding personnel management, particularly in the assessment of
job attitudes, performance, and work ability. Nevertheless, they encounter
obstacles such as the technical limitations of simulators, cost factors, and
potential biases in MCDM methods, which affect the effective implementation of
performance criteria in port operations. The authors propose future studies to
concentrate on developing hybrid training modules for maritime simulators and
examining diverse
MCDMs and hybrid models to enhance personnel assessment in maritime logistics.
Moreover, the research investigates decision-making techniques in maritime
practices through the utilization of methods such as Evaluation of Mixed data
(EVAMIX), Novel Ap- proach to Imprecise Assessment and Decision Environments
(NAIADE), Analytic Network Process-Benefits, Opportunities, Costs and Risks (ANP-
BOCR), TOPSIS, Failure Mode and Effect Analysis (FMEA), Decision Making Trial and
Evaluation Laboratory (DEMATEL), and PROMETHEE [37–43]. These methods are employed
in various contexts, ranging from sustainable transformations in port cities to
sustainability assessments in Mediterranean ports. While providing comprehensive
assessments, conflict resolution, and efficiency in team settings, these techniques
encounter challenges such as biases in selecting indicators and context-specific
limitations. Future research is recommended to focus on applying and evaluating
MCDA methods for sustainable strategies in port cities, enhancing decision- making
for port sustainability, and establishing frameworks for measuring sustainability
in port city transformations.
In enterprise networks, the levels of both cooperation and competition are
increasing, mainly due to globalization. This development demands for new co-
opetition approaches to achieve the next level of innovation (Chen et al., 2020).
Emerging technologies, such as blockchain technology, address this development and
are piloted in various industries to establish trustful and traceable relations
between potentially untrusted parties (Große et al., 2021). Already in 2015 and
2016, with the emergence of blockchain-based smart contracts, the potential of
blockchain technology for enterprises was described by (Swanson, 2015) and
(Radziwill, 2018) mainly as an enabler of secured and decentralized data exchange
as well as track and trace solutions. Also during this time, the first proof of
concepts (PoC’s) were developed by first-movers, namely IBM, Maersk, Walmart,
Oracle, Carrefour, and many more, covering several industries (Grover et al., 2019;
O'Brien, 2019). Even though the developed concepts demonstrated feasibility and
significant potentials of the technology, only few projects successfully introduced
productive systems. Thus, 87% of 447 projects investigated in 2018 and 80%
investigated in 2020 remain in their proof-of-concept or pilot-stages (Gartner,
2022; Pai et al., 2018). Main obstacles for these circumstances are seen in clearly
determining the technology’s business value (Önder & Treiblmaier, 2018; Schwarzer
et al., 2022; Varriale et al., 2020), as wells as in missing procedures to
integrate the solution into supply chain processes (Gonczol et al., 2020; Gürpinar
et al., 2020; Panarello et al., 2018; Reyna et al., 2018). Therefore, the two
described research gaps will be addressed in this paper, and the following research
question will be utilized: What phases and steps should be considered by
enterprises when integrating blockchain technology in supply chains to accomplish a
productive and profitable system? To answer this question, first a theoretical
background on technology integration, blockchain characteristics and its
utilization in supply chain management is presented. A focus is given on the
challenges of utilizing blockchain solutions in supply chains. In section three,
the systematic literature review methodology to identify relevant models and
requirements is introduced. Here, blockchain-specific requirements are aggregated
and used to evaluate state of the art integration models. Also in this section, a
videos analysis of blockchain practitioners is described to add practical insights
to the already developed requirements. As a third component, case studies are
described that finally apply and validate the newly composed integration model
based on current blockchain projects. In section four, the model is described in
detail and discussed with evidence from the experts. Section five concludes the
work and sheds light on limitations and future research opportunities. Proceedings
of the 57th Hawaii International Conference on System Sciences | 2024 Page 4536
URI: https://hdl.handle.net/10125/106929 978-0-9981331-7-1 (CC BY-NC-ND 4.0) 2.
Theoretical Background 2.1 Blockchain Technology Characteristics and Integration
Blockchain technology can be seen as a subset of different distributed ledger
technologies (DLT) that describe decentralized, or rather distributed IT
infrastructures. In these infrastructures, accounts are no longer managed centrally
by an instance, but in a distributed peer-to-peer (P2P) network (Morabito, 2017).
Blockchain technology uses cryptographic mechanisms to encrypt data sent to the
network and utilizes “blocks” to store transactions chronologically “chained”
together. This way, the data is distributed among the network participants
represented by nodes that therefore possess the same data insights (Beck et al.,
2017). Moreover, different blockchain solutions can be categorized into public ones
that grant complete data transparency and are applied, especially in
cryptocurrencies. Other than that, private and consortium blockchain solutions have
permission access-, read- and write authorization for either a single network
member or a consortium of members. In current blockchain projects, private and
consortium variants are used more frequently. This paper theorizes on the
integration of blockchain solutions by utilizing information system (IS) research.
Information systems rely on an interplay of tools, hardware, software, and people
to work together and collectively process and redistribute information to
appropriate parties (Autry et al., 2010; Hazen et al., 2012). In this context,
blockchain technology is deemed capable to combine the before mentioned utilities
to form one all-encompassing information system (Berdik et al., 2021; Gürpinar,
Austerjost, et al., 2022). Types of IS integration can be seen in data integration,
functional integration and process integration, of which the third one gets shaped
on an organizational level by social enterprise and social customer relationship
management approaches (Norshidah et al., 2013). The third type, the integration
into an organization and its business processes, is being focused on in this paper.
In this context, the diffusion of emerging technologies in organizations is
described with three dominant phases: the initiation, adoption, and routinization
phase. The routinization phase describes the actual use of a productive system,
which will be the target of the developed integration approach. 2.2 Blockchain
Technology in Supply Chain Management Supply Chain Management (SCM) aims to
coordinate, optimize, and establish error- and failure- free supply chains, ranging
from raw material extraction to the finished product while considering economic
aspects (Giese et al., 2016). The supply chain and its partners are linked by the
flow of materials, information, and finance (Beckmann, 2012). However, at the
current time, the financial flow is only connected to a limited extent and, as a
result, is not synchronized with the service provision process (Gürpinar, Große, et
al., 2022). Blockchain solutions claim to address this issue and already claim the
logistics and supply chain field as one of its most viable application areas for
blockchain projects (Erol et al., 2021). Mainly private and consortium blockchain
solutions fulfill SCM requirements. The number of smart devices in the Internet of
Things (IoT) increases significantly and demands for trusted, transparent, and
cost-efficient IT infrastructures (Große et al., 2021; Kshetri, 2018). Blockchain
solutions are used to create the prerequisite of gapless documentation of
transactions and data. At the same time, all relevant supply chain partners can get
access to track the production progress or the transportation process of goods
(Brody, 2017; Giese et al., 2016). Blockchains also help to trace back information
and therefore in delivering a proof of origin for products that can help to stick
to sustainability goals and ensure corporate social responsibility (Zhang et al.,
2020). Furthermore, mutual trust between the network partners is achieved through
immutably stored and distributed data. Accordingly, expenses for central
authorities like banks, certification, or assurance service providers are reduced
significantly (Kshetri, 2018). Finally, through blockchain-based smart contracts,
manual, paper- driven processes can be automatized and therefore reduce the
possibility of fraud or error-proneness and speed up processing times. Taking the
above levels into account, the integration of blockchain solutions poses various
challenges that can be categorized by means of the human-technology-organization
(MTO) approach that has been expanded by Henke et al. to include the area of
information (I) (Henke et al., 2020; Karltun et al., 2017) and will be published in
a subsequent paper. The focus of this paper is on the organizational dimension that
affects the challenging integration of blockchain solutions in supply chain
processes of the various stakeholders while considering profitability.
In recent years, the agriculture sector has played an increasingly important role
in ensuring sustainable growth by integrating best agricultural practices and
protecting the environment. The agri-food sector is undergoing a new revolution due
to modernization and the use cases of digital agri-food supply chain have made it
convenient to deliver products from farm to fork. Due to technical advancements,
many innovative technologies, such as the Internet of things (IoT), artificial
intelligence (AI), big data analytics, blockchain, etc., had a significant impact
on the emerging supply chain industry (Vishwakarma et al., 2019; Sharma et al.,
2020; Bhatti et al., 2021; Qader et al., 2022; Purusottama et al., 2022; Singh et
al., 2022; Modgilet al., 2022). These technologies help the agri-food supply chain
to speed up Blockchain adoption The current issue and full text archive of this
journal is available on Emerald Insight at: https://www.emerald.com/insight/1463-
7154.htm Received 30 October 2022 Revised 30 December 2022 Accepted 10 February
2023 Business Process Management Journal © Emerald Publishing Limited 1463-7154 DOI
10.1108/BPMJ-10-2022-0543 the processes, manage global food demand, track food
origin to assess the quality and safety of food, minimize risks, maximize
efficiency and manage complexity (Hajiet al., 2020; Kamble et al., 2020; Di Vaio
and Varriale, 2020; Sindhu and Kumar, 2022). Blockchain stands out among these
technologies, which has received much attention from the scientific community in
integrating with the food supply chain over the past few years (Kshetri, 2018; Wong
et al., 2020a, b). With the decentralized, traceable, tamper-proof and other
technical features of blockchain technology helps to solve many issues in the
traditional supply chain finance (Song et al., 2022). Additionally, it helps to
improve the safety and quality of the global food supply distribution and
transforms many aspects of the agriculture industry. It provides a better
monitoring approach from farm to table and connects the various food supply chain
actors on a single platform (Fernandez-Vazquez et al., 2022). IBM is considered to
be the leading enterprise blockchain provider for the food supply chain (Xu et al.,
2020). Among the world’s most important crops, wheat and rice, India is the second
largest producer in the world (Shukla et al., 2022). Even though the Indian
agriculture sector is lagging from various challenges related to procuring,
storing, food wastage, food quality and inefficient use of resources (Joshi et al.,
2020; Gupta et al., 2021; Yadav et al., 2021). The shortage of an ample number of
procurement centers in India loses farmers’ chance to bargain their production and
the inefficiency of resources leads to passing their production to the local agents
and stakeholders at local prices, which is far less than MSP (Minimum Support
Price) (Mogale et al., 2020). The agri-food systems are multitier and complex,
involving multiple actors and often cut local, national and geographical boundaries
to deal with other actors (Thompson and Scoones, 2009). The multi-tier structure
and lack of information sharing directly impact a product’s quality, cost and
delivery time of product (Haji et al., 2020; Gupta et al., 2021). Additionally, a
lack of coordination between supply chain partners increases the risk of food
contamination at various supply chain stages, furthering concerns about health and
food quality (Song and Zhuang, 2017). Moreover, in the supply chains, there is no
productive framework to maintain the discrepancy of the complex food supply chain
(Fang Du et al., 2009). Digitalization can achieve many of the objectives such as
improving information exchange and reducing market risks and dependability on
various actors in the agri-food supply chain (Leat and Revoredo-Giha, 2013; Kamble
et al., 2019). Implementing blockchain technology in the agriculture sector makes
the agri-food supply chain transparent (Menon and Jain, 2021), traceable (Liu et
al., 2021), trustworthy and secure (Kshetri, 2018; Dayana and Kalpana, 2021;
Gonzalez-Puetate et al., 2022). Furthermore, blockchain technology can facilitate
cooperation among members of the supply chain (Di Vaio and Varriale, 2020; Xue et
al., 2020) with a positive effect on cost and efficiency in the supply chain.
Moreover, the characteristic of traceability, transparency and verifiability of are
some of the dimensional features of blockchain that can help to enhance consumer
trust and prevention of product fraud during the entire journey of supply chain
operations (Biswas et al., 2017; Al-Rakhami and Al-Mashari, 2022; Tang et al.,
2022). Blockchain technology is a revolutionary approach. However, its impact is
still hard to anticipate. Recently, numerous efforts have been made to adopt
blockchain technology in supply chains, but it has yet to fully realize its
potential, particularly in agri-food supply chains (Bazan and Estevez, 2021).
Therefore, this study aims to investigate the main drivers for the adoption of
blockchain technology and focuses attention on the adoption behavior of
stakeholders in the agri-food supply chain. While the literature on blockchain
technology is growing rapidly, it is clear from the early research that a broader
view is needed to understand the adoption behavior. Adoption of technology is not a
new concept; many theories have aimed to determine user behavior toward certain
technologies. Various technology acceptance models and theories such as the
technology acceptance model (TAM) (Venkatesh and Davis, 2000), the task–technology
fit (TTF) theory, the Diffusion of Innovation (DOI) theory, the model of PC
utilization (MPCU), the theory of reasoned action (TRA) (Fishbein and Ajzen, 1975),
the theory of planned BPMJ behavior (TPB) (Ajzen, 1991), the unified theory of
Acceptance and use of technology (UTAUT) (Venkatesh et al., 2003) and social
cognitive theory (SCT) have been existed in the literature and applied in a wide
variety of domains to understand or predict the user behavior to assess the usage
of upcoming, developed and implemented technology (Taherdoost, 2018). Blockchain
technology not only generates trust in the supply chain but also improves the
supply chain’s adaptability, alignment and agility to increase the competitive
environment, which further leads to better business performance (Sheel and Nath,
2019). Digitization of the agri-food supply chain with the help of blockchain
technology will benefit each and every one involved in the supply chain. Despite
these recent advances, blockchain technology is still in its nascent stage (Xu et
al., 2020) with regard to individual adoption behaviors in supply chains. Many
reviews in the literature address the importance of blockchain technology within
the agri-food supply chain, but (Galvez et al., 2018; Zhao et al., 2019; Xu et al.,
2020), recently published articles have not focused on the role of blockchain among
ground-level stakeholders in the agri-food supply chain using UTAUT model. In the
past few years, researchers have focused on empirical studies of blockchain
adoption in the supply chain (Francisco and Swanson, 2018; Wang et al., 2019;
Kamble et al., 2019; Queiroz and Wamba, 2019; Karamchandani et al., 2020; Miraz et
al., 2020; Wong et al., 2020a, b; Queiroz et al., 2021; Alazab et al., 2021) and
food supply chain (Thiruchelvam et al., 2018; Tayalet al., 2021), especially in the
agri-food supply chain (Kamble et al., 2020). Only limited studies take into
account the blockchain adoption specifically in the agri-food supply chain by the
Indian community (Kamble et al., 2020; Saurabh and Dey, 2021; Nayal et al., 2021;
Oguntegbe et al., 2022). Whereas blockchain technology has such a disruptive power
and an unprecedented impact on agri-food supply chain innovation, it is essential
to understand the behavioral intention (BI) of stakeholders behind its adoption.
However, the literature lacks exhaustive research on the drivers of blockchain
adoption and their effect on the BI of stakeholders. Therefore, this study aims to
answer the following research questions: (1) What are the drivers of adopting
blockchain technology in the agri-food supply chain? (2) What is the effect of
drivers of blockchain adoption on the BI of stakeholders in adopting blockchain
technology in the agri-food supply chain? With BI consideration, the blockchain
model can help stakeholders and practitioners understand blockchain technology
adoption better with empirical evidence. To fill this gap in the literature, this
study aims to identify the drivers that influence blockchain adoption and then
examine the BI of stakeholders in adopting blockchain in agri-food supply chain
management by proposing and validating a modified version of UTAUT. The exploratory
research was conducted in the North Indian state of Punjab. Punjab is considered a
leader in agriculture development and the pioneer of India’s Green Revolution.
Initially, this study aims to identify and gather insights into the factors that
drive blockchain technology adoption. The first phase provides a broader view of
the drivers of blockchain adoption. Second, the study proposes a model based on an
extension of the UTAUT model to understand the blockchain adoption behavior of
stakeholders in the agri-food supply chain. The remaining part of the article is
organized as follows—the first part of the study addresses the contribution of this
study is illustrated in section 2. Next, section 3 describes the previous
literature. Section 4 undertakes the research model and hypothesis development;
Section 5 describes the study’s research methods and section 6 reports the data
analysis and results. Lastly, an exhaustive discussion of the foremost findings and
conclusions are set out in sections 7 and 8. Blockchain adoption 2. Underpinning
elements The
 following subsection firstly describes the role of technology acceptance models,
with special emphasis on the unified theory of Acceptance and use of technology.
Then the emphasis is on blockchain technology’s vital role in agri-food supply
chain management. 2.1 Technology adoption models Recognizing the needs of the users
and the Acceptance of technology is the first step in the development of any
technology, and this understanding would be helpful to realize the behavior of
people regarding the Acceptance or rejection of technology. Despite the benefits of
technology, a large number of researchers attested that people refuse to comply
with new technologies. Therefore, the adoption models are invented to understand or
predict the behavior of people in accepting or rejecting new technology in the
future. In general, “Acceptance is defined as an opposition to refusal and refers
to the decision to use an innovation”. Researchers need to know why people accept
new technologies, and these queries may help them to use better methods for
designing, evaluating and predicting the response of the users to the new
technologies (Taherdoost, 2018). Literature has presented several theories of
adoption models. The most significant of these models include TPB (Ajzen, 1991),
which was developed from TRA (Fishbein and Ajzen, 1975). TRA is an associated link
between the beliefs, attitudes, norms, intentions and behavior of an individual.
For the last three decades, TAM given by Davis in 1989 has been considered the most
dominant model in predicting the BI of users for accepting and rejecting a
technology. The two main predictors of the TAM model are perceived ease of use
(PEOU) and perceived usefulness (PU), both of which are the primary constructs of
other models also (Venkatesh and Davis, 2000; Venkatesh et al., 2003, 2012, 2016;
Venkatesh et al., 2016) and BI used as a dependent variable in the TAM model. In
2000, Venkatesh and Davis extended the TAM model and developed TAM2 by
incorporating additional constructs, namely social influence and cognitive
instrument. In 2003, Venkatesh et al. came out with the UTAUT model by
consolidating and testing variables in the eight dominant theories and models such
as TRA, TAM, TPB, combined TPB/TAM, the model of PC utilization, innovation
diffusion theory (IDT), SCT, the motivational model. UTAUT considers four core
variables such as performance expectancy (PE), effort expectancy (EE), social
influence (SI) and facilitating conditions (FC) and the four moderating variables
are gender, age, experience and voluntariness of use. UTAUT model explained about
56% of the variance in BI to use technology and 40% variance in technology use
(Tandon et al., 2016). The UTAUT model is proved to be the superior and most widely
used model among all due to its simplicity, parsimony and robustness (Tarhini et
al., 2016). The original UTAUT has been used in various researches and has inspired
scholars to propose some modifications. In order to reach the objective of the
study, it has used extended UTAUT is the suitable approach by the inclusion of
three more variables such as trust, transparency and interfirm trust. The extended
three factors are considered relevant in predicting stakeholders’ BI in adopting
blockchain technology (Francisco and Swanson, 2018; Queiroz and Wamba, 2019; Wong
et al., 2020a, b; Alazab et al., 2021). In light of the above discussion,
technology adoption research is considered to be a mature research field. By
drawing from existing adoption research, our research aims to find the blockchain
technology adoption that is perceived to be used in the agri-food supply chain
sector. In this study, a research model has been proposed using UTAUT, which in its
current or extended form can be used to explore the BI of stakeholders of using
blockchain technology in the agri-food supply chain. BPMJ 2.2 Blockchain in the
agri-food supply chain: past and new developments Blockchain technology is a
distributed ledger technology governed by a consensus protocol (Dayana and Kalpana,
2021). The list of transactions is recorded onto a ledger to create a block, and
each new transaction is recorded into a block. Each block is further connected to
the previous and the next block using a hash function. A hash function is a digital
identity to lock within the blockchain (Wang et al., 2019; Dhagarra et al., 2019).
The digital flow of agri- food supply chain using blockchain technology is shown in
Figure 1. The topmost physical flow illustrates the various actors, including
grower, producer, supplier, processor and consumer, in the agri-food supply chain
and the digital flow describes multiple devices such as QR codes, Radio frequency
identification (RFID) tags, barcodes, sensors and cameras connected with the agri-
food supply chain processes to provide end-to-end supply chain visibility and
improved business operations. Every action on the agri-food supply chain is
recorded on the bottom layer, that is blockchain network. Growers can record
information about the crops, fertilizers, pesticides and machinery used. A producer
can record information about the farm, farming practices and crop cultivation
process. Suppliers can record information regarding shipping details, storage
conditions, transit time and financial transactions between producers and
distributors. The processor can record information about the processing methods,
factory and equipment used, financial transactions, quality and quantity,
expiration time, shelf time, etc. The blockchain network explains the working of
distributed ledger technology in which the transaction is broadcasted to the
network by means of a block. The block is successfully validated through the
network by various Figure 1. Digital flow of blockchain network Blockchain adoption
business stakeholders involved in the food industry, and finally, the transaction
is complete, and the block is added to the chain. Lastly, consumers can use a
website or web app on mobile phones to trace the whole information about the
product by scanning a QR code. The distributed ledger increases the visibility and
transparency of stored transactions. It is immutable, which ensures trust between
parties and allows the automation of transactions. Also, a blockchain-based network
eliminates the need for an intermediary to facilitate transactions. Therefore, it
reduces the transactional cost and operates at a meager transaction fee. For
example, Noahcoin helps Filipino workers in Japan perform transactions at a very
low cost. Similar would be true for the Indian community (Schuetz and Venkatesh,
2020). Zhao et al. (2019) emphasized that blockchain technology uses a combination
of various technologies in the computer science field, such as cryptography, hash
functions, IoT and database technologies, to provide innovative solutions to food
traceability, transparency, safety and security. Although the authors explored the
key challenges that emerged for applying blockchain technology in the agri-food
supply chain but not study the adoption behavior of using blockchain in the same
field. Thiruchelvam et al. (2018) predicted the importance of blockchain technology
in the coffee supply chain in Burundi using TAM. It was determined that the actors
of the Burundi coffee industry require technological adoption, automation and
digitization of processes to ensure fair trade and price equality for consumers
without the intervention of a third party. Adopting blockchain technology would
offer transparency, greater sustainability, scalability, safety and food security.
Sheel and Nath (2019) have led to a more profound understanding of adopting
blockchain technology in the supply chain, indicating that it can improve supply
chain adaptability, alignment and agility, leading to a competitive environment and
better firm performance. On the other side, in their empirical study, Wang et al.
(2019) explored the use of blockchain in the supply chain and discussed how it can
transform the supply chains in the future. The experts conducted the interview to
gain valuable insights into the emerging nature of blockchain technology and its
potential to revolutionize the concept of trust in supply chains. Tayalet al.
(2021) used a PCA- TISM-MICMAC integrated methodology by integrating Principal
Component Analysis (PCA), Total Iterative Structural Modeling (TISM) and Matrice
Impact Croises Multiplication Applique a un Classement (MICMAC) to find out the
main drivers of the implementation of blockchain technology in the food supply
chain. Experts believe that the transparent system, fraud detection, inventory
management with tracking, scalability, secure system, cost reduction, safety and
quality food, customer satisfaction and government regulations are some of the nine
critical success factors for the adoption of blockchain technology in the food
supply chain. Kamble et al. (2019) proposed a model based on three adoption
theories, such as TAM, TRI and TPB, to understand the supply chain practitioner’s
perception of blockchain adoption in supply chain management in India. In 2020,
Kamble et al. extended their research on blockchain technology in agriculture
supply chains. They identified 13 enablers of blockchain in the agriculture supply
chain from the literature and validated them through a group of experts using
Interpretative Structural Modeling (ISM) and Decision-Making Trial and Evaluation
Laboratory (DEMATEL). They recommended checking the cause-and-effect relationship
between enablers of blockchain technology and used SEM for further studies.
Similarly, Wong et al. (2020a, b) proposed a Blockchain Operation Supply Chain
Management (BOSM) model using Technology, Organization and Environment framework
among Malaysia’s small-scale enterprises. Karamchandani et al. (2020) traced the
evaluation of the perception and benefits
of using Enterprise blockchain (EBC) among service industry practitioners in
India. An extended TAM and IDT model evaluated the results and examined that the
perception of EBC among service industry practitioners was dependent on the theory
of EBC benefits or the publicity about the suitability of EBC. In the proposed
model, perceived EBC benefits were found to BPMJ significantly affect perceived
usefulness in all six dimensions of service SCM, specifically, information quality,
mass customization, service quality, supply uncertainty, delivery reliability and
customer relationship. Similarly, Miraz et al. (2020) used a quantitative approach
to adopt blockchain technology in the logistic food industry (LFI) in Asia or
Blockchain enthusiasts and potential blockchain users worldwide. They proposed a
research model based on UTAUT2 using SPSS and the Smart PLS platform for
descriptive and testing analysis. The results indicated that blockchain could raise
the transparency of the supply chain to a new level. Also, the proposed model
significantly contributes to blockchain businesses and merchants in Asia. Alazab et
al. (2021) presented a modified version of the Classical Unified Technology
Acceptance and Use Theory. It integrated it with the TTF and information system
success (ISS) models in the UTAUT with two Trust-Based Information Technology and
Innovation Acceptance Models to shed some light on the adoption of blockchain
technology in the supply chain in the Australian context. The results revealed that
inter-organizational trust and trust in technology directly influences behavioral
expectations toward blockchain adoption. In their study, strangeret al. (2021)
interviewed the supply chain stakeholders in 2019 and applied thematic analysis to
reap the results. They concluded that blockchain technology leads to more efficient
management of tractions, reduces behavioral uncertainty, improves collaboration
among supply chain stakeholders and reduces the augmented bilateral dependency
among supply chain actors after BCT adoption. It also helps strengthen the
relationship between stakeholders and the quality of collaboration among them. 3.
Research model and hypothesis development From the above discussion, one can infer
that technology acceptance models exist to explain the nature of technology
adoption by different users. The present study used the extended UTAUT model by
considering two more constructs from the literature, such as interfirm trust (IT)
and transparency (T), in the context of predicting the drivers of blockchain
adoption. It also investigates the relationship between drivers of blockchain
adoption and BI to propose the conceptual model for usage intentions of blockchain
technology by stakeholders in the agri-food supply chain in emerging economies. 3.1
Behavioral intention and drivers of blockchain adoption Based on the existing
literature on UTAUT and its variants, a conceptual model has been derived, as shown
in Figure 2, to understand the role of blockchain adoption in the agri-food supply
chain by various stakeholders from the North Indian state of Punjab. Since
blockchain technology is still at its developing stage, the constructs have been
drawn mainly from the existing literature using TAM, UTAUT on supply chain and
agri-food supply chain theories. By following recent literature, the moderators
were dropped in this study as it creates a variation in the adoption and
respondents had no experience in the field of blockchain as a technology is in its
recent stages (Queiroz and Wamba, 2019; Alazab et al., 2021). Based on the
literature, performance expectancy, social influence, facilitating conditions and
effort expectancy were identified as predictors of BI (Venkatesh et al., 2003,
2012, 2016), while interfirm trust (Francisco and Swanson, 2018; Queiroz and Wamba,
2019; Wong et al., 2020a, b; Alazab et al., 2021) and transparency were adapted
from the existing literature (Francisco and Swanson, 2018; Queiroz and Wamba,
2019). Performance expectancy: It is the extent to which a person believes that
using a system will help in attaining gains in job performance (Venkatesh et al.,
2012). In this study, the performance expectancy believes that using blockchain
technology in the agri-food supply chain increased the overall performance and
efficiency of its processes. The smart Blockchain adoption contracts in the
blockchain are automatically executed programs by the blockchain platform, which
leads to a high level of automation and streamlines the supply chain processes
(Wang et al., 2019). Blockchain technology reduces the time of transactions hence
improving the efficiency of logistics and supply chain. Effort expectancy: It is
the measure of ease associated with using a system (Venkatesh et al., 2012). In our
model, effort expectancy is the ease of using blockchain technology in agri- food
supply chain processes. Technology is less likely to be used if perceived as more
difficult to use and requires an extra effort than existing methods. Effort and
performance expectancy are related to each other as they are aligned toward the
system’s efficiency, expectations and effectiveness (Francisco and Swanson, 2018).
Facilitating conditions: It is the degree to which an individual believes that the
organizational and technical infrastructure exists to support the use of the system
(Venkatesh et al., 2012). In the proposed model, facilitating conditions refer to
the availability of essential resources to the stakeholders to adopt blockchain
technology in the future. Also, if there is sufficient technological,
organizational, network and human support for blockchain technology, users will be
more likely to be engaged with this technology and have a more effortless and
pleasant experience with blockchains. Tipmontian et al. (2020) claimed that
available blockchain software and hardware cost are the critical factors
influencing blockchain technology implementation. Social influence: It refers to
the degree to which an individual perceives how important other individuals believe
he or she should use the new system (Venkatesh et al., 2012; Modgil et al., 2021).
In the proposed model, social influence indicates how people influence the behavior
of others to adopt blockchain technology. The previous study by Alazab et al.
(2021) clearly stated that social influence is highly affected by society, family
and friends’ beliefs and actions. The following hypothesis captures this
relationship. H1. Performance expectancy, effort expectancy, facilitating
conditions and social influence are the drivers of blockchain adoption Transparency
and Inter-firm trust: Blockchain technology has a positive influence on the user
and adds value to the supply chain. Due to the distributed nature of blockchain
technology, the data is distributed among all the network members, and records of
Drivers of BC adopƟon Behavioral intenƟon Performance expectancy (PE) Social
influence FacilitaƟng condiƟons Effort expectancy Interfirm trust Transparency
Source(s): Authors Figure 2. Research model BPMJ transactions and various processes
are open for every member of the blockchain, which provides transparency to the
users (Wang et al., 2019). The use of blockchain technology can make agri-food
supply chains more efficient and reliable by linking all the aspects of the food
supply chain with a traceable and immutable data system (Xu et al., 2020).
Interfirm trust is also an essential factor in defining the trust between various
organizations in the same supply chain. Lack of trust or faith in technology plays
a vital role in technology adoption. Trust is demonstrated in the literature as the
main fundamental aspect and influence on technology adoption. Interfirm trust in
the agri-food supply chain using blockchain technology creates trust among various
organizations and secures information exchange between various parties. Miraz et
al. (2020) used trust as the construct to check the impact of BI and the usage of
blockchain technology for supply chain traceability. Stranieri et al. (2021)
emphasized that blockchain technology build trust-based relationship among
stakeholders in the food supply chain. Blockchain networks’ transparency and
visibility help build trust in the supply chain actors. Additionally, it plays a
vital role in avoiding fraudulent activities and providing trust among various
actors (Wang et al., 2019). Alazab et al. (2021) highlighted that inter-
organizational trust played an essential role in building strong relationships
between organizations and therefore is a significant factor in adopting blockchain
technology. Seminal contributions have been made by Ghode et al. (2020), showing
that inter-trust organizations and transparency are the critical factors that
influence the adoption of blockchain technology in the supply chain. Based on these
arguments, the following hypothesis has been formulated. H2. Inter-firm trust and
blockchain transparency are the drivers of blockchain adoption Behavioral
intention: According to the definition, BI refers to the subjective likelihood that
a person has developed an attentive policy to perform some planned behavior. In our
study, the BI is the stakeholder’s attitude or intention toward using blockchain
technology in the agri-food supply chain. BI depends on the various factors, as
defined by Ghode et al. (2020), that influence the stakeholders for the adoption or
rejection of particular technology. This argument leads to the formulation of the
following hypotheses: H3. There is a positive association between drivers of
blockchain adoption and BI
The rapid evolution of global trade has exposed enterprises to highly fluctuating
global environmental shocks, placing the survival and development of these
enterprises under enormous pressure and with increasing risks [1]. For one thing,
commodity flows are vulnerable to disruptions due to natural hazards, strikes,
terrorism, and political instability. For example, the disruption of the supply
chain caused by the COVID-19 pandemic has had a huge ripple effect on economic
activities worldwide. Furthermore, the supply chain is at high risk of supply and
demand side fluctuations, such as the uncertainty of customer demand, government
regulations, and the suspension of cooperation. For example, demand forecasting
becomes more difficult as the fluctuation increases, resulting in a further
bullwhip effect [2]. Therefore, when facing challenges related to product safety or
production ethics, enterprises find it difficult to trace products in time due to
the lack of supply chain traceability [3,4]. In the era of digital transformation
and Industry 4.0, many disruptive technologies, such as the Internet of Things and
Blockchain, provide the potential for enterprises to en- hance their supply chain
risk resistance [5]. Blockchain, a peer-to-peer distributed database, has been
proven particularly useful in promoting supply chain transparency, safeguarding
data security, and improving traceability [3]. For example, companies such as
Walmart, Nestlé, and Unilever have partnered with IBM to use blockchain to ensure
food safety Sustainability 2023, 15, 6634. https://doi.org/10.3390/su15086634
https://www.mdpi.com/journal/sustainability Sustainability 2023, 15, 6634 2 of 24
and improve their responsiveness to product recalls by tracking product provenance
[6]. Some IT manufacturers recently applied a blockchain-based patent to protect
privacy and data security in online games [7]. Furthermore, blockchain has been
widely used to address the issue of traceability and transparency in different
industrial sectors, such as pharmaceutical [8], food [9], and vehicles [10],
agriculture [11], etc. Several studies have examined the factors driving blockchain
adoption in supply chain management from various theoretical frameworks, including
the technology acceptance model (TAM) [12–15], theory of planned behavior (TPB)
[13], unified theory of technology acceptance and use (UTAUT) [12,16–18], and
technology–organization–environment the- ory (TOE) [19–21]. However, while these
models propose different benefits of blockchain technology for supply chain
management, they fail to describe the relationship between individuals’
understanding of the technology and supply chain risk management. The existing
literature on the implementation of blockchain technology for risk management to
prevent supply chain risks is insufficient, as demonstrated by the limited number
of studies [22]. To address this gap, Ivanov, Dolgui and Sokolov [22] provided a
compre- hensive overview of the potential implications of digital technology and
Industry 4.0 on supply chain risk management and highlights the need for further
research in this area. Additionally, Chowdhury, et al. [23] proposed a TAM model
and finds that the adoption of blockchain technology is positively related to the
level of perceived risk resilience in supply chain management. Moreover,
Karamchandani, Srivastava and Srivastava [15] identified and tested perceived
usefulness of blockchain technology in supply uncertainty as a mechanism mediating
the relationship between perceived benefits of blockchain and blockchain adoption.
However, it should be noted that Chowdhury, Rodriguez-Espindola, Dey and Budhwar
[23] solely considered risk resilience and Karamchandani, Srivastava and Sri-
vastava [15] only focused on supply uncertainty, the multifaceted nature of supply
chain risks requires a more comprehensive approach, as highlighted by Ivanov,
Dolgui and Sokolov [22]. Therefore, this study aims to provide answers to the
following three research questions. RQ1: What are the perceived benefits of
blockchain technology? RQ2: What is the relationship between perceived benefits and
blockchain adoption from the perspective of supply chain risk management? RQ3: What
is the boundary condition of the relationship between perceived benefits and
blockchain adoption in supply chain risk management? Our research aims to explore
supply chain managers’ intention to adopt blockchain technology from the
perspective of supply chain risk management (SCRM). Thus, this study employs an
extended TAM framework and structural equation model (SEM), and makes three
contributions: • We clearly demonstrate the features of blockchain in supply chain
management and summarize four benefits of blockchain, which are traceability,
transparency, informa- tion sharing, and decentralization. • We extend the
perceived usefulness of the TAM to the field of SCRM and study the impacts of the
four benefits of blockchain on the intention to adopt blockchain through two types
of supply chain risk resistance capabilities, which are supply chain resilience and
responsiveness. • We examined the moderating role of uncertainty avoidance cultural
values. By elevat- ing cultural differences at the level of uncertainty avoidance
cultural values, this study complements the literature on technological acceptance
and uncertainty avoidance cultural values. The remainder of this paper is organized
as follows. Section 2 comprises a literature review to understand the current
research status of blockchain technology adoption and a summary of blockchain’s
actual role in the supply chain. Section 3 proposes our research model based on the
extended TAM according to the four perceived benefits of blockchain, as summarized
in the literature. Section 4 outlines the steps of our survey. The data analysis
and results are reported in Section 5 and conclusions are drawn in Section 6.
Finally, the Sustainability 2023, 15, 6634 3 of 24 study’s theoretical
contributions, managerial implications, and research limitations, as well as
possible future research directions, are presented in Section 7. 2. Literature
Review and Theoretical Foundation Supply chain risk management plays a vital role
in all organizations, and the appli- cation of new technologies in supply chain
risk management has attracted widespread attention. In order to understand the
willingness of enterprises to adopt blockchain in the supply chain, the literature
on supply chain risk management, blockchain, and blockchain technology adoption is
reviewed in turn. 2.1. Supply Chain Risk Management and Supply Chain Capability
Effective SCRM is a primary strategic consideration in global supply chains,
leading to extensive research on identifying, preventing, detecting, reducing, and
responding to supply chain risks [24]. Categorizing supply chain risks is important
because it helps practitioners distinguish between risk sources [25]. Based on
previous views in SCRM, supply chain risks can be separated into two categories:
supply-demand coordination risks and disruption risks [26–28]. Supply-demand
coordination risks are caused by changes in customer demand. For example, the
demand for personal protective equipment, such as masks and protective suits,
soared at the beginning of the COVID-19 outbreak, while raw materials and finished
products for these items were in short supply [29]. Disruption risks are caused by
factors such as operational risk, natural disasters, terrorism, emergency safety
and health incidents, and partner bankruptcy. For example, to control the
pandemic’s spread, countries implemented lockdowns, severely damaging import and
export trade, thereby causing supply chain disruptions. To resist such risks,
companies urgently need to develop more cost-effective, robust, and dynamic supply
chain capabilities [30]. There are two types of supply-chain-risk-resistant
capabilities, supply chain resilience and supply chain responsiveness, that can
help alleviate the abovementioned two types of supply chain risks, respectively.
Supply chain resilience refers to a supply chain’s ability to prepare for
unexpected events and respond to and recover from disruptions, by maintaining
operational continuity and controlling structure and function at the required level
of connectivity [31,32]. Supply chain resilience enables supply chain members to
endure difficulties and adversities and gain an advantage in the chaos through
better positioning than their competitors. There- fore, supply chain resilience can
help enterprises to quickly revert to normal levels when enterprises encounter
supply chain disruptions [33]. Supply chain responsiveness refers to an
enterprise’s ability to effectively adjust to demand and supply changes by
modifying production quantities, delivery, and product portfolios over time [34].
Supply chain responsiveness reflects the flexibility of operations and can help
companies respond to market dynamics effectively. Therefore, supply chain
responsiveness can help enterprises effectively coordinate the tension between
supply and demand in response to risks caused by customer demand uncertainty,
information asymmetry, and market competition. 2.2. Application of Blockchain in
the Supply Chain and Its Benefits Blockchain is mainly used to record transaction
data or other information, which is encrypted with hash functions and distributed
across nodes. When an agent node in the blockchain wants to add a new transaction
to the chain, it needs to be broadcast to the entire network for verification. Only
if a majority of nodes agree that the transaction has passed a consensus mechanism
can the information be encrypted into a new time-stamped block and copied to each
node [4]. Early studies on blockchain have primarily focused on technical research
about Bitcoin and other application analyses. However,
with the evolution of blockchain technology and its potential to revolutionize
operations and supply chain management (OSCM), it has gained considerable attention
in recent years. A number of studies have explored Sustainability 2023, 15, 6634 4
of 24 how blockchain works for OSCM from various perspectives. For instance, in the
field of operation management, Babich and Hilary [35] highlighted five key
strengths of blockchain technology, such as visibility, aggregation, validation,
automation, and resiliency. In addi- tion, scholars have identified others critical
features, including traceability, transparency, permanent record, reliable data,
distributed ledgers, cryptocurrency, smart contract, and low information
sharing/disclosure cost [36]. In the realm of supply chain management, Centobelli,
et al. [37] explored the potential of blockchain technology for bridging trust,
traceability, and transparency in circular supply chains, while others have
examined im- mutability, transparency, disintermediation, irreversibility,
automation, efficiency, and security [38–40]. Appendix A provides a summary of
blockchain’s benefits in OSCM. Based on this literature and blockchain’s
operational principles, we argue that blockchain technology can provide four
benefits to supply chain management, namely, traceability, trusted information
sharing, transparency, and decentralization. Traceability: Blockchain technology
facilitates traceability for supply chain information by collecting, recording, and
storing distributed time-stamped data during production, transportation, and sales
[11]. This information records the provenance of each prod- uct, thus effectively
combating the counterfeiting of pharmaceuticals, diamonds, and luxury goods [41].
Traceability has enabled the large-scale adoption of blockchain in agriculture
[11], food [9], and pharmaceuticals [8], such as IBM’s TradeLens and Food Trust
projects. Trusted information sharing: Typically, data on blockchain are encrypted
through hash func- tions, which is similar to interlocking, causing data on each
piece to contain arrays representing the previous block [42]. Information on the
blockchain is tamper-proof because data modifi- cation requires the rearrangement
of data in the entire chain and decentralized verification through a consensus
mechanism [43]. Therefore, this valuable information can be turned into reliable
transaction vouchers for supply chain financial enterprises, such as Ant Financial
Services Group, Tencent Financial Technology, One Connect, and Jingdong Finance
[29]. Transparency: The data in the blockchain are distributed to each network
member, and the addition of any data into the chains needs to be audited and agreed
upon by most nodes in the blockchain. Thus, the data on the blockchain are visible
to all supply chain participants. This transparency has been applied in practice,
such as the blockchain collaboration platform created by IBM and Maersk [22].
Decentralization: The metadata are distributed across the network in the
blockchain. Therefore, compared with centralized ledgers, a key advantage of
blockchain is Byzantine fault tolerance; that is, the breakdown of a single
component/node in the blockchain will not paralyze the entire system [35]. This
decentralized nature has prompted communi- cation companies, financial
institutions, and government departments to actively build information systems
based on blockchain [44]. 2.3. Blockchain Adoption and an Extended TAM Scholars
have conducted extensive investigations into the factors influencing blockchain
adoption and the obstacles or challenges that hinder it through expert interviews
and case studies. For example, Janssen, et al. [45] proposed a theoretical
framework that integrates institutional, market, and technical factors for
analyzing blockchain adoption, while others have investigated the challenges and
implications of blockchain and proposed a conceptual framework based on interviews
[46]. However, empirical research has obtained much more attention. For example,
facilitating conditions, trust, social influence, and effort expectancy have been
found to be the main factors affecting blockchain adoption based on a UTAUT model
[17]. Moreover, a TOE framework which studied the technological, environmental, and
organizational factors influencing blockchain adoption has been proposed [20].
Others have developed integrated models of blockchain technology adoption, such the
integration of TAM, TRI, and TPB [13] and the integration of TAM and UTAUT [12].
Appendix B provides a more detailed review of these models. However, these theories
do not ade- quately predict adoption intentions in supply chain from the
perspective of SCRM. UTAUT Sustainability 2023, 15, 6634 5 of 24 only considers the
exogenous conditions affecting technology acceptance from the level of individual
motivation, such as performance expectancy and facilitating conditions [16]. TOE
proposes the factors affecting the adoption of organizational technology from three
broad perspectives: technology, organization, and environment [19,20], while
ignoring the mechanism of technological factors on adoption. Furthermore, TPB is
used to explain general human behavior based on three factors: attitudes,
subjective norms, and perceived behavioral control [13]. Moreover, TAM has received
great attention in operations management and corporate strategy. However, two key
variables, perceived usefulness and perceived ease-of-use, are related to how well
individuals cognize the technology, which is not well described in TAM. The
extended TAM model developed by Venkatesh and Davis [47] outlined the relationship
between cognitive instruments, such as the output quality, and perceived use-
fulness. Moreover, perceived usefulness could also be extended to various
dimensions [15]. Therefore, based on such existing studies on SCRM and blockchain
adoption (Appendix B), this study expands perceived usefulness to two dimensions to
understand the impact of four blockchain benefits on technology adoption from the
perspective of SCRM by using an extended TAM model. 3. Research Model and
Hypotheses Development Based on the theoretical framework of the extended TAM
model, this paper constructs the conceptual model of our study. As shown in Figure
1, the model of this study aims to explore the relationship between the perceived
benefits of blockchain and the intention to adopt. By doing so, this study reveals
the relationship between the perceived benefits of blockchain and the perceived
usefulness (PU) of blockchain (BC) in supply chain resilience and responsiveness,
and further examines the role of cultural values on the relationship between
perceived benefits on blockchain adoption is supply chain management (SCM).
Sustainability 2023, 15, 6634 5 of 26 technological, environmental, and
organizational factors influencing blockchain adoption has been proposed [20].
Others have developed integrated models of blockchain technol- ogy adoption, such
the integration of TAM, TRI, and TPB [13] and the integration of TAM and UTAUT
[12]. Appendix B provides a more detailed review of these models. However, these
theories do not adequately predict adoption intentions in supply chain from the
perspective of SCRM. UTAUT only considers the exogenous conditions affecting
technol- ogy acceptance from the level of individual motivation, such as
performance expectancy and facilitating conditions [16]. TOE proposes the factors
affecting the adoption of organ- izational technology from three broad
perspectives: technology, organization, and envi- ronment [19,20], while ignoring
the mechanism of technological factors on adoption. Fur- thermore, TPB is used to
explain general human behavior based on three factors: attitudes, subjective norms,
and perceived behavioral control [13]. Moreover, TAM has received great attention
in operations management and corpo- rate strategy. However, two key variables,
perceived usefulness and perceived ease-of- use, are related to how well
individuals cognize the technology, which is not well de- scribed in TAM. The
extended TAM model developed by Venkatesh and Davis [47] out- lined the
relationship between cognitive instruments, such as the output quality, and per-
ceived usefulness. Moreover, perceived usefulness could also be extended to various
di- mensions [15]. Therefore, based on such existing studies on SCRM and blockchain
adop- tion (Appendix B), this study expands perceived usefulness to two dimensions
to under- stand the impact of four blockchain benefits on technology adoption from
the perspective of SCRM by using an extended TAM model. 3. Research Model and
Hypotheses Development Based on the theoretical framework of the extended TAM
model, this paper con- structs the conceptual model of our study. As shown in
Figure 1, the model of this study aims to explore the relationship between the
perceived benefits of blockchain and the in- tention to adopt. By doing so, this
study reveals the relationship between the perceived benefits of blockchain and the
perceived usefulness (PU) of blockchain (BC) in supply chain resilience and
responsiveness, and further examines the role of cultural values on the
relationship between perceived benefits on blockchain adoption is supply chain man-
agement (SCM). Figure 1. Figure 1. Conceptual model. Conceptual model. 3.1.
Traceability and Perceived Usefulness Traceability refers to the ability of
companies to use blockchain to trace the upstream source of raw materials [48].
Generally, the source information includes the name and address of the upstream
supplier and details related to manufacturing, such as whether the production
process complies with laws and ethics [3]. The traceability of blockchain makes it
easy to track and monitor information from both upstream and downstream in
Sustainability 2023,
15, 6634 6 of 24 the supply chain [18]. At each transaction node, the blockchain
automatically labels the product using a digital marker, such as a timestamp [49].
The digital marker is unique to this blockchain, allowing it to record and transmit
data in a single-truth version, which can be utilized to verify the product’s
origin. The traceability of blockchain helps to achieve supply chain resilience.
The transactions of all partners in the supply chain can be verified through the
consensus mechanism and monitored by all parties in the supply chain [3].
Monitoring and tracking can reduce information asymmetry, thus making the entire
supply chain more robust in the face of disruptions and improving supply chain
resilience. In addition, tracking can increase supply chain agility, which is
considered a significant source of supply chain resilience, especially involving
disruptions regarding raw materials and components [26]. Babich and Hilary point
out that tracing product movement helps to identify risks and predict their
consequences, thereby mitigating the impact of disruptions [35]. The traceability
of blockchain enables supply chain responsiveness. Traceability cannot be realized
by only one company but by all enterprises participating in the supply chain [50].
Integrating efforts throughout the supply chain achieves an effective response to
changing customer needs. Blockchain can aggregate the data from all the enterprises
in the supply chain into a synthesis, especially production details [51].
Information integration can improve the accuracy and trustworthiness of
information, which is conducive to evaluating supply chain risk and achieving
supply chain responsiveness. Traceability also reduces opportunism by turning the
entire supply chain into a trust chain [50]. Accordingly, we propose the following
hypothesis: H1: Traceability positively impacts the perceived usefulness of
blockchain in (a) supply chain resilience and (b) supply chain responsiveness. 3.2.
Transparency and Perceived Usefulness Blockchain is a critical technology for
improving supply chain transparency. Transparency refers to the openness and
availability of information on the blockchain [52]. Increased transparency can
reduce fraud in the supply chain because fraud can be easily detected. Compared to
the conventional supply chain, which lacks open and trusted infor- mation sources,
blockchain can enhance the transparency of supply chain networks [12]. When supply
chain networks become clear and supply chain visibility is enhanced, more effective
partnership governance can be achieved and supply risks are reduced [53]. Tian et
al. argue that information transparency, especially logistics information, can gain
the trust of stakeholders, such as through customer loyalty and bank investments
[52]. When customers are loyal to the enterprise, companies are more likely to
receive actual de- mand information. Maintaining transparency can also help
companies meet the regulatory needs of stakeholders [48], such as governments and
NGOs. Therefore, blockchain trans- parency increases supply chain responsiveness by
reducing supply risks and helping receive stakeholder assistance. The transparency
and visibility of information provided by blockchain systems can help businesses
make decisions on control and adaptation in an uncertain environment [18]. Sodhi
and Tang believe that visibility can help enterprises avoid, mitigate, and respond
to supply chain disruptions [48]. In addition, more transparent and reliable supply
chain processes can improve trust-related issues in transactions, making supply
chains efficient. An efficient, reliable, and transparent supply chain can help
companies identify avail- able supply chain resources and reduce inventory costs
during disruptions, thus helping enterprises recover as quickly as possible [22].
Accordingly, we propose the following hypothesis: H2: Transparency positively
impacts the perceived usefulness of blockchain in (a) supply chain resilience and
(b) supply chain responsiveness. Sustainability 2023, 15, 6634 7 of 24 3.3.
Information Sharing and Perceived Usefulness Transactions on the blockchain cannot
be deleted or tampered with and can only be interpreted by adding new information
by consensus [54]. Invariable information makes transactions on the blockchain
auditable, which reduces fraud and product adul- teration and helps enterprises
sustain continuous operations [29]. Reliable blockchain technology can help improve
operational efficiency by simplifying supply chain processes, reducing paperwork,
and even replacing paper documents that are easily altered and lost [49]. In
addition, the consensus mechanism significantly advances the fault toler- ance of
the data, thereby increasing the security of the information system in combina-
tion with cryptography [55]. The immutable, credible, and secure information shared
by blockchain improves the operational efficiency, reduces potential conflicts over
specific transactions, and increases the timeliness of information sharing, thereby
enhancing the supply chain responsiveness [18]. Supply chain participants encrypt
information about trade secrets, which promotes frequent communication between
trading partners [49]. Effective communication facil- itates coordination,
cooperation, and learning among partners. Accurate information and collaboration
increase the supply chain’s recovery capacity to enhance the supply chain
resilience. In addition, supply chain managers can obtain abundant data via the
blockchain for more extensive descriptive, predictive, and illustrative analysis,
enhancing the company’s analytical capabilities and effectively responding to
disruptions [53]. Accordingly, we propose the following hypothesis: H3: Information
sharing positively impacts the perceived usefulness of blockchain in (a) supply
chain resilience and (b) supply chain responsiveness. 3.4. Decentralization and
Perceived Usefulness Blockchain transaction data are stored in a ledger composed of
multiple members. Compared with centralized databases, decentralized databases are
less likely to be easily damaged, tampered with, or lead to information asymmetry.
Decentralization allows the verification of transactions without intermediaries,
reducing the complexity and uncertainty of the transaction process [29,56].
Blockchain technology provides automated fair trade, reduces transaction costs, and
improves rapid response [6]. Moreover, the consensus mechanism eliminates reliance
on the central authority [18,57]. The decentralized structure causes real-time data
recording and updating, thereby improving the level of supply chain collaboration
and then supply chain responsiveness. The distributed nature of blockchain networks
can help companies mitigate the impact of centralized attacks or accidents [49]. In
other words, the damage to the decentralized database caused by the disruption of a
node is significantly reduced, thus increasing the resilience of the supply chain
to a single-point attack. A decentralized database can enhance trust among supply
chain partners and facilitate the development of a multivendor network base [11].
Securing flexible and redundant suppliers is beneficial for establishing a
resilient supply chain. Hence, blockchain enables enterprises to make timely
responses and decisions in handling periodic changes and customer demand
emergencies. Accordingly, we propose the following hypothesis: H4: Decentralization
positively impacts the perceived usefulness of blockchain in (a) supply chain
resilience and (b) supply chain responsiveness. 3.5. Perceived Usefulness and
Intention to Use In TAM, perceived usefulness refers to the extent to which
individuals believe that the technology can improve job performance. Applied at the
organizational level, perceived usefulness refers to the degree to which the
organization believes that adopting a certain technology can increase productivity
[58]. The motivation of enterprises to adopt a new technology is related to the
perceived advantages of such technology in business operations. Sustainability
2023, 15, 6634 8 of 24 Perceived usefulness has proven to be a dominant factor
affecting the intention to use blockchain [15]. In this study, perceived usefulness
is defined as the extent to which organizational managers believe that blockchain
adoption can improve supply chain resilience and re- sponsiveness. Specifically,
the perceived usefulness of blockchain in supply chain resilience refers to the
extent to which managers believe that adopting blockchain can help companies reduce
the possibility of disruptions and quickly recover from them [39], and thus can
have a positive impact on the market and financial performance by dealing with
various types and levels of disruption. The perceived usefulness of blockchain in
supply chain re- sponsiveness refers to the extent to which managers believe that
adopting blockchain can prompt businesses to respond quickly to customer needs and
environmental challenges [34], which is considered to be a dimension of supply
chain capability, reflecting the efficiency and effectiveness of an enterprise’s
actions to deal with market volatility, and promoting the improvement of financial,
operational, and competitive performance [59]. Based on this, we believe that
managers’ intention to adopt blockchain will increase when managers realize that
blockchain can significantly improve supply chain resilience and responsiveness.
Accordingly, we propose the following hypothesis: H5: The perceived usefulness of
blockchain in (a) supply chain resilience and (b) supply chain responsiveness
positively impacts the intention to use blockchain. Blockchain has been proven to
have a serious impact on supply chain management, especially for SCRM [35]. By
establishing a collaboration platform through blockchain,
companies can share data about demand forecasting and inventory levels to enhance
risk management processes [39]. Moreover, blockchain can reduce network security
risks, decrease the volatility of customer demand, and weaken the impact of ripple
effects [22]. In essence, credible collaboration, secure communication channels,
trust, informa- tion sharing, and the decentralized structures of the blockchain
can enhance supply chain resilience [39]. Blockchain is further believed to make
supply chains sensitive to market changes or trends. Xiong, et al. [60] prove that
using blockchain in the supply chain can mitigate the negative impact of COVID-19
on enterprises’ stock performance. Yoon, et al. [61] demonstrate through simulation
and numerical analysis that blockchain helps businesses respond to demand
fluctuations in international trade. Blockchain can help the supply chain implement
automated transactions and increase visibility on both the supply and demand sides,
which are verified as drivers of responsiveness. Accordingly, we propose the
following hypotheses: H6: The perceived usefulness of blockchain in supply chain
resilience mediates the relationship between (a) traceability, (b) transparency,
(c) information sharing, (d) decentralization, and the intention to use blockchain.
H7: The perceived usefulness of blockchain in supply chain responsiveness mediates
the relationship between (a) traceability, (b) transparency, (c) information
sharing, (d) decentralization, and the intention to use blockchain. 3.6. The
Moderating Role of Uncertainty Avoidance Cultures differ regarding risk cognition
and processing, instilling people with different degrees of the acceptance of risk.
As a common cultural dimension, uncertainty avoidance, defined as the degree to
which a cultural group feels uncomfortable with uncertainty and ambiguity, is
closely related to trust and high uncertainty avoidance refers to an aversion to
risk. Adopting a new technology presents many risks, such as data security
challenges, privacy leaks, technology immaturity, and hidden costs [4,43,46]. Lee,
et al. [62] argue that people with a high uncertainty avoidance culture values will
hesitate to make decisions until the risk of technology acceptance disappears.
However, from the perspective of SCRM, blockchain technology can help enterprises
avoid and mitigate the impact of supply chain risks by enhancing supply chain
resilience and responsiveness. Hofstede [63] believes that Sustainability 2023, 15,
6634 9 of 24 people who have a high level of uncertainty avoidance also become
adventurous when risks are known. The risks of technology acceptance are assessable
compared to unknown and unpredictable disruptions. Therefore, people who pursue
certainty will more actively use blockchain technology. Accordingly, we propose the
following hypothesis: H8: Compared to people with low uncertainty avoidance, people
with high uncertainty avoidance will show a stronger relationship between the
perceived usefulness of blockchain in (a) supply chain resilience, (b) supply chain
responsiveness, and the intention to use it.
Supply chains have undergone remarkable transformations recently, transitioning
from a mere operational aspect to a stand-alone supply chain management (SCM) role
[1]. These chains encompass various strategic and logistical tasks, such as
strategizing, ex- ecuting, and supervising the efficient movement and storage of
products, services, and associated information from the origin to the end user to
meet their needs [2,3]. Enhancing and consolidating these tasks can lead to
enhanced transparency, revenue growth, faster inventory cycles, efficient movement
of goods, and proficient customer service [4,5]. How- ever, realizing these goals
is a daunting task due to the intricacies of supply chains, which have grown
exponentially and become more complex. This is primarily because of the involvement
of multiple supply sources spread across different geographic regions, each working
autonomously and often in competition to cater to their client’s needs [6–8]. In
addition to these intricacies, supply chains face a myriad of challenges,
heightened by the inherent complexities and evolving landscape of global trade.
Prominent among these challenges are the unexpected disruptions caused by natural
disasters (e.g., the Yogyakarta earthquake in Japan) [9] or geopolitical tensions
(e.g., Russia–Ukraine conflict) [10], which Information 2023, 14, 557.
https://doi.org/10.3390/info14100557 https://www.mdpi.com/journal/information
Information 2023, 14, 557 2 of 33 can strain or even sever crucial supply links.
Dishonest actions by trading allies, such as misinformation or deceit [11], add
complexity. Breaches in data privacy [12] pose significant risks, particularly in
an era of increasing digital connectivity. Many sectors of industry grap- ple with
an increased risk of digital crimes (e.g., hacking to steal intellectual property
and ransomware attacks) and the resource-intensive task of market surveillance for
counterfeit products and supplier monitoring to identify sub-standard components or
ingredients [13]. Recent global events, such as the economic conflict that ignited
a trade war between the USA and China in 2018, and the COVID-19 pandemic, have
further underscored the need for resilience and adaptability in SCM [14,15].
Recently, many companies have started to pilot and adopt blockchain technology to
enhance their operations and better oversee their supply chains [16–18].
Essentially, blockchain is a “digital, distributed ledger that chronologically logs
transactions, aiming for enduring and unalterable records” [19] (p. 547). This
distributed record comprises chronologically arranged blocks secured through
cryptographic techniques [20]. Each block holds specific entries, such as data or
records, which are integrated into the network and are connected to the previous
block. Once integrated into the blockchain, these blocks cannot be altered and are
authenticated through intricate automation and procedures [21]. Built on peer-to-
peer (P2P) networks, blockchain requires consensus among participants to authenti-
cate transactions, enabling the removal of false or deceitful records. Distinct
from traditional IT systems, blockchain reduces the dependence on a central
authority, promoting secure and quasi-anonymous dealings among parties [22,23]. Per
Rejeb et al. [24], an individual blockchain solution is tailored to tackle specific
challenges or business scenarios, indicat- ing its adaptability across various
sectors. The pseudonymous Satoshi Nakamoto [25] introduced blockchain in 2008 with
Bitcoin, marking an innovative strategy for creating trust-based systems. In the
financial domain, blockchain’s secure nature prevents ‘double spending,’
guaranteeing each transaction’s validity without duplication [26]. Apart from its
role in finance, blockchain’s utility spans sectors, such as logistics and SCM [27–
29], social media [28,30], online retail [31,32], travel [33,34], and healthcare
[35–37]. Correspondingly, blockchain research, especially within logistics and SCM,
has surged [38]. The heightened interest in blockchain research stems from various
factors. Firstly, blockchain introduces novel paradigms for business structures,
management models, and organizational systems, enhancing resource allocation,
traceability, trust, and data security [39,40]. For example, Gayialis et al. [41]
present a comprehensive reference model for wine traceability, emphasizing the
potential of blockchain-enabled systems that integrate value chains, organizational
resources, business functions, and risks to bridge the gap between developers and
stakeholders. Khanna et al. [42] propose a blockchain-based platform for India’s
dairy industry, utilizing smart contracts, QR codes, and IoT to address concerns
about dairy-related food fraud and elevate social, economic, and sustainability
standards. Kechagias et al. [43] introduce a distributed application for table
olives’ traceability on the Ethereum network. The project showcased a successful
implementation by a Greek producer by enhancing supply chain efficiency, data
reliability, and regulatory compliance. Wang et al. [44] present a combined
blockchain and RFID-based traceability system, embedding blockchain data within
RFID tags for decentralized, battery-free product traceability, suitable for
industrial scalability. Beyond the food industry, Omar et al. [45] introduce a
blockchain solution using Ethereum smart contracts for personal protective
equipment (PPE) supply chain challenges during COVID-19, enhancing transparency and
security. Collectively, these selected studies underscore the diverse and
transformative applications of blockchain technology across various industries,
highlighting its potential to enhance traceability, transparency, trust, and
operational efficiency in SCM. Furthermore, blockchain can help to reshape
transaction and relationship dynamics among supply chain stakeholders [17] by
enhancing trust, enabling integration, and rein- forcing collaboration [46].
Importantly, blockchain can help to modernize key aspects of Information 2023, 14,
557 3 of 33 logistics and SCM operations by advancing sustainable practices and
optimizing processes such as distribution and information exchange [47].
Blockchain’s application in SCM has increasingly piqued academic and industrial
interest, as reflected in the plethora of reviews that have been conducted. Gurtu
and Johny [48] embark on a systematic review of the literature and posit the
formidable poten- tial of blockchain in SCM, emphasizing its capability to enhance
efficiency by eliminating intermediaries. Their review is based on an analysis of
299 papers from the EBSCO database up to December 2018. Similarly, Queiroz et al.
[49] analyze 27 articles spanning 2008 to 2018 and underscore the nascent yet
promising nature of blockchain–SCM integration, with some sectors, such as the
electric power industry, already exhibiting mature blockchain applications, notably
smart contracts. Through a systematic literature review of 37 publi- cations,
Varriale et al. [50] delineate the sustainable implications of blockchain in supply
chains, revealing its multi-dimensional impact on environmental, economic, and
social facets while underscoring both its benefits for business profitability and
reputation, as well as the extant research gaps for future exploration. Wang et al.
[51] review the transformative potential of blockchain in supply chains,
identifying its value in enhancing visibility, trace- ability, and digitalization,
and underscore both its challenges and broader socio-economic implications. Hastig
and Sodhi [52] examine supply chain traceability in industries such as cobalt
mining and pharmaceuticals, identifying core business requirements and critical
factors for successful blockchain implementation. Musigmann et al. [53] investigate
the impending ramifications of blockchain on supply chain practices and policies.
The authors conclude that trust is blockchain’s main feature as it gains traction
in SCM. The research highlights potential applications that encompass enhanced
transparency, digital transformation, reinforced data security, and the inception
of smart contracts. Rejeb et al. [38] and Pournader et al. [54] adopt a
bibliometric approach to explore the blockchain in logistics and SCM terrain. While
Rejeb et al. [38] classify 613 ar- ticles into meaningful clusters, including
theoretical frameworks and practical applications, the study by Musigmann et al.
[53] scrutinizes 628 papers from 2016–2020 and emphasizes the academic structures,
seminal works, and pioneering scholars in this space. It unveils themes centered
around blockchain’s conceptualization, potentialities, adoption challenges, and
roles in fortifying supply chain agility and intellectual property protection.
Pournader et al. [54] research blockchain’s implications in supply chains,
logistics, and transport and present four pivotal co-citation clusters: Technology,
Trust, Trade, and Traceabil- ity/Transparency, each representing emerging themes
for blockchain in SCM. Furthermore, Van Nguyen et al. [55] utilize a distinctive
methodology that leveraged the power of Latent Dirichlet Allocation (LDA) combined
with text mining for autonomous content analysis of full-text articles. Their
subsequent analysis of 108 articles from 2017–2022 identifies ten salient research
themes, including revenue management, decentralized autonomous organizations in
SCM, and more. The primary objectives of their study are to provide a comprehensive
review of the literature on the subject matter, identify emerging trends, and
present novel analytical methods to further enhance our understanding of the
blockchain-supply chain nexus. Meanwhile, while our study extracts valuable
insights from these research findings, it carves a distinct niche in several
dimensions. First, our sample encompasses a
broader dataset beyond the boundaries set by previous systematic literature
reviews [51,55]. Sec- ond, in a strategic departure from the full-text-centric
approach of earlier research, we focused our attention on article abstracts. This
refined focus facilitates a more agile yet incisive examination, adeptly capturing
the crux of each document without delving into its main body. Methodologically
speaking, while we continue to rely on the robust foundation of LDA, we introduce a
pivotal modification: Our algorithm is meticulously calibrated to discern patterns,
trends, and subtle undertones within abstracts. This optimization ensures that our
process is proficient in extracting valuable insights from brief summaries. This
fusion of traditional bibliometric techniques with a machine learning-enhanced LDA
framework Information 2023, 14, 557 4 of 33 introduces a renewed analytical
paradigm, extending the traditional boundaries of what systematic reviews can
achieve. Our review’s contributions are multifaceted. Our emphasis on abstracts
presents a methodology of analysis that is scalable and efficient, hence expanding
the research capabilities to include comprehensive and exhaustive syntheses in
future meta-studies. The expansive nature of our dataset review offers a panoramic
view, incorporating a plethora of perspectives and insights. Additionally, the
blending of a refined LDA approach with bibliometric techniques contributes to
methodological innovation and the advancement of systematic review methodologies.
The organization of this article is as follows: Section 2 articulates the research
method- ology, and Section 3 presents a concise summary of the review’s primary
findings. Section 4 delves deeper into the themes discovered, and the article
concludes with overarching reflections and a brief discussion of the inherent
limitations of our review.
The supply chain [1,2] is defined as a type of network used mainly in industrial
sectors for satisfying customers according to their requirements. This framework
encompasses the producers, wholesalers, retailers, customers, and traders.
Similarly, supply chain management [3–5] is mainly developed for strategically
managing the marketing channels, storage materials, components, and procurement for
enhancing future profitable growth. The intricate production and distribution of
items are both a part of the supply chain. It has a variety of stages, geographical
locations, accounts, and payment methods, as well as a number of people,
organizations, and modes of transportation, all depending on the product. As a
result, the supply acquisition process can take many months [6]. The stakeholders
in the logistics process are very interested in introducing and developing
blockchain technology to improve the logistics operations in the supply chain [7,8]
and make them economically sustainable because of the complexity and lack of
transparency inherent in logistics. The most common uses of blockchain technology
are in crypto- currencies, although there is a much wider range of potential
applications [9]. A distributed book (ledger) called blockchain [10,11] has a wide
range of possible uses. Any data interchange, including contract negotiations,
product tracking, and financial transactions, can be conducted with it. The system
is transparent, since each activity is recorded in the Sustainability 2023, 15,
6905. https://doi.org/10.3390/su15086905
https://www.mdpi.com/journal/sustainability Sustainability 2023, 15, 6905 2 of 23
block and the data is dispersed among numerous nodes. The system is safe, since
each block is connected to the one before it and the one after it [12]. Blockchain
technology has the potential to improve all logistical procedures, including
storage, transport, and payment, as well as the efficiency and transparency of the
supply chain [13]. With blockchain, it is possible to speed up the physical flow of
commodities while achieving improved security [14,15] and transparency. The
blockchain-based tracking [16] of items can enhance decision making, which will
ultimately lead to more satisfactory service for the customer. The literature [17]
suggests that new business models and logistics services could be developed using
blockchain technology. Blockchain is a relatively new technology that aims to
provide decentralization, real-time peer-to-peer operation, privacy, openness,
transience, and integrity in a broadly used manner [18]. However, there are still
issues and problems with this technology that must be taken into consideration. Its
performance is one of the obvious drawbacks [19,20]. It will take a lot longer to
verify every transaction using the blockchain method than using the centralized
method because each node in the network must acknowledge it. The foundation of
blockchain technology is a technique that enables previously unidentified people to
collaboratively create and maintain almost any database on a fully distributed
basis, with transaction integrity and completeness being verified by the consensus
of teh identifiers [21–23]. In comparison to other communication platforms,
blockchain has three significant advantages: • The communication parties have
unrestricted access to it and can join for free. • Data that has been submitted
cannot be changed, and in particular, the integrity assurances are not made by a
centralized authority, but rather by the network as a whole. • The published
information can indeed be changed; therefore, no one can censor information that
has already been made public. As a result of the immutability of the blockchain
[24], it is practically impossible to change the covert messages, and the
incorporation of hidden information can be unstable. The supply chain is a
collection of businesses that are connected through various processes and
activities to create value in the form of goods and services for the eventual user.
For several reasons, blockchains [25] are thought to be well-suited for use in the
logistics and supply chain management industries. The data generated at each stage
of the product’s lifecycle as it moves down the value chain can be recorded as a
transaction, giving the prod- uct a permanent history [26]. Blockchain is a
decentralized, global ledger that is digitally managed and used to store
transactions in an unchangeable way. It pertains to applications involving
transactions because of its ample delivery of confidence, openness, and prove-
nance [27]. Even non-financial industries, such as healthcare, production,
retailing, and public services, have begun to take notice of the technology, which
was initially developed to assist in financial transactions. However, the adoption
of blockchain in SCM [28,29] is still in the development stage, and it faces many
obstacles before it can provide a high level of security. For solving this problem,
several new optimization algorithms have recently been developed. To maintain a
high level of security [30], only a certain number of transactions can be handled
in a small amount of time. In light of this, it is now difficult to balance the
factors of security and block size in SCM [31,32]. Additionally, the integration of
financial information in blockchain-based SCM can result in less transparency,
which raises costs and lowers performance. Therefore, the proposed work [33] aims
to develop a new and successful blockchain-based privacy preservation framework for
SCM. Motivation The major contributions and objectives of this work are as follows:
• The lightweight blockchain technology-based supply chain network is modeled for
enabling a secured and reliable information sharing. • For ensuring the privacy of
original manufacturer’s data, an optimization-based privacy preservation technique
is deployed, which includes the operations of data sanitization and data
restoration. Sustainability 2023, 15, 6905 3 of 23 • The perceptive craving game
search optimization (PCGSO) algorithm is employed to optimally generate the key for
data sanitization and restoration operations, ensuring the security and privacy of
logistics data. • The analytical results are validated and compared using various
parameters for demon- strating the efficacy of the proposed privacy preservation
model. The following units make up the remaining sections of this article: Section
2 provides a complete literature review regarding the impacts of using blockchain
technology for improving supply chain management in industrial sectors. The
proposed blockchain-based privacy preservation framework used in the SCM system is
explained in detail in Section 3 of the manuscript. By employing various factors,
Section 4 validates the analytical findings of the existing and proposed blockchain
models. In Section 5, the overall summary of the paper is offered, along with
suggestions for further research. 2. Literature Survey This section presents the
literature review of the existing works relevant to the impacts of using blockchain
technology for improving the privacy preservation of supply chain management
systems. Moreover, it discusses several optimization algorithms that are currently
used in the field of SCM. Tijan et al. [34] developed a decentralized data storage
system with the use of blockchain technology for supply chain management. Here, the
basic properties of using blockchain have been discussed, along with its
applications and uses. Typically, ensuring the trans- parency of supply chain
management is one of the most important aspects of logistics. Raja shanthi et al.
[35] provided a detailed overview of the importance of using blockchain for
addressing the challenges and key issues in logistics. Specifically, a private
blockchain is more suitable for multi-organizations for improving their security.
The supply chain, on the other hand, is thought of as the beating heart of
organizations because it ensures that goods are transported without interruption
from one production process to another until they reach the customer. Pournader et
al. [36] presented a comprehensive review for analyzing the major impacts of SCM in
organizational sectors. The different areas covered in this work are as follows:
supply management, demand management, product management, and information
management. In addition to this, it investigated various risk factor associated
with the SCM, which include industrial risks, problem-specific risks, environmental
risks, financial flow risks, material flow risks, and decision-making risks. Ref.
[37] investigated the different types of security challenges, with appropriate
solutions, for IoT systems. Gurtu et al. [38] presented a comprehensive study of
supply chain risk management, along with risk management strategies. Typically, the
supply chain is considered the back- bone of the global economy, which supports
enhancing trade and optimization of resource consumption. Heidari et al. [39]
deployed a fuzzy analytic hierarchy (FAH) incorporated with the fuzzy TOPSIS model
for resolving risks in the SCM. The key factor of this work was to develop a new
hierarchical framework for enhancing the performance and growth of the
organization, with a reduced level of risks. In this work, various processes, such
as product lifestyle, operational process cycle, operational risk, and a multi-
criterion decision model, were analyzed for reducing the level of risks in the
organization environment. Salamai et al. [40] investigated the major impacts of
internal and external factors asso- ciated with CM. The purpose of this work was to
analyze the importance of deploying operational risk management strategies for the
successful growth and development of the organization. Here, the different types of
risk management approaches have been discussed for enhancing
business growth and development. The most commonly used risk mitiga- tion
techniques in conventional works were quantitative models, arbitrary optimization
techniques, theoretical models, Q-sorts analysis, and qualitative approaches. Chang
et al. [41] conducted a systematic literature review on blockchain-based supply
chain management using current trends and potential applications. The authors
mentioned that future orientation depends on four key issues, including procurement
integration and automation, stakeholder engagement and interaction, traceability
and transparency, and Sustainability 2023, 15, 6905 4 of 23 shared frameworks on
blockchain-based platforms. Moreover, the traditional supply chain operations
involve several intermediates, problems with trust, and reduced performance. Lotfi
et al. [42] introduced a new framework, called viable supply chain network design
(VSCND), using blockchain technology. Here, the authors identified that crypto-
currency can assist the supply chain in achieving sustainability by lowering costs
and imposing versatility. Kashem et al. [43] investigated the effects of using AI
and blockchain technology in supply chain management systems. The purpose of this
research was to avoid supply chain interruptions with the help of blockchain and AI
models. The blockchain strengthens legitimacy, privacy, and productivity in
logistics while enabling reliable communication across intricate manufacturing
networks. Additionally, it might create websites where transportation providers can
list the trucks or ships that are currently available. Blockchain technology [44]
may make it possible to create tamper-proof smart contracts for purchases that
automatically uphold the conditions of cross agreements. In contrast, smart
contracts can self-verify and self-execute by allocating funds to the appropriate
parties. A supply chain optimization system powered by AI improves smart decisions
by enhancing demand forecast with the optimal course of action. This can help
manufacturers to predict the results of particular events in terms of time,
expenditures, and revenue, which also helps to improve the overall performance of
the supply chain. Chen et al. [45] introduced a new trusted trading framework with
the use of blockchain technology. This system uses blockchain technology to create
a coordination committee, and it can function without the requirement of a
coordination center. Moreover, the suggested framework is immune to single-point
failures due to multi-point backups. Table 1 reviews some of the existing
blockchain technologies used in the conventional works for SCM. Table 1. Survey of
an existing blockchain–SCM system. Ref. Application Domain Context Technology Model
Approach [46] Supply chain distribution A blockchain-based supply-chain visibility
system is developed for tracking shipments in physical distribution. Blockchain
Framework model [47] Smart contracts A clear illustration is provided for
determining how smart contracts are deployed in several applications that includes
SCM-IoT. IoT integrated with blockchain Theoretical framework [48] Medical
application system A secured key management scheme is developed for a heterogeneous
networking system. IoT integrated blockchain model Theoretical framework [10]
Medical equipment SCM A complete life cycle theory is utilized, along with
blockchain technology, for the production, destruction, and traceability of medical
equipment. Blockchain Conceptual framework [49] Supply chain integrity management A
blockchain-integrated SCM is deployed to enable the sharing of personal records in
an accountable way for smart hospital applications. Blockchain Theoretical
framework [50] Healthcare system A blockchain-based app development allows patients
to quickly exchange and control their data while also improving the security of
healthcare facilities. Blockchain Conceptual framework
1.1 Blockchain Blockchain technology is still in the early stages of development,
and there is a general lack of understanding of it (Scott et al., 2017; Waller et
al., 2019). A blockchain is “a digitised, decentralised, tamper-proof ledger
platform that records and verifies transactions, and cuts out the middlemen” (Vyas
et al., 2019). A key takeaway from this definition is that Blockchain is
essentially a database, i.e., the primary purpose is to store transactions over a
period of time. The difference between a traditional, centralised database and a
Blockchain is how this data is stored and secured. Kafeel et al.: Blockchain in
Supply Chain Management: A Synthesis of Barriers and ... 16 | Vol. 8, No. 1, 2023
Figure 1. How a generic blockchain transaction works (Accenture, 2018). Figure 1
shows how a generic blockchain-based transaction works. The network is made up of
nodes; each node represents a single participant in the network. Every node
participates in the verification of transactions to add new blocks through
consensus mechanisms. A block is simply a combination of different transactions
which are cryptographically secured using hashes. These blocks are linearly linked
to each other in a chain, hence the name blockchain. Each block contains its data,
timestamp, hash, and the previous block's hash. New blocks are added using a
consensus mechanism, with Proof-of-Work (PoW) and Proof- of-Stake (PoS) being the
most popular ones. 1.2 Blockchain in SCM Blockchain’s use was initially explored in
the financial sector; however, research into blockchain applications in Supply
Chain Management (SCM) has recently become a hot topic (Wamba and Queiroz, 2020).
Contemporary supply chains are hyper-connected and increasingly complex, resembling
the more chaotic network. Managing supply chain networks simultaneously and
efficiently remains a crucial problem in supply chain management (Badenhorst-Weiss
et al., 2017). The failure of many businesses can be attributed to the inability to
manage the product’s movement with its information and transactional flows (Chopra,
2018). Information flow can be viewed as real-time information regarding the
product’s state and historical information associated with the product.
Trackability is the ability to reconcile the physical flow with the real-time
information flow. Traceability is the ability to view historical data about the
product’s handling. When both of these characteristics are adequately managed
through an appropriately designed supply chain, it gives rise to visibility. A key
issue faced by supply chain managers is the lack of visibility into their
suppliers’ processes. The interconnected and dynamic nature of today’s supply
chains means that firms seldom have information beyond second-tier suppliers (Busse
et al., 2017). Consequently, if something goes wrong in the chain, businesses may
not find out until it is too late. An excellent example is the KFC chicken shortage
in the United Kingdom (UK) in 2018, which occurred after it switched suppliers to
DHL (Priday, 2018). The initial reports indicated the cause to be a traffic
accident and the use of a single warehouse. However, the underlying reason was
eventually discovered to be a lack of visibility in the supplier’s network: DHL’s
software partner had failed to match up the data properly with KFC’s system (Vyas
et al., 2019). If KFC Kafeel et al.: Blockchain in Supply Chain Management: A
Synthesis of Barriers and ... 17 | Vol. 8, No. 1, 2023 had had access to this
system, the mismatch might have been identified, and the entire incident avoided.
This is where permissioned blockchains can create value by ensuring timely access
to information. Two primary characteristics are distributed database and
transparency, allowing businesses to monitor even their nth-tier supplier’s
processes, essentially acting as an early warning system. Furthermore, the
increased connectivity and visibility could enable firms to recognise new
opportunities for optimising the supply chain, thus enhancing collaboration
(Williams, 2019). A recurring problem in modern supply chains is a mismatch between
demand and supply, which amplifies demand as a precaution (i.e., the bullwhip
effect). One of the most prominent causes of the bullwhip effect is the lack of
transparency and trust due to asymmetrical information sharing (Bhattacharya and
Bandyopadhyay, 2011). Data on the Blockchain is immutable since altering a block
requires updating the entire ledger from that point forward. Furthermore, data on
the Blockchain is visible to everyone with access to the network. This creates a
single repository of trust, allowing suppliers and retailers to retrieve data
easily and with higher trust, potentially reducing the bullwhip effect (van
Engelenburg et al., 2018). Additionally, the timely availability of data and ease
of retrieval could reduce forecasting horizons by reducing forecasting errors.
Supply chains are essentially built on trust (Sahay, 2003). Increased globalisation
and complexity in supply chains have resulted in organisations focusing on their
core business and outsourcing the rest (Leavy, 2004). Consequently, the management
of these networks shifted towards relationship building and trust. Trust, however,
is a two-way street, and many firms believe their counterpart is not living up to
their end of the bargain (Sahay, 2003). This distrust manifests in many supply
chain problems, from information asymmetry to lack of risk mitigation. As a result,
several third-party organisations, such as banks, are needed to ensure trust within
the supply chain (Vyas et al., 2019). This, however, increases the cost and
complexity of the chain further. Blockchain, by design, can eliminate the issue of
mistrust. Based on computational logic and code, it shifts the nature of trust from
subjective humans to objective, open-source technology (Shein, 2019). Of course,
trust is still required; however, this trust is in publicly available and
verifiable technology as opposed to trust in human relationships, which are
subjective and everchanging. Furthermore, since trust is hardcoded into the nature
of Blockchain itself, the need for intermediary third parties such as banks is
eliminated. This could result in simplification of the supply network as well as
offer cost-reduction benefits. 1.3 Research Gaps and Research Objectives Although
the usefulness of Blockchain in supply chain management and the expression of
interest from industry leaders, the actual rate of blockchain implementation
remains low (Choi et al., 2020). Nevertheless, multiple studies (Danese et al.,
2021; Kamble et al., 2021) have explored the adoption of Blockchain in supply chain
management. Danese et al. (2021) conducted twenty semi-structured interviews to
investigate the use of Blockchain in wine supply chains to mitigate counterfeiting,
concluding that Blockchain is not a standalone solution and should be used in
conjunction with other technologies. Kurpjuweit et al. (2021) explored the barriers
and opportunities of Blockchain in additive manufacturing. One of the barriers
identified was a lack of understanding and awareness of Blockchain. One participant
remarks, “[in the company] there will be questions like: ‘Blockchain? Can you eat
it? What is this?’”. A case study on the textile industry in Northern Italy
reported similar findings: the management did not fully understand Blockchain, and
therefore the services of a consultant were sought (Caldarelli et al., 2021).
Similar gaps were seen in the humanitarian supply chain; a focus group conducted by
Baharmand et al. (2021) reported a lack of understanding of Kafeel et al.:
Blockchain in Supply Chain Management: A Synthesis of Barriers and ... 18 | Vol. 8,
No. 1, 2023 Blockchain’s requirements, ambiguity regarding the design, and
uncertainty concerning potential benefits. Karuppiah et al. (2021) finalised a list
of 45 challenges impeding Blockchain’s adoption with experts through a fuzzy Delphi
study and ranked them using a combination of Decision Making Trial and Evaluation
Laboratory (DEMATEL) and Weighted Aggregated Sum Product Assessment (WASPA)
methods. After verification utilising a sensitivity analysis, the top-ranked
barrier was a lack of understanding of blockchain technology. The number of studies
exploring Blockchain use cases in supply chain management is rising rapidly (Kamble
et al., 2021; Wamba and Queiroz, 2020). Despite a growing body of research, the
lack of understanding and awareness about Blockchain indicates that knowledge is
available but scattered (Rakshit et al., 2022; Wu et al., 2022). Therefore,
collecting and synthesising these findings is necessary to provide a holistic
picture of the research field. This would assist managers in understanding
Blockchain better and enable researchers to identify past methodologies and future
research trends. This study aims to answer the question: What are the current and
future trends in research on the barriers and enablers of blockchain adoption in
supply chain management? To do so, the research assimilates publications about
barriers and enablers of blockchain adoption in SCM by undertaking a systematic
literature review (SLR). Furthermore, through a bibliometric analysis, we
investigate the current state of research on barriers and enablers of Blockchain in
SCM. Finally, we synthesise barriers and enablers of blockchain adoption in SCM
into a suitable framework. Findings from this study offer a research agenda for
future research in this interesting domain. Furthermore, the PESTLE framework
developed in this research helps increase the awareness among organisations about
Blockchain. The remainder of this study is structured as follows. Section 2
discusses the research methodology. Section 3 conducts a bibliometric analysis to
identify research clusters. Section 4 synthesises the
identified barriers and enablers into a PESTLE framework. Section 5 discusses the
key findings from the bibliometric analysis and PESTLE framework. Section 6
concludes the paper by highlighting practical and theoretical implications and
limitations.
Sustainable food supply chains (SFSCs) consists of vulnerable processes that are
challenging to manage due to their complex and multi-stakeholder structure (Benedek
et al., 2022). Hence, its resiliency is threatened in the face of events that will
occur in the supply chains (Panwar et al., 2022). The COVID-19 pandemic, which
affects almost all supply chains around the world, has also caused disruptions in
SFSCs (Godrich et al., 2022). Problems have arisen in every process from the first
stage to the last stage of SFSCs, and the resiliency of the supply chains has been
endangered (Ozdemir et al., 2022). With COVID-19, the importance of issues such as
supply chain management (Prataviera et al., 2022; Hervani et al., 2022), resiliency
of supply chains (Ivanov, 2021; Fu et al., 2022), reverse logistics activities
(Heiman et al., 2022) have increased. Moreover, COVID-19 and its devastating
effects on supply chains highlight the importance Page 2 of 25
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Peer Review 2 of reverse logistics since provides transparency and traceability in
SFSC’ processes and also contributes to the circular economy (Garnett et al.,
2020). Reverse logistics can be defined as the activity of planning, implementing
and controlling the effective flow of raw materials, semi-finished products,
finished products and related information from the point of consumption to the
point of origin, in order to ensure that the value is gained or destroyed properly
(Binalla & Mateo, 2022). Especially since SFSCs are vulnerable and contain
perishable products, effective management of reverse logistics activities also
increases its resilience against sudden events such as COVID-19 (Sharma et al.,
2021). In addition, it is seen that companies/countries that encounter problems in
advanced SFSCs processes can manage their reverse logistics activities in the
context of circular economy, and it is seen that they get rid of the devastating
effects of COVID-19 with the least damage (Beheshti et al., 2022). Recently, COVID-
19 has necessitated the adoption of “new normal” for almost all industries and
supply chains (Coluccia et al., 2021; Sarkis, 2020). With these “new normal”
adaptation, the most important factor to be considered in both forward and reverse
logistics is technological developments such as Blockchain Technology (BC-T)
(Govindan, 2022; Parmentola et al., 2022). BC-T adaptation has become an extremely
important issue in reverse logistics activities of SFSCs (Hrouga et al., 2022)
since it can provide radical changes with its disruptive technology approach for
the “new normal” created by COVID-19 (Muduli et al., 2022). Furthermore, BC-T
provides to easily monitor all processes in SFSCs, to keep all data under control,
and to take quick actions against sudden disruptions (de Sousa Jabbour et al.,
2018). Although there is an increase in technological adaptations and studies on
the subject in advanced SFSCs, these studies are insufficient for reverse logistics
activities (Wu et al., 2022; Hrouga et al., 2022). By considering studies, it can
be stated that advantages and disadvantages of BC-T are known for advanced supply
chains (Srivastava & Dashora, 2022; Rejeb & Rejeb, 2020) and especially in SFSCs
(Saurabh & Dey, 2021), however; the knowledge about BC-T adaptation in reverse
logistics, especially in SFSCs is not yet adequately researched (Samadhiya et al.,
2022; Münch et al., 2021). As mentioned before, increasing the resiliency of
especially vulnerable and complex SFSCs can be achieved with BC-T adaptation to
supply chain processes. For this reason, in this study, it is aimed to answer the
following research question.  Research Question: What are risks of BC-T adaptation
for resilient reverse logistics in SFSCs? To give an answer of the research
question, Fuzzy Synthetic Evaluation Method (FSE) is used for the risk’s assessment
of BC-T adaptation for resilient reverse logistics in SFSCs. As an answer of the
research question, it is aimed to identify the most important criteria and finding
a roadmap for it by using FSE. With this motivation, one of the main purposes of
the study is to increase the resiliency of SFSCs, to reveal the importance of BC-T
adaptation and at the same time to reveal the risks that may occur. In addition to
the advantages of BC-T adaptation, it is extremely important to identify these
risks, eliminate risks and ensure resiliency in reverse logistics activities of
SFSCs, which is discussed in the literature scarcely any. One of the biggest
contributions of this study is to make a deeper research about resiliency of
reverse logistics activities in SFSCs and the necessity of BC-T to achieve this
resiliency. Other critical contribution and the uniqueness of this study is that
besides discussing about the benefits of BC-T, it is to identify the risks it can
create, to create awareness to eliminate these risks and to guide Page 3 of 25
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Review 3 the establishment of resilience in reverse logistics activities of SFSCs.
Although the importance of BC-T is a topic discussed in the literature (Nandi et
al., 2021; Farouk & Darwish, 2020), the determination of BC-T risks and especially
their examination in terms of reverse logistics creates a research gap in the
literature. Section 2 covers the importance of BC-T adaptation for resilient
reverse logistics in SFSCs and Section 3 consist of determination risks of BC-T
adaptation for resilient reverse logistics in SFSCs. Moreover, methodology is given
in Section 4. Section 5 presents the implementation and results. Section 6
highlights the discussions and implications and lastly conclusion. First of all,
BC-T adaptation for resilient reverse logistics in SFSCs are explained in details.
2. BC-T Adaptation for Resilient Reverse Logistics in SFSCs The reverse logistics,
which is called reverse material flow from customers to suppliers, has an important
role in supply chain management due to product returns and sustainability problems
and contributes to the circular economy (Binalla & Mateo, 2022). Reverse logistics
can be used as a competitive strategy, a profit center, an asset recovery and a
tool to increase customer satisfaction (Beheshti et al., 2022). The wastes obtained
throughout the supply chain are returned to the manufacturer as raw materials by
the reverse logistics system and are put into production again (Lai et al., 2022).
Moreover, the importance and impact of reverse logistics varies from sector to
sector and according to the location of the enterprise in the distribution channel
(Heiman et al., 2022). Reverse logistics activities are of great importance in
sectors where product value, diversity and recycling rates are high (Shahidzadeh &
Shokouhyar, 2022). With COVID-19, the importance of reverse logistics activities
and its contribution to the circular economy in supply chains has been understood
(Lai et al., 2022). Raw material problems in supply chains, production stoppages,
and logistics problems have highlighted the necessity of reverse logistics
applications (Orlando et al., 2022). During COVID-19, it has become imperative to
adopt new approaches in SFSCs, especially in order to adapt to increasing
competition conditions and meet consumer demands (Sharma et al., 2021). Moreover,
problems that may occur in the processes of the chain caused by disruptions such as
COVID-19 can cause significant losses in product quality (Spieske et al., 2022).
For this reason, it has become extremely important to record, monitor and track the
SFSCs in order to carry out resilient forward and reverse logistics activities,
especially during COVID- 19 (Kamalakshi, 2022). Although the adoption of new
approaches and technologies in the forward supply chain has become widespread, the
application of reverse logistics activities in SFSCs still remains in limited
areas. In order to achieve more efficient results, especially in reverse logistics
activities of SFSCs, it is necessary to benefit from developing technologies in new
supply chain designs, as in every field (Klimczuk-Kochańska, 2018). Some of these
technologies such as electronic data interchange, internet, enterprise resource
planning, radio frequency identification is recently adopted in reverse logistics
activities of SFSCs. Moreover, one of the most important issues in reverse
logistics activities of SFSCs is coordination and information sharing (Bottani et
al., 2019). By considering structure of SFSCs, RFID technology, barcodes and
sensors are used quite frequently (Kim and Laskowski, 2018). In addition to these
technologies, BC-T, whose popularity is increasing day by day, Page 4 of 25
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Peer Review 4 has gained importance (Khan et al., 2022). Redesigning supply chains
with BC-T is expected to facilitate the traceability of reverse logistics
activities, processes, and increase reliability and efficiency (Wong et al., 2020).
BC-T is a digitally signed record of account transactions that cannot be tampered
with and therefore assumed to be trustworthy (Hrouga et al., 2022; Muduli et al.,
2022). The BC-T, which will be integrated into resilient reverse logistics in
SFSCs, enables users to consume reliable, transparent,
traceable and quality products, while making it easier for managers to take quick
actions in case of sudden situations (Burgess et al., 2022). In addition, the
adaptation of BC-T to the SFSCs, especially to reverse logistics activities, will
be less costly than different applications (Leng et al., 2018). Moreover, the use
of this technology in the reverse logistics activities of the SFSCs ensures that
the entire process from the beginning to the last stage of reverse logistics
activities is integrated with each other and constantly shares information
(Kamilaris et al., 2019) and this information is visible to all parties involved in
the chain (Wu et al., 2022; Pandey et al., 2022). To sum up, with sudden
disruptions such as COVID-19, especially the supply chain and reverse logistics are
under active threat (Raja Santhi & Muthuswamy, 2022). The vulnerable nature of
SFSCs, which is one of the supply chains most affected by COVID-19, has made it
necessary to ensure their resilience in reverse logistics activities. With the use
of BC-T in reverse logistics activities, which have a more complex structure, many
improvements such as instant tracking and information sharing are provided
(Govindan, 2022), and it is expected that the resiliency of SFSCs in reverse
logistics activities will increase. Considering all these reasons, BC-T adaptation
is needed in order to carry out resilient reverse logistics activities in SFSCs.
However, adapting BC-T to increase the resilience of reverse logistics activities
in the SFSC has advantages as well as risks that need to be considered. Some of
restrictions in front of BC-T can be described as the risks of BC-T. Therefore, by
eliminating the risks of BC-T adaptation for flexible reverse logistics in SFSCs,
resilient reverse logistics activities can be achieved. Hence, detailed information
about risks of BC-T adaptation for resilient reverse logistics in SFSCs are
explained in the following section.
Blockchain technology is generating a big stir in logistics and supply chain
management. This particular technology received initial attention for its
association with Bitcoin [1] and its capability to create a trusted and transparent
ledger of transaction information. Now, as supply chain managers begin to recognize
the possibilities of this new technology, there is high potential for elevating
transparency. The arrival of this technology is timely because consumers are
demanding supply chain transparency. For example, consumers often want guarantees
that fish purchased and consumed are not farmed using illegal netting practices or
from closed waters [2]. Also, jewelry consumers want assurance that purchased
diamonds are authentic and not farmed from war-torn regions of the world. These
concerns are exacerbated when supply chains are multi-tiered and increasingly
global in scope. Blockchain technology promises to dramatically change transaction
methods by providing a transparent and immutable record for inspection, bringing to
mind the classic tale “The Emperor’s New Clothes” by Hans Christian Andersen.
Currently blockchain applications are primarily being used and developed within the
finance sector [3–5], but the popular press and supply chain Logistics 2018, 2, 2;
doi:10.3390/logistics2010002 www.mdpi.com/journal/logistics Logistics 2018, 2, 2 2
of 13 managers have taken notice and are quickly applying the technology to
customer service and achieving competitive advantages. Awaysheh & Klassen [6]
identify transparency as the extent to which information is readily available to
both counterparties in an exchange and also to outside observers. In a supply chain
context, transparency refers to information available to companies involved in a
supply network. Supply chain traceability leverages transparency to operationalize
organizational goals related to raw material origins and provide context to a final
product or service. Blockchain technologies indeed provide increased supply chain
transparency, but more importantly create an immutable and distributed aspect of
the custody record by nature of the protocol which lends itself well to
traceability applications. Scholars have identified that optimizing transparency
and traceability are correlated. Skilton & Robinson [7] identify traceability
(synonymous with “provenance”—derived from French referring to “the origin of
something”) as the ability to identify and verify the components and chronology of
events in all steps of a process chain. The relationship between supply chain
transparency and traceability is not straightforward and linear: while having more
information available (i.e., transparent) may lead to increased traceability;
increased traceability may not lead to increased transparency if the supply chain
is made of few participants with loose affiliations. Traceability is hindered when
material information is incomplete or missing; however, the merits of traceability
are limited by the complexity within the supply network. For example, a single
source producer of coffee beans is less complex than a multinational conglomerate
that aggregates the beans from several producers from several countries. The
complexity of supply chain networks comprised of different actors (i.e., raw
material suppliers, distributors, manufacturers, retailers, and end consumers)
consists of concealed elements and raises questions of effective and secure
monitoring. Markman & Krause [8] suggests that supply chain scholars are among the
most qualified to address these concerns due to their holistic view of the value
chain. Due to the infancy of blockchain, it is poorly understood and the intent to
adopt it for supply chain traceability is unknown. Furthermore, despite the hype
and possibilities, even the most innovative, technically superior technologies are
rendered useless if they are not adopted by the users [9]. For this reason
exploring and studying the issues of consumer technology adoption have been
discussed in a variety of domains. Within the marketing and logistics literature,
Flint [10] defines innovation not as something new to the world, but as being new
to the user and subsequently affirms a “voice of the customer” approach to
logistics innovation and emphasis of the dynamic inter-organizational interface
with customers. The goal of this article is to explore the adoption of users of
blockchain technologies in supply chain traceability applications. Using the
Unified Theory of Acceptance and Use of Technology (UTAUT) as a framework for
technology acceptance and the construct of information technology trust, a
conceptual model with researchable propositions is developed. The research
culminates with supply chain implications of blockchain inspired by theory and
literature review. 2. Background and Literature Review 2.1. Blockchain Blockchain
uses mutually distributed ledgers that have been built on a series of innovations
used for organizing and sharing digital data. As defined by Seebacher & Schüritz
[11], “A blockchain is a distributed database, which is shared among and agreed
upon a peer-to-peer network. It consists of a linked sequence of blocks (a storage
unit of transaction), holding timestamped transactions that are secured by public-
key cryptography (i.e., “hash”) and verified by the network community. Once an
element is appended to the blockchain, it cannot be altered, turning a blockchain
into an immutable record of past activity.” The process of “hashing” transforms
tangible (e.g., raw material) and intangible (e.g., ownership of a file) assets
into a digitally encoded “token” and can be registered, tracked, and traded with a
Logistics 2018, 2, 2 3 of 13 private key on a given blockchain. Further control of
an asset may be achieved and supply chain traceability may be enabled through use
of tracking technologies such as RFID, NFC tags, and similar technologies enabled
by the Internet of Things (IoT). As demonstrated by Bitcoin, the technology
underlying the digital currency constitutes a proven, effective mechanism for
achieving distributed consensus in a dynamic, unreliable networked environment of
untrusted participants [12,13]. A particular feature of operating in a digital
environment is the possibility of creating algorithms and programs that can be
partially or fully executed or enforced when certain conditions occur without human
interaction—a feature known as “smart contracts” [4]. A “smart contract” is
activated once a pre-set condition or set of conditions agreed to by the parties in
involved are triggered and all partied informed (or updated) per the contract. An
example is the systematic notification and payment for automated escrow. Hofmann &
Rüsch [14] suggests blockchain will help facilitate further supply chain
integration. Nonetheless, for industries and firms already well integrated, they
may not be willing to substantially invest in blockchain that does not provide
significant benefits over present solutions. Much is still yet to be learned about
this emerging technology. 2.2. Supply Chain Transparency Similar to supply chain
traceability, the supply chain concept of transparency embodies information readily
available to end-users and firms in a supply chain. Lamming [15] indicates that
there are varying degrees of supply chain information sharing (also referred to as
“visibility”) within the supply chain. Lamming refers to it as transparency and
that supply chains need to transparently supply all actors with knowledge,
normalizing information leverage during negotiations and providing more information
about component origins and processes. See Figure 1. Logistics 2018, 2, 2 3 of 13
private key on a given blockchain. Further control of an asset may be achieved and
supply chain traceability may be enabled through use of tracking technologies such
as RFID, NFC tags, and similar technologies enabled by the Internet of Things
(IoT). As demonstrated by Bitcoin, the technology underlying the digital currency
constitutes a proven, effective mechanism for achieving distributed consensus in a
dynamic, unreliable networked environment of untrusted participants [12,13]. A
particular feature of operating in a digital environment is the possibility of
creating algorithms and programs that can be partially or fully executed or
enforced when certain conditions occur without human interaction—a feature known as
“smart contracts” [4]. A “smart contract” is activated once a pre-set condition or
set of conditions agreed to by the parties in involved are triggered and all
partied informed (or updated) per the contract. An example is the systematic
notification and payment for automated escrow. Hofmann & Rüsch [14] suggests
blockchain will help facilitate further supply chain integration. Nonetheless, for
industries and firms already well integrated, they may not be willing to
substantially invest in blockchain that does not provide significant benefits over
present solutions. Much is still yet to be learned about this emerging technology.
2.2. Supply Chain Transparency Similar to supply chain traceability, the supply
chain concept of transparency embodies information readily available to end-users
and firms in a supply chain. Lamming [15] indicates that there are varying degrees
of supply chain information sharing (also referred to as “visibility”) within the
supply chain. Lamming refers to it as transparency and that supply chains need to
transparently supply all actors with knowledge, normalizing information leverage
during negotiations and providing more information about component origins and
processes. See Figure 1. Figure 1. Information Transparency [15]. Awaysheh &
Klassen [6] suggest supply chain transparency drives the adoption of supplier
socially responsible practices to both influence customer purchase behavior and
create conditions that force
competitors to match their actions, especially for managers with valuable, high
visibility brand names. However, high-profile companies such as Apple have followed
a policy of secrecy about component sourcing and practices [8] and only released
information after extensive social pressure [16]. According to the United National
Global Compact on Traceability [17], traceability is not a substitute for corporate
due diligence to uncover potential adverse impacts. Some companies with a robust
understanding of their supply chains and supply chain partners have their own
traceability protocols, often for high value or strategic items. For other
industries with a wide and disparate multi-stakeholder framework such as
agriculture and most manufacturing, several traceability frameworks exist to
develop credible and robust chain of custody standards and certification for
products along the supply chain: • Product Segregation model: certified materials
and non-certified materials are not mixed (e.g., Fairtrade coffee) Figure 1.
Information Transparency [15]. Awaysheh & Klassen [6] suggest supply chain
transparency drives the adoption of supplier socially responsible practices to both
influence customer purchase behavior and create conditions that force competitors
to match their actions, especially for managers with valuable, high visibility
brand names. However, high-profile companies such as Apple have followed a policy
of secrecy about component sourcing and practices [8] and only released information
after extensive social pressure [16]. According to the United National Global
Compact on Traceability [17], traceability is not a substitute for corporate due
diligence to uncover potential adverse impacts. Some companies with a robust
understanding of their supply chains and supply chain partners have their own
traceability protocols, often for high value or strategic items. For other
industries with a wide and disparate multi-stakeholder framework such as
agriculture and most manufacturing, several traceability frameworks exist to
develop credible and robust chain of custody standards and certification for
products along the supply chain: • Product Segregation model: certified materials
and non-certified materials are not mixed (e.g., Fairtrade coffee) Logistics 2018,
2, 2 4 of 13 • Mass Balance model: certified and non-certified materials can be
mixed where segregation is very difficult or impossible to achieve (e.g., cotton
yarn) • The Book and Claim model: does not seek to have traceability at each stage
in the supply chain. The model relies on the volume of the certified material
produced at the beginning of the supply chain and the amount of certified product
purchased at the end of the value chain. Sustainability certificates are bought via
a trading platform (e.g., UTZ Certification). 2.3. How Blockchain-Enabled
Traceability Applications Work The characteristics of blockchains make them
especially suited for traceability applications. Whenever goods and related
documentation (e.g., bills of lading or ship notifications) pass from one actor in
the supply chain to another, items are subject to counterfeiting or theft. To
protect from this, blockchain technology involves the creation of a digital “token”
which is associated with physical items when they are created. The final recipient
of the item can then authenticate the token which can follow the history of the
item to its point of origin. End users have more confidence in the information they
receive since the no one entity or group of entities can arbitrarily change the
information contained within the blockchain. Due to most goods’ linear flow from
material origin to final consumer, blockchain is a suitable technology to enable
supply chain traceability. Since goods and their associated “tokens” usually are
not traded between competitors within in a given blockchain, this operational facet
helps maintain anonymity. As such, participant confidentiality may be maintained.
2.4. Current Blockchain-Enabled Supply Chain Traceability Applications The first
traceability application evaluated is a project enabled by Ethereum [18]. From
January to June 2016, yellowfin and skipjack tuna fish were tracked throughout the
entire supply chain, from fishermen to distributors. End users could then track the
“story” of their tuna fish sandwiches via a smartphone and determine information
about the producers, suppliers, and procedures undergone by the end product. Every
unit of measure (by fish or by catch) was associated with a digital “token” to
confirm a given fish’s origin and tracked throughout the supply chain, presenting a
viable model for product certification to an end consumer. Everledger [19] is
another blockchain enabled traceability application for the global diamond
industry. The company, which partnered with Barclays, created a database of over a
million diamonds registered on their blockchain to certify the final cut diamond
was ethically-sourced from “conflict free” regions. Similar measures are being used
to create an anti-counterfeit database for other valuable goods such as fine wine
and art.
Extant literature has widely emphasized that trust and information sharing are
beneficial to supply chain performance, especially in the context of a global
market with an increased tendency to outsource strategic operations (Kasemsap,
2017) to achieve greater flexibility and resilience. It has been shown that trust
is also a significant predictor of supply chain’s performance and fosters cost
reductions, higher flex- ibility and better relational governance (Kim & Chai,
2017; Lee, Kim, Hong, & Lee, 2010; Singh & Teng, 2016). As can be observed in Viet,
Behdani, and Bloemhof (2018), when it comes to analyzing trust and information
sharing in the supply chain, studies commonly focus on demand and inventory data.
Every player in a supply chain needs to forecast its customers’ demand timely and
accurately for its own pro- duction planning, inventory control and material
requirement planning activities (Tsanos & Zografos, 2016). Any forecast uncertainty
would propagate through the supply chain and amplify the order-quantity variability
as we move further up the supply chain. It will eventually lead to a greater
variance of production exceeding the variance of sales, excess safety stock,
increased logistics costs and inefficient use of re- sources. This phenomenon,
well-known in literature as bullwhip effect (Lee, Padmanabhan, & Whang, 1997), has
been widely stemmed over the last years by the use information and communication
technologies (ICT) and big data (Hofmann, 2017) that increase collaboration and
data visibility. Companies have started to give partners visibility to business
data (e.g. inventory data) by giving them user credentials to access their
enterprise information system according to a Software-as-a- Service (SaaS)
paradigm. However, information sharing and inter- organizational collaboration get
complicated when customers and suppliers are spread over several countries (Shore,
2001) or they do not trust each other. As supply chains become more demand-driven,
data accuracy is crucial and organizations perceive trust as a vital factor of
their competitive performance. However, in a low-trust scenario, supply chain
partners are often averse in providing information to the other partners as they
increasingly see themselves as competing entities for revenue rather than partners
(Myers & Cheung, 2008), especially companies on the same echelon (e.g. wholesalers
with other whole- salers, retailers with other retailers). Building trust is a slow
process https://doi.org/10.1016/j.cie.2019.07.026 ⁎ Corresponding author. E-mail
addresses: f.longo@unical.it (F. Longo), l.nicoletti@cal-tek.eu (L. Nicoletti),
antonio.padovano@unical.it (A. Padovano), datri@mat.unical.it (G. d'Atri).
Computers & Industrial Engineering 136 (2019) 57–69 Available online 10 July 2019
0360-8352/ © 2019 Elsevier Ltd. All rights reserved. T that requires a certain
amount of accurate information to be shared for a long time by collaborating
parties (Özer, Zheng, & Chen, 2011) but, on the other hand, access to accurate
enterprise data and information in a supply chain is only possible when a high
level of trust between the parties already exists (Ebrahim-Khanjari, Hopp, &
Iravani, 2012). De- spite ICT has reduced the information asymmetry and increased
the degree of interorganizational collaboration (Shi, 2007), significant in-
vestments in ICT infrastructures are still required (Zhong, Newman, Huang, & Lan,
2016). Furthermore, even if companies have access to the supply chain partners’
data, trust issues still exist. Indeed, compa- nies might mislead deliberately or
unconsciously the supply chain partners with inaccurate, wrong or counterfeit
information that does not reflect the real data. Building trust in the supply chain
leveraging on conventional ICT is therefore an expensive and long process (Poppo &
Zenger, 2002), which does not always bring benefits. Our present work proposes the
use of the Blockchain as a method to provide the state of truth and trust for the
information exchanged be- tween the actors of the supply chain. A blockchain is a
distributed ledger of a chronological chain of records in the form of encrypted
blocks made up of all transactions executed by the participants. In the blockchain,
systems can directly communicate with one another: each system can use a pair of
private/public key to be identified and the communication between the systems is
secure because each commu- nication is signed by the private key of the sender
(Reyna, Martín, Chen, Soler, & Díaz, 2018). Each actor of a supply chain can have a
wallet in it that can be used to certify the authenticity, the integrity and in-
variability of data through the hash sum that is public on the blockchain and
accessible at any time, while the original data are stored off-chain and exchanged
between companies by using conventional methods. Therefore, blockchain creates
transparency and provides a single and secure point of truth (Tapscott & Tapscott,
2016). The Bitcoin blockchain has been the first successful application
(Wattenhofer, 2016) and, today, it is one of the most widely known. However, as of
June 2018, there are at least 50 different blockchains with a market value of more
than 100 million USD (e.g. Ethereum, Binance, Coin, EOS, Stellar, Litecoin,
Cardano, Bitcoin, TRON, Monero). Many of them are just minor modifications of the
original protocol, but new ideas have also been introduced to overcome limitations
on scal- ability and updating time of the first blockchains. While the rise of
blockchain in finance has been extremely rapid, supply chain managers, researchers
and practitioners are taking longer to recognize the impact that blockchain may
have on their business (Hackius & Petersen, 2017). Blockchain technology has been
proved to be successful when the object under consideration has a significant value
for people – e.g. food (Tian, 2016) or money – especially if the players operating
in the environment where this object is created, transformed and used, do not trust
each other. Although Blockchain has started to offer large benefits to make
paperwork processing easier, to identify counterfeit products, to facilitate item
traceability (Tian, 2016) and to operate the Internet of Things, enterprises –
especially small and medium-sized companies – claim to have little knowledge about
Blockchain (Kersten, Seiter, von See, Hackius, & Maurer, 2017). This is mainly due
to the novelty of the technology but also to the lack of use cases and application
studies in literature that show Blockchain’s po- tential benefits (Yli-Huumo, Ko,
Choi, Park, & Smolander, 2016) for companies operating in a supply chain. Supply
chain management research on Blockchain is still in its in- fancy so it is worth to
look into possible applications that may convince supply chain managers to adopt
this technology as certification agent for shared data and information. A proof of
concept is needed to show quantitatively which are the benefits companies could
achieve in a blockchain-enabled supply chain environment before its implementa-
tion in a real context. However, data that companies send to the blockchain can be
still counterfeited or be inaccurate in advance: in this sense, the trust in the
blockchain still depends on the trust in partner companies. Evidence is needed to
prove that actors in a supply chain that share inaccurate or counterfeit data about
demand and inventory on the blockchain will not be able to achieve a high
performance. 1.1. Contribution of the study This research work addresses the
mentioned gap in literature and industrial practice and provides in Section 2 a
methodological frame- work to assess the performance of a blockchain-enabled supply
chain. The contribution of this article is twofold. The first contribution of our
research work is represented by the design and development of a software connector
module that bridges an Ethereum-like blockchain with a generic enterprise
information system to enable the companies to send data to the blockchain and check
the data authenticity, integrity and invariability over time. In the context of
this work, an Ethereum- like public blockchain, called UnicalCoin, which represents
the decen- tralized ledger where all the information regarding demand forecasts and
inventory levels are stored, has been used. In order to show quantitatively the
benefits that companies can achieve in a blockchain- enabled supply chain, a supply
chain simulation model has been de- veloped to carry out “what-if” scenario
analysis. It recreates the net- work of suppliers, carriers, wholesalers, retailers
and customers, the flow of goods and information among them and all the main
organi- zational, production and delivery processes (e.g. inventory manage- ment,
demand forecasting, procurement, customers’ orders arrival, deliveries etc.). The
model has been integrated with the blockchain via the same software connector
through REST web services to serve as a replica of a real supply chain. In this
model, simulated companies can send data to the blockchain and check at their
convenience the au- thenticity, integrity and invariability of data shared with
them by other companies by using the software connector services. The present
article will eventually answer two research questions: 1. is blockchain a
convenient instrument for companies operating in a supply chain - i.e. do the
economic or operational benefits of building trust in the supply chain through a
blockchain exceed its costs? 2. do the benefits deriving from a blockchain-enabled
supply chain encourage companies not to send counterfeit or inaccurate data to the
blockchain? The second contribution of this article is indeed represented by the
application study that couples the blockchain with a supply chain si- mulation
model to quantitatively assess the benefits and advantages companies
can achieve. The application study has been set up to assess the benefits of the
use of blockchain for wholesalers and big-box re- tailers in a simulated global
supply chain with low trust among the companies. Summary results are presented in
Section 3 while full data from the scenario analysis are available in the
supplementary file pro- vided along with this article. Section 4 goes over the
results and highlights the significant economic and operational benefits that com-
panies can achieve by sharing accurate information with their sup- pliers, while no
significant economic and operational benefits can be observed for those companies
that just use those data. Results prove that blockchain technology is a convenient
instrument to overcome collaboration and trust issues in a supply chain, to
minimize the ne- gative consequences of information asymmetry over the echelons of
a supply chain but also to discourage companies from any misconduct (e.g.
counterfeiting data or low data accuracy).
The work of commodity producers and farmers in developing countries is undervalued.
On January 14, 2019, news website Reuters published a story about an Ethiopian
coffee farmer Gafeto Gardo. In 2018, Gafeto received US$0.29 for a kilogram of
coffee beans (Maasho & Hunt, 2019). The average price of regular cappuccino in the
U.S. in early 2019 was US $4.02 (Byrnes, 2019). For the amount of coffee used to
prepare a cappuccino, Gafeto’s share translated to less than US$0.01 for every cup
of cappuccino sold in the U.S. Similarly, in an article pub- lished in NextBillion
website, which explores the links between enter- prise and development, the
executive director of Uganda’s National Union of Coffee Agribusinesses and Farm
Enterprises (NUCAFE) noted that the country’s coffee farmers receive less than 5%
of the retail value of coffee beans they grow. He also stated that many Ugandan
coffee farmers make less than US$1/day (Nkandu, 2018). The above examples make it
quite clear that less powerful members of supply chains (SCs) such as farmers are
underpaid. While ethical consumption campaigns such as Fairtrade exist, their
effectiveness has been questionable (Vidal & Provost, 2014). A complaint that has
been often levelled is that the current system fails to consistently and accu-
rately document levels and distribution of benefits to various SC actors
(Giovannucci & Ponte, 2005). Some recent research has documented that blockchain
can facilitate sustainable SC management (SCM) and hence address unethical be-
haviors in SCs such as those discussed above as well as environmental challenges
(Gurtu & Johny, 2019; Kouhizadeh & Sarkis, 2018; Kshetri, 2021). We argue that by
studying blockchain deployment to promote SC sustainability in the developing
world, we can gain novel insights that are not possible by analyzing SCs in the
developed world. Indeed, prior researchers have noted that developing countries
would be early adopters of blockchain in many areas of economic and social life due
to their outdated record-keeping systems, a public mistrust of regulators and rapid
diffusion of modern ICTs such as smartphones (Kshetri, 2017; Yermack, 2017). One
such area could be the development of sustainable SCs. The importance of this
research topic also lies in the fact that most sustainability violations can be
found deeper down in SCs in developing countries (Kshetri, 2021). This is because
these countries have weak regulations and enforcement mechanisms in areas related
to sustain- ability such as the environment (Fikru, 2014), and child labor
practices (Doepke & Zilibotti 2005). Most firms operating in these countries do not
go beyond compliance requirements in their sustainability policies (Jeppesen &
Hansen, 2004). This is understandable since if developing E-mail address:
nbkshetr@uncg.edu. Contents lists available at ScienceDirect International Journal
of Information Management journal homepage: www.elsevier.com/locate/ijinfomgt
https://doi.org/10.1016/j.ijinfomgt.2021.102376 Received 17 May 2019; Received in
revised form 20 May 2021; Accepted 21 May 2021 International Journal of Information
Management 60 (2021) 102376 2 world-based firms invest too much in new
technologies, training of employees and purchasing of international certification,
their products become too expensive (Jeppesen & Hansen, 2004) making them less
competitive. Due to low levels of trust and high costs of intermediation,
addressing sustainability issues in the developing world has been a challenging
task (UNCTAD, 2020). Blockchain could be a valuable tool in overcoming these
challenges. Prior research has established that this technology plays a key role in
creating trust and facilitating disinter- mediation and decentralization of markets
and existing modes of busi- ness and governance (Gurtu & Johny, 2019; Kshetri,
2021). Such characteristics are especially important in addressing trust- and
intermediation-related issues in developing countries (UNCTAD, 2020). That is,
blockchain can be used to replace the need for institutional and personal
intermediation. Technological intermediation by blockchain can also provide a major
opportunity for fighting corruption in these countries (UNCTAD, 2020), which has
been an important contributor to unethical behaviors in SCs (LeBaron, 2020; LeBaron
& Crane, 2018). A number of forces have also contributed to the use of blockchain
in facilitating the development of sustainable SCs in developing countries.
Especially firms are facing increasing pressures from regulators, activists and
consumers to develop sustainable SCs (European Union (EU, 2020). Some entities of
governance such as the European Union (EU) have recommended that the use of
technologies such as blockchain be explored to enhance SC visibility in developing
countries (European Union (EU, 2020). Companies are also under increasing pressure
from consumers to be more sustainable. In a survey, 66 % of respondents were
willing to pay more for sustainably and ethically sourced products. The proportion
was 73 % for millennials (Forbes Africa, 2018). Blockchain can help firms
demonstrate the sustainability of their actions to con- sumers and other
stakeholders. The objective of this study is to address the above issues by
offering a theory that articulates the roles of blockchain in monitoring and
enforcing sustainability standards in SCs in the developing world. Spe- cifically,
the following research question has been addressed: What is the role of blockchain
in addressing various challenges related to monitoring and enforcing sustainability
standards in SCs in the devel- oping world? Before proceeding further, we provide
some clarifying definitions. Our approach to sustainability is based on triple
bottom line (TBL), which considers sustainable actions as those that are
economically viable, environmentally sustainable and socially responsible (Jamali,
2006). Economically viable actions are those that contribute to the corporate
bottom line and ensure the flow of money in the community via taxes, employment,
and other means (Slaper & Hall, 2011). By environmental sustainability, we mean
pro-environmental initiatives undertaken by organizations in managing natural
resources and the natural environment (Ones & Dilchert, 2012). Actions that
contribute to social and distributive justice, improve fairness in the allocation
of re- sources (e.g., by increasing the price paid to commodity producers and
farmers in developing countries) or promote the sustainability of com- munity are
viewed as socially responsible (Barton, 2000; Dempsey et al., 2011). We define
sustainable SCs are those that contribute to one or more of the above outcomes. The
article is organized as follows. We first discuss some background, concepts and
facts related to blockchain and enabling technologies in SCM. It is followed by the
literature review section, which summarizes previous literatures on challenges in
enforcing sustainability standards in developing countries, increasing adoption of
blockchain in these countries and blockchain’s use in SCs to provide a clear
rationale for the current research in the light of what has been done before. Then
we discuss how the multiple case study method has been applied. Next, we develop
propositions that highlight how blockchain can potentially address various
challenges in enforcing sustainability standards in developing countries. In the
discussion and implications section, we offer a commentary concerning blockchain’s
technical potential to address sustainability-related concerns in SCs in developing
countries, highlights how economic, technological and infrastructural de-
velopments affect the ability to realize such potential and delves into some
practical challenges. In the conclusion section, we summarize the main ideas of the
paper and discuss the most salient barriers that can prevent blockchain’s use to
promote sustainability in SCs in these countries. 2. Blockchain and enabling
technologies in SCM: some background, concepts and facts In this section, we
introduce a primer on blockchain to help readers gain an understanding of this
complex topic (Table 1). Blockchain can be viewed as a decentralized ledger that
maintains digital records of a transaction simultaneously on multiple computers.
After a block of re- cords is entered into the ledger, the information in the block
is mathe- matically connected to other blocks. In this way, a chain of immutable
records is formed (Yaga et al., 2018). Due to this mathematical rela- tionship, the
information in a block cannot be changed without chang- ing all blocks. Any change
would create a discrepancy which is likely to be noticed by others (Kshetri,
2018b). Blockchains can be permissioned (e.g., Hyperledger Fabric) or per-
missionless (e.g., Bitcoin and public Ethereum). Permissioned block- chains can be
designed to restrict access to approved actors such as SC partners. In a way,
permissionless blockchains are like a shared data- base. Everyone can read
everything. However, a user cannot control who can write. Implementing smart
contracts is among blockchain’s most trans- formative applications. Smart contracts
execute automatically when certain conditions are met. A smart contract assures a
party with cer- tainty that the counterparty will fulfill the promises. Ethereum,
which is the first blockchain platform to make smart Table 1 Explanation of major
terms used in the paper. Term Explanation Blockchain A decentralized ledger that
maintains digital records of a transaction simultaneously on multiple computers.
Cryptocurrency A cryptocurrency functions like money, which means that it defines
value, serves as a value transfer and can be used for making and receiving
payments. Such currencies are on the blockchain and encrypted using cryptography.
Ethereum The Ethereum network is a public blockchain-based
open software platform, in which each node can be discovered by and known to other
nodes in the network. It has its own cryptocurrency known as Ether. Ethereum Gas A
fraction of an Ethereum token used by a smart contract to pay for the miners’
efforts to secure the transaction on the blockchain. Hyperledger Fabric It is an
open-source blockchain platform from The Linux Foundation, which is provided by IBM
as “Blockchain as a Service”. It is targeted to businesses. Hyperledger facilitates
smart contracts by connecting all relevant parties together. Fabric is type of
private or permissioned blockchain. Some organizations or government agencies “own”
the nodes, who permit the nodes to communicate with each other. Identities and
roles of members are known to other members Permissioned blockchain In a
permissioned blockchain, nodes or users are not publicly discoverable. The
permission to create smart contracts may also be restricted to approved actors.
Permissionless blockchain A permissionless blockchain can allow anyone to join the
network and participate in block verification to create consensus and create smart
contracts. Some examples include the Bitcoin and Ethereum blockchains Smart
contracts Smart contracts execute automatically when certain conditions are met.
Computerized protocols and user interfaces are used to execute a contract’s terms
(Szabo, 1994) and to “formalize and secure relationships over public networks”
(Szabo, 1997). N. Kshetri International Journal of Information Management 60 (2021)
102376 3 contracts widely available to the blockchain community, is also argu- ably
the most advanced platform for creating and processing such con- tracts (De Meijer,
2020). While Bitcoin blockchain stores data related to transactions, Ethereum
stores diverse types of data such as those related to finance, industry, legal,
personal information, community, health, education and governance (State of the
DApps. U.D., 2021). These data can be accessed and used by computer programs known
as decentralized applications (dApps) that run on Ethereum. Software developers can
choose their own ‘rules’ for ownership, transaction formats and other aspects.
Ethereum can thus be customized to offer unique solutions to special needs. It is
mainly used to develop B2C applications. In Ether- eum, computers connected in an
open and distributed network provide the processing power needed to run a smart
contract. The computers in the network also verify and record transactions. The
owners of the computers are awarded with Ether tokens for their contributions.
Ethereum can be viewed as the first shared global com- puter. Bitcoin, on the other
hand, is considered to be the first accounting ledger shared globally (MIT
Technology Review, 2017). Ethereum needs what is referred to as Ethereum Gas in
order to execute transactions or smart contracts. 2.1. Specific characteristics of
blockchain Three key characteristics of blockchain have been identified –
decentralization, immutability and cryptography-based authentication (Kshetri,
2018b). 2.1.1. Decentralization Blockchain’s value proposition is arguably embedded
in decentral- ization. By supporting decentralized models, blockchain can make
sustainability-related activities more transparent and produce trust. Blockchain
eliminates the need for a trusted third party in the transfer of value and thus
enables faster, and less expensive transactions. Even those who are skeptical of
the potential of blockchain in many other fields and applications are optimistic in
its trust producing capabilities (Hackett, 2017). 2.1.2. Immutability The term
immutable comes from object-oriented programming, in which data structure and
operations or functions that can be applied are defined by programmers. Immutable
means that once an object has been created and is recorded in a software code, it
cannot be modified (Tschantz & Ernst. 2005). Blockchain-based transactions are thus
indelible and cannot be forged. The immutability feature makes trans- actions on
blockchain auditable, which can improve transparency. A party can be given
controlled access to relevant data. For instance, blockchain’s distributed ledger
model would allow regulators and au- thorities to access key data and information
related to sustainability (Till et al., 2017). 2.1.3. Cryptography-based
authentication To ensure that only authorized users can access the information,
blockchain systems use cryptography-based digital signatures to verify identities
of participants. Users sign transactions with a private key, which is generated
when an account is created. A private key is typically a very long and random
alphanumeric code. Using complicated algo- rithms, blockchain systems also create
public keys from private keys. Public keys make it possible to share information.
This feature makes it possible to measure and track sustainability-related
outcomes. For instance, if a coffee retailer claims that living wages are paid to
coffee farmers, the accuracy and truthfulness of such claims can be assessed by
checking the payments to digital wallets assigned to the farmers. 2.2. Enabling
conditions to facilitate blockchain deployment in SCs in developing countries
2.2.1. Low cost of blockchain deployment and micrometering Blockchain deployment
does not need investment in new devices or hardware. Thus, it is economically
justifiable to generate a blockchain code even for small transactions. This is
especially important for developing countries. 2.2.2. Low costs and rapid diffusion
of the Internet-of-things (IoT) devices Prior researchers have suggested that
blockchain–IoT combination is likely to have a powerful impact on many industries
(Christidis & Devetsikiotis, 2016). In this regard, a key observation is that IoT
com- ponents such as sensors are becoming affordable and accessible. For instance,
during 2005–2015, the costs of sensors decreased by a factor of 100 (Lesser, 2015).
2.2.3. High penetration rates of cellphones in developing and least developed
countries Modern ICTs such as smartphones are diffusing rapidly in developing
countries, which is likely to make them possible early adoption of blockchain
(Yermack, 2017). According to the International Telecom- munication Union’s (ITU),
cellphone penetration rate in developing countries was 99.3 % in 2020. For least
developed countries, the pro- portion was 74 %. 3. Literature review In this
section, we focus on three key points. First, as noted, new insights can be gained
by extending the existing research on blockchain and sustainability in the context
of developing countries. Second, various SC tasks and activities that blockchain
facilitates can be used to improve SC sustainability. Third, the existing research
on blockchain in developing countries can provide the foundation for studying how
blockchain can facilitate sustainable SCs in these countries. In light of these
situations, blockchain’s impact on sustainability practices in SCs in developing
countries would thus represent a promising research op- portunity in order to
delineate the associated contexts and mechanisms. This literature review is thus
organized around the following three themes: a) Key challenges in enforcing
sustainability standards in developing countries; b) Blockchain’s roles in meeting
key SCM objec- tives including those that relate to sustainability, and c)
Blockchain diffusion in developing countries. 3.1. Key challenges in enforcing
sustainability standards in the developing world 3.1.1. Institutional challenges
Institutions are the macro-level rules of the game (North, 1990), which include
“formal constraints (rules, laws, constitutions), informal constraints (norms of
behavior, conventions, and self-imposed codes of conduct), and their enforcement
characteristics” (North, 1996, p. 344). Developing countries lack institutional
conduciveness to implement sustainability initiatives. For instance, due primarily
to lax enforcement and corruption, the seafood trading industry is plagued by
problems such as overfishing, fraud, as well as illegal, unreported, and unregu-
lated (IUU) fishing. There are also human rights abuses (Moosa, 2016). Concerns
have also been raised regarding the validity and reliability of auditing methods
and third-party certifications (TPCs). Some re- searchers have suggested that
social and environmental audits lack transparency (Ball et al., 2000) 3.1.2.
Considerations related to costs and/or benefits Due to their inability to invest in
systems to measure and track relevant data, small firms in developing countries
cannot prove their compliance with sustainability standards. For instance, consider
grades N. Kshetri International Journal of Information Management 60 (2021) 102376
4 and standards (G&S), which are arguably among most relevant in- stitutions for
the developing world (Reardon et al., 1999). The impor- tance of this stems from
the obvious fact that there is a tendency among consumers to demand product quality
and safety. Such demands are communicated to the suppliers of products through G&S,
which are reflected in certification and labels (Reardon et al., 1999). Note that
standards are "rules of measurement established by regulation or authority” and the
grades are “a system of classifications based on quantifiable attributes” (Jones &
Hill, 1994). Meeting G&S often requires huge in- vestments. Many small dairy
operations were reported to go out of business in Latin American economies due to
their inability to meet G&S standards related to quality and safety for milk
products (Jank et al., 2001). 3.1.3. Technical and practical challenges Due to
market and competition related forces, it is becoming important to ensure that
sustainability-related claims are credible and verifiable (Giovannucci & Ponte,
2005). There are, however, significant challenges in achieving such objectives
due to existing technologies’ limitations in measuring and enforcing
sustainability (North, 1999). To take an example, the global apparel retailer C&A
requires its suppliers to respect its ethical standards which include fair and
honest dealings with employees, sub-contractors and other stakeholders (Graafland,
2002). There are, however, implementation challenges due to the technical
impracticality of assessing various stakeholders’ sus- tainability practices. In
terms of indicators related to forced labor, for instance, studies of buyer-led
supply chain governance programs have revealed significant gaps between corporate
social responsibility (CSR) standards and business practices (LeBaron, 2021). Such
gaps can be attributed to opaque and complex SCs that make effective monitoring
extremely difficult (Eckert, 2013). Due to the opacity of modern SCs, unethical
practices often go un- detected and unpunished. Even if unethical problems such as
forced labor are found in a SC, powerful firms often attempt to shift the blame to
some “unscrupulous and corrupt intermediaries” and create a false impression that
the SC as a whole is run in an ethical manner (LeBaron, 2020; LeBaron & Crane,
2018). 3.1.4. Power distribution and integration related issues in inter-
organizational networks 3.1.4.1. Unequal power distribution among SC partners. The
world trade arguably mostly benefits multinationals (Herron & Browne, 2015). Re-
searchers have long suspected that the benefits associated with price premiums
dilute or even disappear along SCs (Giovannucci & Ponte, 2005). According to a
study commissioned by the U.K. government on the production of flowers, coffee and
tea in Ethiopia and Uganda, sales of Fairtrade-certified products failed to benefit
poor farmworkers. The wages were lower in farms and places that grew Fairtrade
flowers or farmers’ groups that sold coffee and tea to Fairtrade certified markets
compared to farms that were larger, commercial and not Fairtrade-certified (Vidal &
Provost, 2014). Some have suggested that Fairtrade’s bureaucratic system has
negligible effect to change unfair practices (Herron & Browne, 2015). Thanks to TPC
systems, supermarkets’ power to regulate the agrifood system has drastically
increased. TPCs arguably reconfigured social, political, and economic relations in
the global agrifood system (Hata- naka et al., 2005). 3.1.4.2. Porosity and opacity
of value delivery networks (VDN). SC net- works have low degrees of integration and
responsiveness. In food supply networks, farmers, processors, distributors, and
retailers use different types of documentation systems to track products. Some rely
on papers. All these lead to information silos. Challenges such as those related to
data silos are more pronounced for developing countries than for developed
countries. Manufacturers thus rely on opaque channels to distribute their products.
Products’ ownership and custodianship change many times before they reach to end
users (Till et al., 2017). For instance, wide- spread availability of fake drugs in
Africa can be attributed to the dis- tribution system’s porosity (Yeebo, 2015).
3.2. Blockchain’s roles in meeting key SCM objectives Blockchain can help achieve
various SCM goals including those that relate to sustainability (Di Vaio, &
Varriale, 2020; Gurtu & Johny, 2019; Kshetri, 2018a). Using blockchain, it is
possible to make indicators related to sustainability transparent, quantifiable and
more meaningful (Gurtu & Johny, 2019; Kshetri, 2018a). Especially in combination
with other technological advancements, blockchain can help firms achieve TBL goals
(Treiblmaier, 2019). For instance, Venkatesh et al. (2020) have demonstrated that
by combining blockchain with the IoT and big data, firms can monitor and evaluate
SCs’ social sustainability performance. Blockchain’s key features such as
decentralization and immutability make it an ideal tool to improve SC traceability
by addressing various shortcomings of traditional SCs (Kim & Laskowski, 2018;
Toyoda et al., 2017). Immutable data related to product dimensions and other key
characteristics, such as nature, quality, quantity, location and ownership can play
key roles in addressing such issues (Saberi et al., 2018). Despite traditional SC
information systems’ capability to uniquely identify products, they perform poorly
in traceability mainly due to data silos. That is, some SC data are accessible by
some participants but are isolated from other participants. In order to be able to
trace ingredients across multiple tiers of a SC, data must be shared in a tamper-
proof way and must be accessible to relevant parties (Westerkamp et al., 2020).
Improving the governance structures in SCs is a key mechanism by which blockchain
can promote sustainability. This technology can pro- vide visibility and document
provenance and allow the access of per- missioned data to facilitate the automation
of tasks such as payments, and settlements (Narayanaswami et al., 2019). For
instance, blockchain can be used to create a SC map showing a transaction and
information flows. Such flows can help understand the weakest links and the degree
and nature of risks and threats involved (Min, 2019) and reduce opportunistic
behaviors (Schmidt & Wagner, 2019). For instance, blockchain’s transparency help
ensure that middlemen and other actors do not engage in unethical behaviors
(Treiblmaier, 2019). Disintermediation is a further mechanism by which blockchain
can transform SCs (Gurtu & Johny, 2019; Queiroz et al., 2019). Some of the
intermediary tasks are likely to be replaced by blockchain (Tonnissen ̈ &
Teuteberg, 2020). Transactions thus can be conducted without relying on a third
party’s trust. Instead, participants rely on distributed trust that is based on the
consensus of the network of other users (Francisco & Swanson, 2018). These
mechanisms are likely to reduce transaction costs and facilitate market-oriented
practices (Cole et al., 2019; Schmidt & Wagner, 2019). Blockchain can also help
provide product information to consumers to increase their confidence about the
quality of products (Nikolakis & Krishnan, 2018). Blockchain-based product
traceability is thus key in bringing SC transparency (Banerjee, 2018; Hald & Kinra,
2019), which can enhance consumers’ perception of a firm’s sustainability
practices. Regarding the mechanisms through which blockchain-led trans- parency
could reduce unethical behaviors, prior research has noted that under some
conditions, behaviors that are viewed as unfair may be punished (Fehr et al.,
1997). For instance, in ultimatum game experi- ments, researchers found that
individuals are willing to forego some monetary benefits in order to punish unfair
practices (Camerer & Thaler 1995; Roth, 1995). This means that when there is the
possibility of being punished, firms are less likely to engage in unfair behaviors.
A challenge in the non-blockchain world, however, is that there is no data to
assess the fairness of some participants’ behaviors. Blockchain-based N. Kshetri
International Journal of Information Management 60 (2021) 102376 5 transparency
makes it more difficult to hide unfair or unjust practices. 3.3. Blockchain in the
developing world Prior researchers have also looked at the adoption and impacts of
blockchain in the developing world (Kshetri & Voas, 2018). Yermack (2017) suggested
three factors’ crucial roles in explaining developing countries’ possible early
adoption of blockchain: a) inadequate and outdated record-keeping systems in these
countries may increase the appropriateness of blockchain in filling this void; b) a
public mistrust of regulators could make blockchain’s role as a trust producing
machine more compelling; c) modern ICTs such as smartphones are diffusing rapidly,
which would make it relatively easy to adopt blockchain. Regarding the impacts,
prior researchers have argued that blockchain can play a major role in addressing
various challenges such as fighting corruption (Kenny, 2017; Kshetri & Voas, 2018),
improving the pro- tection of property rights (Kshetri, 2017) and creating secure
digital identities (Kshetri, 2020). Blockchain can also be used as an important
tool for humanitarian and development applications such as handling of vaccines by
aid groups (Till et al., 2017) and helping refugees (Kshetri, 2017, 2020). One
example of the latter is the World Food Program’s (WFP) “Building Blocks” pilot
started in 2017. In the first stage, Building Blocks distrib- uted food and cash
assistance to needy families in Pakistan’s Sindh province. In May 2017, the WFP
started distributing food vouchers in Jordan’s refugee camps by delivering
cryptographically unique coupons to participating supermarkets (Kshetri, 2020).
Blockchain is an evolving technology that is expected to improve competitive
advantages through innovative plat- form-based business models [1, 2]. Blockchain—
the tech- nology used in the cryptocurrency of Bitcoin—is believed to have the
ability to address the challenge of gaining end- to-end transparency. This
technology, which is gradually becoming more widespread, serves as a networking
tools for simplifying business operations by applying a peer-to- peer (P2P) network
for data verification and sharing. Blockchain technology uses public key encryption
to verify transactions on the Internet and defend against cybersecu- rity threats
including ransomware, trojans, worms, rootkits, and botnets [3–5]. It reflects a
shared transaction system in which all entries are registered in public or private
ledgers that are visible to users [6–9]. Blockchain-based supply chain applications
include smart contracts, product trace- ability, enforcement tracking, stock
control, transaction and settlement, and information immutability. These have led
to the enhancement of market, economic, and environ- mental performance in the form
of partnership growth. Blockchain also has marginal effects on partnership effi-
ciency [10]. Furthermore, it supports connectivity and reliability in the
electronic money market and offers a secure technology solution with a wide range
of advantages and applications [11–14]. In addition, it expands the potential for
sustainability by accelerating and automating the exchange of information critical
to natural resources and environmental protection [10, 15]. According to the Market
Watch report (2019), the global market size of blockchain-enabled supply chains is
pre- dictable to extent $9.8 billion by 2025. The global Cluster Computing
https://doi.org/10.1007/s10586-020-03200-4(0123456789().,-volV)(0123456789(). ,-
volV) & Moutaz Alazab m.alazab@bau.edu.jo Salah Alhyari Salah_Alhyari@yahoo.com
Albara Awajan a.awajan@bau.edu.jo Ayman Bahjat Abdallah aymanabdallah@yahoo.com 1
Faculty of Artificial Intelligence, Al-Balqa Applied University, As-Salt, Jordan 2
Department of Business Management, The University of Jordan, Amman, Jordan 123
contribution of blockchain to the supply chain market is set to grow by $424
million by 2023 [16]. In Australia alone, 51% of companies are expected to boost
supply chain collaboration and transparency through large scale finan- cial
investment in blockchain technology over the next decade. However, less than 11% of
companies are cur- rently utilizing blockchain solutions [17]. One possibility for
this, as suggested by [18], is that knowledge generation regarding blockchain
technology within supply chains is still in a very early stage. Moreover, the lack
of general acceptance of blockchain-based supply chain technologies is a problem
that necessary to be resolved [19–23]. While several studies such as [24] and [18]
have discussed the relationship between blockchain technology, and supply- chain
management, they highlight the stronger purpose of blockchain to achieve
competitive supply chain priorities at the organisational level. Nevertheless, user
behaviour towards blockchain-based supply chain technology remains underexplored.
In fact, supply-chain stakeholders must incorporate blockchain into their
activities, as almost any kind of blockchain exchanges are easier, more reliable,
traceable and more effective [24], and collaboration between Supply Chain members
continues to progress on the basis of cost savings and increased productivity in
the supply chain [18, 19]. The implementation of blockchain will strengthen
consumer confidence, enabling them to track the entire product path across the
supply chain with complete confi- dence. As discussed by Saberi et al. [25],
traceability capability of blockchain would help the avoidance of fraud and
counterfeit goods through supply chains. Supply chains would therefore benefit a
great deal in the matter of cost savings and performance. The growing research on
blockchain has confirmed that blockchain can address supply chain challenges and
underwrite multiple major strategic aims for the supply chain management, such as
costs, quality, speed [26], reliability, risk mitigation [27], sustainable growth
and agility [24, 28]. Thiruchelvam et al. [29], emphasised that efficiency through
block chain technology in the supply chain can benefit in increasing market access,
fair trade, and price equality for supply chain partners. This would enhance
visibility and accountability of supply chain pro- cesses and help address current
sustainability issues related to social, economic, and environmental
considerations. Thus, among other operations likely to be transformed by
blockchain, special attention needs to be paid to the supply chain. On the basis of
the theoretical analysis referred to above, the respective major study question is
posed: What are the major aspects influencing the acceptance/adoption of
blockchain-based supply chain technology in the Aus- tralian context? Prior studies
addressed the issue from a variety of organisational perspectives, suggesting that
decision-making regarding the use of blockchain-based supply chain technology
depends on organisational and technological factors [6, 30–32]; contextual factors
such as inter-organisational trust factors, and technical and external barriers
[25, 33]; the desire to take advantage of organi- sational, technological, and
individual factors simultane- ously [21, 34]; and the perspective of global
organisations [35]. However, most of these studies have typically explored the use
of blockchain in a single industry. This has restricted the generalisability of
their findings, and no work has been carried out across different industries.
Moreover, some studies [6, 25, 33] have proposed that non technological variables,
including policy, cultural aspects and social influence, should also be considered.
In recent years, several widely known theories have aimed to assess user behaviour
towards certain technolo- gies—such as blockchain—and the main influences that
determine the implementation of these technologies. From the area of social
psychology, the technology acceptance model (TAM), the task–technology fit (TTF)
theory, the diffusion of innovation (DOI) theory, the model of PC utilisation
(MPCU), the theory of reasoned action (TRA), the theory of planned behaviour (TPB),
the unified theory of acceptance and use of technology (UTAUT), and the social
cognitive theory (SCT) are some of the key modular approaches used in the analyses
[36, 37]. These theories have advantages, as well as disadvantages, and differ
considerably in terms of benefits, predictive power, and key limitations. Adopting
only one model could result in a failure to benefit from the advantages of other
models [38]. As such, a multi-model integration method is crucial for a sound
theoretical foundation, recurring predictive power, and robustness in studying the
potential acceptance or rejection of a technology. This study integrates factors
from the TTF and infor- mation system success (ISS) models into the UTAUT model
with two trust-based information technology (IT) innovation adoption constructs.
These two constructs, namely, trust in technology and inter-organisational trust,
are part of exploring the potential of blockchain fostering ‘trust’ in supply
chains. These two constructs can also help predict user intention for adopting
blockchain technologies. The above-mentioned models are integrated to achieve a
sound foundation for recurrent predictive power (i.e. 56%, see [37, 39]), and
strength of the conceptual framework, as opposed to other models and theories
linked to the potential success or failure of technology. Furthermore, the UTAUT
evolved through a review of the factors mentioned in eight previous theories and
models [39]. Therefore, scholars prefer the model of UTAUT in diverse situations
and timeframes [37]. The multi-model integration method was used because of its
relevance to this study. Developing Cluster Computing 123 such a broad social
conceptual model leads to stronger evidence-based support and predictive power, and
coun- teracts the constraints of many other classical acceptance and adoption
models [40]. More importantly, by following up and integrating state- of-the-art
research trends, this study contributes to the enrichment of ICT adoption
literature in several ways: • This research describes blockchain adoption as a
trend- setting theme for academics and professionals eager to gain an in-depth
understanding of the adoption process at the inter-organisational level. • In this
article, we offer a detailed investigation into the implementation of blockchain
technology for supply chains. As such, we will address and analyse the behaviour
underlying the adoption and use of block- chain, the pros and cons discussed in the
past studies, not only from the standpoint of the automated fashion, but rather
from the perspective of experts already involved in blockchain adoption projects. •
In addition, we will contribute to the progressive literature on blockchain-based
supply chain technology by providing hypothesized acceptance models and scientific
evidence from multi-industrial supply chains in Australia. • Furthermore, the
review of the relevant literature identifies outstanding challenges and areas for
future research in the development and enhancement of the area, both for business
and the academic community. The remaining part of the article is organised as
follows. The theoretical framework for study variables illustrated in Sect. 2.
Next, Sect. 3 undertaken the methods of study, whereas the Sect. 4 exhibits the
results. Lastly, an exhaustive discussion of the foremost findings and con-
clusions was set out in Sect. 5, including the key limita- tions and avenues for
future investigation. 2
Theoretical framework and hypotheses development The existing theoretical models
and the related literature on technology acceptance/adoption models (and their
exten- sions) for block chain technology and supply chain man- agement,
convincingly suggest that the presence of multi- model integration is positioned as
an essential framework for behavioural expectations to overcome the challenges of
adopting a single model in isolation, which could result in the loss of advantages
from other models. Our model (Fig. 1) has been proposed to recognize the role of
block- chain acceptance in the supply chain domain. The model sets out theoretical
guidelines to expand study hypotheses for the blockchain technology usage and
acceptance in supply chains domain. Given the evolving nature of the block chain,
the majority of variables were extracted from existing literature on integrated TTF
and ISS models with UTAUT-based blockchain efficiency, and IT innovation. More
specifically, blockchain efficiency, ISS, and TTF were hypothesised as required
supplementary segments to the UTAUT [29, 41]. Additionally, this study incorporates
two trust-based IT innovation adoption constructs suit- able for the exploration of
the potential of blockchain’s inherent qualities to foster ‘trust’ in supply chains
[33, 42–44]. Relatedly, constructs such as the TTF, ‘user satisfaction’,
‘performance expectancy’, ‘efforts expec- tancy’, ‘social influence’, and
‘facilitating conditions’ were hypothesised as determining factors for the
intention of adopting blockchain. The trust-based IT innovation adop- tion model
has two constructs (trust in technology and inter-organisational trust) that
interact with the link between the UTAUT dimensions and the intent to adopt the
blockchain. The proposed model does not consider the moderator constructs
(variables) of the initial version of UTAUT framework (i.e. sex, age, expertise and
voluntariness of usage; [19, 29, 33, 41]). The possible explanation for this
omission is the absence of variability in acceptance and usage as a matter of fact
of moderator variables [19]. In addition, while our survey respondents had some
experi- ence in the field of blockchain, we omitted the construct ‘age, expertise,
and voluntariness of use’ as technology is indeed recent, but still hasn’t gained a
high level of understanding. 2.1 Performance expectancy The authors in [39]
described ‘performance expectations’ as the extent to which a user thinks that
he/she will achieve work success by using latest tech. For the intent of this
research, ’performance expectancy’ reflects the extent to which personnel are
certain of how the use of blockchains will boost their performance and functions.
In this regard, the more the users who employ the technology (block- chain-based
supply chains) to advance their performance, the higher the increase in the
intention to use such a technology [33]. Blockchain adoption has produced high
expectations for advancement in supply chain operations, extending from
productivity and product quality to other main process developments [24]. In
addition, Ref [10]. highlighted that blockchain is able to take advantage of its
decentralised status (i.e. lack of unified intermediaries to verify the
transaction) to diminish procedure complication and incertitude, particularly with
smart contract executions [23]. Blockchain provides a solution for transparent,
single- source distributed information with enhanced information consistency and
accuracy that offers asset managers more Cluster Computing 123 scale and deployment
of resources [33]. Given these find- ings, the study proposes the below hypothesis:
H1-1 Performance expectations positively related to the behavioural intention to
adopt blockchain. In addition, it has been found that performance expec- tancy is
directly related with the corresponding ISS framework suggested by [45]. The
authors claimed that ISS influences user satisfaction and the willing to use tech-
nology. As per the updated version of the ISS framework, the UTAUT states that
enhanced satisfaction of the user has a significant additional influence on the
intention to use, which is ultimately influenced by performance expectancy.
Performance expectancy, integrated with the ISS, shows a near correlation between
satisfaction and usage intention [40, 41]. An upturn in performance expectancy
would boost user satisfaction and consequently affect user willingness to adopt the
blockchain technology. Given these findings, the below two hypotheses are proposed:
H1-2 Performance expectations positively related to the user satisfaction. H1-3
User satisfaction positively related to the beha- vioural intention to adopt
blockchain. 2.2 Effort expectancy Efforts expectancy is identified as the ease of
use of technology. Employees are less likely to utilise technology if they believe
it is more challenging and involves more effort than the current system [36, 37,
46]. In our model, the sophistication (complexity) and ease of use of block- chain
may also be expressed with regard to the time and effort of users in the supply
chain. Thus, it can be argued that as long as participants find the use of
blockchain low in effort and sophistication, they would be satisfied with their
experience in using such a technology. This proposition on the effect of efforts
expectancy on the intentional use of block chain within the supply chain network
has been largely confirmed in [33, 47] studies. Furthermore, the authors of [33],
highlighted that blockchain uses ‘smart contracts’ in accordance with rules defined
by the user that require less or no input from humans. This, in turn, min- imises
human effort. Based on this argument, we formulate the below hypothesis: Fig. 1
Research model Source Developed by authors based on literature review Cluster
Computing 123 H2 Effort expectancy positively related to the behavioural intention
to adopt block chain. 2.3 Social influence The social impact is one of the most
significant variables in the acceptance or rejection by operators of block chain
technologies. Social impact is described as the extent to which the individual is
concerned about the experience of other users in applying the latest tech [39]. In
our model, the social impact indicates how well a member of staff understands the
value of whether or not folks say they should adopt blockchain-based supply chain
technologies. Prior works, such as [19, 48], have pointed out that at the level of
individual, social influence is affected by the beliefs and actions of peers,
family and friends. Recent studies have shown how significant social influence is
for the introduction of new systems. For example, external influence has a notable
impact on the acceptance of inter- net-based Apps [40, 41, 49]. Block chain,
incorporated into the supply chain network, often requires cooperation between
participants of the supply chain [50]. That is, current partnerships across the
supply chains network have a huge effect on network-wide acceptance of blockchain.
In other words, the realisation of increased network effects could give rise to
greater intention usage. The following hypothesis captures this relationship: H3
Social influence positively related to the behavioural intention to adopt
blockchain. 2.4 Facilitating conditions Facilitation of conditions indicate to how
well an employee feels there is an organisational and technological infras-
tructure that facilitates the system usage [36, 39]. In our model, facilitation of
conditions refers to an awareness of the resources available in organisations to
promote the use of blockchain. In other words, it can be argued that if users
perceive a sufficient level of technological, organisational, network, and human
support while using blockchain, they are more likely to have a more effortless and
pleasant experience of blockchain and thus, will be more engaged with the
technology. The authors of [19] claimed that the facilitating conditions construct
in terms of (desktops, network connectivity and application programming inter-
faces, etc.), has an influence on the adoption and technol- ogy usage. In the
supply chain domain, transactions that are enabled by block chain technology are
processed in the cloud. It often signifies non-barrier acceptance of infras-
tructure costs [33]. In fact, the blockchain network supplies a copy of the
transaction, thereby assisting the application at all times and simplifying the
tracking of goods and/or transactions for the participants of the supply chain.
This leads to the following hypothesis: H4 Facilitating conditions positively
related to the behavioural intention to adopt blockchain. 2.5 System quality System
quality is described as the number of company operations that satisfy the
requirement of users and the criteria to increase everyone’s satisfaction [45, 51].
According to [52], system quality represents the simplicity, response time,
trustworthiness, and consistency of GUIs. The system quality of a block chain
technology in the supply chain is regarded as the ability of the platform to assist
users in completing upstream to downstream tasks. Inadequate quality system, can
limit satisfaction level since it contributes to the complexity of the adoption of
block- chain technology and fails to meet the needs of users across supply chain
networks. Conversely, improved quality of the system, the greater the number of
blockchain adopters. This leads to the following hypotheses: H5-1 System quality
positively related to the satisfaction level. H5-2 System quality positively
related to performance expectancy. 2.6 Quality of information Information quality
refers to the desired characteristics of a system [51] (i.e. ‘system-based
relevance, accurateness, timeliness, unity, extensive system, and accessible’
([41], p. 6). According to [45], an effective system that
includes uncomplicated information and able to entice users from the start since
it tends to be secure and accessible. Corre- spondingly, in our model, information
quality reflects the quality of information and contents provided by a dis-
tributed ledger and the P2P network. Blockchain infor- mation and content enable
users to make buy and sell decisions, as well as share information with supply
chain actors using a P2P network. In addition, it is essential to know what
promotes the satisfaction levels with the blockchain platform. Therefore, the
quality of information should be considered a core component in determining
everyone’s satisfaction and performance expectations (ex- pectancy). The following
hypotheses capture this relationship: H6-1 Information quality positively related
to the user satisfaction. H6-2 Information quality positively related to the
perfor- mance expectancy. Cluster Computing 123 2.7 Service quality Quality of
services are described how well do users think the system is safe (secure),
trustworthy, and reliable? [45, 53–56]. As stated by [40], two of the most powerful
factors of service quality are personalisation (enjoyment; i.e. earnings and free
upgrades) and interaction. Most information system dimensions reinforce the quality
of goods rather than the quality of services, and the effec- tiveness, of the
information system can never be assessed properly unless the quality of services is
present [41]. In this sense, we believe that confirmation of the quality of all
support functions reduces the risks of use. Service quality also plays a vital role
regarding user-trust in the system. Thus, users are often more willing to embrace
blockchain if they believe that it offers a high level of service (e.g. website,
blog, mobile use, interaction tools, etc.). Based on this conclusion, the below
hypotheses capture this relationship: H7-1 Service quality positively related to
the user satisfaction. H7-2 Service quality positively related to the performance
expectancy. 2.8 Blockchain efficiency Efficiency refers to the execution of best
practices using available resources. Here, efficiency depends on results and how
well companies fulfil the needs of stakeholders to their satisfaction [57, 58].
According to [29], blockchain effi- ciency can result in increased market access,
fair trade, and price equality for supply chain partners, thereby improving
transparency and traceability in supply chain processes and helping address current
sustainability issues related to social, economic, and environmental
considerations. Thus, adopting blockchain enables supply chain participants to
response to the demands of stakeholders and to achieve user satisfaction and
performance expectancy. For instance, Crypto N’ Kafe is a global block chain based
platform that uses smart contracts to increase the produc- tivity of the entire
coffee supply chain service delivery while retaining credibility and accountability
amongst authorised users [59, 60]. Starbucks—a pioneer of the coffee industry—is
incorporating blockchain into the cof- fee supply chain through a pilot
traceability programme. Starbucks has stressed that block chain efficiency can add
significant advantages to the supply chain, which in turn would have an impact on
the intention usage of block chain across all supply chain entities [61]. For this
reason, we set out the below hypotheses: H8-1 Blockchain efficiency positively
related to the per- formance expectancy. H8-2 Blockchain efficiency positively
related to the behavioural intention to adopt blockchain. 2.9 The TTF of blockchain
The integrated TTF-UTAUT model illustrates how the UTAUT mediates between the TTF
and the decision to accept new technologies. The study by [41] combined the TTF
model with the UTAUT to explore the sustainable use of mobile payments technology
in Korea. According to this study, the integration of TTF and UTAUT offers a fuller
overview of adoption intention than does the use of a single model. For example, by
using integrated model, the limi- tation caused by the lack of consideration
regarding the task characteristics can be overcome. The TTF can be influenced by
two major elements: task characteristics and technology-characteristics [62]. Task
characteristics represent the user behaviour in transforming input to output to
satisfy information needs, while tech- nology characteristics are interface
platforms (e.g. mobile devices, apps, and transactional data analytics tools) used
to perform certain activities. Ref. [63] highlighted that a user’s intention to
adopt IT would decrease if the task is characterised as time consuming or by
information tech- nology that is less functional. In the blockchain setting, the
extent of fit among task and technology characteristics defines the magnitude of
the TTF. Effective task charac- teristics have a beneficial impact on people
intention to use blockchain technology. On the contrary, a poor task func- tion
reduces willingness to use the technology. Similarly, Ref. [41] highlighted that
unintentional technological characteristics may lead to new technologies to be
over- looked or concealed. The below hypotheses capture these relationships: H9-1
Task-characteristic significantly influence the TTF of blockchain. H9-2 Technology-
characteristic significantly influence the TTF of blockchain. H9-3 The TTF of
blockchain positively influences per- formance expectancy. H9-4 The TTF of
blockchain significantly influences the behavioural intention to adopt blockchain.
2.10 Technology trust Trust in technology describes the interaction between humans
and computer technology. This trust affects an employee behaviour towards a certain
technology, which Cluster Computing 123 further affects his/her intention to adopt
the technology [33, 64]. For instance, if users are aware that blockchain
technology is unsafe, they may be hesitant to adopt or use it. Nevertheless, the
more employees are trained to understand the technology, the more awareness and
insight they obtain, and the more robustly they tend to adopt the technology. Ref
[42]. recognised that a level of trust in technology may drive people to avoid
adopting or accept- ing technology as a result of failed of trust in its func-
tionality or reliability. Clearly, Trust is a key determinant of the user’s
intentions. Therefore, the below hypotheses are put forward: H10-1 Trust in
technology significantly moderates the association between performance expectations
and the intention to adopt blockchain. H10-2 Trust in technology significantly
moderates the association between effort expectations and the intention to adopt
blockchain. H10-3 Trust in technology positively moderates the association between
social influence and the intention to adopt blockchain. H10-4 Trust in technology
significantly moderates the association between, facilitating conditions and the
inten- tion to adopt blockchain. 2.10.1 Inter-organisational trust
Interinstitutional trust refers to the trust between organi- sations, which is
crucial for the adoption and sharing of technology and information. Supply chain
members rely on other partners for components or their ability to promote functions
[33]. Reference [65] highlighted that inter-or- ganisational trust played an
instrumental role in enhancing inter-organisational relationships and therefore is
a crucial factor that has a major effect on the adoption of block chain
technologies in supply chains networks. In addition, block chain can boost the
level of trust among participants of the supply chain [19, 24, 33]. This argument
lead to formulate the following hypotheses: H11-1 Inter-organisational trust
significantly moderates the association between performance expectations and the
intention to adopt block chain. H11-2 Inter-organisational trust positively
moderates the association between effort expectations and the intention to adopt
block chain. H11-3 Inter-organisational trust positively moderates the association
between social influence and the intention to adopt block chain. H11-4 Inter-
organisational trust significantly moderates the association between facilitating
conditions and the intention to adopt blockchain.
1.1. Blockchain and its implications on supply chain operations Blockchain is an
innovative, decentralized, and distributive “state-of-the-art” technology, which
maintains confidentiality, in- tegrity, and availability of all the transactions
and data. It is a shared, open and distributed ledger that can help store/record
data and transactions backed by a cryptographic value (Choi, 2020a) across a peer-
to-peer network (Chang et al., 2019a; Choi et al., 2019). Blockchain is a digital
shared ledger which is distributed over the network. Once the records are added
they cannot be edited without changing the previous records (with the consent of
all/majority of involved parties), which makes it very safe to business operations.
It has endless applications in various fields like designing smart contracts to
track frauds in finance or securely share medical records between healthcare
professionals. Fig. 1 shows how blockchain improves the transaction journey
(O'Leary, 2017; Bogucharskov et al., 2018). Blockchain enables a distributed
consensus mechanism that allows its participating entities to be informed of every
event and transaction by creating an irrefutable record in the public ledger.1 It
has disrupted many industries like banking, SC, operations, real
https://doi.org/10.1016/j.tre.2020.102067 Received 11 May 2020; Received in revised
form 21 July 2020; Accepted 18 August 2020 ⁎ Corresponding author. E-mail
addresses: pdutta@iitb.ac.in (P. Dutta), jason.choi@polyu.edu.hk (T.-M. Choi),
surabhi.somani@sjmsom.in (S. Somani), richabutala@sjmsom.in (R. Butala). 1 This
refers to the public blockchain. For private blockchains, companies can choose to
selectively show what records that they would like to share. Transportation
Research Part E 142 (2020) 102067 1366-5545/ © 2020 Elsevier Ltd. All rights
reserved. T estate, insurance, healthcare, electronic health records, copyright,
music, and renewable energy and is continuing to grow its foothold and impact in
these sectors due to its decentralized, verified and immutable nature. There are
many examples of successful transformations of SCs with blockchain technology but
there is still a barrier in terms of usability, security, privacy (Peck, 2017;
Firica, 2017) and cost (Choi, 2020c). Along with transforming SCs of various
sectors, it also helps improving the functionality and security of current digital
platforms (Cai et al., 2020) including Internet of Things (IoTs) and other Industry
4.0 related technologies. Every industry has varied needs with respect to their
privacy and security control. To adhere to varied needs, blockchain can have 3
structures – public (non-permissioned), private (permissioned) and consortium
(hybrid). Public blockchain is accessible to all the users on the network and
implemented via peer to peer network. Private blockchain provides role-based access
to data and uses cloud networks for improving flexibility. Blockchain can also
support social media analytics (Choi et al., 2020c). Consortium blockchain
possesses the functions of both public and private blockchains and provides a
balance between both (Qiao et al., 2018). Blockchain has an immense potential to
transform every step of SC, from raw materials procurement to distribution to the
consumers (Goyat et al., 2019; Babich and Hilary, 2019). It also enables SC
reengineering by establishing a blockchain-based BPR (Business Process
Reengineering) framework (Chang et al., 2019a). Every transaction made can be
restructured using blockchain technology and the journey can be made faster and
more secure. The structure of the blockchain is organized in a way such that it
ensures security and transparency of SCs. We outline the related mechanism of a
typical blockchain system as follows. Each block in the blockchain has a hash
number (256 bit), which is created with consensus by a scientific algorithm. The
blocks are linked to each other with reference to previous block’s hash which
creates a secure and independent chain. Before adding blocks to the blockchain,
they need to be validated, which can be in the form of proof of work which is known
as “blockchain mining”. After validation, block becomes a part of the network’s
auditable and immutable blockchain. There is also a built-in defense mechanism. To
be specific, any corruption which is detected by the blockchain as malicious
(including attempts to alter block changes the hash functions of all the blocks)
will be captured and “defended”. The corrupted block in the infected node will also
be corrected. 1.2. Scope of this study Our work aims at incorporating all the
literature that has been published as articles, articles in press, review papers
and short survey pertaining to the applications, integration and implementation of
blockchain technology in SCs and logistics. It strives to capture the meaningful
data from the plethora of literature available using a systematic literature
searching methodology. It uncovers the current trends of blockchain in SC
operations and paves way for future research. As a remark, the scope of this work
is restricted to SCs. The trend of research in this area has been accelerating
since 2017 and has continued at an enormous pace. Through this paper, we try to
provide insights by addressing the following research questions: How can blockchain
enhance SC performance? What are the sectors most impacted by blockchain
technology? Which SC functionalities are most impacted and in which way? What are
the different applications of blockchain in SCs of various sectors? What are the
challenges and future scope of research for blockchain implementation in SC? 1.3.
Organization This work has the following structure: Section 1 gives a short
introduction about blockchain and its functionality and applications in
transforming SCs. Section 2 entails in detail the research methodology adopted in
this work. Section 3 gives a detailed explanation of the functionalities of
blockchains which enable it to be the future disruptive technology in this arena.
Section 4 walks us through some of the functional areas of SC which can be improved
using blockchain as per the current research. Further, Section 5 gives an idea
about different sectors where blockchain has been implemented and has the potential
to improve. The managerial implications, Pre-transaction Transaction Post
transaction Monitoring Reduces risk, ensures transparency, enables data matching,
saves time in correspondence Secure, real time response of transaction matching,
irrevocable settlement, anonymity ensured Process disintermediation, reduced
procedures, smart contracts auto execution, decentralized clearance Automation of
antifraud agreements between third parties, simplification of auditing, more flat
hierarchy Fig. 1. The blockchain supported transaction journey. P. Dutta, et al.
Transportation Research Part E 142 (2020) 102067 2 societal impacts and challenges
of blockchain implementation in supply chain management (SCM) and logistics
services are presented in Section 6. Section 7 summarizes the work with future
research followed by the conclusion in Section 8. 2. Review methodology With the
attempt to examine the related literature on blockchain’s applications in SCs, we
have undertaken a systematic literature review of all the relevant papers and
following review methodology has been adopted. 2.1. Searching methodology for
literature The searching is conducted on the “Scopus platform”. Fig. 2 shows the
search methodology with the way of finding related articles. Note that we exclude
some types of articles such as editorials as they are not deemed as original
research or survey. 2.2. Descriptive statistics 2.2.1. Subject wise classification
Our study considers top 13 subject areas, which include a total of 178 papers. The
chart in Fig. 3 clearly shows that Computer Science, Engineering, Business
Management and Accounting, and Social Sciences are the major areas in which related
research has been published. Material Science, Decision Sciences, Medicine, Finance
and Environmental Sciences have also seen an upward trend in publishing research on
blockchain technology in SCs. 2.2.2. Year wise analysis The major research in
blockchain for SCs started from 2017 onwards. We can see a substantial increase in
the number of papers from 2017 to 2018. Also, in 2019, there has been an
exponential increase with more than 165 papers published, which indicates an
explosive growth trend in this area for research (Fig. 4). If we look at the
studies more closely, we will also find many studies focusing on specific
industries. This hence shows that blockchain is being studied at a much-accelerated
pace across various industries, partially because of its increased industrial
applications in practice. 2.2.3. Country wise analysis The trend (Fig. 5) here
shows that USA and China have the maximum number of published research for
blockchain. But India is also moving forward and contributing to the research in a
substantial way. The interest of the top economies of the world shows that Filter 6
Search criteria Filter criteria 178 Title-Abs- Keyword search - SCOPUS Filt
“Blockchain” AND (“Supply Chain” OR er 1 Document Type Article, review, short
Filter 2 Source Type Journals Filter 3 Language English Filter 4 Qualitative
selection Relevant in scope Subject Areas Top 13 areas Filter 5 713 254 238 227 222
This filter was applied as the scope of the research paper included block chain
application in supply chain Top 13 areas with the maximum papers were selected so
that research is on recent trends Fig. 2. Search methodology. P. Dutta, et al.
Transportation Research Part E 142 (2020) 102067 3 blockchain has a potential to
transform the economies and improve the SC in various domains. South Korea and
European nations like the UK, Italy and Germany are also majorly contributing in
this area of research.
3. Blockchain overview Blockchain is an immutable, tamper-proof distributed ledger
technology (DLT), which is utilized in a shared and synchronized environment where
all the transactions are validated by users and are traceable. It enables a
decentralized environment where all the members of the network can interact
securely without the need for a trusted authority. Hence it eliminates the need for
a central entity by validating and storing all transactions through distributed
consensus. To implement blockchain with these functions, Fig. 6 shows the typical
“work flow” of using blockchain for a transaction. Note that this work flow is
rather standard (see Min, 2019; Fu and Zhu, 2019a). Blockchain is formed through a
series of connected blocks, where transactions history can be easily traced through
previous blocks making the technology transparent and trustworthy. Each block
contains its own unique ID and has the hash of the previous block, thus ensuring
transaction security. All transactions are validated and recorded by the users in
that network; they are also time stamped, arranged in a chronological order,
connected to the previous block and are irreversible once added to the network.
This entire structure of blockchain makes it a “trusted technology” (Queiroz et
al., 2019). One of the most important functionalities which make blockchain
trusted, secure and transparent is the so called “consensus mechanism”. Records are
embedded in blocks linked through hash values and the decision to add a new block
to the system is taken through the consensus mechanism. For any alteration of an
existing block, the adversary must compete with all the users to construct a longer
branch which helps DLT to maintain protection of historical data with collaboration
mechanism. Fig. 3. Subject wise classification. Fig. 4. Year wise classification.
P. Dutta, et al. Transportation Research Part E 142 (2020) 102067 4 3.1.
Characteristics of blockchain The characteristics of blockchain which make it
unique and promising for future industrial applications are: • Decentralized: The
data on the system can be accessed, monitored, stored and updated on multiple
systems. • Transparent: Data is recorded and stored on the network, with consensus
from the network and is visible and traceable throughout its lifetime. • Immutable:
Blockchain provides timestamps and controls to ascertain immutability •
Irreversible: For every transaction ever made, a certain and verifiable record is
kept in each blockchain. • Autonomy: Each node on the blockchain can access,
transfer, store and update data by itself safely without third party inter-
vention. • Open source: Blockchain provides open source access to everyone in the
network with sense of hierarchy. • Anonymity: As data transfer occurs between
nodes, the identity of the individual remains anonymous. • Ownership and
uniqueness: Every document exchanged on the blockchain stores its ownership records
with a unique hash code • Provenance: Every product has a digital record document
in the blockchain which proves its authenticity and origin. • Contract automation
(i.e. smart contracting): It is a small computerized program to help execute
contract. It replaces the need of a usual contract with providing better security
and lower transaction costs. Smart contracts are usually coded to include
conditions for rules, penalties and actions that will be applied for all the
parties involved in the transaction. Smart contracting supports quick response (Li
et al., 2019a) operations in supply chains. 3.2. Blockchain architecture It
consists of five modules that govern the respective operations and create protocols
for blockchain applications (see, e.g., Min, 2019; Choi et al., 2020b). • Data
source module: It helps create the blockchain in the “distributed and shared
databases”. It ensures that the data retrieved by the users of the blockchain would
be unaltered and uncorrupted. Note that data immutability, tamper-proofed storage
with any form and shared data ledger through data “Application Programming
Interface (API)” are the key aspects of blockchain. • Transaction module: It
monitors, manages, enables and supports the “journey of a transaction in
blockchain”. It helps to validate and facilitate addition to the blockchain. Though
smart contracting transaction gates, data are transferred. Along with shared Fig.
5. Country wise classification. Fig. 6. Blockchain work flow. P. Dutta, et al.
Transportation Research Part E 142 (2020) 102067 5 visibility of transactions, the
flow of information across the SC is constituted through the bockchain.
Transactions are bundled and delivered to each node in the form of a block. Note
that transactions once executed are almost impossible to delete or roll back in
blockchains. • Block creation module: Blocks can be regarded as data structures
created by the miners. They contain information and details of transactions that
are replicated to all nodes of the network. The block creation module enables the
addition of new blocks to an existing SC by providing hash values and connections
of the previous block. The sequences of transactions are saved in “chronological
blocks” and blocks that store invalid transactions can be identified and tracked
easily. • Consensus module: Proof of work and proof of state algorithms are used to
confirm and validate all the transactions to avoid corruption of data. Data
consistency is maintained in the distributed network through the carefully designed
“consensus algo- rithms”. Distributed concensus helps in both verification of the
validity of transactions and link creation among the blocks in the blockchain
system. • Connection and interface module: It monitors the tracking of transactions
and helps provide real time data on smart contracts. This module synchronizes all
the information technology (IT) platforms, algorithms and software required for
blockchain ap- plications. Depending upon the use cases, multiple distributed
ledger platforms could be made available in the market that offer consensus
algorithms for the blockchain system, no matter whether the blockchain is public,
private, permissioned or non- permissioned. 3.3. Major drawbacks of blockchain
technology Blockchain technology can provide a tool to support publicly viewable
and secure transactions. However, due to the irreversible nature of transactions in
blockchain, the receiver does not get any refunds unless a new transaction is
issued. Also, the laws and regulations surrounding blockchain environment are not
clear which can lead to confusion among consumers. Finally, blockchain is in fact
not as cheap as some people believe. The non-trivial operations cost and
implementation cost of blockchain systems should never be under-estimated. 3.4.
Prior related review papers on blockchain in supply chains Blockchain technology
has also been reviewed by various prior studies (Hoek, 2019a; Saberi et al., 2019;
Hald and Kinra, 2019). Most current review papers commonly include bibliometric
review of many blockchain papers, including conferences. Some of them focus on
examining blockchain adoptions for understanding applications and future research
in SCM (Surjandy et al., 2019a; Gurtu and Johny, 2019; Saberi et al., 2019). Hastig
and Sodhi (2019) examine blockchain applications for SC traceability, and some
important successful implementation factors. Khosla et al. (2019) discuss the basic
overview of blockchain in SCM and its usability in practices. Juma et al. (2019)
present a survey on blockchain in trade SCs and its challenges in SC design while
integrating blockchain. Wang et al. (2019a) highlight that blockchain majorly has a
potential for enhanced data sharing, record management and role-based access. The
authors focus on the related research in designing new structural frameworks,
models, architecture, etc., but details about actual or prototype implementation
are largely missing. In Shen and Pena-Mora (2018), the relevant application cases
for smart and sustainable cities are discussed based on four pillars - social,
economic, environmental and governmental. The authors also show that Ethereum and
Hyperledger Fabric are the most commonly used platforms for blockchain
applications. In Choi et al. (2019), the authors review the analytical literature
using the mean–variance approach for responsive supply chain operations using air
logistics. The authors highlight the role played by blockchain. Although the above
prior review papers have been published, our paper is different from them in
various aspects. First, we cover a comprehensive overview of blockchain’s
application in SCs, with an exhaustive review of journal articles. Second, we
idenitify many key takeaways and propose the subsequent challenges and
opportunities. To be specific, we conduct a thorough review on blockchain
technology’s applications in various industrial SC operations that include
healthcare, energy, food and agriculture, finance, gov- ernment services,
education, manufacturing and environment among others. The corresponding societal
impacts are also highlighted. 4. Blockchain technology for supply chain functions
SCM is an enormous sector and is the main skeleton of every industry (Hughes et
al., 2019). However, traditional SC systems are not versatile and transparent
enough to accommodate the growing needs and demands of the future leading to huge
overheads in terms of error handling, costs, administration and fraud management.
4.1. Benefits of using blockchain in supply chains In the Industry 4.0 era
(Fernández-Caramés et al., 2019), blockchain is proposed as a way to organize
records in a distributed manner through consensus mechanism (Gao et al., 2018;
Benčić et al., 2019). It has the potential to transform SCM through its features of
transparency, authenticity, trust and security, reduction of cost,
disintermediation,
efficient operations and reduced waste (Philipp et al., 2019; Gurtu and Johny,
2019). Furthermore, all the transactions supported by blockchain are more
efficient, secure, economic and transparent (Queiroz et al., 2019). It is hence
commonly believed that the distributed nature helps blockchain to mitigate risks in
the SC (Arza et al., 2020; Zhang et al., 2020) associated with piracy, hacking,
vulnerability, expensive compliance with government rules and contractual disputes
(Min, 2019). Blockchain also helps to facilitate real time order settlement and P.
Dutta, et al. Transportation Research Part E 142 (2020) 102067 6 automation of
manufacturing tasks with the smart contracting implementation (Sheel and Nath,
2019). Blockchain also ensures the mitigation of ripple effect in SC minimizing the
disruption caused through changing paradigms (Ivanov et al., 2019). Table 1 shows
some of the benefits of blockchain implementation in SCs (Chang et al., 2019a; Wang
et al., 2019a; Saberi et al., 2019; Surjandy et al., 2019a; Shamout, 2019;
Narayanaswami et al., 2019). Thus, blockchain deployment in SCs not just increases
efficiency and decreases cost but also improves relationships among all the
stakeholders. It also garners more trust and streamlines the related business
processed (Queiroz et al., 2019). There have been examples of successful
implementation of blockchain with SC for wood and shipping industry. In the wood
SC, blockchain has been implemented to provide end-to-end traceability from the
moment of cutting to transforming it into usable materials (Figorilli et al., 2018;
Li et al., 2019a). In China, blockchain has reduced the load at its international
trading ports by integrating and sharing information among all stakeholders (Tan et
al., 2018). Blockchain integration transforms the structure of the SC by ensuring
col- laboration between all the actors involved through the utilization of
digitalization and smart contracts (see Saberi et al., 2019 for more). 4.2.
Blockchain for major SC functions SC reengineering, security, resilience,
provenance, process management and product management are some of the major func-
tions that can be transformed with blockchain technology. 4.2.1. Supply chain
provenance Blockchain technology and IoTs help in granular provenance of physical
goods, which are produced and transported in complex, inter-organizational, or
internationally spanning SCs which are studied using traceability ontologies and
constraints on Ethereum blockchain (Kim and Laskowski, 2018). SC provenance is
delivered by providing certifiability, traceability, verifiability and tract-
ability of product information, origin and authenticity assurance and integrity
along the entire SC spanning across borders (Montecchi et al., 2019; Liu and Li,
2019; Tang and Veelenturf, 2019). It has been the core function of blockchain for
diamond supply chains (see Choi, 2019 for the Everledger’s case). In particular,
“Hyperledger Sawtooth” project has been implemented using blockchain and IoT
technologies (Pally and Reddy, 2019). SC provenance framework using blockchain
which stores all the critical information, ensures role-based access to data and
safeguards the data through secure encryption has been developed by Engelenburg et
al. (2019). 4.2.2. Supply chain resilience Blockchain technology enables SC
resilience by reducing impacts of disruptions, applying preventive and proactive
approach for risk management and providing multilayer protection for SC network
(Liu et al., 2019). The structural design of blockchain helps capture both the
organizational and network risks associated with any SC. 4.2.3. Supply chain
reengineering Blockchains enhance the transparency and visibility of SC, enable
process automation, eliminate intermediaries and enable real time tracking through
traceability, privacy and data management techniques which are all the cornerstones
of SC reengineering. A properly reengineered SC can achieve synchronization of
tracking information in all arenas of businesses. Moreover, usage of smart
contracts can help reduce the time and cost required further assisting SC
reengineering (Chang et al., 2019a; Dolgui et al., 2019; Liang et al., 2019). Table
1 Benefits of using blockchain in supply chains. Benefits of blockchain in SCs
Details Data management - Enables calibration of data located across diverse SCs. -
Improves security of data stored. - Real time capturing of all information is done
Improves transparency - Helps track status of an item during a process - Automates
data analysis activities - End to end transparency based on permission level via
hierarchy Improves response time - Creates a dynamic and real time SC with better
utilization of its resources Smart contract management - Customized and individual
contracts can be defined for each function and can be coordinated with each other -
Helps in process design for business operations - Improves visibility and
eliminates the need of intermediary Operational efficiency - Improves end to end
speed of SC process - Identifies bugs and issues in the beginning to make the
process robust Disintermediation - Leads to an uninterrupted chain of transactions
- Increases speed - Increases trust among stakeholders of process Immutability -
Consensus mechanism for all modifications - Ensures security of all transactions
Intellectual property Management - Intellectual Property protection and
registration P. Dutta, et al. Transportation Research Part E 142 (2020) 102067 7
4.2.4. Security enhancement Blockchain enables authentication, confidentiality,
privacy and access control, data and resource provenance, and integrity as- surance
in the services it provides (Mackey et al., 2019; Yi, 2019). It also enables the
formation of risk control analytics framework to study the connection among
business, information and engineering and to gather an analytics perspective on
digitalization in SC (Ivanov et al., 2019). Even in a big production enterprise,
blockchain can provide robust risk management due to its ability to scale up as per
requirements (Fu and Zhu, 2019b). Blockchain is much more secure than traditional
IoT systems or traditional security services due to its capabilities of enhanced
cybersecurity and better performance (Kshetri, 2017a). The following systems are
en- hanced when integrated with blockchain technology, which can lead to a more
secure SC: a. IoT security: The traditional IoT system is a centralized network of
digital integration. Blockchain ensures high security of IoT system by enabling a
consensus mechanism for dynamic data storage, securing end-to-end transmission of
data and providing product traceability and monitoring (Qiao et al., 2018). Rules
and hierarchy-based consensus algorithms all help improve the security in IoT
devices and facilitate the throughputs of transactions (Cho et al., 2017). Further,
by its nature, blockchain is less prone to tampering and identity frauds as it
provides a decentralized sharing platform for data verification and provides an
immutable ledger structure (Kshetri, 2017b). b. Intrusion detection system:
Blockchain helps create the collaborative intrusion detection systems where the
product codes can interact with each other and exchange data throughout their
entire journey. There is a risk associated with the tampering and security of the
codes which can be resolved by the use of blockchain technology because it helps to
ensure the integrity and transparency of data storage (Meng et al., 2018). c. RFID
security: Blockchain improves the transparency, data protection, reliability and
cost management for RFIDs using an ultra- light weight mutual authentication RFID
protocol. This protocol is compatible with decentralized databases and enables
seamless communication with RFID devices. RFID is mainly used for traceability of
products and services in SC which can be improved drastically with its integration
with blockchain (Sidorov et al., 2019). Walmart and IBM tracked consumer products
with RFID systems using blockchain technology (Pally and Reddy, 2019). 4.2.5.
Business process management Blockchain enables efficient business process
management through smart contracts by compiling the control flow and business logic
of interorganizational business processes. Blockchain can also be used with smart
contracts for hyperconnected logistics (Betti et al., 2019). These controls are
enabled by triggers and they act as a bridge between the enterprise applications
and blockchain. A pilot study of contract management for a grid operator has
revealed that information gap between various stakeholders results in sub- optimal
business performance. This creates strong arguments and a high level of distrust
amongst the associated parties. A proper smart contract implementation for any
request of modification or payments would automatically trigger a process flow
based on appropriate approvals achieving speed, trust and improved business
performance (Downey et al., 2018). Blockchain technology can also be effectively
used for customer-order-process management (COM) and improve the efficiency,
traceability and visibility of orders (Martinez et al., 2019). Asset management is
also enabled by blockchain through its “proof of concept algorithm” which
guarantees transparency, reliability and efficiency (Notheisen et al., 2017). Pilot
prototypes like DAO (Decentralized Autonomous Organization) have been implemented
to replace the traditional management system with automated governance but have to
be halted due to security breach (Hütten, 2019). Blockchain technology adoption and
implementation needs to be carried out in a stage by stage process to ensure
optimal integration with business processes and reduce security concerns.
Rahmanzadeh et al. (2019) propose the adoption of blockchain together with fuzzy
sets for registering best possible
ideas and tactical decision making of SC strategies. 4.2.6. Product management
Blockchain improves cycle time, productivity and quality, opens new business
opportunities and enables product differentiation through its integration with SCs.
Extensive research has been done on efficient product deletion and price management
through blockchain technology. Some details are elaborated in the following. a.
Product deletion: Product deletion requires recognition, analysis and
revitalization, evaluation and decision making and im- plementation of the
decisions. All these functionalities are facilitated by blockchain by real time
tracking, multilayer data management, better demand forecasting, risk reduction and
automated decision making (Zhu and Kouhizadeh, 2019). A re- lationship exists
between blockchain, circular economy and product deletion. The information stored
in the blockchain can be used to analyse policies developed by companies on product
deletion and circular economy (Kouhizadeh et al., 2019). b. Price tracking in
product distribution: The traditional price tracking system is developed in a non-
transparent way and does not show end-to-end price variation across the SC. It only
shows the final price of the item to the consumer directly during tras- nactions.
Blockchain can allow the consumers to know the exact pricing from raw materials to
distributors to suppliers and disclose all the data to the public domain. This will
result in dissemination of honest information by all the stakeholders thus ensuring
price transparency. A pilot implementation has been done through smart contracts on
Ethereum network where price transparency is guaranteed (Yoo and Won, 2018). From
the above discussions (Sections 4.2.1–4.2.6), we can see that improvement of these
functionalities will resolve the major problems associated with traditional SCs and
make it scalable for future use. Blockchain implementation and integration with SCs
can P. Dutta, et al. Transportation Research Part E 142 (2020) 102067 8 further be
improved via a 2-step block construction model using distributed technology where
block reservation and data generation are separated into two steps (Gao et al.,
2018). This mechanism will help to reduce latency, improve scalability, and mange
inter- operability of “adding a new block”. It also gives proper access controls
for distributed ledgers. Instrumented, interconnected and intelligent SCs can be
built using blockchain and IoTs. As a remark, consortiums like CBSR (Central Baltic
Sea Region) are established by professionals across the world to apply blockchain
to SCs (Gromovs and Lammi, 2017). Table 2 provides a brief summary on use of
blockchian technology in major SC functions. Blockchain implementation in SC
operations with key themes and objectives of each papers studied are presented in
Table 8 in the Appendix.
The financial crisis of 2008. fuelled determination of a group of activists to
develop a stable, decentralized, autonomous and sustainable financial system, one
that would not be under the influence of individual “too big to fail” institutions—
moreover—one that would not be under the influence of any institution whatsoever.
The loss of trust in financial intermediaries which privatized profits but
socialized losses motivated tech-savvy enthusiasts to employ internet as by now
matured innovation, and significantly powerful (yet affordable) home computers in
novel ways. Bitcoin as both payment system and fully digital currency was the first
cryptocurrency launched in 2009. Two years later first alternative cryptocurrencies
emerged, while at the beginning of 2018 there were more than 1300 of them, beside
almost 500 tokens.1 One of the Bitcoin’s main contributions is the technology of
blockchain—its underlying architecture. The concept of blockchain is evolving, and
while the future of Bitcoin remains unclear (as it is for the most elements of the
economy) it is evident that the blockchain holds enormous potential for large-scale
improvements of many different areas of economic system. However, being a strongly
disruptive technology that could bring down many of today’s large global
corporations, institutions and power structures which have keen interest in
preserving established hierarchies, its potential could well remain unexploited.
Blockchain has found its applications and is under development in logistics and
supply chain activities as well. Radio-frequency identification (RFID), telematics,
barcode and 2D codes, sensors-enabled technologies, Internet-of-things (IoT) and
numerous other technologies are used for tracking products through supply chain.
However, until recently their true potential was not fully exploited as the
underlying data was available only within an institution—a company, or perhaps
exchanged with limited group of trustworthy partners. Typically, there are numerous
supply chain members each with their own information systems, but communication
between these systems is limited at best. The main barrier was (and still is) the
lack of trust in exchanging information. Blockchain technology promises
overpowering trust issues and allowing trustless, secure and authenticated system
of logistics and supply chain information exchange in supply networks. Based on
these features and blockchain development in general, the pace of new
implementations within supply chain is accelerating rapidly. Pilot projects are
launched worldwide and supply chain industry is expecting changes. For majority of
companies blockchain is still a mystery when it comes to its practical use in
logistic and supply chain activities. This paper aims to introduce and present the
concept of blockchain and its current applications in supply chain management. By
presenting its characteristics, current applications and future 1 Data from
https://coinmarketcap.com (accessed 5. 1. 2018). Tokens are digital assets such as
vouchers, debt instruments (IOUs), or real-world objects. They are mostly based on
the Ethereum blockchain. 22 D. Dujak and D. Sajter trends, the goal is to provide
basic material for academics and practitioners when considering its application in
supply chain activities. We attempt to answer fol- lowing research questions: what
is blockchain and how does it function? What are the key features of blockchain
applicable in the supply chain and in which supply chain areas are currently being
applied? What are future possible development directions for blockchain
applications in supply chain? Paper is structured in four chapters. After the
introduction, the second chapter presents the current state of the progress in
supply networks. Third chapter analyses the features of blockchain as it came from
the cryptocurrency universe, while the next one presents its current
implementations and advantages in supply chain and logistics. The fifth chapter
concludes.
The blockchain technology, which has existed since the introduction of bitcoins in
2009 (Nakamoto, 2008), has now reached a level of maturity that makes it suitable
for many applications. Blockchain technology is often referred to in the current
literature as disruptive technology (Holotiuk, Pisani, & Moormann, 2017; Nofer,
Gomber, Hinz, & Schierech, 2017; Swan, 2015) and as an innovation with the
potential to destroy business processes (Wessel & Christensen, 2012), interrupt
development processes, abruptly postpone opportunities for action in companies and
radically change business models (Brousseau & Penard, 2007). In 1995 Bower and
Christensen recognized that the most per- sistent pattern in the economy is the
failure of leading companies to stay at the forefront of their industries when
(disruptive) technologies displace existing technologies (Bower & Christensen,
1995). Disruption due to blockchain technology can relate to business processes
(Wessel & Christensen, 2012) and business models (Brousseau & Penard, 2007).
Business models are a tool for mapping, innovating and evaluating the business
logic of a company (Veit et al., 2014). According to Chris- tensen, disruption is a
relative phenomenon, since a disruptive business model can only be defined when
compared with that of another com- pany (Christensen, 2006). The blockchain is a
distributed system between participants in a network which stores transactions
between those participants in a consistent, unchanging and chronological chain
(Risius & Spohrer, 2017). Due to the peer-to-peer network of the blockchain, there
are no intermediaries between the players; thus, in a logistics chain, producers or
suppliers can deal directly with their customers (Hughes et al., 2019).
Businessrelationships between unknown individuals are ne- cessarily based on trust
(Queiroz & Wamba, 2019) and trust is an in- herent component of the blockchain
consensus mechanism (Wang, Singgih, Wang, & Rit, 2019). Disintermediation or the
bypassing of middlemen promises to achieve supply chain management goals of cost,
quality, speed, reliability, risk reduction, sustainability, and flexibility
(Kshetri, 2018). However, it is still unclear what effect blockchain technology
will have on roles and tasks in a logistics chain and which intermediary tasks the
blockchain will take on. Players in a logistics chain face new players with new
functions as well as a loss of business partners that they know well. Maintaining a
functioning supply chain requires knowledge of and transparency in the changing
roles and functions brought about by the blockchain. In order to achieve this, we
carried out a literature review in order to record and analyze the gen- eral tasks
of an intermediary. We determined a functional intermediary profile and then
compared it against blockchain-based use cases in the logistics sector in order to
gain an understanding of the new role allo- cation this would lead to in the
industry. In this article, we use a multiple case analysis to develop an ex-
planatory model of the interaction of actors in a supply chain involving blockchain
technology. The explanatory model is based on the answers to the following research
questions: https://doi.org/10.1016/j.ijinfomgt.2019.05.009 Received 23 January
2019; Received in revised form 13 April 2019; Accepted 13 May 2019 ⁎ Corresponding
author. E-mail address: stoennissen@uni-osnabrueck.de (S. Tönnissen). International
Journal of Information Management xxx (xxxx) xxx–xxx 0268-4012/ © 2019 Elsevier
Ltd. All rights reserved. Please cite this article as: Stefan Tönnissen and Frank
Teuteberg, International Journal of Information Management,
https://doi.org/10.1016/j.ijinfomgt.2019.05.009 RQ1: Does blockchain technology
lead to the removal of inter- mediaries in supply chains and thus to
disintermediation, or does re- intermediation occur? RQ2: Which of the tasks of an
intermediary in a supply chain are replaced by the blockchain or become
superfluous? RQ3: What effect does disintermediation or reintermediation have on a
supply chain? The paper is structured as follows. We proceed by first providing a
theoretical insight into blockchain technology as well as the theory of
disintermediation. Next, in the methods section, we will explain the approaches to
literature research on the functions of an intermediary and the search for use
cases of blockchain-based solutions from the supply chain, including a brief
description of the selected use cases. The results section presents the detailed
results of a within-case analysis as well as a cross-case analysis and finally
shows the relationships in an explanatory model. Following is the section
implications with an out- look on future research. The last section contains
conclusions and comments on limitations. 2. Theoretical background 2.1. Blockchain
A blockchain is a concatenation of data, which is combined into individual blocks
and stored on all of the users' computers. This se- quence of data into blocks
results in a sequence that reflects the course of transactions in the form of a
chain. The data blocks are protected against subsequent changes by means of
cryptographic methods, so that over time a gapless chain of linked data blocks is
created. The inclusion of a new record in the blockchain requires the passage of a
so-called consensus mechanism that runs across the network of all participants
(Risius & Spohrer, 2017). The consensus mechanism is used to reach agreement among
all participants in the blockchain network about the correct state of data on the
blockchain (Beck, Avital, Rossi, & Thatcher, 2017). This ensures that the data is
the same on all nodes in the network (Swan, 2015). The best-known consensus
mechanism is proof-of-work, in which the computer has to execute a complicated
mathematical al- gorithm. Only after successful execution can a new data block be
gen- erated on the blockchain, which must be checked by the other com- puters in
the peer-to-peer network before inclusion in the blockchain (Holotiuk et al.,
2017). In addition to the data, each block contains a timestamp as well as the hash
value of the previous block. The blocks are protected against subsequent changes by
means of cryptographic methods, so that a continuous chain of linked data blocks is
formed over time (Nofer et al., 2017). The impact of blockchain on the strategic
goals of supply chains is the subject of a recent study by Kshetri (2018). They
analysed 11 use cases and showed conclusively that the blockchain makes a positive
contribution to achieving the goals of cost, speed, dependability, risk reduction,
sustainability, and flexibility. Despite blockchain's positive contributions to the
supply chain, Queiroz and Wamba (2019) show that there is a difference in the
acceptance of blockchain technology between the US and India in the logistics
sector, which should be factor in to the design of blockchain-based global supply
chains. In their literature review, Hughes et al. (2019) demonstrate the benefits
of blockchain technology in achieving UN Sustainable Development Goals by
contrasting those goalswith the capabilities of blockchain. Wang et al. (2019)
examine the impact of blockchain on the supply chain through interviews with supply
chain experts. Experts think that the blockchain will provide improvements in
supply chain transparency and operational improvements, secure information sharing,
and build confidence. Ying, Jia, and Du (2018) conducted a study of a successful
blockchain-enabled ecommerce platform in a conglomerate and con- cluded that
blockchain empowers companies to issue their own cryp- tocurrency and protect
sensitive information. They also demonstrate that the inherent trust present in
blockchain technology means that institutional intermediaries can be dispensed
with. 2.2. Inter-, dis- and reintermediation Distributed data management in a
blockchain enables transactions between parties without the need for a central
intermediary (Zheng, Xie, Dai, & Wang, 2017). Following Turban et al. (2018), a
central in- termediary usually provides relevant information on supply and de-
mand, prices and trade requirements, and matches market supply and demand. In
addition, they provide further added value through the transportation and
distribution of goods, trustee services, payment ar- rangements and consultancy
(Turban et al., 2018). In electronic mar- kets, the intermediary also acts as a
platform provider and provides technology for the exchange of services (Puschmann &
Alt, 2016). In doing so, it also acts as a trustworthy authority, enabling business
re- lationships between strangers with confidence and risk reduction (Kiviat,
2015). Today, logistics chains include third-party logistics providers who act as
business partners in the logistics chain and assume logistics functions (Lieb &
Bentz, 2004). There are also fourth-party logistics providers, who act as neutral
business partners in the supply chain and offer various services to the companies
involved in that supply chain (Mehmann & Teuteberg, 2016). The intermediary also
has a regulatory function in order to cover legal uncertainties and the high cost
of bilateral contracts between the trading partners (Giaglis, Klein, & O`Keefe,
1999). These intermediary functions can be fully automated through electronic
marketplaces, providing such functions as "sup- plying relevant information about
supply and demand" and "matching supply and demand" and thus replacing
intermediaries. However, the intermediary’s expertise and knowledge of the market
and the industry cannot be replaced (Turban et al., 2018). Disintermediation can
not only occur as a whole, but also as partial disintermediation in the context of
the intermediary's previous key activities (Tay & Chelliah, 2011) (Fig. 1).
Intermediation is the most prevalent asset ownership verification and
transaction processing solution today (Nofer et al., 2017). How- ever, blockchain
technology with its peer-to-peer network and dis- tributed data management can lead
to an elimination of intermediaries, also known as disintermediation. The crypto-
currency Bitcoin allows payment to be made between two parties without using a
banking in- termediary. This reduces fraud and identity theft (Kursh & Gold, 2016)
as well as increasing efficiency and reducing transaction costs (Zheng et al.,
2017). Disintermediation is, in its original sense, the investment Fig. 1.
Traditional vs. blockchain based Markets: The Disintermediation (based on Giaglis
et al., 1999). S. Tönnissen and F. Teuteberg International Journal of Information
Management xxx (xxxx) xxx–xxx 2 of assets, such as money, without the use of a bank
or financial in- stitution (Allen, 1996). More recent definitions refer to
disintermedia- tion as a shortening of value-added or supply chains based on
electronic marketplaces (Giaglis et al., 1999). Atkinson and Schumpeter (2001)
define disintermediation as the reduction or elimination of retailers, dealers,
brokers and other middlemen in transactions between manu- facturers and customers.
Cue (1999), on the other hand, describes disintermediation as the circumvention of
an intermediary organization in a business relationship that would normally be
involved in the transaction, regardless of whether the goods or services are the
subject of the transaction. For Sampson and Fawcett (2001), disintermediation
describes a situation in which an end customer has a direct business relationship
with a manufacturer without an intermediary. Due to in- creasing digitization, the
role of intermediaries in many markets has changed significantly (Peukert &
Reimers, 2017). As well as the inter- mediary disappearing, there is also the
possibility that an existing in- termediary will change its role based on
experience, expertise and market knowledge and participate in the business model in
a new function. This process is referred to as reintermediation (Giaglis et al.,
1999; Zamani, 2018). Reintermediation can also refer to a situation where an
increase in electronic distribution channels initially replaces an existing
intermediary, which later in turn are replaced by new central agents or
intermediaries (Cue, 1999). All the aforementioned types of intermediation can
occur in any aspects of a supply network. The disintermediation of a middlemen in a
supply network leads to the effect, that all the different former func- tions of
the middlemen has to overtake from another player in the supply network. Beside the
key functions, some has to manage the in- formation flow, material flow and
knowledge flow between the dif- ferent actors in the remaining supply network
(Shunk, Carter, Hovis, & Talwar, 2007).To clarify the research questions, a
systematic literature searches (see Fig. 3) was carried out in this paper (Webster
& Watson, 2002). Following Denyer and Tranfield (2009), the literature search is
divided into problem formulation, literature search, literature analysis, and
interpretation as well as presentation phases. For this purpose, journals as well
as contributions from conferences and databases were eval- uated. This was followed
by a forward search as well as a backward search. The databases EBSCO,
ScienceDirect, Web of Science, ACM Digital Library, IEEE Explore and AISEL were
searched. The keywords "Intermediation", "Disintermediation" and "Reintermediation"
were searched for in titles, keywords and abstracts. The contributions to the
literature were collected in an Excel file. After the databases were evaluated, the
conferences relevant to business information technology were searched, including
MKWI, WI, ECIS, ICIS, HICSS, AMCIS and PACIS. Then relevant journals were selected
for research. Journals were selected on the basis of the Information Systems VHB-
JOURQUAL3 rating. Due to the novelty of blockchain technology, the journals ex-
amined were in the A + to C ranking, in order to obtain the widest possible range
of contributions. We received 139 database hits, 4 hits in conference contributions
and 48 hits in journals. The contributions collected in the Excel file were then
adjusted for duplicates. The titles of the papers as well as their abstracts were
ex- amined for relevance to the research questions and then analyzed. We were able
to identify the functions of intermediaries from the resulting 14 contributions.
The functions of intermediaries (see Table 1) include: the provision of relevant
information to customers and suppliers; data on demand, supply and prices and trade
requirements (Turban et al., 2018). A fundamental function is the matching of
supply and demand in a market (Turban et al., 2018). Intermediaries also act as
platform providers, offering additional services on an electronic platform for
customers (Puschmann & Alt, 2016). An intermediary is a trustworthy authority that
can deliver the trust required for settling business be- tween strangers, thus
reducing risk in a business relationship (Giaglis, Klein, & O`Keefe, 2002). In
addition, an intermediary can provide added value such as the transportation of
goods, fiduciary services, additional payment arrangements and financing options as
well as consultancy (Turban et al., 2018). Lastly, an intermediary can ensure
compliance with governance rules by providing a regulatory function between buyer
and seller (Giaglis et al., 1999). Based on the method for developing taxonomies
described in Nickerson, Varshney, and Muntermann (2013), we have followed an
empirical-to-conceptual approach. We have collected functions of intermediaries
found in the research contributions (empirical approach) until no new functions
were found despite multiple new posts (pragmatic termination cri- terion). In
addition to analysing current literature, we have used case study research to
answer our research questions by analysing real ap- plications (conceptual
approach).
A ‘blockchain’ is a distributed public consensus system that maintains an immutable
record of transactions on the web, incapable of being falsified after the event.
The cryptography behind the protocol is based on asymmetric encryption modulo
mathematics where the 'key' for encrypting a message or transaction is different
from the 'key' to decrypt it. The algorithm accomplishes this by splitting the key
into a private and a public key that are mathematically linked trapdoor functions.
By calculating modulus functions of mutually known starting numbers, only the
sender and recipient can encrypt and decrypt messages using their own different
private keys, while the transaction itself can be verified publicly by using the
'public key'. Since it requires no 'central authority' as a 'book-keeper',
transactions are faster depending upon the number of nodes that mine the data at
any particular point in time. The usual incentive to verify (mine) the blockchain
is the dispensing of bitcoin. However, as the supply of this algorithmically
designed anti-inflationary crypto-currency dwindles, that incentive could be a
transaction fee or linked to remuneration in goods and services. What does all this
mean to pharmaceutical manufacturers in simple terms? The blockchain is a simple
way of passing information, which could include embedded financial transactions,
from party A to B to C to...Z in a fully automated and safe manner without the need
for intermediaries, whereby the final receiving party Z has direct access to the
complete and non-falsifiable web-based transactional record tracing all the way
back to originating party A. The first party to a transaction initiates the process
by creating a block. This block is verified by multiple computers distributed
around the net. The verified block then becomes the starting point for a chain of
blocks as the contents are passed from party to party which is stored across the
net in multiple copies thereby creating an indestructible single unique record
including its whole transactional history. This effectively creates an accounting
ledger that can never later be changed or falsified given that this could only be
done by changing or falsifying every single copy of the ledger distributed across
the net, which would be effectively impossible. In effect, copies of the *
blockchain are stored at multiple places in the Corresponding author: 5204 Coventry
Court, Colleyville, TX 76034, Tel: 817 501 2984, e-mail: shireeshpapte@msn.com This
Journal is © IPEC-Americas Inc September 2016 J. Excipients and Food Chem. 7 (3)
2016 - 76 DOWNLOAD FREE FROM HTTP://OJS.ABO.FI/JEFC This material MAY NOT be used
for commercial purposes see Creative Commons Attribution NonCommercial‐
NoDerivatives 4.0 International Editorial cloud, thereby providing assurance that
even if one storage site was knocked out by a catastrophe; sufficient copies would
remain such that the block chain would not be lost. This exploits the same feature
of the web that underpinned its creation, namely the idea that whole areas of the
network could be wiped out for example by nuclear war and yet the information
stored on the network would be preserved. Blockchain advocates claim transparency,
speed, accessibility and non-falsifiability as the cornerstones of this new
paradigm. Blockchain technology should make it much more difficult, if not
impossible, for illicit or counterfeit products, for example, adultered or non
compliant excipients, or goods whose processing is environmentally detrimental to
enter legitimate supply chains. It would enable end users to verify exactly how,
where and by whom the product they intend to purchase has been assembled and made,
thereby denying a market for illegal and counterfeit products. While the veracity
of transactional records (as distinct from actual transpired events), the chain of
custody is unalterable, this fact, in and of itself, is no indication that an
excipient has remained unaltered in transit or at the point of source. Indeed, just
as in current supply chain verification methods, where rogue collusion exists
within the supply chain there can be no guarantee that what is transacted in the
blockchain (such as the attributes of a certificate of analysis) is actually
congruent with the chemical make up of the excipient or material. Similarly, a
chain of custody transaction records is no guarantee of the actual physical
whereabouts of the material en route from supplier to end-user. Just because a
transacted record is computerized and 'blockchained' does not necessarily imply
that its physical world counterpart material of commerce has not been tampered
with; all it implies is that the transaction record cannot, and has not, been
tampered with. Of course, block chain veracity is reliant on appropriate audit
processes to verify each transactional record to ensure it is accurate at the time
it is entered into the blockchain. Providing this is done, it is not possible for
the transactional ledger to be subsequently adulterated to hide, or change, a
particular step to, for example, change the real source of a reagent, certificate
or process. This is an important advance as it means that any falsification of the
material source has to be done prospectively in real time, which is a much harder
challenge, than at any time retrospectively falsify a physical transactional
record, where hard copy documents can be simply substituted with new versions
containing different facts This is a very important advance in the authentication
and validation of supply chains, but it is not able to, and was never intended to,
replace traditional quality and auditing processes needed at each step of
prospectively creating a transactional record. In fact, as each of these auditing
steps are completed they too become part of the transactional record, so that
someone at the end of the supply chain can verify that appropriate audits have been
undertaken by appropriately credentialed authorities and can hereby ‘trust’ the
whole transactional record. Whether public or private, the possibility of ‘miner’
collusion (parties controlling mining servers performing verification of the
transactional records on the web) obtaining > 50% of the network's hashing power
could present a threat to the consensus protocol thereby allowing the miners
themselves to enter illegitimate transactions into the block chain. These may range
from over-invoicing, changing quality documentation, testing protocols and/or
contracts, changing exclusivity, 'preferred supplier' or sub-contract clauses,
changing shipping, distribution or repackaging logistics. However, this would
require the This Journal is © IPEC-Americas Inc September 2016 J. Excipients and
Food Chem. 7 (3) 2016 - 77 DOWNLOAD FREE FROM HTTP://OJS.ABO.FI/JEFC This material
MAY NOT be used for commercial purposes see Creative Commons Attribution
NonCommercial‐NoDerivatives 4.0 International Editorial miners to be colluding and
working for a particular supplier, as the miners themselves just verify the record
but do not have access to its contents. Paradoxically, such attacks are more
probable in so-called private blockchains which may not require extensive 'proof of
work' processing across multiple independent servers to achieve consensus. If
transactions on the blockchain are contractually obligatory, then such attacks
could prove disastrous for the end-user. In a sense this is no different to
currency, which we rely upon for global commercial transactions accepting
nevertheless it is not a perfect system and at any one time a give percentage of
this currency will be counterfeit. Blockchain technology provides a major advance
for excipient supply chains, assisting in the delivery of unadulterated, source,
process and transit verifiable excipients (or APIs and drug products), but does not
alleviate the necessity for quality audits. As IPEC-Americas argues, there is no
substitute for knowing and communicating with your supplier, random audits by
certified bodies of the supplier and supply chain, and chemical testing to validate
and authenticate a supply chain. The adoption of blockchain technology should make
the process faster and make the transactional record more robust and reliable,
however other rate-limiting steps of the excipient supply chain including transit
and testing time will remain. In terms of pure speed, blockchain is suited to
financial transactions where no physical goods change hands (such as financial
instruments and derivatives, stocks, insurance, land-registry, taxation, medical
records etc.) but this does not mean that it should be ignored in respect of the
advantages it could offer in improving the excipient supply chain.
The COVID-19 pandemic has revealed a general lack of visibility and data exchange
with global supply chains [1]. In an attempt to build resilient supply chain
management, blockchain technology has become a prominent tool, which is a novel
technology using distributed and decentralized ledger to trace the real-time
movement of goods and ser- vices in a supply chain, thus bringing transparent and
robust connectivity in the process. Blockchain technology has seen an extensive
application among businesses, such as fi- nancial services (e.g., Ripple and
Libra), food and agricultural distributions (e.g., IBM Food Trust and Bumble Bee
Foods), and healthcare and pharmaceutical supply chains (e.g., ProCredEx and
MediLedger). There is a general consensus about the value of the blockchain to
achieve a reliable supply chain system. Among many others, one major contribution
is its potential to promote sustainable development. Our project will focus on the
blockchain-based supply chain and evaluate its unique contributions to the three
pillars of sustainability—environmental protection, social equity, and governance
efficiency. A central focus of the literature has been conceptualizing the impact
of blockchain technology on supply chain management. For example, Saberi et al. [2]
introduced several blockchain technology adoption barriers in supply chain and
described how it could affect local and global supply chain sustainability. We
argue that there are two fundamental reasons why focusing on sustainability is
important: First, the role of supply chains for a sustainable global economy has
become increasingly prominent in recent years. Over 93 percent of the world’s 250
largest firms report on sustainability. Therefore, sustainability in the supply
chain will be imperative. Second, as blockchain technology becomes increas- ingly
popular, it is important to document its role in various aspects, such as promoting
sustainability. Accordingly, this paper explores the effects of blockchain
technology on Sustainability 2021, 13, 1726. https://doi.org/10.3390/su13041726
https://www.mdpi.com/journal/sustainability Sustainability 2021, 13, 1726 2 of 18
sustainability performance in supply chain management. It analyzes critical
sustainabil- ity measurements that can be considered to quantify corporate
performance through an extensive literature review. The purpose of this study is to
document the association of blockchain technology and the three pillars of
sustainability, environmental (e.g., waste management), social (e.g., public
perception), and governance (e.g., corporate manage- ment). To this end, we also
provide two case studies showing the contribution of blockchain technology to
sustainability in the context of the food supply chain and logistics (the three
pillars of sustainability follow the United Nation’s Sustainable Development Goals
(SDG)). We propose a two-step framework. First, following a systematic literature
analysis approach, we conduct a broad review of the previous studies regarding the
association between the blockchain-based supply chain and sustainable development.
We collect the most relevant articles on our topic by searching for the proper
keywords. Our proposed analysis includes four research focuses: (i) blockchain
technology in supply chains; (ii) blockchain-based supply chains and environmental
sustainability; (iii) blockchain-based supply chains and social sustainability; and
(iv) blockchain-based supply chains and economic (governance) sustainability.
Having documented these associations, in the second step, we provide two case stud-
ies regarding the blockchain-based system and sustainability. The first case study
is focused on the collaboration between Wal-Mart and IBM Food Trust. The IBM Food
Trust program applies blockchain technology to food supply chains to enhance food
safety and security. It aims to reduce tracking time, shorten operation process,
result in a reduction in truck gas consumption, and ultimately make resource
planning more efficient. The second case study explores the Maersk blockchain-based
system in logistics. Their blockchain system is in its infancy. Therefore, we
analyze the potential effect on their sustainability performance based on the
literature reviews and the company’s sustainable report, given they do not have
direct evidence of sustainability performances. Our paper aims to shed light on two
issues through case study analysis: First, what is the overall relationship between
blockchain technology in the supply chain and sustainability performance? Second,
the effectiveness of blockchain technology on supply chains’ sustainability
performance. Our study extends the literature by analyzing the effects of
blockchain on the supply chain, emphasizing the sustainability concept. This
suggests directions for a future research agenda that will further quantify
sustainability performance. Our paper proceeds as follows. Section 2 summarizes the
background of blockchain technology and the blockchain-based supply chain. In
Section 3, we introduce the System- atic Literature Analysis method and use it to
select a list of articles for later analysis. Using the method in Section 3, we
present in Section 4 the concepts of sustainability and how the blockchain-based
supply chain contributes to its performance. In Section 5, we present two case
studies on Wal-Mart’s collaboration with the IBM Food Trust Program in the food
supply chain and Maersk with IBM in the shipping industry. We conclude our paper
with future directions in Section 6. 2. Blockchain-Based Supply Chain Blockchain
refers to a technology that stores and distributes data based on databases among
all users who are stakeholders participating in the network [3]. All participants
can access detailed transaction information in real-time. In the past, transaction
data were stored in a centralized hub system and shared information with direct
transaction participants. However, blockchain technology enables people to share
all information based on decentralization, security, and smart execution. In other
words, all participants can access to transaction details one after another through
peer-to-peer networks (refers to decentralization) [4,5]. Moreover, if transactions
are performed by signatures, security is enhanced, and ultimately, transparency is
secured. Therefore, if any operational problems occur, they can be cooperatively
processed promptly (security) [4,6]. Additionally, once a transaction is recorded
in the system with a validated signature given to the users, it remains unchanged.
This feature is called “immutability” [7]. Given all these features, Sustainability
2021, 13, 1726 3 of 18 this technology is expected to bring benefits to many
industries. It greatly influences the supply chains, where information sharing is a
key aspect [8,9]. This study explores how blockchain technology impacts supply
chain management. Supply chain management is a process that encompasses the entire
process of trans- porting, storing, and delivering products from the place of raw
materials to production and to the final consumers [10]. Blockchain technology is
expected to bring various advantages to supply chains, including increasing
efficiency and lowering costs, which are the two main objectives of the supply
chains. Meantime, the literature on blockchain-based supply chains is growing [11].
Below, we summarize the four characteristics of blockchain-based supply chains:
traceability (or visibility), reliability with security, synchronized transaction
process, and cost efficiency [7,8]. 2.1. Traceability (or Visibility) Within the
blockchain-based supply chain environment, real-time location tracking of goods
becomes easy. Traceability is defined as the ability to trace all information in
real- time [9]. For instance, container freight management and document processing
regarding transactions can be stored and shared in the blockchain. All transaction
information can be confirmed by relevant participants along the movement path of
cargo in real-time through blockchain technology [12]. Therefore, a blockchain-
based supply chain allows for enhancing transparency [2]. 2.2. Reliability and
Security It is known that the blockchain system helps to reduce the risk of
counterfeit or unli- censed products distributed in the region. This is because
blockchain is a decentralized record-keeping system [8,9]. Many industries, such as
the food industry, employ this func- tion to their supply chains based on
blockchain technology [13,14]. Particularly, blockchain technology can manage
inventory appropriately while tracking cargo and recording and managing cargo
history. This makes it possible for consumers to trust the product, because anyone
who participates in the transaction can share and verify all the information. Based
on these primary functions, supply chain processes and objectives are impacted
positively. This study sheds light on two advantages of blockchain-based supply
chains: synchronized transaction process [15] and cost efficiency [4,16]. 2.3.
Synchronized Transaction Process The contract process of supply chains is
simplified on account of blockchain technology. In the past, the contract between
the seller and the buyer took a complicated procedure [17]. Blockchain eliminates
unnecessary and complicated documents through a smart contract. A smart contract
refers to a transaction protocol supporting the automated execution and control of
documents [7]. This system makes a simplified process that all relevant parties are
necessary to check the agreement through digitally signed documents within the
blockchain system [12]. 2.4. Cost Efficiency Supply chains are associated with many
relevant costs, such as inventory and trans- portation, affecting the total cost
[18]. Blockchain-based supply chains allow us to manage inventory efficiently
and help to reduce costs [4,16]. Logistics covers all processes from the point of
departure to the end destination, so unnecessary losses are profits. In particular,
inventory accounts for the most significant cost, and the supplier needs to
periodically forecast demand to produce and purchase inventory in a timely manner
[19]. If the com- pany has excess inventory than demand, the economic burden will
increase with stock-out costs. When operations manage fewer inventories, paying
lost sales costs is required [14]. Therefore, the blockchain-based supply chain
enhances cost efficiency through traceability and security functions [9].
A supply chain (SC) is an essential aspect of every business that consists of down-
stream and upstream activities between various organizational stakeholders across
functional verticals, generating value through the efective and efcient delivery *
Satish Kumar skumar.dms@mnit.ac.in Extended author information available on the
last page of the article S. Sahoo et al. 1 3 of products (e.g., goods, services)
[1, 2]. However, SC activities can produce not just desired but also undesired
consequences [3, 4], raising concerns about its sus- tainability on a range of
economic, environmental, regulatory, and social issues [5, 6]. Furthermore,
customers may lose trust in a frm and stop investing in it if they feel that the
frm has not kept itself sufciently accountable to the preservation of cultural
diversity, the environment, and other societal expectations [2, 3, 7]. In this
regard, frms are increasingly engaging in sustainability practices and demanding
that their SC partners practice the same in order to satisfy their social
responsibility and sustain their competitiveness in the marketplace [4, 8, 9]. The
idea and practice of sustainable SC management (SSCM) has gained signif- cant
traction, with numerous frameworks developed, introduced, and implemented across
various sectors [10–13]. In essence, SSCM is characterized by the triple bottom
line (TBL) model that aims to accomplish an equilibrium between environ- mental
protection (planet), social responsibility (people), and economic prosperity
(proft) while managing the SC [5, 14, 15]. The agreement among SC partners and
their commitment that raw materials, products, procedures, and practices within the
SC adhere to sustainability requirements and regulatory compliance are crucial cri-
teria for SSCM [3, 4, 15]. In this regard, concerns have been raised as to whether
traditional information technology (IT) systems can facilitate and support the fow
of sustainability details across multi-echelon SC (upstream and downstream) for the
safe, transparent, and reliable authentication of product/process exchanges among
SC partners [1, 14]. Emergent information and communication technologies (ICTs)
have been touted as solutions to complex issues in SSCM, though the growing
penetration of ICTs in SC activities has also led to increasing operational
complexity for business across all sectors [16–19]. Specifcally, emergent ICTs are
undermining traditional workplace activities, forcing frms to change or modify SC
strategies in light of digitization [20, 21]. Given that ICTs are becoming
inextricably linked to SSCM [22], a new era of functional integration (e.g.,
enterprise resource planning system) involving block- chain tags that embed
accountability and transparency in end-to-end SC transactions between members in a
multi-tier SC is rapidly emerging [2, 23, 24]. A noteworthy exemplary is smart
contracts, which are programs recorded on a blockchain that get activated when
certain criteria are satisfed [9, 20]. Smart contracts are often used to automate
the implementation of an agreement with efciency and security, thereby instilling
confdence among transacting parties with no intermediary participation or time
wasted [12, 14]. Blockchain is a state-of-the-art technology emerging from the
Fourth Indus- trial Revolution (IR4.0) [25–28] that holds immense potential in the
digitization of SC [29, 30], with features such as data immutability, operational
consistency, record tracking, and a consensus mechanism that creates a trusted
business eco- system built on cryptographic evidence with fewer or no
intermediaries [1, 31]. Specifcally, blockchain operates on a highly secure and
live distributed ledger database that facilitates informational exchanges among SC
partners to allow them to track the assembly of products from the moment they are
procured until they reach the end user [28, 32, 33]. For example, the distribution
of COVID- 19 vaccines worldwide has been powered by blockchain, enabling
manufacturers 1 3 Blockchain for sustainable supply chain management: trends... to
proactively monitor its delivery and manage undesirable incidents (e.g., drug
recall), and instilling a sense of confdence among consumers in the traceability of
the vaccines that they receive [34, 35]. In this regard, blockchain empowers all
members in the SC with real-time visibility into SC activities, thereby optimizing
inventory management and improving response to SC issues [28, 36–38]. More
importantly, incorporating cutting-edge ICTs such as blockchain in SSCM can address
not only the barriers to accountability and traceability in SC [39], but also
promote coordination and improve transparency as SC members around the world become
more integrated through its use [32, 40, 41]. As policymakers and regulators
increase pressure on focal frms to take sus- tainability actions, focal frms must
direct each member in their SC to follow a common set of sustainability guidelines,
which must be traceable, validated, and authenticated by SC members within focal
frms’ network [42, 43]. Using cryp- tographic keys, blockchain is capable of
recording all transactions within a SC network, protecting it with a hash pointer
function in each block of transaction [43–46]. In other words, blockchain operates
on secured frameworks necessary for sustainability management within the SC network
to prevent data falsifcation by SC members or cyberattacks such as identity
impersonation and sybil attacks [47–49]. The distributed and irreversible ledger of
blockchains also renders trans- actions among SC partners and focal frm
irremovable, thereby providing a com- plete record where every activity within the
SC can be tracked for compliance in the long run [5, 50]. In this regard,
blockchain provides visibility and trans- parency while protecting privacy of SC
exchanges among SC partners and focal frms [51–53], thereby signifcantly
contributing to SSCM [33, 54, 55]. To gain a deep and high-quality understanding of
the application of blockchain for SSCM, this paper conducts a systematic literature
review of articles published in high-quality journals to unpack the distinctive
peculiarities characterizing high-quality research at the intersection of
blockchain and SSCM. The focus on “high-quality” is important given the increasing
importance of quality in schol- arly research and the rise of predatory journals
[43]. Though several reviews on blockchain and SC management avail, which were
mostly concerned about the present state of blockchain adoption and future
opportunities in SC [23, 48, 49, 56], and the technical advantages and challenges
of blockchain implementation in SC [33, 39, 47, 57], few reviews sought to explore
and link blockchain’s tech- nological capability to SC sustainability, albeit
scantly [39, 43, 56], with only a single review involved in an explicit
investigation, albeit narrowly to the circu- lar economy [33] (see Table 1).
Noteworthily, no review, to date, has attempted to take stock of the extant
literature relating to the application of blockchain for SSCM, which leaves
understanding of the utility of blockchain for sustainable practices in SC
incomplete. Similarly, no review has focused solely on articles published in high-
quality journals, which leaves readers of reviews susceptible to low-quality
insights of the feld [43]. This is especially concerning in instances where
multiple databases were used (see Table 1), which leaves greater room for errors
and inefciencies to manifest due to the large extent of duplication that emerges
from such a review strategy [58, 59]. Finally, most reviews, to date, S. Sahoo et
al. 1 3Table 1 Summary of existing reviews on blockchain and SC Author(s) Scope of
review Review type Time period Major fndings Gurtu and Johny, 2019 [23] ▪ Trend
analysis of studies con- ducted on the potential of block- chain in SC management ▪
Analysis of 299 articles identifed from EBSCO database ▪ Systematic literature
review (struc- tured narrative) ▪ 2015 to 2018 ▪ Blockchain’s technical
capabilities have enormous potential to reduce SC intermediaries and improve the
efciency of SC management ▪ Three major themes on blockchain and SC management
research: (1) smart contracts, (2) SC fnance, and (3) SC visibility and
traceability Wang, Han, and Beynon-Davies, 2019 [57] ▪ State of technological
adoption of blockchain in SC ▪ Opportunities for blockchain in digitalized SC ▪
Challenges for successful difusion of blockchain technologies in SC ▪ Analysis of
227 articles identifed from nine integrated databases consisting of Emerald, IEEE
Explore, ABI Inform Global, JSTOR, Web of Science, Scopus, Springer, ScienceDirect,
and Tay- lor and Francis ▪ Systematic literature review (struc- tured narrative) ▪
2008 to 2017 ▪ Blockchain innovation remains in an embryonic state but continues to
gain traction in SC management, with trust serving as a primary motivator for their
adoption ▪ Blockchain in SC management spans across (1) SC fnance, (2) SC
intermediation structure, (3) SC member relationship management, (4) SC
sustainability, and (5) nega- tive consequences of blockchain implementation ▪
Blockchain implementation raises (1) institutional, (2) technological, and (3)
operational challenges 1 3 Blockchain for sustainable supply chain management:
trends... Table 1 (continued) Author(s) Scope of review Review type Time period
Major fndings Dutta et al., 2020 [39] ▪ Current adoption status and imple-
mentation challenges and opportu- nities for blockchain technologies in the feld of
SC management across various business sectors ▪ Societal impacts of blockchain
technologies Analysis of 178 articles identifed from Scopus database ▪ Systematic
literature review (struc- tured narrative) ▪ 2017 to 2019 ▪ Blockchain in SC
management spans across (1) blockchain adoption and implementation in SC, (2) SC
reengineering,
(3) SC resilience, (4) SC coordination, (5) security enhancement, (6) business
process management, (7) SC sustainability, and (8) sector specifc peculiarities ▪
Challenges to implement blockchain for SC management include (1) organizational and
(2) technical challenges ▪ Opportunities for societal impacts of blockchain
implementation in SC include humanitarian SC, cryptocur- rency for recycling
activities, smart cities, social sustainability, and activities aimed at achieving
circular economy goals S. Sahoo et al. 1 3Table 1 (continued) Author(s) Scope of
review Review type Time period Major fndings Müßigmann, Gracht, and Hartman, 2020
[49] ▪ Blockchain’s role and application in logistics and SC management ▪ Analysis
of 613 articles identifed from 10 diferent databases con- sisting of Scopus, Google
Scholar, Web of Science, Springer, IEEE Xplore, ScienceDirect, SSRN, Taylor &
Francis, EBSCO, and Emerald Insight ▪ Systematic literature review (bib- liometric)
▪ 2016 to 2019 ▪ Five distinct areas of research on blockchain for SC, namely (1)
concept development about the chal- lenges, opportunities, and barriers to
blockchain technology adoption, (2) evaluating and conceptualizing frameworks for
impact analysis of blockchain in industry-specifc cases, (3) blockchain-based
digitized SC, (4) technical design of block- chain applications for real-world
applications, and (5) framing block- chain and other interdisciplinary technologies
for SC management Pournader et al., 2020 [48] ▪ Applications of blockchain
technologies in SC, logistics, and transport management ▪ Analysis of 48 articles
identi- fed from Scopus and ISI Web of Knowledge databases ▪ Systematic literature
review (bib- liometric) ▪ 2016 to 2018 ▪ Blockchain in SC, logistics, and transport
management span across the 4Ts of blockchains, namely tech- nology, trust, trade,
and traceability/ transparency 1 3 Blockchain for sustainable supply chain
management: trends... Table 1 (continued) Author(s) Scope of review Review type
Time period Major fndings Wamba et al., 2020 [47] ▪ Advantages and drawbacks of
bitcoin, blockchain, and fntech for SC management ▪ Analysis of 141 articles
identifed from fve diferent databases con- sisting of Academic Search Com- plete,
ABI/INFORM Complete, Emerald Journals, ScienceDirect, and JSTOR ▪ Systematic
literature review (struc- tured narrative) ▪ 2007 to 2017 ▪ Bitcoin, blockchain,
and fntech are constantly emerging and evolving for SCmanagement across diferent
industries ▪ Implementation benefts include (1) low transaction costs and (2)
trustworthiness of the peer-to-peer transaction system ▪ Implementation barriers
include (1) lack of legislative regulation for fntech and (2) absence of clear
legal status for bitcoin Wamba and Queiroz, 2020 [56] ▪ Assess the current status
of research in blockchain for opera- tions and SC management ▪ Future research
directions for blockchain technologies and how they interact with SC and opera-
tions management activities across sectors ▪ Analysis of articles (exact number not
specifed) identifed from Web of Science database ▪ Systematic literature review
(bib- liometric) ▪ 2013 to 2020 ▪ Guest editorial inviting prospec- tive
researchers to investigate the technological role of blockchain across various
sectors such as food, e-commerce, and healthcare ▪ Future studies should
concentrate on evaluating the efect of blockchain technologies on the environment
and sustainable business activities S. Sahoo et al. 1 3Table 1 (continued)
Author(s) Scope of review Review type Time period Major fndings Lim et al., 2021
[43] ▪ Future prospects for tertiary industries’ blockchain-based SC on sustainable
themes ▪ Analysis of 106 articles identifed from Web of Science database ▪
Systematic literature review (struc- tured narrative) ▪ 2017 to 2020 ▪ Blockchain
technologies for SC management activities spans across four categories, namely (1)
neglected concepts in SC such as environmental issues, social sustain- ability, and
economic dimensions, (2) usage of new research methods, such as conceptual,
empirical, modeling, and technical approaches to gain a better understanding of
blockchain’s applicability in SC, (3) academic theory and industrial practice that
refect the develop- ment of new theories for real-world application and analysis
using a case study approach, respectively, and (4) its implementation across
diferent industrial sectors Moosavi et al., 2021 [30] ▪ Application of blockchain
tech- nologies for diferent areas of SC ▪ Analysis of 286 research articles
identifed from Scopus and Web of Science databases ▪ Systematic literature review
(bib- liometric) ▪ 2010 to 2019 ▪ New research aspirations should focus on the
creation of a block- chain deployment framework that makes use of internet of
things technologies and machine learning algorithms ▪ Future studies should
concentrate on assessing the sustainability-, resiliency-, reliability- and
fexibility aspects of blockchain technologies 1 3 Blockchain for sustainable supply
chain management: trends... Table 1 (continued) Author(s) Scope of review Review
type Time period Major fndings Tandon et al., 2021 [29] ▪ Applications of bitcoin
and block- chain technologies for business management ▪ Analysis of 586 articles
identifed from Scopus database ▪ Systematic literature review (bib- liometric) ▪
2015 to 2019 ▪ Applications of blockchain tech- nologies for business management
spans across four areas, namely (1) strategic and regulatory issues afecting
bitcoin and blockchain implementation, (2) benefts and drawbacks of integrating
blockchain into business frameworks, (3) using blockchain technologies across
diverse organizational disciplines to build a productive manufacturing ecosystem,
and (4) inefciencies of bitcoin ▪ Future studies are encouraged in fve areas,
namely (1) extending the sectoral scope of blockchain’s appli- cation, (2)
blockchain applications for developing economies, (3) efect of the business
environment on inter- and intra-institutional block- chain deployment, (4)
consumer’s perspective of blockchain applica- tion and awareness of technology, and
(5) development of a research framework for empirical validation based on
management theories such as UTAUT, difusion of innovation, and behavioral
resistance theory S. Sahoo et al. 1 3Table 1 (continued) Author(s) Scope of review
Review type Time period Major fndings Upadhyay et al., 2021 [33] ▪ Present
retrospective and prospec- tive contributions of blockchain technologies to the
circular economy in the domain of business management through the view- point of
sustainability and social responsibility ▪ Issues and problems in implement- ing
blockchain technologies for the circular economy ▪ Analysis of research articles
(exact number not specifed) identifed from Web of Science, Cross Ref, EBSCO
Business Source Premier, and Science Direct databases ▪ Systematic literature
review (struc- tured narrative) ▪ 2015 to 2020 ▪ Blockchain systems, with their
peer- to-peer verifcation and participative properties in SC management, serve to
drive the circular economy ▪ Blockchain, in particular, will con- tribute to the
circular economy by lowering transaction costs, increas- ing productivity, securing
connectiv- ity along the SC, ensuring human rights compliance, and reducing
environmental impact ▪ Challenges of incorporating block- chain in terms of
achieving circular economy objectives include the initial cost of technical
adoption, illegal activities, and lack of regula- tory governance ▪ Future research
should explore the following questions: (1) how block- chain technology may apply
within the circular economy paradigm of social responsibility, (2) how country-
specifc regulations afect blockchain development and deploy- ment to realize
circular economy goals, and (3) how will developing countries with infrastructural
con- straints utilize blockchain technolo- gies to build circular economies? 1 3
Blockchain for sustainable supply chain management: trends... have overlooked the
importance of delivering sector-specifc insights, which have important implications
for sector-specifc adoption of blockchain for SSCM. To achieve its aim and address
the extant gaps of past reviews, this paper con- ducts a systematic literature
review that delivers a state-of-the-art overview of high- quality research on
blockchain for SSCM inclusive of sector-specifc insights using a bibliometric
analysis, which is an objective review technique, of articles published in journals
ranked “A*”, “A”, and “B” by the Australian Business Deans Council, which
represents the journal ranks refective of “high quality”. The articles and their
bibliometric details will also be retrieved using Scopus, which is one of the most
comprehensive scientifc databases, for the bibliometric analysis. The use of a
single scientifc database was recommended to reduce unintentional mistakes caused
by multiple databases, such as double counting from duplicate entries. In line with
past systematic literature reviews relying on a bibliometric analysis [60–64], this
study seeks to shed light on the answers to the following research questions (RQs):
RQ1. What are the performance trends of high-quality research publications, cita-
tions, and constituents (authors, institutions, countries) on blockchain for SSCM?
RQ2. What are the major themes of high-quality research on blockchain for SSCM?
RQ3. What are the sector-specifc insights of high-quality research on blockchain
for SSCM? RQ4. What are the potential uses of blockchain for SSCM across various
sectors indicated by high-quality research in the feld? RQ5. What are the research
gaps and questions on blockchain for SSCM that warrant future research? The
remainder of this paper is organized as follows. The paper begins with an overview
of the fundamentals of blockchain in relation to SC and SSCM.
This is followed by the methodological aspects of its systematic literature
review, and the ensuing fndings from its review. The paper concludes with
suggestions to fertilize the feld with high-quality research on blockchain for
SSCM. 2 Theoretical foundation 2.1 Blockchain for SC Blockchain attracted global
attention when its spinof, bitcoin, disrupted the fnan- cial market [65, 66], with
other spinofs in new areas emerging rapidly, such as healthcare [67], oil and gas
[68], and telecommunications [69]. This IR4.0 technol- ogy serves as an essential
enabler of SC in the circular economy[16, 33, 70, 71]. Indeed, SC has become
increasingly complicated as a result of globalization, involv- ing participants
worldwide and requiring a great deal of interorganizational coordi- nation [50,
72]. This raises the cost of SC management, especially for focal frms engaged in
international business transactions [5, 7, 17, 46]. Nonetheless, block- chain is a
promising solution for lowering transaction costs in SC management [33], with the
process of a blockchain transaction between two business entities illustrated in
Fig. 1. S. Sahoo et al. 1 3 In essence, blockchain is a cryptographic digital
ledger or an electronically pro- tected archive of documents, interactions, or
performed activities that are exchanged by participating members [31, 73, 74].
Operational activities based on blockchain facilitates the authenticated exchange
of information between each entity in a SC without the need for a trustworthy
centralized authority to act as an intermediary [75–77]. In this regard, blockchain
ofers a quick settlement that lowers transaction cost and increases transparency
across a SC by confrming and recording data in real time [14, 24, 78, 79]. That is
to say, blockchain is a global platform that business entities can rely upon to
record SC transactions or other digital interactions in a way that is encrypted,
accessible, completely immune to outages, auditable, and reliable [23, 39]. Global
SC networks are currently governed by information systems, with trans- action data
maintained in databases, posing signifcant risks that blockchain could mitigate.
When comparing blockchain and database (Table 2), the frst noticeable diference is
centralization. Database functions in a centralized manner, whereas blockchain
functions in a decentralized way [78], and thus, blockchain has the potential to
change the existing state of information systems employed in SCs [80]. Though
decentralization necessitates substantial changes to existing information systems
used for SC management by diferent sectors, it can empower all members in a SC to
operate independently and eliminates the need for centralized control [81, 82]. For
example, a blockchain-enabled smart contract is a self-executing contract in which
the conditions of the buyer–seller agreement are directly encoded into lines of
code [23, 40]. The code and the agreements contained within it are dispersed and
decentralized over a blockchain network [46]. Another advantage of blockchain over
database is that it allows immutability, which implies that data, once recorded,
cannot be wiped or updated [55, 82]. In this regard, data in blockchain becomes
trustworthy as it can autonomously detect and Fig. 1 The key features and process
of blockchain transaction 1 3 Blockchain for sustainable supply chain management:
trends... Table 2 Comparison of blockchain versus database Attribute Information
technology Blockchain Database Authority Decentralized distributed ledger
technology that works on a peer-to-peer approach Centralized ledger in which data
is stored in a systematic manner and is controlled by an administrator Architecture
Uses a distributed ledger network architecture Uses a client–server architecture
Data handling Data management using an authentication approach supported by times-
tamp-enabled read and write functions Data management with no authentication
mechanism that supports create, read, update, and delete functions Integrity
Supports data integrity where any malicious act is recorded Malicious actor can
alter data in the database Transparency Ofers transparency among participants Not
transparent as administrators decide which participants have access to data
Functionality An emerging technology that is complex to deploy and maintain
indepen- dently, though its functionality can be democratized to and used by all
participants A mature and well-established technology that is easy to deploy and
maintain independently, but its functionality is confned to independent
participants Performance Operates on verifcation and consensus mechanism at a
larger scale Operates on internal mechanism at a small scale S. Sahoo et al. 1 3
rectify itself based on programmed business logic and consensus [39]. Noteworthily,
it is practically never the case that two organizations collaborate on a single
data- base containing a single set of entries, since database, in most cases, is
managed and updated by the database administrator of the focal company [83]. Due to
the fact that only one out of two organizations pays the database administrator,
there is vested interest to attain the success of the paying organization, but not
necessarily that of the other organization. In other words, if the paying party
makes a move that favors their organization, the other party or organization will
never know. Similarly, and perhaps more dangerously, if a business rival chooses to
pay of the database administrator, then that rival may make modifcations to the
database without either transacting organizations knowing [83]. When blockchain
technology is used in the data transaction process, it also elim- inates the single
point of failure, which means that if one of participant makes a mistake, the other
participants can quickly restore it, since each participant keeps their own
digitally encrypted ledger [66, 74]. After the data in the blockchain-based ledger
has been rectifed, the unchangeable record of alteration will reveal which
participant has made the change [84–86]. With the data process safeguarded, an
organization can rely not only on the information exchanged between collaborating
organizations but also on the information supplied by competitors in the SC ecosys-
tem. This exemplifes the usage of smart contract technologies and the power of its
encryption [46, 73], resulting in lower costs and accuracy since there are no
middle- men or cost fees throughout the execution process, as well as no human
interference during the execution process [39, 67, 87]. 2.2 Blockchain for SSCM The
complexity of new-age SC has escalated [88], and the impact of its management on
business competitiveness is recognized as an aspect that warrants further inves-
tigation [20, 32, 76]. To illustrate, the SC for a typical focal frm (manufacturer)
engaged in multi-layered relationships of upstream and downstream physical fows [1,
4, 12], alluding to the notion of a multi-echelon SC [2, 3, 18], is presented in
Fig. 2. Specifcally, frms today are under immense pressure to engage in sustain-
able practices across the SC as a result of recent developments such as globaliza-
tion, market shifts, demand uncertainty, and economic challenges, and thus, relying
solely on internal efciencies of SC is now inadequate to gain a competitive edge
[14, 78, 89]. Moreover, the restructuring practices engaged by any one frm in
trans- forming traditional SC management into SSCM can place an equivalent pressure
on its SC partners to improve their own practices to meet sustainability
requirements of the reinvigorated SC [5, 42]. Therefore, the operational
complexities and vulner- abilities in the contemporary, multi-echelon SC are
afected by a variety of internal and external factors [2–5, 7], as illustrated in
Fig. 2. Many focal frms in multi-echelon SC networks that are engaged in SSCM—
either proactively or reactively as a result of enforcement by regulatory
authorities or pressure by stakeholders [5, 12, 48]—face the challenge of
monitoring and trac- ing of SC activities [3, 7]. To overcome this challenge, it is
important that every SC 1 3 Blockchain for sustainable supply chain management:
trends... member provides authentic and timely information of their SC activities
[50], which is nonetheless dependent on the system capacity of each SC member to
accurately gather and record data and produce reliable reports to the systems of
other SC mem- bers in a secured manner [3, 5, 7]. Most often, the efectiveness of
information fow in an end-to-end SC for a focal frm is limited by the SC’s weakest
member, or the “most immoral” link. Because interorganizational operability
standards in a multi- echelon SC are constrained by external factors, there is
often little fexibility in the provision of information pertaining to
sustainability compliance among SC mem- bers [14, 45]. Due to increasing complexity
of interactions among SC members, it is equally challenging for focal frms to
monitor and trace details of product movement without distortion [18, 46, 70]. Most
SC members struggle to access information from other SC members due to the lack of
secured information sharing infrastruc- ture, which is exacerbated by the fact that
information is fragmented across several stakeholders [39, 73, 90]. The presence of
diverse stakeholders in a multi-echelon SC is also correlated with the possibility
of fraudulent cases caused by unethical members, raising business risks such as
reputational damage and fnancial losses for participating frms [5, 7]. Identifying
code of ethics violations in SC is now one of the most pressing issues that frms
today must address [5, 8, 75]. This implies that the efectiveness of SSCM is
determined by the level of trust established and infor- mation sharing among
stakeholders [45]. Blockchain ofers an innovative way out to address the inherent
issues of trust and information sharing of sustainability practices among SC
members through its inherent technological qualities, supported by internet-of-
things (IoT) technologies [9, 50]. Noteworthily, the unchangeable and irreversible
characteristics of block- chain can ensure traceability and reduce the risks
involved by efciently exchang- ing information among stakeholders involved in the
multi-echelon SSCM [39, 41, 47]. Furthermore, the transparent and auditable
functionality of blockchain enabled Fig. 2 The key vulnerabilities in multi-layer
SC S. Sahoo et al. 1 3 by suitable IoT technology can provide requisite access to
information in the future for focal frms to address accountability issues in event
of non-compliance by an SC member [57, 90, 91]. In addition, blockchain operates on
self-enforcing consen- sus among SC members to render a transaction to be
authentic, and thus, prevent- ing false or potentially illegitimate transactions
from being recorded in the digitally distributed ledger [12, 53]. Moreover,
blockchain is a scalable application built for peer-to-peer networks that allows
for quick fnancial settlements between SC mem- bers while eliminating the need for
trusted intermediaries [23, 47, 63, 92, 93]. This smart contract functionality in
blockchain is critical in lowering economic and repu- tational harm [54, 73, 74].
Taken collectively, implementing blockchain systems can make it easier for focal
frms to collect information (e.g., certifcation, date, location, price, quality)
from their SC partners and thus improve SSCM [11, 94]. In other words, the
availabil- ity of information through a blockchain-based infrastructure for a
multi-layered SC, as seen in Fig. 2, can improve the traceability of products in
the SC [9, 44], lower losses from counterfeit and grey markets [14, 49, 54], boost
visibility and compli- ance over outsourced contract manufacturing [39, 57], and
strengthen the focal frm’s role as a leader in responsible manufacturing [2].

To improve the supply chains performance for many industries and provide new supply
chain management (SCM) solutions, some systematic literature review (SLR) on SCM
have, recently, demonstrated the importance of information and communication
technology (ICT) ([1], [2], [3], [4] and [5]), but without focusing on blockchain
technology (BCT). The BCT has been generating interesting research areas because of
its innovative characteristics that provide efficient solutions for the current
gaps related to several supply chains industries. Indeed, existing SLR on
blockchain conducted until now did not address such topic linked to the blockchain
application for SCM. For example, a SLR performed by BOJANA KOTESKA et al. [6],
Stefan Seebacher and Ronny Schüritz [7], and SMS established by Yli-Huumo J, et al.
[8], did not cover blockchain application for SCM that should be possible to map
out the current status of research area. Blockchain is a decentralized transaction
and data management technology firstly designed, by Satoshi Nakamoto, for Bitcoin
cryptocurrency [9]. Based on the literature, the blockchain definition was
synthesized as a distributed database, which is shared among and agreed upon a
peer-to-peer network. It consists of a linked sequence of blocks, holding
timestamped transactions that are secured by public-key cryptography and verified
by the network community. Once an element is appended to the blockchain, it cannot
be altered, turning a blockchain into an immutable record of past activity [7].
Trust and decentralization were identified as the two key BCT characteristics,
which are closely connected and interrelated [7]. The remaining parts of the paper
are structured as follows: In Section 2, we describe the applied research
methodology and the process of collecting relevant research papers. Section 3
presents the results of the collected papers and the classification mechanism
extracted from data. Section 4 discusses the study and answers the research
questions. Section 6 presents the limitations of this mapping study, and Section 7
concludes the paper.
The rapid advancement in digital communication has allowed for quicker, easier
connectivity between businesses and customers. With the development in technology,
the customers’ expectations and their needs have increased with regards to delivery
on time, transparency, good quality of products and response times. Supply chain
management (SCM) is defined as the management of the flow of goods and services
that transform raw materials into final products. In other words, to control the
flow of any products from raw state to final customers in the most streamlined and
cost-effective way represents the SCM process. It protects the distribution of all
goods from manufacturing to end product. The production, shipment, and distribution
of any product are controlled in a centralized manner. Also, SCM reduces the excess
cost of products and delivers to the customer in the ISSN 1816-6075 (Print), 1818-
0523 (Online) Journal of System and Management Sciences Vol. 9 (2019) No. 3, pp.
92-103 DOI:10.33168/JSMS.2019.0306 Goyat et al. / Journal of System and Management
Sciences Vol. 9 (2019) No.3, 92-103 93 fastest way. Every product reaches at
markets with a lot of efforts of different groups. The basic process of SCM is
depicted in Figure 1. Fig. 1: A basic process of Supply chain management 1.1.
Challenges and risks in SCM The modernization of the supply chain has a great
experience and it is an important factor for various organizations which affects
competitiveness. The supply chain has different risks inherent that are connected
to its nature4. (Chain and Sscm, 2006). SCM has various challenges fed by various
internal and external factors. Globalization and global connectivity of the supply
chain increase the complexity and risks for SCM. Others challenges are inherent to
the never-ending struggle for better efficiency and to reduce the overall operating
cost of the products(Chain et al., 2010). In manufacturing, to reduce lifecycles of
products, outsourcing, Just in Time inventory, proper utilization of machinery and
consolidation of the supplier are factors of any business models that carried
significant improvement and important challenges and risks to supply management
(Eyers, 2017). Various risks and challenges of SCM are depicted in Figure 2 and
discussed as following: Goyat et al. / Journal of System and Management Sciences
Vol. 9 (2019) No.3, 92-103 94 Fig. 2: Challenges and risks in SCM Fig. 3:
Blockchain attributes 1. Sudden demand changes: Due to advancement in technology
the demand for markets changes frequently every day and it is quite difficult to
adapt the variations in the markets. Rapidly fluctuating in markets requires
businesses to react quickly to sudden changes with good efficiency. 2. Lack of end
to end visibility: Most of the organizations are struggling to have proper details
about their supply chain externally and internally. This exposes the risk of fraud,
mishandling, and code of conduct violations, etc. (Lourenço and Ravetti, 2018). 3.
Obsolescence of technology: Significant and appropriate investments are required
for growth of SCM and it is a major challenge for most businesses (Szegedi and
Kerekes, 2012). 4. Ineffective supply chain risk: To control, monitor and predict
the supply chain risk, an effective supply chain management programs are an
important key factor to react on time. 5. Unforeseen delay: To track the progress
of products and materials in the Goyat et al. / Journal of System and Management
Sciences Vol. 9 (2019) No.3, 92-103 95 supply chain may be easy, but the delivery
of particular products on time may not always be 100% on time due to time
differences and different shipping frames (Ji, 2007). 6. Quality customer services:
SCM works in a centralized manner to fulfill the requirements of the customers. It
represents the supply of products at the right time with the right quantity and
good quality with affordable amount of money. It is not a simple process because
customers have different preferences with time (Henrie and Hedgepeth, 2006). 7.
Supplier relationship: To create a mutual association with various suppliers in
marketing is a challenging issue in SCM. Advancement in emerging technology has
attracted attention from centralized systems to the decentralized one (Nakamoto,
2008). Blockchain technology provides a significant contribution in the field of
trust, comfort, robust, traceability and transparency with distributed ledger13.
(Efanov and Roschin, 2018; Filippi and Hassan, 2016). Blockchain represents the
peer to peer decentralized network with a distributed immutable ledger which has
all transactions accomplished by participants (Lewis, 2016). Blockchain is quite
simply a single version of the truth that can be viewed and shared by a number of
users (Devine, 2017). Distributed nature of blockchain eliminates intermediaries in
the supply chain and has the proficiency to reinvent it. It provides control and
management to every stakeholder as per their needs be it terminal operators, inland
carriers, ocean carriers, financial authorities or service providers (Iansiti and
Lakhani, 2017). 2.1. Attributes of the blockchain technology The blockchain
technology is essence database which collects, control and monitors the
information. The information is stored in blocks and each block has a finite set of
records and transactions maintain a chain by connecting all bocks in a predefined
order (Meunier, 2018). The blockchain holds the present records of a transaction
with its complete history. The incorporation of blockchain technology in supply
chain offers a number of benefits as compared to the classical supply chain.
Decentralization of data is the most important feature of blockchain technology
which leads provides more transparency to transactions. Every participant holds the
actual dataset but not able to fraud or temper the dataset (Appelbaum and Smith,
2018). A small change in the dataset is publicly shared with every participant. The
inability to modify or tamper with transactions in blockchain enables to join
trusty participants and offer immutability to the dataset. Various attributes of
blockchain technology are shown in Figure 3. 2.2. Blockchain in SCM Development in
shopping options through eCommerce and mCommerce has made Goyat et al. / Journal of
System and Management Sciences Vol. 9 (2019) No.3, 92-103 96 supply chain
management a crucial issue of concern for various organization or businesses. For
large manufacturing industries or companies, it is the most critical problem to
deliver their products to supply chain partners (Wong and Ngai, 2019). With an
increasing emphasis on technological advancements, as well as the changes in
customer expectations, the need for integrated supply management has become
increasingly important (Moretto et al., 2019). Various limitations that are faced
by different supply chain actors and the impact of Blockchain on supply are
summarized in Table 1. Table 1. Various limitations faced by different supply chain
actors and the impact of blockchain Supply chain roles Limitations of current
blockchain Impact of blockchain on SCM Raw material Producer of raw materials
should have the capability to prove the origin and quality globally with
transparency Using blockchain, materials can be tracked from the production of the
raw item and trust can be maintained from start point to end consumer point.
Supplier Suppliers are responsible for agreements or contracts between a company
and its supplier. Lack of transparency influence the supplier’s efficiency. Trust
is maintained using blockchain and it also offers transparency between documents or
agreements. Manufacturer Manufacturers have restricted capability to monitor the
products from source to destination. Also has limited capability to measure the
quality of raw products. The distributed consensus of blockchain technology added
value from a raw material producer to its suppliers. Distributor Certification and
trust issues are having limited capability and custom tracking systems are with
least collaboration. Proof-of-identification, smart contracts, and proof-of-
locations provide the ability of certification in the distributed ledger.
wholesaler Traditional supply chain management has a lack of trust and
certification of materials. With blockchain, the wholesale is able to check the
origin of the products, their certification, the transformation of goods and
transportation conditions. Goyat et al. / Journal of System and Management Sciences
Vol. 9 (2019) No.3, 92-103 97 Retailer/Custo mers Traditional supply chain
management has a lack of trust and certification of materials. The retailer is able
to track the individual products between the wholesaler and end-user. Ability to
return of malfunctioning products effectively Consumers The consumers are not able
to track the origin of products, their quality, and certification of products with
the specified standard. Blockchain provides full transparency to consumers from the
raw stage to the final stage of the products with product origin and their
certification. Within the supply chain management, a supply chain is the connected
network of individuals, organizations, resources, activities, and technologies
involved in the manufacture and sale of a product or service (Cole et al., 2019).
With blockchain, users across the supply chain get access to an automated digital
system that marks all changes and records the exchange of hands without any human
intervention (Kouhizadeh et al., 2018). Every transaction or entry recorded in
blockchain is in many ways more efficient and honest. The system ensures that no
piece of inventory exists in the same place twice while it moves ahead in the chain
(Partida, 2018). This way, it gives a unified view and real-time status updates
with full traceability of actions. This drastically cuts down the time taken
to trade internationally and removes all physical procedures that ever existed
(ElMessiry and ElMessiry, 2018; Partida, 2018). Fig. 4: Advantages of blockchain to
SCM Various benefits of blockchain technology are highlighted in SCM as shown in
figure 4. Delay in work supply due to paperwork can be reduced via blockchain-
based SCM. In this method, all the history of transactions and data is stored in a
Goyat et al. / Journal of System and Management Sciences Vol. 9 (2019) No.3, 92-103
98 distributed manner and any authorized party can utilize that information.
Incorporation of blockchain in SCM improves the trust relationship among consumers,
customers, manufacturers, and suppliers. As a part of the blockchain ecosystem,
sellers and buyers alike are always who they say they are and products are always
the right ones. What’s more, because prices cannot be modified, the whole process
of invoices will be rendered obsolete in the future. If a purchase order is
represented as a block in the blockchain, it invariably becomes an immutable
digital entity. Impact of various attributes on supply chain management is
discussed in Table 2. 3. Proposed Blockchain-based SCM Blockchain technology has
the potential to renovate the way through which organizations do work in the supply
chain. The integrated process enables all participants to access the information or
data at any point and any time in the network. Any participants that are willing to
access the supply chain need to be registered in the blockchain technology. Once
they have registered, they can participate in initializing, validating and tracking
of goods as per their requirements. In Figure 5, the working principle of
incorporation SCM with blockchain is depicted. Firstly, the request for the new
transaction from the network is generated and appended to block after verification.
The more detail about buyers and suppliers are recorded on each block at each
stage. Each block comprises different information such as certification, production
date, batch number, the weight of goods, temperature, etc. All the information is
recorded in decentralized ledger acts as single unified source of the dataset such
as raw material, manufacturing, maintenance process, and supply, etc. (Angrish et
al., 2018). Table 2: Blockchain attributes that impact supply chain management
Relation and impact of blockchain on supply chain management Consensus Blockchain
consensus provides the ability to stakeholder to track the whole process of supply
chain and offers trust to SCM. As the all features such as certification, quality,
quantity and other details of products are recorded in consensus which adds value
to its final products. The quality of raw materials are validated, certification of
manufacturers is checked which gives more transparency and added value to the final
product. Goyat et al. / Journal of System and Management Sciences Vol. 9 (2019)
No.3, 92-103 99 Distributed ledger / Decentralization Blockchain works in a
decentralized manner that means information is not handled by a single node. All
the information regarding the products from its raw stage to the final stage is
stored in a distributed way and it is publically available based on some
agreements. It avoids the risks of data loss or one-point failure. Additionally,
data alteration and manipulation is difficult in distributed ledger. Privacy/
immutability Blockchain is distributed in nature having public ledger and designed
in such a way to enable access control to who is able to have access on the ledger.
Before accessing the data of ledger, the authentication of each controller is
checked using some decision process. It provides privacy to information that is not
visible to all (only legitimate parties allowed) and it verifies the essential
information during authentication. The distributed ledger is immutable in nature
and manipulation or tampering is not possible. Transparency / Scalability With
blockchain technology, the entire stakeholder participates in a universal system of
the supply chain. The nature of blockchain is peer to peer which is designed in a
robust and scalable manner for eliminating a single point of interaction. The
distributed ledger is shared by stakeholder to improve transparency and
scalability. Shared transaction history Each transaction is included into blocks
and each block contains a hash function of previous blocks into the blockchain. The
hash function of block maintains the integrity of the recorded information. All the
past transactions are recorded into blocks and are shared among different
legitimate parties. Goyat et al. / Journal of System and Management Sciences Vol. 9
(2019) No.3, 92-103 100 Fig. 5: Blockchain-based SCM Fig. 6: Smart-contract process
in blockchain-based SCM Initially, to create smart contract each party must
identify an opportunity on which they collaborate and must agree about all the
outcomes for each party as shown in Figure 6. It is considered in the proposed
scheme that each party or stakeholder who are willing to access the blockchain
data, require to be registered with integrated Blockchain with supply chain
network. Once all the parties are registered, the account assignment process is
applied by them for generating a combination of the public-private key. The public-
private keys are utilized by each party for creating or verifying each transaction.
The concept of distributed computing has been around since 1990. In 2009, Satoshi
Nakamoto created bitcoin and introduced the concept of Blockchain [1]. The original
goal was to propose a solution to the double-spending problem using a peer-to-peer
network [2]. It has been about ten years since then and cryptocurrency has
developed. Now, Blockchain proves to have the capacity to deliver a new kind of
trust to a wide range of services [3]. Applications are being explored in
healthcare (patient records), government (land registries) and electronics
(Internet of Things). The supply chain is one of the fields that Blockchain is
expected to be applied. Estimated 90% of the world trade is carried out by the
international shipping industry every year [1]. But the logistics behind global
trade is highly complex as it involves many parties with conflicting interests and
priorities as well as the use of different systems to track shipments. According to
one estimate from the World Economic Forum, reducing supply chain barriers to trade
could increase GDP by nearly 5% and global trade by 15%. Blockchain technology can
help reduce many of the frictions in global trade logistics including procurement,
transportation management, track and trace, customs collaboration, and trade
finance. In this paper, I combine blockchain with distributed storage and propose a
blockchain model for the supply chain. 2. Related work 2.1. Blockchain Blockchain
can be defined as a database that can record transactions between parties in a
secure and permanent way [1][3]. Each block contains three elements, a hash,
timestamped batches of recent valid transactions, and the hash of the previous
block. A hash function is a function that converts the data it is given into an
irregular value of fixed length [4]. The timestamp proves that the data must have
existed at the time [2]. The previous block hash links the blocks together and
prevents any block from being altered or a block being inserted between two
existing blocks. In this way, each subsequent block strengthens the verification of
the previous block and hence the entire blockchain. The method renders the
blockchain tamper-evident, lending to the key attribute of immutability. A smart
contract is a component of a blockchain-based system that can automatically enforce
stakeholder-agreed rules and process steps [1]. There are two key features, data
transparency, and security [1]. Blockchain technology ensures that stored records
are accurate, tamper-evident, and from a verifiable source. Instead of multiple
parties maintaining copies of their own dataset, every stakeholder receives
controlled access to a shared dataset creating a single source of truth. This gives
confidence to everyone working with this data that they are using the most recent,
accurate, and reliable dataset. Secondly, Traditional ledgers typically provide an
overall layer of security which once breached allows access to all stored data. In
a blockchain-based system, the security mechanisms make sure that individual
transactions and messages are cryptographically signed. This ensures essential
security and effective risk management to tackle today’s high risks of hacking,
data manipulation, and data compromise. 2.2. Supply chain A supply chain is often
described as a system of organizations, people, activities, information, and
resources involved in moving a good or service from the initial supplier to the
final customer [6]. Supply Chain Management (SCM) is the planning and management of
all activities involved in sourcing and procurement, conversion, and all logistics
management activities to meet the customer’s need. It also includes coordination
and collaboration with channel partners, including suppliers, intermediaries,
third-party service providers, and customers. There are these key concepts; 
Client demand: Clients in different field missions request goods and services. 
Monitoring, tracking, and reporting: Tracking is enabled for any requisition or
shipment to monitor progress  Planning: Field support teams develop optimized
plans for sourcing, logistics, storage, transport and distribution.  Sourcing:
Field support teams evaluate and secure the best suppliers. Natsuki Kawaguchi /
Procedia Computer Science 164 (2019) 143–148 145 Natsuki Kawaguchi / Procedia
Computer Science 00 (2019) 000–000 3  Inbound logistics: Field support teams
organize transport from supplier to a first distribution hub.  Storage and
transport: Goods are stored or prepared for transport according to an optimized
schedule.  Outbound logistics: Goods and services are distributed to clients. 
Delivery and receipt: Clients receive the right goods, with the right quality at
the right time. 2.3. IBM Food Trust IBM Food Trust uses the blockchain solution to
build transparency of supply chain from the farmer, processor, retailer, to the
consumer. The solution provides participants with a permission-based, shared view
of food ecosystem information [7]. It allows convenient data publishing and
controlled sharing of information. IBM Food Trust users can quickly locate items
from the supply chain in real-time by searching food product identifiers using the
product name and filtering on dates. Any IBM Food Trust participants can use a
Smart Contract in a Private Channel between two or more specific network members.
Data in that channel is unencrypted. By using this technology, decision making is
automated. IBM Food Trust has an integrated set of modules. ・Trace module Trace
module provides the provenance of a product through immediate access to end-to-end
data. This module also shows real-time location and status, so allows expedited
product recalls. ・Fresh Insights module Fresh Insights module connects disparate
product data to draw insights and gain visibility into inventory across the supply
chain. Then, it shows time since production and to expiration. It becomes easier to
calculate an at-risk inventory. So, suppliers can identify inefficiencies, improve
freshness, and reduce product losses. ・Certifications module Certifications module
digitizes business-critical certificates and inspection documents. It can optimize
efficiency for information management, certify provenance, and ensure authenticity.
Fig. 1. IBM Food Trust Module Demo. IBM Food Trust combines supply chain with
blockchain core functions successfully. IBM explains the advantage of the Food
Trust system is "All data is stored on blockchain ledgers, protected with the
highest level of commercially- available, tamper-resistant encryption." But,
blockchain records who owns what and who transacts what. In other words, it is not
fit to record a lot of information. If the supply chain becomes more complex, there
will be mass data and blockchain should be used with any other storage. So, I
combine blockchain with distributed storage and use this technology more
appropriately. 3. Methodology I propose Blockchain for supply chain. Fig. 2. is the
whole picture of it. In this system, I define the low layer, high layer, lower
blockchain and higher blockchain as such. 146 Natsuki Kawaguchi / Procedia Computer
Science 164 (2019) 143–148 4 Natsuki Kawaguchi / Procedia Computer Science 00
(2019) 000–000  Low Layer: trades between traders at the stage of production and
processing.  High Layer: trades between traders at the stage of sales and
consumption.  Lower Blockchain: records of transactions on the low layer.  Higher
Blockchain: records of transactions on the high layer. (In case of a large-scale
system, we can create a middle layer and a middle Blockchain.) Low Layer is a
public community. On this layer, participants look for potential business partners.
The important thing on this layer is to find good partners from a wide variety of
options. So, the community must be open. On the other hand, High Layer is a private
community. On this layer, retailers and customers conclude a contract. The
important thing on this layer is to deliver products to customers accurately. There
is personal information such as name and address. So, the community must be close.
Fig. 2. Blockchain application model for supply chain. In the production stage, a
serial number is assigned to the raw material. In each stage, participants verify
the digital signature of the previous stage and create a new one. Also, they record
information on each stage in distributed storage. Lower Blockchain and Higher
Blockchain is automatically generated at the formation of contracts. Goods are
tracked by the parcel code, QR code, serial number and so on if it is necessary.
Customers can search for goods by the serial number on Lower Blockchain and Higher
Blockchain. The key features of the system are as shown below.  Comprehensive
records of ordering, receiving, cash flow, logistics, and information flow: In this
system, every transaction is recorded. In general, companies do not know enough
about the products that they buy and sell to navigate the many complex challenges
facing today’s global supply chains. This system can solve the issue.  Client
demand: Clients can make to order on Lower Blockchain network. When an order is
placed, traders will react to it. Good projects will gather many traders. On the
contrary, bad projects will be at a standstill. Low Layer High Layer Producers
Processors Retailers Customers DS DS Lower BC Higher BC Traders Contract Contract
(Distributors) (Distributors) (Distributors) Digital Signature Digital Signature
Digital Signature Serial Number Contribution Contribution Information Certification
Digital Signatures Contribution (DS) DS: Distributed Storage Natsuki Kawaguchi /
Procedia Computer Science 164 (2019) 143–148 147 Natsuki Kawaguchi / Procedia
Computer Science 00 (2019) 000–000 5 This feature is important for the industry of
the next generation. INDUSTRIE 4.0 is set to revolutionize manufacturing
and production [8]. I 4.0 represents a paradigm shift from "centralized" to
"decentralized" smart manufacturing and production. "Smart production" is an ICT
technology-driven approach that utilizes Internet-connected machinery to manage the
production process. The goal of SM is to identify opportunities for automating
operations and use data analytics to improve manufacturing performance. Table 1
shows the Comparison between characteristics of Industry 3.0 and Industry 4.0 in
manufacturing [9]. The characteristics of I 4.0 meets the blockchain-based system
and the model can aid these changes. Table. 1. Comparison between characteristics
of Industry 3.0 and Industry 4.0 in manufacturing  Distributed storage: Blockchain
is not fit to record a lot of information. It requires both on-chain storage of the
core ledger data and off-chain storage of data required by smart contracts for
verification and documentation [10]. The Inter Planetary File System (IPFS) is a
concrete solution. IPFS is a peer-to-peer distributed file system that seeks to
connect all computing devices with the same system of files [11]. Each file is
given a cryptographic hash. Each network node stores only content and some indexing
information that helps figure out where data is stored. When looking up files,
participants search the network to find nodes storing the content behind a unique
hash. IPFS and the Blockchain are a good match. Participants can address large
amounts of data with IPFS and place the immutable, permanent IPFS links into a
blockchain transaction. This timestamps and secures their content, without having
to put the data itself on the chain.  Digital signatures: As long as there are not
three digital signatures, a Higher Block is not generated. The system builds
transparency of supply chain from the producers, processors, retailers, to the
consumer. That can be regarded as a kind of smart contract. Digital signature
infrastructures have two distinct goals [12]; Firstly, Digitally signed messages
assure the recipient that the message truly came from the claimed sender. They
enforce nonrepudiation (that is, they preclude the sender from later claiming that
the message is a forgery). Secondly, Digitally signed messages assure the recipient
that the message was not altered while in transit between the sender and recipient.
This protects against both malicious modification (a third party altering the
meaning of the message) and unintentional modification (because of faults in the
communications process, such as electrical interference). Digital signature
algorithms rely on a combination of the two major concepts, public key cryptography
and hashing functions .  Blockchain interconnection: Serial number enables the
interconnection of Lower Blockchain and Higher Blockchain. In addition, Digital
signature has an expiration data. So, data cannot be stored for a long time. By
using distributed storage, the system can treat long storage data.
Today, the vast majority of traditional logistic information systems in Agriculture
and Food (Agri-Food) supply chains merely track and store orders and deliveries,
without pro- viding features as transparency, traceability and auditability. These
features would surely improve food quality and safety, therefore they are more and
more requested by consumers [1]. Thus, several Research & Development communities
are con- centrating their efforts on adopting some specific Internet of Things
(IoT) technologies such as RFIDs and Wireless Sensor Networks, or everyday-cheaper
connected devices, to enabled remote monitoring of the conditions in food
transportation scenarios and at a very fine granularity along the whole Agri- Food
supply chain, e.g., from production to consumption [2]. However, the majority of
the current IoT solutions still rely on heavily-centralized cloud infrastructures,
where there is usually a lack of transparency, and by nature presents security
threats including availability, data lock-in, confidentiality and auditability [3].
In the Agri-Food domain, in order to maintain trust and reliability along the whole
supply chain, it is essential for the stored records to be tamper-proof, while the
best case would be if each actor issuing transactions could do that without relying
on any centralized third-party intermediary. A potential solution to alleviate all
of such issues and concerns is the Blockchain technology, which is a peer-to-peer
digital ledger that does not rely on centralized servers. Since all the records
stored in a blockchain are based on a consensus reached at least by the absolute
majority of peers of the network itself, this distributed ledger is immutable by
design and offers an auditable and transparent source of information. And from an
IoT perspective, instead of requiring connectivity to a central cloud, sensor
networks in a blockchain-based traceability solution would only require stable
connection to their closely located peer. Thus, blockchains exposes all the
required properties for decentralizing food traceability systems, while making
traceable data available at every step of the supply chain. In this paper, we
present AgriBlockIoT, a fully- decentralized traceability system for the Agri-Food
supply chain management. Specifically, the proposed solution can rely either on the
Ethereum1 or the Hyperledger Sawtooth2 publicly available blockchain
implementations, while it is able to integrate various IoT sensor devices. By
directly producing and consuming valuable information from the IoT devices along
the whole supply chain and storing such data directly in its underlying blockchain,
AgriBlockIoT guarantees transparent and auditable asset traceability. To assess the
feasibility of the proposed solution, we engineered and deployed the so- called
from-farm-to-fork use-case: a classical food traceability scenario fostering
certified traceability of food along the whole supply chain, e.g., from
agricultural production (the farm- side) to consumption (the fork-side). Then, we
compare the two implementations, in terms of three performance metrics, namely
latency, CPU load, and network usage. The remaining of this paper is organized as
follows: Sec. II summarizes the current state of the art in the adoption of
blockchains as an enabling technology for the traceability in Agri-Food supply
chains; Sec. III describes the system architecture of AgriBlockIoT; Sec. IV
contains the analysis of our preliminary results; Sec. V concludes the paper.
1https://www.ethereum.org/ 2 978-1-4673-9944-9/18/$31.00 © 2018 IEEE
https://www.hyperledger.org/projects/sawtooth 2018 IoT Vertical and Topical Summit
on Agriculture - Tuscany (IOT Tuscany) 978-1-5386-6930-3/18/$31.00 ©2018 IEEE II.
RELATED WORK The last few years have witnessed an explosion of research and
development activity around the Blockchain technology, mainly within the financial
technology (FinTech) industry. Indeed, its intrinsic capability of providing
immutable and tamper-proof records, together with its potential of enabling trust
and reliability among untrusted peers represent too attrac- tive features,
preventing this technology to stay relegated into a single vertical sector. For
this reason, several industries beyond the FinTech sector have already identified
the Blockchain technology as a driver for a paradigm shift. For data reliability,
ProvChain [4] explored the use of the Blockchain technology in a cloud storage
scenario to verify three levels of data provenance: collection, storage and
validation. In this work, the use of blockchains showed good results in terms of
tamper- proof records and user privacy, with very low overhead for the storage
itself. In a similar context, the authors on [5] explored the use of blockchains
with smart-contracts to achieve secure data provenance, using the Open Provenance
Model (OPM) with an access control-based privacy-preserving solution. Also the
adoption of some IoT devices and technologies in the supply chain management sector
has attracted a lot of research interest in the last few years. From the impact of
autonomous identification system [6] to the application of RFID technologies in
logistics [7], the technological maturity of the devices and of the sensors is
literally revolutionizing each step of the process. Specifically for the Agri-Food
do- main, the authors of [8] presented an inventory transparency use-case, also
adopting some IoT devices. There, the goal was to explore the use of RFID and NFC-
based devices to achieve transparency and real-time information production directly
on the field, enabling persistence by means of a centralized, cloud-based database.
This is indeed the classical paradigm adopted by far the majority of the current
IoT-based solutions. However, the use of both the Blockchain and the IoT
technologies in the Agri-Food domain is still an under- explored, yet worth-to-
explore, research field. A traceability system based on the blockchain and the RFID
technology was proposed in [9], with a sharp focus on Chinese food markets. The
work considered fresh food asset tracking as fruits, vegetables and meat, by means
of RFID-based devices for the data acquisition and blockchains for data
persistence. The authors of [10] presented a supply chain traceability system for
food safety, based on HACCP (Hazard Analysis and Critical Control Points) and focus
on transparency. There, they described the process of crop plants in different
phases, from harvesting to retailing, without going into the details of a
performance analysis. Overall, to the best of our knowledge, some key-features
offered by certain blockchain implementa- tions remain either not explored, or not
fully exploited, one for all being the autonomous transactions capability (often
referred to as smart contracts [5]). III. AGRIBLOCKIOT: SYSTEM ARCHITECTURE The
unique constrains and requirements of the modern Agri-Food industry pose some major
challenges to achieve a transparent, auditable and reliable supply chain management
process . Some of these challenges are the heterogeneity of the involved actors,
stakeholders and business models, their different levels of confidentiality, the
lack of interoperability among the involved systems and, most notably, the complete
lack of a clear data governance [11]. Fig. 1 depicts a simplified version of such
process, whose involved actors are briefly introduced in the following: A)
provider: providers of raw materials, such as seeds and nutrients, but also
pesticides, chemicals, etc; B) producer: usually the farmer e.g., the responsible
of the actions from seeding/planting to harvesting; C) processor: this actor may
perform various actions, from simple packaging to more complex processes (e.g.,
press- ing of the olives); D) distributor: this actor is responsible of moving the
output of the processor (e.g., the product) from processor’s site to retailers; E)
retailer: this actor is responsible of selling the products, representing it either
small local stores or big supermar- kets; F) consumer: the final element of the
chain. Along the whole process, authorities provide standards, regulations, laws,
rules and policies that the involved actors have to comply with. Fig. 1. Simplified
version of the Agri-Food supply chain management process. We propose a layered
architecture able to rely on the Blockchain and the IoT technologies to achieve
transparency, auditability and immutability of the stored records in a trust- less
environment. We consider the blockchain as a layer of our system (see Fig. 2),
allowing AgriBlockIoT to be blockchain- independent, while it can be integrated
into existing traditional software systems (ERP, CRM, etc.). The proposed
architecture takes advantage of the increasing capabilities offered by modern edge
devices (e.g., gateways, mini-PC, etc.), which may be directly used as full nodes
of our layered blockchain implementation, hence extending the resistance,
decentralization, security and trust of the whole network. The main modules of
AgriBlockIoT are : • API: a REST Application Programming Interface expos- ing the
capabilities of AgriBlockIoT to other applications, with a high level of
abstraction, allowing easy integration with existing software systems; •
Controller: a component responsible of transforming the high-level function calls
into the corresponding low-level 2018 IoT Vertical and Topical Summit on
Agriculture - Tuscany (IOT Tuscany) Fig. 2. Layered architecture of AgriBlockIoT.
calls for the blockchain layer, and viceversa (i.e., querying and converting the
data records stored in the blockchain, into high-level information for the upper
layer). • Blockchain: The main component of the system, con- taining all the
business logic, implemented through smart-contracts on the blockchain, as a gateway
to the blockchain itself. Depending on the
selected blockchain, this module will vary in complexity, according to the program
capabilities of the selected blockchain, as well as the capabilities of the client
interfaces for that blockchain. Then, to coherently define the high-level
functionality of AgriBlockIoT, we had a bottom-up approach through which we
extracted the set of requirements starting from a complete use-case, namely from-
farm-to-fork. The latter is, indeed, a classical food traceability use-case that
fosters certified trace- ability of food along the whole supply chain, from
agricultural production to consumption. In other words, AgriBlockIoT shall provide
consumers with complete history of the food he is buying. The only pre-condition is
that all the participants (so including the IoT devices) are registered users of
the underlying blockchain, meaning that they have the correct public/private key-
pairs to digitally sign each operation on the distributed ledger. In the following,
we summarize the list of extracted requirements: R1: Raw Materials Purchasing:
producers and providers store in the blockchain the details of sales and purchases
of raw materials, including technical information of prod- ucts and amounts. Note:
smart-tags (e.g., barcode, QR codes) can be used to automatize this process; R2:
Planting: producers store in the blockchain information about the planting process
(e.g., the amount of seeds used). Note: sensors can automatize such data entry pro-
cess (e.g., connected weight scales), while smart contracts can autonomously fire,
hence creating records whenever anomalies are detected (e.g., more seeds than the
ones registered as purchased); R3: Growing: sensors, at regular intervals,
autonomously store in the blockchain information about the grow- ing plants and
environment. Note: smart contracts can asynchronously fire, hence creating records
whenever anomalies are detected (e.g., sensor values outside certain thresholds);
R4: Farming: farmers store in the blockchain information about each stage of the
process (e.g., irrigation, fertilizing, etc.), including amounts of inputs applied.
Note: sensors can automatize such data entry process (e.g., chemical sensors and
multisensory systems), while smart contracts can autonomously fire, hence creating
records whenever anomalies are detected (e.g., sensor values outside certain
thresholds); R5: Harvesting: farmers store in the blockchain details about the
harvesting. Note: sensors can automatize such data entry process (e.g., connected
weight scales), while smart contracts can autonomously fire, hence certifying that
the process from seeding to harvesting is compliant with certain regulations (e.g.,
organic, fair trade, etc.); R6: Delivery to processor: farmers transfer the
ownership of the products to distributors, directly through the blockchain. Note:
sensors (e.g., GPS sensors) and smart contracts can automatize this process, or
create records whenever anomalies are detected during the delivery phase (e.g.,
sensor values outside certain thresholds); R7: Processing: considering the simplest
case of a packaging processor, the latter store in the blockchain details about the
received amount of product from distributors, the packaged amount and, eventually,
the amount of product lost during the processing phase. Note: sensors can au-
tomatize such data entry process (e.g., connected weight scales), while smart
contracts can autonomously fire, hence creating records whenever anomalies are
detected (e.g., the packaged amount is larger than the received amount); R8:
Delivery to retailers: processors transfer the ownership of the processed product
to distributors, directly through the blockchain. Note: sensors (e.g., GPS sensors)
and smart contracts can automatize this process, or create records whenever
anomalies are detected during the deliv- ery phase (e.g., sensor values outside
certain thresholds); R9: Retailing: retailers store in the blockchain details about
the received amount of product from distributors. Then, at regular intervals,
sensors autonomously store in the blockchain information about the status of the
retail en- vironment. Note: smart contracts can asynchronously fire, hence creating
records whenever anomalies are detected (e.g., sensor values outside certain
thresholds); R10: Consuming: retailers store in the blockchain details about the
sold products, while consumers are able to transparently verify the whole history
of a product before buying it. Note: smart-tags can be associated to each package,
so that consumers can easily retrieve the whole history of the product.
The continuous emergence of counterfeit products and product quality scandals has
revealed the importance of quality management from a supply chain perspective.
According to "The Economic Daily", China's manufacturing industry suffers a direct
loss of over 170 billion RMB yearly from quality problems in supply chains [1].
There is also an indirect loss of more than 1 trillion RMB due to their negative
influences on downstream supply chains, including loss of market share and costs on
pollution controls. How to solve the problems of products qualities in supply
chains has become a key issue in acquiring manufacturing power from strategy
implementation in China, and has drawn attention of scholars in various fields
recently. Although there have been many related research projects and studies, to
resolve the series of problems in supply chain quality management arising from the
lack of trust is still a difficult problem for the technology used nowadays. The
root cause is that the traditional centralized trust mechanism cannot completely
solve these three challenges: 1) the self-interests of the supply chain members [2]
[3]; 2) the information asymmetry in the production process [4][5][6][7]; 3) the
cost of quality testing and technical limitations [8][9] [10][11]. The emergence of
blockchain technology has brought innovative possibilities to Supply Chain Quality
Management (SCQI). In a Bitcoin system, blockchain demonstrates the characteristics
such as trust machine [12], decentralized governance [13], traceable transactions
[14]. The applications have been extended from financial services to supply chain
management, intelligent manufacturing and Internet of Things (IoT), etc. How to use
the technology of blockchain to solve the problems caused by distrust in supply
chain quality management and to achieve the intelligent management of products
qualities has become a feasible research proposition. Firstly, blockchain is a kind
of new Information Technologies (IT) used in supply chain quality management. It
solves the issues of distrust on the basis of unchanged information and traceable
records through standardized norms and agreements. By setting up automatic
executions of quality management contracts, it is possible to develop an auto-run
intelligent system. Secondly, blockchain has brought a new mechanism and ways of
thinking to supply chain quality management. Blockchain technology adopts the
governance model of human society in IT systems, and further develops the
traditional centralized system to a multi-centered or decentralized system that
enables different interest groups to share power in the same IT system. This system
also improves the qualities of products and services in supply chains by contracts.
These two aspects of IT and management mechanisms are exactly the two domains in
which management science and information management systems are exploring in supply
chain quality management, and also interprets the value of blockchain in the
research of this field. In order to improve supply chain quality management with
the blockchain technology, this study proposes the framework and system
architecture for blockchain-based supply chain quality management. The rest of the
paper is organized as follows: we introduce the framework in Section 2, and use a
case to illustrate the framework in Section 3. We conclude the target contributions
and future research directions in the final section. The Fourteenth IEEE
International Conference on e-Business Engineering 978-1-5386-1412-9/17 $31.00 ©
2017 IEEE DOI 10.1109/ICEBE.2017.34 172 II. A BLOCKCHAIN-BASED SCQI FRAMEWORK In
this section, we propose a blockchain-based SCQI framework. Based on blockchain
technology [15], a new supply chain system can be built in which information
sharing and quality control are assured. Apart from enterprises on the supply
chain, this framework consists of blockchain, smart contracts and various IoT
sensors. blockchain provides safe distributed ledger with various quality
information, assets information, logistics information and transaction information.
Smart contracts bring privacy protection, automation and intelligence into this
system, while IoT sensors gather various data from the real world. The framework
and the corresponding system architecture are composed of four layers based on
different functions, as seen in Figure 1. The bottom layer is IoT Sensor Layer. In
this layer, GPS is used to locate the products in logistics process. Quality
information, assets information and transaction information is recorded with RFID
technology. Considering the relatively higher cost of RFID, barcode can be used
alternatively in some processes when the standard of accuracy is not very strictly
required and the kinds of data is not a lot. In addition, various sensors will be
used to gather the information about temperature, vibration, humidity and so on
[16][17]. Last but not least, considering many enterprises and numerically
controlled machines have their own information systems, it is more efficient to
develop some interfaces for acquiring information from these different information
systems [18]. The second layer is Data Layer, including blockchain and safe
distributed ledger. In blockchain, there are four kinds of data: quality data,
logistics data, assets data and transaction data. Furthermore, all the enterprises
keep a copy of data on supply chain including supplier, manufacturer, logistic
operator, retailer and financial institutes. With these data or information, smart
contracts are used to execute quality control and improve the efficiency of supply
chain. The third layer is Contract Layer. Only data sharing is not enough. Data
gathering in the layers above not only facilitate data sharing but also aims to
assist quality control and improve efficiency of supply chain. The first concern
about the data sharing may be the privacy issues. Privacy issues need to be
considered for data sharing. Because competitive enterprises are operating on the
same supply chain, some information needs to keep confidential for their own
competitive advantages. Therefore, digital identity is used to control the access
authority to the data. With the real time data about qualities, smart contracts can
execute real time quality monitoring and control. With the logistics data, smart
contracts are able to plan logistics automatically. Moreover, commercial contracts
can execute automatically and efficiently with transaction data and smart
contracts. Smart contracts also facilitate requirements of customers transmit from
retailers to manufacturers and then to suppliers. There are many functions that
smart contracts can achieve with the data in blockchain. For example, with the
retailers' transaction data, smart contracts analyze the ultimate customers'
demands automatically and provide suggestions about purchasing and producing to
manufacturers and suppliers. The top layer is Business Layer. This lay includes
various business activities in enterprises. Each enterprise on supply chain is able
to control and manage the products qualities with the support of blockchain and
smart contracts. They also make decisions on purchasing and manufacturing
activities based on the suggestions provided by the smart Digital Identity Real
Time Quality Monitoring & Control Logistics Planning Contract Automation End
Customer Demand Analysis & Feedback Supplier Manufacturer Logistic Operator
Retailer Financial Institutions Data Layer Contract Layer Business Layer Quality
Data Logistics Data Transaction Data Assets Data Product, Time, Temperature,
Route ... Physical Quality, Service Quality Date, Money, Participants, Contract ...
Product, Equipment, Capital ... IOT Sensor Layer GPS RFID Sensor Barcode Other IS
Logistics Process Selling Process Manufacture & Quality Inspection Process 澸濝濧濨濦濝濖濩
濨濙濘澔 激濙濘濛濙濦 Figure 1. system architecture diagram 173 contracts. In this way,
efficiency and profits are improved in these enterprises.
About two decades ago, the internet emerged as an unprecedented and highly
disruptive technology that shook the foundations of many established businesses.
This upheaval proliferated throughout many supply chains (SCs) and led to the
restructuring of complete value networks (Yao et al., 2009; Dresneret al., 2001).
While the use of network technology to exchange data electronically (e.g. EDIFACT)
had existed long before, it was the widespread adoption of the internet for
commerce (both B2B and B2C) that heavily impacted supply chains (Lancioniet al.,
2003). The current blockchain development somewhat resembles those early days of
internet adoption, which was slow at first. The roots of the ARPANET, which was an
early packet switching network based on TCP/IP, date back to the end of the 1960s.
It was not until the commercial potential of the internet was fully realized in the
1990s that the World Wide Web yielded many user-friendly applications with both
positive and negative implications for businesses and individuals (Kambil, 1995).
With widespread adoption, the internet had a significant impact on supply chain
management by creating electronic marketplaces, helping to realize cost reductions,
increasing productivity, enabling e-procurement, integrating business processes and
allowing for the creation of customized services (Lancioni et al., 2003). It is now
the blockchain which offers similar promises, and a rigorous academic investigation
is needed into the extent to which it may help businesses to create value. The
general pattern of interest in the blockchain exhibits several years of slow
adoption followed by exponential growth starting at the end of 2015 and a spike of
the end of 2017, which was caused by massive public interest in Bitcoin (Google
Trends, 2018). Similar to the internet, the blockchain is not a The current issue
and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1359-8546.htm Supply Chain Management: An International
Journal 23/6 (2018) 545–559 Emerald Publishing Limited [ISSN 1359-8546] [DOI
10.1108/SCM-01-2018-0029] © Horst Treiblmaier. Published by Emerald Publishing
Limited. This article is published under the Creative Commons Attribution (CC BY
4.0) licence. Anyone may reproduce, distribute, translate and create derivative
works of this article (for both commercial and non-commercial purposes), subject to
full attribution to the original publication and authors. The full terms of this
licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
Received 23 January 2018 Revised 1 August 2018 Accepted 7 August 2018 545
Downloaded by 109.94.173.19 At 18:35 26 January 2019 (PT) single technology but
rather operates on a stack of technologies that includes the internet as an
infrastructure and uses the blockchain protocol for storing transaction records and
establishing consensus rules. Various applications such as smart contracts can be
operated on the application layer, yet the full range of potential applications is
still unclear (World Economic Forum, 2017). Proponents of the blockchain point out
that it enables the creation of a so-called “Internet of Value” (Deloitte, 2016),
through which property rights can be transferred online. This marks a key
development from the “Internet of Information”, in which users can share
information but cannot be prevented from creating infinitely many copies. The
ongoing discussions regarding the potential impact of the blockchain and lack of
research on this topic notwithstanding, many companies are investing huge sums of
money in blockchain- based solutions that bear the potential to revolutionize SCs.
According to Juniper Research, which conducted a study amongst 369 company
founders, executives, managers and IT experts, 76 per cent of respondents believe
that the blockchain could be “very useful” or “quite useful” for their company, 35
per cent expect significant internal disruptions and 51 per cent anticipate
significant disruptions to their partners or customers (Holden and Moar, 2017). An
IBM study reports that one-third of organizations are considering or actively
engaged with blockchain technology, with numbers varying by industry. Using input
from 2,965 C-suite executives the IBM study reports that early adopters
(“explorers”) are experiencing disruptions in their industry twice as often as so-
called “passives” (60 vs 30 per cent) and that explorers are much more likely to
disrupt a market or industry themselves by “changing the rules of the game” (21 vs
5 per cent) (IBM, 2017, p. 7). The whole blockchain market size is estimated to
grow from US$210.2m in 2016 to US$2,312.5m by 2021, at a compound annual growth
rate of 61.5 per cent (Markets and Markets, 2016). The academic relevance of the
blockchain has already been acknowledged for supply chain management (SCM) and
logistics (Kshetri, 2018). Furthermore, a substantial number of publications in
academic conferences and white papers are already being published which critically
investigate the blockchain (Romano and Schmid, 2017) and its potential applications
in the field of SCM/logistics (Hackius and Petersen, 2017; Oakley, 2017). For
academic research to be able to make impactful contributions that benefit the
industry, it is crucial that researchers apply their core competence of rigorous
research methodology to scrutinize blockchain and its potential implications on
SCM. The aim of this paper is threefold. First, following the suggestion from
MacInnis (2011) that conceptual contributions necessitate the identification,
delineation and differentiation of the particular entity or a domain, this paper
seeks to clearly define and delimit the domain occupied by the blockchain. Second,
to demonstrate the applicability of the blockchain within the field of
SCM/logistics, the basic functionality of the blockchain is explained to provide
some indication of the blockchain’s potential future impact on supply chains.
Third, the major goal of this paper is the development of a theoretical framework
for further research that allows the derivation of research questions which are
based on theory and enable methodologically rigorous research designs. The
framework we elaborate is based on four widely used general theories – principal
agent theory (PAT), transaction cost analysis (TCA), also called transaction cost
theory, resource- based view (RBV) and network theory (NT) (Halldorsson et al.,
2007) – which can be applied to explore the implications of the blockchain. The
combination of these four theories allows for the simultaneous consideration of
structural as well as managerial aspects from the perspective of new institutional
economics. This framework, which is made up of research questions pertaining to the
respective theories, allows for the further creation of middle-range theories and
propositions that can later be empirically tested and provides an initial
understanding of the “inner workings within key relationships” (Stank et al., 2017,
p. 6). It will therefore enable researchers to systematically investigate the
blockchain phenomenon and its potential implications from varying theoretical
standpoints. More specifically, it will help to answer two overarching research
questions: RQ1. How to structure a supply chain that incorporates the blockchain?
RQ2. How to manage a supply chain that incorporates the blockchain? Questions
regarding how to structure a supply chain (SC) are primarily addressed using PAT
and TCA, while questions about what is needed for managing such structures fall
under the domain of RBV and NT. This paper ends with a brief discussion of
theoretical and managerial implications and suggestions for future research. 2. The
blockchain: functioning, definition and impact assessment The basic unit of a
blockchain is a single transaction that involves one or more entities. This could
be a payment process but might as well be a transfer of information. A
cryptographic hash function, which takes an input and returns an alphanumeric
string of fixed length, is used to create so-called transaction hashes that encode
the contents of this transaction. These transaction hashes cannot be used to
recreate the original transaction and are visible in case the blockchain is public.
Several transactions are subsequently combined into one single block, which in most
cases is verified by so-called miners who deploy computing resources that compete
amongst each other to create the next block. If a block is successfully validated,
it is appended to the chain of previous blocks, hence the term blockchain. A new
block is connected with previous blocks in a way that makes it increasingly hard to
remove from the total chain. The whole process of validating transactions and
adding blocks in a public blockchain is fully distributed such that no single
controlling authority exists (Nakamoto, 2008; Raval, 2016). Sophisticated
procedures exist to circumvent fraud (e.g. double spending) which is why it is
sometimes written that the blockchain leads to trustless consensus. An important
characteristic of blockchains is their resistance to the modification of data.
Transactions on the blockchain cannot be later modified or removed because of the
linking of the blocks together. The longer the chain, the harder it is to make
modifications in previous blocks, and thus the higher the level of trust (Narayanan
et al., 2016). Impact of the blockchain on the supply chain Horst Treiblmaier
Supply Chain Management: An International Journal Volume 23 · Number 6 · 2018 ·
545–559 546 Downloaded by 109.94.173.19 At 18:35 26 January 2019 (PT) We thus
define the blockchain as a digital, decentralized and distributed ledger in which
transactions are logged and added in chronological order with the goal of creating
permanent and tamper- proof records. Decentralization
 refers to a situation whereby no single entity controls transaction processing,
while distribution relates to the computational work that is divided between
several computers. Distributed Ledger Technology (DLT) is a broad term which
describes all technologies that distribute information across multiple sites,
countries or institutions and which includes the blockchain. If a dedicated group
of owners or users exists, the ledger is permissioned and private (e.g. a clearing
or settlement network). If the usage is public, but the integrity is maintained by
trusted ledger owners, it is called a permissioned, public shared ledger (e.g. a
global financial transaction system). Finally, if the integrity is ensured by the
users themselves through untrusted consensus, this is called an unpermissioned
public shared ledger (e.g. a cryptocurrency such as Bitcoin) (UK Government, 2016).
2.1 Industry adoption of the blockchain It was Bitcoin, a cryptocurrency
application of the blockchain, which first drew public attention to this
technology. In 2008, a seminal paper entitled “Bitcoin: A Peer-to-Peer Electronic
Cash System” was published under the name of Satoshi Nakamoto, (Nakamoto, 2008),
and in January 2009, the first open source Bitcoin client was released with
Nakamoto, himself being the first miner. This name was later revealed to be a
pseudonym and the actual inventor (or group of inventors) of Bitcoin still remains
unknown. In the years to follow, it was the computer science and cryptography
communities that were most occupied with the technology, but attention broadened
around 2010/2011 when Bitcoin started to take off with exponential trade volumes
and a dramatic price increase (Alabi, 2017). Bitcoin has paved the way for a
multitude of so-called Altcoins to follow, many of which were actually derived
(“forked”) from the original Bitcoin implementation. Those Altcoins serve different
purposes ranging from replacing fiat money to more specific applications such as
supplanting the use of the USA dollars in the container shipping industry with
tokens launched by open-source blockchain-based platforms (MarEx, 2017). Current
use cases go far beyond simply using the blockchain as a technological platform for
currencies and have now started to include the implementation of so-called smart
contracts, for example, on the Ethereum platform. This was made possible by an
extension of the basic functionality of the blockchain that enabled the
implementation of complex business logic. Smart contracts are agreements between
two or more contracting parties which can be automatically enforced without any
intermediaries. These agreements exist in the form of software code on the
blockchain platform, which ensures their autonomy and self-executive nature based
on predefined rules (Savelyev, 2017). The blockchain is frequently labeled a
“disruptive” technology, but, as Iansiti and Lakhani (2017) point out, it would be
more appropriate to call it a foundational technology, as it can create new
foundations for social and economic systems. Although at present the full range of
potential blockchain applications is still unclear, many use cases have been
suggested for various kinds of industries. A notable example in manufacturing, SCM
and logistics involves combining the internet of things (IoT) and the blockchain.
This combination has the potential, for example, to enable connected vehicles that
automatically communicate their current status and smart locks that give access to
real-world objects. Blockchain platforms can also be used for SC tracking
applications which keep a formal product registry and are able to track possession
of goods at different stages in the chain. Other ideas include smart diagnostics,
which will enable machines to monitor their state and diagnose problems and smart
contracts between manufacturers and vendors for the procurement of supplies and
service of machinery (Bahga and Madisetti, 2016). Additionally, it would be
possible to track the identity and reputation of suppliers and to use smart
contracts to automatically negotiate best prices in real time while taking into
account the seller’s reputation (Bahga and Madisetti, 2017). On a more general
level, Field (2017) predicts that the blockchain will lead to improved SC
visibility, SC optimization and better demand forecasting, as increased
transparency will make it possible to react in real time to unforeseen events. This
will also have a positive effect on inventory management. The general expectation
is that the blockchain will help to reduce fraud and errors, reduce transit and
shipping costs as well as waste and improve inventory management (JOC, 2017).
With the unparalleled disruptions that the operations and supply chain management
(OSCM) field is experi- menting (Queiroz, Ivanov, et al. 2020; Ivanov and Dol- gui
2020a, 2020b), organisations are challenged to adopt critical technologies to face
challenges, improve perfor- mance, and gain competitive advantage. Most of these
challenges are attributed to the rapid emergence of the information and
communication technologies (ICTs), particularly in the Industry 4.0 era (Hahn
2020). As one of the most disruptive technologies that have emerged recently,
blockchain (Koh, Orzes, and Jia 2019) – Also called the blockchain Technology (BCT)
– is already rad- ically transforming many business models (Y. Chen 2018; Dolgui et
al. 2020), thus impacting not only produc- tion systems and supply chains (SCs)
(Ivanov, Dolgui, and Sokolov 2018; Pournader et al. 2020; Queiroz, Fosso Wamba, et
al. 2020), but also the society as a whole (Aste, Tasca, and Di Matteo 2017;
Pazaitis, De Filippi, and Kostakis 2017). The BCT consists of a distributed ledger
in which the transactions are organised in blocks and linked each other into a
chain (Risius and Spohrer 2017). CONTACT Maciel M. Queiroz
maciel.queiroz@docente.unip.br Postgraduate Program in Business Administration,
Paulista University – UNIP, São Paulo 04026-002, Brazil It operates in a peer-to-
peer network; that is, the transac- tions are validated and recorded by consensus
(Y. Chen 2018). The capacity of the BCT to transform the SCs and production systems
has aroused the interest of a sig- nificant number of practitioners and scholars
(Schmidt and Wagner 2019; Wang et al. 2019; Chang, Iakovou, and Shi 2020; Dolgui et
al. 2020; Fosso Wamba, Queiroz, and Trinchera 2020; Koh, Dolgui, and Sarkis 2020;
Pournader et al. 2020; Vatankhah Barenji et al. 2020). In this regard, considering
the recent literature on the technology adoption, there is a great debate about the
adoption of cutting-edge technologies (Wang, Wang, and Yang 2010; Shin, Park, and
Lee 2018; Yeh and Chen 2018), especially in emerging economies (Ahmadi et al. 2018;
Mital et al. 2018; Raut et al. 2018; Karamchandani, Srivastava, and Srivastava
2019), and in supply chain management contexts (Kamble, Gunasekaran, and Arha 2019;
Queiroz and Fosso Wamba 2019; Fosso Wamba, Queiroz, and Trinchera 2020; Wong et al.
2020). For instance, Raut et al. (2018) showed that trust, manage- ment style,
technology innovation, risk analysis, and per- ceived risk in IT security influence
cloud computing © 2020 Informa UK Limited, trading as Taylor & Francis Group 2 M.
M. QUEIROZ ET AL. adoption in the Indian context. In another study, Ahmadi et al.
(2018) showed that system affiliation, mimetic pressure competitors, normative
pressure, and employ- ees’ information system knowledge affect the adop- tion of
information systems by hospitals in Malaysia. Also, Kamble, Gunasekaran, and Arha
(2019) found that perceived usefulness, attitude, and perceived behaviour control
are essential variables for BCT adoption in India. The highly disruptive potential
of BCT has led to an increased interest in studying this technology in a good
number of contexts. Thus, from different angles, blockchain is being investigated
in the context of sup- ply chain management (SCM) (Kshetri 2018; Queiroz, Telles,
and Bonilla 2019; Rahmanzadeh, Pishvaee, and Rasouli 2019; Li et al. 2020; Wamba
and Queiroz 2020). For instance, blockchain-enabled SCM has been inves- tigated in
industries such as transport and logistics (Koh, Dolgui, and Sarkis 2020; Pournader
et al. 2020), multi-echelon SCs (Manupati et al. 2019), manufac- turing
(Aghamohammadzadeh and Fatahi Valilai 2020; Vatankhah Barenji et al. 2020), global
trade (Chang, Iakovou, and Shi 2020), sustainable SCs (Saberi et al. 2019),
humanitarian SCs (Dubey et al. 2020), etc. Despite these recent advances, BCT is
still in its infancy (Fosso Wamba et al. 2020), especially concern- ing individual
adoption behaviour in supply chains. Very few empirical studies of BCT adoption in
SCM were conducted recently (Kamble, Gunasekaran, and Arha 2019; Queiroz and Fosso
Wamba 2019; Fosso Wamba, Queiroz, and Trinchera 2020; Wong et al. 2020). In addi-
tion, the blockchain adoption literature that is specifically focused on the effect
of trust in the intention to adopt is scarce (Queiroz and Fosso Wamba 2019; Wong et
al. 2020), especially in emerging economies. Furthermore, a deeper understanding of
the use of BCT by different industries, especially in the OSCM field, is yet to be
pro- vided. Besides, it is fundamental to have an in-depth understanding of the
behaviour behind BCT adoption, considering the highly disruptive capacity of this
technol- ogy (Wamba and Queiroz 2020) and its unprecedented impacts on supply
chains (Ivanov 2019; Dolgui et al. 2020). To bridge this gap, this study aims to
identify and gather insights into the driving factors of and possi- ble barriers to
BCT adoption behaviour in the Brazilian OSCM context. Thus, our guiding research
questions (RQ) are designed as follows: RQ1. What is the prevailing BCT adoption
behaviour in an emerging economy’s supply chain environment? RQ2. What are the
possible barriers to BCT adoption, and how will they be resolved? Since BCT is a
new technology, IT adoption theories are a suitable approach to understand the
behaviour of its potential adopters in the supply chain context. Thus, to answer
the questions mentioned above, this study proposes a model that is based on an
altered version of the unified theory of acceptance and use of technology (UTAUT)
(Venkatesh et al. 2003) to understand blockchain adop- tion behaviours and possible
barriers. Moreover, the pro- posed model is supported by essential studies from the
emerging literature on BCT as well as by the supply chain literature. We used the
partial least squares structural equation modelling (PLS-SEM) (Hair et al. 2017)
and have exploited data collected in a Brazilian OSCM context. We were conscious of
the fact that unlocking and providing a deeper understanding of blockchain adoption
barriers (Saberi et al. 2019) and blockchain adoption behaviour of OSCM
professionals from an emerging economy would certainly stimulate and advance the
related theory. This study brings valuable contributions to OSCM and production
research by proposing and validating a modified UTAUT applied to BCT in supply
chains in an emerging economy. In addition, the comparison of our findings with the
extant literature revealed signifi- cant differences in the variables that predict
the intention to adopt blockchain. This, therefore, suggests that the cultural
aspects (between countries) should be consid- ered as a potential barrier. A
singular contribution of this study here resides in that it demonstrates the
importance of including cultural aspects in the new versions of the model. This
paper is organised as follows: In Section 2, we present the theoretical background,
including BCT past and new developments, the integration of BCT with SCM, and the
UTAUT model. Section 3 is dedicated to introducing the hypotheses and the proposed
research model. In sequence, Section 4 draws the methodology adopted, followed by
data analysis and findings in Section 5. Section 6 highlights the discussion,
showing implica- tions for theory and practice. Finally, Section 7 presents the
main conclusions, limitations, and opportunities for future studies. 2. Theoretical
background In this section, we provide the theoretical underpinning for the past
and new developments of BCT applica- tions, the fundamentals of the supply chain
management vision, and the integration of blockchain into supply chains. The
section ends with a description of the role of technology acceptance models,
highlighting specifically the unified theory of acceptance and use of technology
(UTAUT) model. INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 3 2.1. Blockchain
technology: past and new developments The first appearance of blockchain
technologies (BCTs) occurred in the bitcoin market (Nakamoto 2008; Derks, Gordijn,
and Siegmann 2018), where it was expected to support transactions; but blockchain
applications have since then outperformed this field to span other areas. Regarding
the main characteristics of the BCT, each block has a unique hash number and also
carries the hash of the previous block. This process connects all blocks into a
chain. In addition, the blocks have a mech- anism called Merkle root that stores
all transaction infor- mation. Another essential characteristic is that there is
the timestamp whose role is to record the duration of blocks. It saves transaction
date and time, thus ensuring integrity, immutability, reliability, and
trustworthiness, among others. In general, the validation of transactions is
performed by consensus between the network mem- bers. The blocks linked into a
chain allow the network members to trace any transaction’s origin. In other words,
the process through the supply chain is characterised by transparency and
accountability, all of which tend to be improved (Kshetri 2018). Many fields have
been reporting the potential of BCT applications. For instance, Veuger (2018)
studied BCT from a real estate perspective and showed that BCT had the potential to
add preventive mediation, fraud preven- tion, efficiency, and transparency to real
estate transac- tions. Viryasitavat et al. (2018) presented BCT as applied in
business process management (BPM), considering its benefits for service composition
in the Industry 4.0’s landscape. The authors demonstrated that BCT could bring
about reliability and trustworthiness to transfer and verify any transactions made
by businesses and part- ners. Other studies have investigated BCT in contexts such
as business and entrepreneurship. This is the case of Y. Chen (2018), who reported
that BCT with tokens could democratise entrepreneurship
and support innovations. If combined with IoT, BCT can strengthen cybersecurity
and therefore improve privacy (Kshetri 2017). In terms of BCT benefits and
challenges in supply chains (Dol- gui et al. 2020; Wamba and Queiroz 2020), a few
types of research have been carried out, but plenty of studies and experimentations
are still going on. 2.2. Supply chain management and the integration with
blockchain technologies Like other areas, supply chain management (SCM) is not yet
a universal concept with a commonly accepted definition. A suitable definition was
provided by Stock and Boyer (2009), in which they highlight the importance of
managing the relationships between the different members in a network, which is
possible not only by considering the flow of materials, services, finance, etc. but
also through value creation from all the stakeholders, namely the customers and the
suppliers. Moreover, SCM has been studied through with different, but complemen-
tary angles (Carter, Rogers, and Choi 2015). According to the various identified
perspectives, SCM can be viewed as a network; a complex adaptive system; a relative
per- spective depending on the node; and a system that can be divided into physical
(i.e. suppliers, focal firm, final customer) and support entities (financial
organisations, transportation, etc). SCM can also be viewed as a setting where the
focal members can constrain the visible hori- zons. It should be noted that a
visible horizon of the focal firm varies according to the distance (physical,
cultural, closeness centrality) between angles (Carter, Rogers, and Choi 2015). In
this context, SCM networks commonly have sev- eral members, which renders
relationships very complex. Besides, due to the unprecedented digitalisation of
sup- ply chains (Queiroz et al. 2019), BCT has the potential to disrupt all SCM
business models and usher in more fluid- ity and visibility. Nonetheless, it is
only recently that BCT has attracted the attention of scholars and practitioners
(Aste, Tasca, and Di Matteo 2017; Pazaitis, De Filippi, and Kostakis 2017; Kshetri
2018; Queiroz, Telles, and Bonilla 2019; Rahmanzadeh, Pishvaee, and Rasouli 2019;
Saberi et al. 2019; Fosso Wamba et al. 2020; Koh, Dolgui, and Sarkis 2020;
Pournader et al. 2020) in the SCM field. SCM operations integrating BCT are recent,
even though a large number of organisations are already adopting BCT for their
operations (Kshetri 2018). Recently, the blockchain literature has definitely
integrated the term ‘operation’ in the supply chain context (OSCM) (Choi and Luo
2019; Helo and Hao 2019; Wamba and Queiroz 2020) to highlight the several
operations that are hence- forth performed in the SCM field thanks to blockchain
applications (e.g. product traceability, information shar- ing, transactions,
etc.). In this sense, several benefits of using BCT in OSCM can be achieved. For
instance, product traceability (Lu and Xu 2017; R. Y. Chen 2018) is improved
significantly, and this has been acknowledged in industries such as the wine
sector, where product adulteration and coun- terfeiting are being overcome owing to
BCT (Biswas, Muthukkumarasamy, and Tan 2017). So goes with the food industry, where
there is a regular OSCM food trace- ability with BCT (Tian 2017), coupled with
increased security and transparent traceability of the entire jour- ney of a
particular product across the chain. Also, BCT can leverage transparency in
products traceability and services (Bai and Sarkis 2020). 4 M. M. QUEIROZ ET AL. In
several other OSCM contexts, BCT has shown proof of outstanding support. Recently,
as Dubey et al. (2020) were exploring the contribution of BCT in the human- itarian
supply chain (HSC) context, they demonstrated its fundamental role in supporting
disaster relief oper- ations by leveraging the collaboration of the SC mem- bers,
through swift-trust. Besides, Rodríguez-espíndola, Chowdhury, and Beltagui (2020)
proposed an interesting framework combining BCT, artificial intelligence, and 3D
printing for HSC. BCT was also studied in global SCM and international trade
operations and transactions (Yoon et al. 2020), as well as in platform operations
for rental services in SCMs, and it was found to play a vital role in supporting
and ensuring trustworthiness between product/service providers and customers (Choi,
Feng, and Li 2019). Moreover, reinforcing the possible gains of this inte- gration,
previous research deployed considerable efforts to identify some of the main
benefits of BCT in SCM- related fields (Manupati et al. 2019; Tozanlı, Kongar, and
Gupta 2020; Yoon et al. 2020). Authors highlighted the following BCT advantages:
increased transparency in operations and transactions (Kim and Laskowski 2017),
accountability and trust (Zou et al. 2018; Vatankhah Barenji et al. 2020), the
security of information (Tian 2017), fraud prevention (R. Y. Chen 2018),
transparency (Biswas, Muthukkumarasamy, and Tan 2017; Lu and Xu 2017), operational
efficiency (Aste, Tasca, and Di Matteo 2017), costs reduction (Kshetri 2018), among
others. Despite such benefits, the current literature has just begun to tackle BCT
adoption issues in the SCM field (Kamble, Gunasekaran, and Arha 2019; Queiroz and
Fosso Wamba 2019; Fosso Wamba, Queiroz, and Trinchera 2020; Wong et al. 2020). 2.3.
Unified theory of acceptance and use of technology model The literature concerning
technology adoption models is rich (Davis 1989; Venkatesh and Davis 2000; Venkatesh
et al. 2003; Venkatesh and Bala 2008; Venkatesh, Thong, and Xu 2012). A very
widespread model dubbed uni- fied theory of acceptance and use of technology model
(UTAUT) is increasingly being used in research; it was first introduced by
Venkatesh et al. (2003). Thereafter, many adoption contexts have relied on the
UTAUT (Rana et al. 2016; Dwivedi, Rana, Jeyaraj, et al. 2017; Chua et al. 2018).
The UTAUT model aimed to unify previ- ous acceptance models described in the extant
literature. Venkatesh et al. (2003) derived this model from the fol- lowing models:
theory of reasoned action (Fishbein and Ajzen 1975), technology acceptance model
(Davis 1989), the model of PC utilisation proposed by (Thompson, Higgins, and
Howell 1991), innovation diffusion theory (Rogers 1962; Moore and Benbasat 1991),
the theory of planned behaviour (Ajzen 1991), motivational model (Davis, Bagozzi,
andWarshaw1992), social cognitive the- ory (Compeau and Higgins 1995), and the
combination of the technology acceptance model with the theory of planned behaviour
(Taylor and Todd 1995). The UTAUT model is made of four main constructs
(performance expectancy, effort expectancy, social influ- ence, and facilitating
conditions) that predict behavioural intention. In this vein, use behaviour is
predicted by behavioural intention. The model is built on four moder- ators,
namely: gender, age, voluntariness, and experience. Following the recent
literature, we did not incorporate these moderators (Dwivedi, Rana, Janssen, et al.
2017; Dwivedi, Rana, Jeyaraj, et al. 2017) in our proposed model, as they cannot be
applied to any context exerting good influence. In a recent study of BCT adoption
in SCM, Wong et al. (2020) applied a modified version of the UTAUT and found that
performance expectancy, effort expectancy and trust had no significant positive
effect on the behavioural intention to adopt blockchain in Malaysia. In another
study using UTAUT as model’s base, Queiroz and Fosso Wamba (2019) investigated the
intention to adopt BCT for SCM in India and in the USA. The results obtained looked
somewhat different from those reported by Wong et al. (2020), thus suggesting the
existence of adoption disparities across countries. Concerning the barriers related
to BCT adoption in SCM, various authors identified a number of headwinds. For
example, Saberi et al. (2019), highlighted potential unfavourable factors with
different natures: intra-organisational (e.g. lack of tools, knowledge), inter-
organisational (e.g. collabora- tion, culture), external (e.g. lack of governmental
policies and stakeholders involvement), and systems related (e.g. security,
technology immaturity).
Blockchain technology (BCT) is gaining momentum, with an increasing number of
diverse applications, as well as with more and more actors involved in its
applications (Nowiński and Kozma, 2017). It is one of the select, emerging
technologies which is expected to enable transformational platform-based business
models to enhance competitive advantages (Burkett and Johnson, 2016). Popularly
hailed as “the most important invention since the internet” (Tapscott and Tapscott,
2016a), BCT has been identified as one of the top ten strategic technology trends
(Panetta, 2016). With mainstream adoption of the technology expected within five to
ten years, it will be possible to see its widespread applications in terms of
monetary remittances, academic credential systems, land title systems, tracking the
origin and provenance of products and many more areas (Panetta, 2017). The
technology is expected to have profound and disruptive effects on society as a
whole and has therefore triggered an international policy response calling for a
joint technological infrastructure (Pedersen, 2018). With the global blockchain in
the supply chain market poised to reach $424m by the year 2023 (Dyble, 2018),
academic and practitioner interest from a supply chain management (SCM) perspective
is also growing exponentially (Kshetri, 2018). Blockchains within SCM International
Journal of Physical Distribution & Logistics Management © Emerald Publishing
Limited 0960-0035 DOI 10.1108/IJPDLM-02-2019-0063 Received 20 February 2019 Revised
20 February 2019 Accepted 21 February 2019 The current issue and full text archive
of this journal is available on Emerald Insight at: www.emeraldinsight.com/0960-
0035.htm The authors would like to thank Student Lorenzo Russo for assisting the
authors with the research. The authors would also like to thank the two anonymous
reviewers and the guest editors for providing invaluable feedback and comments to
this paper. Supply chain performance Downloaded by University of Technology Sydney
At 18:41 15 May 2019 (PT) have been addressed by case descriptions of its use or
potential use in different industrial settings. Blockchains in the food industry
(e.g. Coyne, 2017; Yuva, 2017), the shipping industry (e.g. Riley, 2017;
Tirschwell, 2018) and the pharmaceutical/healthcare industry (e.g. Bocek et al.,
2017; Shanley, 2017) have attracted the most attention. However, knowledge
generation on BCT within SCM is still very early in its lifecycle. Although some
peer-reviewed publications on the relation between BCT and SCM have emerged, these
emphasise the broader role of the blockchain in achieving supply chain competitive
priorities at the organisational level (see Kshetri, 2018; Petersen et al., 2017).
Another challenge is that the literature on BCT within SCM needs theoretical
substance and a theoretical foundation, based on which it can begin a more
structured process of knowledge generation. The current knowledge is dominated by a
multitude of imprecise literature highlighting the many promises of the new
technology. This is a problem, because the theoretical and methodological
approaches of these contributions are weak and the validity of their claims low
(Adams, Smart and Huff, 2017). While some recent research on the theorisation of
blockchain for SCM has emerged (see Treiblmaier, 2018), it has yet to conceptualise
both the positive and negative managerial work-related effects of the technology
and its specific architectural properties. As a result, the technology, management
and performance relationship (Hald and Mouritsen, 2013) remains under-
conceptualised. This study explores the potentially enabling and constraining
managerial implications of BCT for SCM. It addresses the impact of the technology
on the dimensions of SCM and supply chain performance. Because the technology
affects not only supply chain processes but also individual actors and their
behaviours, its impact on the supply chain can be complex, uncertain and
potentially both enabling and constraining (Lyall et al., 2018). There is,
therefore, a need for research which may establish a grand overview of this
complexity and synthesise current insights into a set of propositions that
highlight both the potentially enabling and constraining effects of this new
technology. The research presented in this paper makes several contributions. The
theoretical approach and synthesis are new. Based on Adler and Borys (1996), the
research takes into account the blockchain as an organisational technology which is
seen as powerful and actively affecting the ability to manage the supply chain, its
processes and its relationships. This adds to the literature, which has not yet
explored how the same potentially powerful architectural properties of BCT might
have both enabling and constraining effects for SCM and supply chain performance
(see Treiblmaier, 2018). This adds a new and more holistic understanding of the
potential dual implications of BCT on SCM. The paper is structured as follows.
Section 2 presents BCT and its relationship to SCM and performance. Section 3
describes the research methodology. Section 4 analyses the literature with a view
towards its position on how BCT may enable and/or constrain SCM. Finally, the
discussion and conclusion are presented in Sections 5 and 6. 2. Blockchain
technology, SCM and performance 2.1 Blockchain technology A blockchain can be
defined as “a digital, decentralised and distributed ledger in which transactions
are logged and added in chronological order with the goal of creating permanent and
tamperproof records” (Treiblmaier, 2018, p. 547). Thus BCT holds several important
architectural properties. One important architectural property of BCT is its
decentralised structure. In the blockchain, all the participants in the network
have a copy of the same data, which is distributed across the peer-to-peer network.
This property of BCT may be designed to allow greater accessibility to the data set
to everyone at any time and any place in the network (O ́Dair and Beaven, 2017).
However, there is a distinction between permissionless (public) and permissioned
(private) blockchains. In public blockchains, the digital ledger is IJPDLM
Downloaded by University of Technology Sydney At 18:41 15 May 2019 (PT) completely
decentralised, and it can be accessed by any internet user. Hence, information
about the transactions is broadly available to the network participants in a public
setting (O ́Leary, 2017). However, in a business setting, such information may
provide competitors or other institution with the potential for business
intelligence. As a solution, private blockchains can be implemented. In
permissioned blockchains, only a preselected and limited number of participants are
authorised to use the ledger. The entries in a fully private blockchain are
monitored by a central authority (Siba and Prakash, 2016), which can decide to
accept new members into the network and determine the level of access provided to
members (Kewell et al., 2017). Another important architectural property of BCT is
the cryptography system, which promises immutability of data and further enables
the tracking of chains of data and transactions over time (Ølnes et al., 2017;
Nowiński and Kozma, 2017). From a technical perspective, it consists of two
functions: keying and hashing. Keying works by using two different but related
keys, either of which can encrypt or decrypt a message or transaction. If one key
encrypts the message, only the other key can decrypt it (Brandon, 2016). Hashing
allows blocks to be chained together in an immutable sequence (Haber and Stornetta,
1990). The header of each block contains a hash value reflecting the contents of
the previous block, which itself includes a hash value derived from its
predecessor, and so forth, all the way back to the first block in the chain
(Yermack, 2017). Thus, new information cannot be forged retroactively by changing a
prior entry in the blockchain because it would cause changes in the sequences of
all subsequent entries (Biswas et al., 2017). Yet another important architectural
property of BCT is the consensus mechanism, through which quality and integrity in
the blockchain can be provided. The consensus mechanism confirms that transactions
are coded into blocks according to the cryptographic rules and enforces the time
sequence placing of blocks on the chain (Brandon, 2016). This typical peer-to-peer
architecture contributes to the security as well as the immutability of the
transactions which are recorded in the blockchain. Furthermore, the distributed
consensus protocols can have several forms, such as majority voting, priority
voting or having a minimal number of votes, to ensure the data integrity of the
transactions (Ølnes et al., 2017). In some versions of BCT, the smart contract is
added as an extra important architectural property. The smart contract is a
computer programme that can autonomously verify and execute the terms of contracts
(Szabo, 1997). Thus, with this property, the blockchain has the ability to allow
the self-enforcement of contracts. All the various promises in the contract can be
authenticated by the BCT, validating that each party has the ability to perform the
tasks it is responsible for. 2.2 Blockchain in SCM For SCM, the blockchain is
positioned as a digital innovation, an emergent enabling technology (Buer et al.,
2019). SCM is defined as the systemic, strategic coordination of traditional
business functions and the tactics across these functions within a particular
company and across businesses within the supply chain, for the purposes of
improving the long-term performance of the individual companies and the supply
chain as a whole (Mentzer et al., 2001). Through the above-mentioned architectural
properties, the blockchain then provides unique technological qualities, such
as immutability, automaticity, pseudonymity and non-repudiability
(irreversibility), which in turn may result in unparalleled reliability,
transparency and efficiency in the supply chain (Treiblmaier, 2018). Kshetri (2018)
explores how the blockchain is likely to affect key SCM and performance objectives,
such as cost, quality, speed, dependability, risk reduction, sustainability and
flexibility. Based on the analysis of secondary case data, it is concluded that the
relation between blockchains and increased transparency and accountability is
likely to be strong. It is further conjectured that the new technology may
potentially affect all the explored objectives. Supply chain performance Downloaded
by University of Technology Sydney At 18:41 15 May 2019 (PT) Petersen et al. (2017)
perform one of the first mapping studies in the field and explore the stance of
industry professionals towards blockchains. They identify 49 different applications
of the blockchain, which may be grouped into three main clusters: product tracking,
product tracing and supply chain finance. It is found that although most managers
realise the potential impact of the new technology, the rather conservative
logistics companies seem hesitant to adopt and invest in blockchain applications
due to unclear performance benefits and employee effects. Treiblmaier (2018)
presents an agenda for the applicability and subsequent adoption of BCT in SCM.
Based on the theoretical premises for SCM (Halldorsson ́ et al., 2015),
Treiblmaier’s framework provides a good theoretical starting point for
understanding the implications of blockchains in aiding SCM, though his
propositions do not yet show the organisational work-related managerial constraints
and benefits of the BCT properties, which may affect its applicability. As the
study of Petersen et al. (2017) shows, there is a distinct difference in terms of
different managerial levels and professional backgrounds in how the benefits and
effects of BCT are perceived. It is important to account for these managerial
effects in order to have a better understanding of the technology-management–
performance relationship (Hald and Mouritsen, 2013). 2.3 Organisational
technologies and supply chain performance Organisational technologies can have
potentially enabling or constraining effects on organisation. This theory,
presented by Adler and Borys (1996), proposes a conceptualisation of workflow
formalisation which helps reconcile the contrasting assessments of bureaucracy as
enabling employees to perform their tasks more effectively or as constraining and
alienating to their work and performance. The theory further defines organisational
technology as an instance of formalisation which enables managerial intervention in
organisational processes and workflow. Depending on its design, organisational
technology may lead to both enabling and constraining effects. Thus, Adler and
Borys (1996) predict that any organisational technology creates the possibility for
both enabling and coercive bureaucracy. From an SCM perspective, the blockchain may
be understood as an organisational technology which spans multiple organisations
and work processes and which helps supply chain managers intervene and manage the
supply chain. However, its design affects supply chain actors’ work and commitment
and modifies the ability to manage the supply chain and reach desired levels of
supply chain performance. Thus, embedding BCT in the supply chain may produce
possibilities for both enabling and constraining formalisation. Based on these
considerations, a central question, then, is whether and how the blockchain
understood as an organisational technology will be supportive of the ability to
manage the supply chain and to enhance supply chain performance. The purpose of the
present research is, therefore, to understand the enabling and constraining roles
of BCT in managerial work practices, and to further conceptualise the technology–
performance relationship for SCM. With this ambition in mind, the following
research question is formulated: RQ1. How does the blockchain enable and constrain
SCM and supply chain performance? 2.4 The enabling and constraining effects of BCT
on supply chain performance Our research strategy follows Hald and Mouritsen’s
(2013) research, which applies Adler and Borys’ (1996) research to explore the
enabling and constraining effects of enterprise resource planning systems in
operations management. We look for evidence in the literature regarding how the
blockchain as an organisational technology is imbued with a set of powerful
identities, each with the potential to either enable or constrain different
dimensions IJPDLM Downloaded by University of Technology Sydney At 18:41 15 May
2019 (PT) of SCM and supply chain performance. The analysis, therefore, not only
observes enabling effects, but also simultaneously looks for the potential
constraining/coercive effects which may potentially emerge from the same
architectural properties or BCT design. Thus, the analyses acknowledge that
enabling and constraining effects may go hand in hand, but also that they may be
difficult to capture, as they may be dislocated across complex organisational
structures such as a supply chain system (De Leeuw et al., 2013). Specifically,
Figure 1 shows the theoretical model. The theoretical model projects that when the
blockchain is understood as an organisational technology, it can lead to both
enabling formalisation and coercive formalisation in the supply chain. Whether it
results in an enabling or coercive formalisation is affected by its design. Thus,
the theoretical model projects that the same architectural property of the
blockchain or combination of properties (e.g. decentralised structure,
cryptographic mechanism, consensus mechanism, smart contract) can result in either
enabling formalisation or coercive formalisation, depending on how these properties
are taken into account in the supply chain. When the blockchain is enabling, it is
designed with usability and an upgrading rationale, it supports and enhances supply
chain capabilities and leverages supply chain skills and intelligence (Adler and
Borys, 1996). Thus, supply chain actors are seen as sources of skills and
intelligence to be supported. When the blockchain enables, it moves organisational
processes in new and desirable directions and it will immediately or over time
increase supply chain performance. When the blockchain is constraining, it is
designed with a fool-proofing and deskilling rationale, it substitutes commitment
with procedures, and it coerces effort and compliance from supply chain actors
(Adler and Borys, 1996). Thus, supply chain actors are seen as sources of problems
to be eliminated. When the blockchain constrains, it hinders the supply chain, its
processes and its actors in performing to their potential and it decreases supply
chain performance. Supply chain performance is understood as the efficiency and
effectiveness of supply chain processes and relationships (Maestrini et al., 2017),
and it may be operationalised as a set of supply chain performance dimensions or
objectives (Kshetri, 2018).
The very first public perception of blockchain technology came in 2009 from Satoshi
Nakamoto [1] when the crypto currency Bitcoin made headlines in the financial
industry [2]. In August 2008 the domain named bitcoin.org was registered, whereupon
the paper called “Bitcoin: A Peer-to-Peer Electronic Cash System” is describing a
digital currency that uses the blockchain technology [18]. As a basis, the
following definition for blockchain is used in this paper. By a decentralised
system storage and management, the blockchain is described as a digital,
distributed transaction book that uses identical information on Available online at
www.sciencedirect.com ScienceDirect Procedia Computer Science 00 (2020) 000–000
www.elsevier.com/locate/procedia * Corresponding author. E-mail address:
ralf.haerting@hs-aalen.de 1877-0509 © 2019 The Author(s). Published by Elsevier
B.V. This is an open access article under the CC BY-NC-ND license
(https://creativecommons.org/licenses/by-nc-nd/4.0/) Peer-review under
responsibility of KES International. 24th International Conference on Knowledge-
Based and Intelligent Information & Engineering Systems Potentials of Blockchain
Technologies in Supply Chain Management – A Conceptual Model Ralf-Christian
Härtinga,*, Alexander Sprengela , Katja Wottlea , Julia Rettenmaiera a Aalen
University of Applied Sciences, Beethovenstr. 1, 73430 Aalen, Germany Abstract
Meanwhile the rapidly advancing digitisation affects almost all areas of society
and business. This development is based in particular on the omni-present use of
digital information technology. One of these technologies awarded with special
potential related to business is the distributed ledger technology. The objective
of this study is to investigate influences on the potentials of blockchain
technology, being one distributed ledger technology, in the area of supply chain
management. An empirical, qualitative data collection attained through expert
interviews forms the data basis. The conceptual model is derived by using Grounded
Theory Methodology to evaluate the interviews. Important influencing factors
(trust, efficiency, costs, control, privacy, scalability) for the potential of
blockchain technology in supply chain management and moderating effects (use case,
knowledge, collaboration, regulations) form the conceptual model in order to deduce
recommendations for business. © 2019 The Author(s). Published by Elsevier B.V. This
is an open access article under the CC BY-NC-ND license
(https://creativecommons.org/licenses/by-nc-nd/4.0/) Peer-review under
responsibility of KES International. Keywords: blockchain technology; distributed
ledger; supply chain management; potentials; empirical results; qualitative study;
Grounded Theory. 1. Introduction The very first public perception of blockchain
technology came in 2009 from Satoshi Nakamoto [1] when the crypto currency Bitcoin
made headlines in the financial industry [2]. In August 2008 the domain named
bitcoin.org was registered, whereupon the paper called “Bitcoin: A Peer-to-Peer
Electronic Cash System” is describing a digital currency that uses the blockchain
technology [18]. As a basis, the following definition for blockchain is used in
this paper. By a decentralised system storage and management, the blockchain is
described as a digital, distributed transaction book that uses identical
information on 2 Härting, Sprengel, Wottle, Rettenmaier / Procedia Computer Science
00 (2020) 000–000 a common blockchain. By validating the network consensus
algorithm, authorised users can access and update stored information [2]. With a
blockchain it is possible to have a way of tracking and tracing transactions or any
digital interactions that are designed to be secure, transparent, highly resistant
to outages, auditable and efficient [2]. Comparable to the financial sector other
industries have also recognised the potential of the blockchain technology for a
wide range of applications [3]. A widespread application is found in the supply
chain sector. Since globalisation is increasingly linking customers, products and
value chains together, companies face strong challenges. Blockchain is used to
master these challenges. In the financial sector, transactions can be executed much
faster across several continents. Also, in the area of SCM, blockchain offers
potential to meet major challenges, particularly referring to track-and- trace
applications [4]. Complex global supply chains lack transparency about the origin
of processed products. By using blockchains, information about the origin can be
verified, which excludes manipulation. Track-and-trace applications store all
product information by creating a new block for each order. After an order has been
executed, the next one is triggered. This forces enterprises to expand
communication networks and enhance their supply chain processes [4]. In the context
of these requirements, the research design targets to identify factors which might
be relevant for companies to use blockchain in supply chain management (SCM). In
consequences, the study is focusing on following research question: Which factors
influence the willingness of companies, to use a blockchain- based technology in a
supply chain? It is important to stress that this research is dealing with
blockchain-based business solutions for SCM, not blockchain as the open source
technology itself. It is much rather about the implementation of information
technology in SCM based on a blockchain concept. The present work is structured as
follows. After a brief introduction, the second section demonstrates the research
design and data collection. Here the basis of the research is described and the
procedure is explained using information collected by the experts. The third
section presents the research results including a conceptual model about the
potentials of blockchain in SCM. In the summary, results are summarised and the
authors give an outlook for further investigations as well as implications for
research. 2. Research Method and Data Collection The following part of the research
explains the research method and applied methodology for collecting and analysing
the interview data to find essential drivers regarding the potential of blockchain
technology in SCM. 2.1. Research Method The authors developed a qualitative
research study to investigate the main potentials and main risks of blockchain
based solutions in SCM. The research design is based on the methodology of Grounded
Theory according to Glaser [5]. By systematically gathering and analysing the data
during the research process [6], the approach of Grounded Theory was used to
develop an own theory in order to identify main drivers regarding the potential of
blockchain technologies in SCM. By using Grounded Theory, not only the masses of
raw data can be handled with the use of several analytical tools but also to
explore different phenomena by identifying and developing concepts, which are the
building blocks of the theory [7]. It must be noted that a substantive literature
review is not made, since this is not part of the process of origin of the concept
of Grounded Theory [6] [8] [9]. In fact, this approach is more appropriate for
discovering new and unknown relations, as the researcher should not be biased in
using this approach. The aim of the evaluation is to describe relationships and
generate theoretical suggestions to explain potentials and challenges of blockchain
based solution SCM supported by the statements of the interviewed experts [10].
2.2. Data Collection Semi-structured, in-depth interviews were used in this
qualitative research study to enable a detailed exploration of the topic. This
method is appropriate to get useful insights regarding complex issues from
blockchain technology experts by using a flexible and responsive approach [11].
Three thematic sections built the framework for the semi- Ralf-Christian Härting et
al. / Procedia Computer Science 176 (2020) 1950–1959 1951 Available online at
www.sciencedirect.com ScienceDirect Procedia Computer Science 00 (2020) 000–000
www.elsevier.com/locate/procedia * Corresponding author. E-mail address:
ralf.haerting@hs-aalen.de 1877-0509 © 2019 The Author(s). Published by Elsevier
B.V. This is an open access article under the CC BY-NC-ND license
(https://creativecommons.org/licenses/by-nc-nd/4.0/) Peer-review under
responsibility of KES International. 24th International Conference on Knowledge-
Based and Intelligent Information & Engineering Systems Potentials of Blockchain
Technologies in Supply Chain Management – A Conceptual Model Ralf-Christian
Härtinga,*, Alexander Sprengela , Katja Wottlea , Julia Rettenmaiera a Aalen
University of Applied Sciences, Beethovenstr. 1, 73430 Aalen, Germany Abstract
Meanwhile the rapidly advancing digitisation affects almost all areas of society
and business. This development is based in particular on the omni-present use of
digital information technology. One of these technologies awarded with special
potential related to business is the distributed ledger technology. The objective
of this study is to investigate influences on the potentials of blockchain
technology, being one distributed ledger technology, in the area of supply chain
management. An empirical, qualitative data collection attained through expert
interviews forms the data basis. The conceptual model is derived by using Grounded
Theory Methodology to evaluate the interviews. Important influencing factors
(trust, efficiency, costs, control, privacy, scalability) for the potential of
blockchain technology in supply chain management and moderating effects (use case,
knowledge, collaboration, regulations) form the conceptual model in order to deduce
recommendations for business. © 2019 The Author(s). Published by Elsevier B.V. This
is an open access article under the CC BY-NC-ND license
(https://creativecommons.org/licenses/by-nc-nd/4.0/) Peer-review under
responsibility of KES International. Keywords: blockchain technology; distributed
ledger; supply chain management; potentials; empirical results; qualitative study;
Grounded Theory. 1. Introduction The very first public perception of blockchain
technology came in 2009 from Satoshi Nakamoto [1] when the crypto currency Bitcoin
made headlines in the financial industry [2]. In August 2008 the domain named
bitcoin.org was registered, whereupon the paper called “Bitcoin: A Peer-to-Peer
Electronic Cash System” is describing a digital currency that uses the blockchain
technology [18]. As a basis, the following definition for blockchain is used in
this paper. By a decentralised system storage and management, the blockchain is
described as a digital, distributed transaction book that uses identical
information on Available online at www.sciencedirect.com ScienceDirect Procedia
Computer Science 00 (2020) 000–000 www.elsevier.com/locate/procedia * Corresponding
author. E-mail address: ralf.haerting@hs-aalen.de 1877-0509 © 2019 The Author(s).
Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND
license (https://creativecommons.org/licenses/by-nc-nd/4.0/) Peer-review under
responsibility of KES International. 24th International Conference on Knowledge-
Based and Intelligent Information & Engineering Systems Potentials of Blockchain
Technologies in Supply Chain Management – A Conceptual Model Ralf-Christian
Härtinga,*, Alexander Sprengela , Katja Wottlea , Julia Rettenmaiera a Aalen
University of Applied Sciences, Beethovenstr. 1, 73430 Aalen, Germany Abstract
Meanwhile the rapidly advancing digitisation affects almost all areas of society
and business. This development is based in particular on the omni-present use of
digital information technology. One of these technologies awarded with special
potential related to business is the distributed ledger technology. The objective
of this study is to investigate influences on the potentials of blockchain
technology, being one distributed ledger technology, in the area of supply chain
management. An empirical, qualitative data collection attained through expert
interviews forms the data basis. The conceptual model is derived by using Grounded
Theory Methodology to evaluate the interviews. Important influencing factors
(trust, efficiency, costs, control, privacy, scalability) for the potential of
blockchain technology in supply chain management and moderating effects (use case,
knowledge, collaboration, regulations) form the conceptual model in order to deduce
recommendations for business. © 2019 The Author(s). Published by Elsevier B.V. This
is an open access article under the CC BY-NC-ND license
(https://creativecommons.org/licenses/by-nc-nd/4.0/) Peer-review under
responsibility of KES International. Keywords: blockchain technology; distributed
ledger; supply chain management; potentials; empirical results; qualitative study;
Grounded Theory. 1. Introduction The very first public perception of blockchain
technology came in 2009 from Satoshi Nakamoto [1] when the crypto currency Bitcoin
made headlines in the financial industry [2]. In August 2008 the domain named
bitcoin.org was registered, whereupon the paper called “Bitcoin: A Peer-to-Peer
Electronic Cash System” is describing a digital currency that uses the blockchain
technology [18]. As a basis, the following definition for blockchain is used in
this paper. By a decentralised system storage and management, the blockchain is
described as a digital, distributed transaction book that uses identical
information on 2 Härting, Sprengel, Wottle, Rettenmaier / Procedia Computer Science
00 (2020) 000–000 a common blockchain. By validating the network consensus
algorithm, authorised users can access and update stored information [2]. With a
blockchain it is possible to have a way of tracking and tracing transactions or any
digital interactions that are designed to be secure, transparent, highly resistant
to outages, auditable and efficient [2]. Comparable to the financial sector other
industries have also recognised the potential of the blockchain technology for a
wide range of applications [3]. A widespread application is found in the supply
chain sector. Since globalisation is increasingly linking customers, products and
value chains together, companies face strong challenges. Blockchain is used to
master these challenges. In the financial sector, transactions can be executed much
faster across several continents. Also, in the area of SCM, blockchain offers
potential to meet major challenges, particularly referring to track-and- trace
applications [4]. Complex global supply chains lack transparency about the origin
of processed products. By using blockchains, information about the origin can be
verified, which excludes manipulation. Track-and-trace applications store all
product information by creating a new block for each order. After an order has been
executed, the next one is triggered. This forces enterprises to expand
communication networks and enhance their supply chain processes [4]. In the context
of these requirements, the research design targets to identify factors which might
be relevant for companies to use blockchain in supply chain management (SCM). In
consequences, the study is focusing on following research question: Which factors
influence the willingness of companies, to use a blockchain- based technology in a
supply chain? It is important to stress that this research is dealing with
blockchain-based business solutions for SCM, not blockchain as the open source
technology itself. It is much rather about the implementation of information
technology in SCM based on a blockchain concept. The present work is structured as
follows. After a brief introduction, the second section demonstrates the research
design and data collection. Here the basis of the research is described and the
procedure is explained using information collected by the experts. The third
section presents the research results including a conceptual model about the
potentials of blockchain in SCM. In the summary, results are summarised and the
authors give an outlook for further investigations as well as implications for
research.
This review paper considers the three areas of research—blockchain technology,
supply chain management (SCM), and sustainability. The research offers abundant
resources to study each of these three topics. Previous systematic literature
reviews focus on blockchain-based applications [1] and understanding the influence
of blockchain technology on future supply chain practices [2]. As shown in Figure
1, the study focuses on the intersection between blockchain technology, SCM, and
sustainability. While literature in this area started appearing in 2017 [3], to the
best of our knowledge, this is the first systematic review of the subject.
Furthermore, this study provides a systematic literature review (SLR) and a
classification framework for the literature on the role of blockchain technology in
sustainable SCM (SSCM). Sustainability 2020, 12, 7638; doi:10.3390/su12187638
www.mdpi.com/journal/sustainability Sustainability 2020, 12, 7638 2 of 39
Sustainability 2020, 12, x FOR PEER REVIEW 2 of 40 Figure 1. Area of research
interest. This paper begins with an introduction to blockchain technology.
Subsequently, we introduce SSCM, owing to the study’s focus on sustainability in
the supply chain context. We also introduce how blockchain technology is relevant
to SCM. With this background, we use the What, Who, Where, When, How, and Why
(5W+1H) pattern to set the objectives and questions [4] that motivate the current
research. This is followed by a description of the research methodology and the
classification framework developed for studies on the role of blockchain in SSCM.
Next, we present a discussion in terms of the aforementioned research objectives
and questions. We conclude this review by highlighting our contribution and
limitations. The blockchain technology gained prominence because of its use in
Bitcoin and the latter’s prevalence, adoption, and rising price [5]. Today,
cryptocurrencies, initial currency offerings (ICOs), and cryptocurrency exchanges
have become common, with the emergence of a new cryptocurrency or an ICO becoming
commonplace. Blockchain is the technology which provides foundations to develop a
cryptocurrency like Bitcoin and also other cryptocurrencies, and it has been proven
to be robust, efficient, and a secure means of exchanging currency. The broad use
of blockchain for cryptocurrencies has led to its popularity and prompted an
examination into its possible applications. Evidence shows that blockchain may
revolutionize many fields, not just finance. The merits of blockchain technology
for SCM and logistics have been studied for quite some time. These studies have
proposed to use blockchain technology for managing the supply chains of companies
in the fields of manufacturing, agriculture, food, pharmaceutical, e-commerce,
airlines, hotels, and retail, as well as within the supply chains of many others
sectors. The construct of smart contract has enabled the usage of blockchain
technology in industries other than finance. Since 2016–17, the technology has been
evolving in parallel with the development of various applications across various
industries. Blockchain technology is considered an essential part of Industry 4.0,
along with other technologies, like the Internet of Things (IoT) and Big Data. SCM
can realize immense value with a blockchain network of supply chain participants
like manufacturers, suppliers, retailers, and financial service providers. However,
the inertia of existing supply chain theories and SCM business practices may be the
cause behind the slow adoption of the technology in this area. As a revolutionary
technology, blockchain exerts a noticeable impact on society, law, and governance.
Some of its applications, such as voting based on blockchain technology, have
political implications. Blockchain has even impacted organizational design by
creating the possibility of decentralized autonomous organizations. Concerning its
use in cryptocurrencies, various countries have taken different stances regarding
Bitcoin, ICOs, and other blockchain applications. The positive Figure 1. Area of
research interest. This paper begins with an introduction to blockchain technology.
Subsequently, we introduce SSCM, owing to the study’s focus on sustainability in
the supply chain context. We also introduce how blockchain technology is relevant
to SCM. With this background, we use the What, Who, Where, When, How, and Why
(5W+1H) pattern to set the objectives and questions [4] that motivate the current
research. This is followed by a description of the research methodology and the
classification framework developed for studies on the role of blockchain in SSCM.
Next, we present a discussion in terms of the aforementioned research objectives
and questions. We conclude this review by highlighting our contribution and
limitations. The blockchain technology gained prominence because of its use in
Bitcoin and the latter’s prevalence, adoption, and rising price [5]. Today,
cryptocurrencies, initial currency offerings (ICOs), and cryptocurrency exchanges
have become common, with the emergence of a new cryptocurrency or an ICO becoming
commonplace. Blockchain is the technology which provides foundations to develop a
cryptocurrency like Bitcoin and also other cryptocurrencies, and it has been proven
to be robust, efficient, and a secure means of exchanging currency. The broad use
of blockchain for cryptocurrencies has led to its popularity and prompted an
examination into its possible applications. Evidence shows that blockchain may
revolutionize many fields, not just finance. The merits of blockchain technology
for SCM and logistics have been studied for quite some time. These studies have
proposed to use blockchain technology for managing the supply chains of companies
in the fields of manufacturing, agriculture, food, pharmaceutical, e-commerce,
airlines, hotels, and retail, as well as within the supply chains of many others
sectors. The construct of smart contract has enabled the usage of blockchain
technology in industries other than finance. Since 2016–17, the technology has been
evolving in parallel with the development of various applications across various
industries. Blockchain technology is considered an essential part of Industry 4.0,
along with other technologies, like the Internet of Things (IoT) and Big Data. SCM
can realize immense value with a blockchain network of supply chain participants
like manufacturers, suppliers, retailers, and financial service providers. However,
the inertia of existing supply chain theories and SCM business practices may be the
cause behind the slow adoption of the technology in this area. As a revolutionary
technology, blockchain exerts a noticeable impact on society, law, and governance.
Some of its applications, such as voting based on blockchain technology, have
political implications. Blockchain has even impacted organizational design by
creating the possibility of decentralized autonomous organizations. Concerning its
use in cryptocurrencies, various countries have taken Sustainability 2020, 12, 7638
3 of 39 different stances regarding Bitcoin, ICOs, and other blockchain
applications. The positive aspect is that blockchain is not just one network, but
comprises multiple networks with different consensus mechanisms and other
specifications. There are multiple levels of tokenization that can help the
adoption of certain blockchain networks; however, certain networks may be banned in
more conservative or risk averse countries. Tokenization provides four key
advantages to all investors and sellers—greater liquidity, faster and cheaper
transactions, enhanced transparency, and increased accessibility. Tokenization is
not an essential component of all blockchain-based applications. However, it is the
key behind most of the disruptions in the financial sector, and it serves as a
basis for ICOs. The role of blockchain in the supply chain is to act as an inter-
organizational system; this starts with tracking the journey of products from raw
materials to finished goods. Tokenization, low-energy-consuming consensus
protocols, and smart contracts have added new dimensions to the potential of
blockchain technology in SCM. This study provides a deeper dive into the benefits
and applications of blockchain technology in SCM while reviewing the existing
literature on the subject. Economic performance, social performance, and
environmental performance form the three pillars (Figure 2) of sustainability [6].
It is often a challenge for businesses to follow sustainability practices while
delivering improved environmental and financial performance. The social performance
calls for a democratic design where the rights and needs of all stakeholders are
protected. There are long-term benefits for promoting sustainable development
objectives, which are also referred to as the triple bottom line. While boosting
its competitive advantage, an organization can engage in activities that have a
positive environmental and societal impact [6]. This aspect must be analyzed in
terms of supply chain activities. In this context, it must be noted that
collaboration plays a crucial role in optimizing the flow of goods, information,
and financial transactions. Very often, the supply chain participants have
conflicting interests and priorities. There also exists a technological barrier of
incompatible systems used by different parties to track shipments. Firms can
address these challenges by integrating sustainability into their overall strategy.
This will help firms to make a positive impact on the economy, society, and
environment. Sustainability 2020, 12, x FOR PEER REVIEW 3 of 40 aspect is that
blockchain is not just one network, but comprises multiple networks with different
consensus mechanisms and other specifications. There are multiple levels of
tokenization that can help the adoption
of certain blockchain networks; however, certain networks may be banned in more
conservative or risk averse countries. Tokenization provides four key advantages to
all investors and sellers—greater liquidity, faster and cheaper transactions,
enhanced transparency, and increased accessibility. Tokenization is not an
essential component of all blockchain-based applications. However, it is the key
behind most of the disruptions in the financial sector, and it serves as a basis
for ICOs. The role of blockchain in the supply chain is to act as an inter-
organizational system; this starts with tracking the journey of products from raw
materials to finished goods. Tokenization, low- energy-consuming consensus
protocols, and smart contracts have added new dimensions to the potential of
blockchain technology in SCM. This study provides a deeper dive into the benefits
and applications of blockchain technology in SCM while reviewing the existing
literature on the subject. Economic performance, social performance, and
environmental performance form the three pillars (Figure 2) of sustainability [6].
It is often a challenge for businesses to follow sustainability practices while
delivering improved environmental and financial performance. The social performance
calls for a democratic design where the rights and needs of all stakeholders are
protected. There are long-term benefits for promoting sustainable development
objectives, which are also referred to as the triple bottom line. While boosting
its competitive advantage, an organization can engage in activities that have a
positive environmental and societal impact [6]. This aspect must be analyzed in
terms of supply chain activities. In this context, it must be noted that
collaboration plays a crucial role in optimizing the flow of goods, information,
and financial transactions. Very often, the supply chain participants have
conflicting interests and priorities. There also exists a technological barrier of
incompatible systems used by different parties to track shipments. Firms can
address these challenges by integrating sustainability into their overall strategy.
This will help firms to make a positive impact on the economy, society, and
environment. Figure 2. Sustainable supply chain management. We address this aspect
of sustainability through a set of research objectives and questions. The prior
literature proposes a 5W+1H pattern for the formulation of research objectives and
questions [4]. The 5W+1H stands for What, Who, Where, When, How, and Why. This
pattern has been shown to help researchers survey a research area in a systematic
manner. Using this pattern, we answer the following research questions: 1. What:
What are the key findings of this literature review? 2. Who: Identify researchers
in the area of our research interest and the most active researchers. Figure 2.
Sustainable supply chain management. We address this aspect of sustainability
through a set of research objectives and questions. The prior literature proposes a
5W+1H pattern for the formulation of research objectives and questions [4]. The
5W+1H stands for What, Who, Where, When, How, and Why. This pattern has been shown
to help researchers survey a research area in a systematic manner. Using this
pattern, we answer the following research questions: 1. What: What are the key
findings of this literature review? Sustainability 2020, 12, 7638 4 of 39 2. Who:
Identify researchers in the area of our research interest and the most active
researchers. 3. Where: Identify the journals that have published research in the
area of our research interest. 4. When: Identify the span of time for which
research has been conducted in the area of our research interest. 5. How: How is
research in this area going to change the way business is conducted? Identify the
new business models in this area. 6. Why: Why is it important for researchers to
conduct research in this area? Why is it necessary to further examine this research
area if it has already been studied in great detail? Identify the research gaps.
Considered as one of the most disruptive technologies, the blockchain (a peer-to-
peer distributed data infrastructure) enables the creation of decentralised
currencies (e.g. Bitcoin), self-executing digital contracts (smart contracts) and
intelligent assets that can be controlled over the internet (smart property) (Kosba
et al., 2016; Wright and De Filippi, 2015). Originally created by Nakamoto (2008),
recent research on the blockchain has focussed primarily on financial transactions
and distributed ledger systems (Pilkington, 2016). Blockchain technology uses a
shared data infrastructure that updates itself in real-time and can process and
settle transactions in minutes using computer algorithms, with no need for third-
party verification. Within the financial sector, the blockchain is proposed as a
means for the management of financial transactions without the need for trusted
intermediaries such as banks. However, the blockchain as a technology has potential
to disrupt many other domains of organisation, including the supply-chain. As a
blockchain allows secure exchange of data in a distributed manner, it starts to
impact upon the way organisations are governed, supply chain relationships are
structured and transactions are conducted. Integrated with other technologies, like
the Internet-of-Things (IoT), the blockchain could be used to create a permanent,
shareable, actionable record of every moment of a product’s trip through its supply
chain, creating efficiencies throughout the global economy. Improved visibility
facilitated through such technology may also afford product traceability,
authenticity and legitimacy. Although many speculate about the impact of blockchain
technology upon supply chains, current understanding of its potential remains
limited. As the development and diffusion of this technology is still in its
infancy, a systematic review of current thinking is likely to assist both academics
and managers’ sensemaking, where they become aware of this technological
innovation, sense its potential disruptive effect, The current issue and full text
archive of this journal is available on make an initial exploration of its efficacy
and decide whether to Emerald Insight at: www.emeraldinsight.com/1359-8546.htm
Supply Chain Management: An International Journal © Emerald Publishing Limited
[ISSN 1359-8546] [DOI 10.1108/SCM-03-2018-0148] Received 31 March 2018 Revised 12
July 2018 27 September 2018 2 October 2018 Accepted 4 October 2018 Downloaded by
Tulane University At 02:35 21 December 2018 (PT) either embrace or ignore it. A
systematic review will provide a solid foundation by cultivating a deep
understanding of blockchain technology when its tangible benefits are unclear,
disruptive effect unpredictable and its diffusion path ambiguous. A systematic
review will separate the hype from reality by identifying evidence where the
blockchain has potential to disrupt supply chains (both positively and negatively),
identify challenges to its future diffusion and offer agendas for future research.
Our systematic literature review aims to answer the following question: RQ1. How
will the blockchain influence future supply chain practices and policies? We
further set the following research objectives (ROs) in relation to this research
question: RO1. To identify drivers to blockchain deployment within supply chains
RO2. To identify areas where the blockchain provides the most value for supply
chain management RO3. To investigate the challenges/barriers to further diffusion
of the blockchain within the supply chain RO4. To develop elements of a future
research agenda for the blockchain within the supply chain. This paper begins with
a high-level description of the architecture of blockchain technology, followed by
a discussion of the methodology used within our investigation. From our research
database, we identified four major ways in which the blockchain is approached
within the extant academic supply chain literature. We further provide a summary of
the latest developments in practice. This is followed by a discussion of the
insights the literature provides in terms of our research objectives. We conclude
by highlighting our contribution to the literature, as well as considering certain
limitations of the research. 2. Blockchain technology Technically, the blockchain
refers either to a distributed data infrastructure or a method for recording data
using a crypto- analytic hash function. Blockchains consist of nodes situated upon
some communication network which use some common communication protocol – each node
on the network stores a copy of the blockchain and a consensus function is
implemented to verify transactions to preserve the immutability of the chain
(transactions cannot be changed) (Bashir, 2017). The blockchain can be perceived as
another application layer that runs on top of internet protocols and that enables
economic transactions between relevant parties. It can also be used as a registry
and inventory system for recording, tracing, monitoring and transacting assets
(tangible, intangible or digital). Some think of the blockchain as a giant
spreadsheet appropriate for registering all types of assets and an accounting
system for transacting such assets on a global scale (Swan, 2015). A blockchain is
an encoded digital ledger that is stored on multiple computers in a public or
private network. Blockchains comprise data records or blocks. As each transaction
occurs, it is put into a block. Each block is connected to the one before and after
it. Each block is added to the next in an irreversible chain and transactions are
blocked together – hence the term “blockchain”. Once these blocks are collected in
a chain, they cannot be changed or deleted by a single actor. Instead, they are
verified and managed using governance protocols (Cheng et al., 2017) (Figure 1). In
a blockchain, no single party controls the data. The entire data infrastructure is
visible to all parties. Every party can verify the records of its transaction
partners directly, without an intermediary or distributed consensus mechanism. The
verification process, along with modern encryption methods, can effectively secure
data on blockchain ledgers against unauthorised access or manipulation. As existing
blocks in the chain cannot be overwritten, users always have access to a
comprehensive audit trail of activity (Miles, 2017). As such, the bigger the
blockchain network, the more tamper-resistant the blockchain will be. The
decentralised storage of data reduces the risk of single point of access failure
associated with centralised databases. Two main types of blockchain are
distinguished in terms of access control – who can read a blockchain, submit
transactions to it and participate within the consensus process. Within public
blockchains, every transaction is public (“permissionless”), and users can remain
anonymous. The network typically has an incentivizing mechanism to encourage
participants to join the network. Bitcoin and Ethereum are examples of public
blockchains. Within permissioned blockchains, participants need to obtain an
invitation or permission to join. Access is controlled by a consortium of members
(consortium blockchain) or by a single organisation (private blockchain). New
applications of the blockchain technology, beyond financial transactions, are being
experimented with and exploited in sectors such as financial services, insurance,
food, health care and government. Within the supply chain, some compelling cases of
blockchain adoption have been identified. For example, the blockchain can be
deployed as a means of enabling a record of complete provenance details for each
component part of an aircraft. These details can be accessed by each manufacturer
within the production process (Gupta, 2017).
Sustainability and effective balancing of environmental, social, and business out-
comes has become an essential requirement of the manufacturing sector [1].
Sustainability strategies enable manufacturers to meet growing demands with minimal
impacts on the environment and society [2–4]. Considering the importance of
sustainable practices, manu- facturers have adopted various technologies and
approaches such as big data analytics, blockchain, artificial intelligence, lean
manufacturing, six sigma, and reverse logistics to en- hance their sustainability
performance in the industry 4.0 era [5,6]. Blockchain is one of the emerging and
fast-growing technologies that can contribute to sustainable manufacturing among
digital technologies. Blockchain technology is a decentralised and distributed data
structure. Data are shared on a peer-to-peer, open access network and transactions
should be certified, verified, and accessed by members of the network community.
Blockchain ensures the transparency Sustainability 2021, 13, 7870.
https://doi.org/10.3390/su13147870 https://www.mdpi.com/journal/sustainability
Sustainability 2021, 13, 7870 2 of 20 and security of the transactions [7,8].
Blockchain is initially introduced in the financial industry for cryptocurrency to
replace manual authentication of transactions with digital authentications [9]. As
blockchain could enhance traceability, transparency, trust, data immutability, and
data security, it has received attention from both academics and pro- fessionals
from various industries [10,11]. Investment in blockchain solutions is growing fast
and expected to reach USD 176 billion by 2025 [12]. Blockchain technology offers
promising capabilities that can improve economic, social, and environmental
sustainability practices of the supply chain and manufacturing industry [1,13].
Given the importance of sustainability in the manufacturing sector, there is an
increasing academic interest in investigating the contributions of blockchain
technology to the sustainable performance of manufacturers [14,15]. However, to our
best knowledge, there is a lack of review articles that synthesise the current
knowledge on the applications of blockchain technology in sustainable manufacturing
and provide future research directions. Thus, this article aimed to explain the
connection between blockchain technology and sustainable manufacturing. The paper
used the systematic review approach to answer the following research questions: 1.
What are the applications of blockchain technology in sustainable manufacturing? 2.
How can blockchain attributes enhance the sustainable performance of manufactur-
ers? This study contributes to the literature on sustainable manufacturing by
explaining the contributions of blockchain technology to the economic, social, and
environmental performance of manufacturers and their supply chain based on
blockchain attributes such as traceability, transparency, security, and real-time
information sharing. The study may serve as the foundation for further discussion
and research by both practitioners and scholars. The study also proposes directions
for future studies on blockchain technology in sustainable manufacturing. 2.
Background of Blockchain Technology Concept 2.1. Overview of Blockchain Technology
Blockchain technology was first conceptualised and introduced by Satoshi Nakamoto
in 2008 [9]. Blockchain technology is a distributed data structure in which the
data are shared on a peer-to-peer network. Blockchain consists of a chain of blocks
that record transactions generated by contracting parties. Following a predefined
protocol, transactions must be approved and validated by the network members who
belong to a peer-to-peer network. The transaction details are recorded on a public
ledger called the distributed ledger [16]. The distributed ledger is a
decentralised record of transactions in which the transaction blocks are stored in
all computers of the network members and can be seen by anyone in the network. When
a transaction/block is generated and validated by certain members of the network,
this block is added to the network and linked to previous blocks [17,18].
Verification of transactions can be performed by individuals, machines, algorithms,
and organisations. Blockchain can eliminate intermediates from a network and link
different parties directly, which may reduce human errors and transaction costs
[19]. Storing data in share databases instead of central ones reduces the risk of
losing data and increases transparency and security of information [19]. Smart
contracts help to eliminate the need for intermediaries and reduce transaction
costs [20]. Smart contracts enhance the privacy and security of information as all
transactions should be complied with the underlying legal agreements and should be
approved and verified by the members based on the transaction validation rules
defined in the smart contracts [19,21]. 2.2. Applications of Blockchain Technology
Blockchain is an emerging and fast-growing technology that has been adapted in
various industries such as finance, real estate, health care, and energy due to its
capabilities and benefits. Various industries can benefit from blockchain
technology’s attributes and features, such as traceability, transparency, data
security, and real-time information shar- ing [13,17,19]. For instance, in the
agri-food industry, blockchain can be integrated with Sustainability 2021, 13, 7870
3 of 20 other technologies such as RFID to track food supplies in real time, which
may optimise processes of food operations, enhance food safety and quality, and
reduce unethical prac- tices and social harms [22]. In the financial industry,
blockchain technology can be applied to decentralise and trace transactions and
remove banks’ financial institutions [23]. In the healthcare sector, blockchain can
be used to enhance the confidentiality and accuracy of patient information.
Furthermore, blockchain can reduce healthcare costs and improve the quality of
services provided to patients. Using blockchain technology in healthcare can also
prevent healthcare fraud and increase transparency with patients [8]. In the
automobile industry, blockchain is utilised to secure and protect automated cars
from being hacked and is applied to develop driving technologies. Blockchain-based
systems enhance the performance of self-driving cars and contribute to fuel usage
and emissions reduction [8]. Blockchain technology is one of the key technologies
in developing a smart city due to its benefits, such as data security,
decentralisation, real-time information sharing, and trust, which are essential for
a successful smart city development [24]. Blockchain can also be utilised as a
middleware solution that integrates technological advancements with Industry 4.0
smart manufacturing. This integration can facilitate information sharing, increase
security, reduce costs, and increase organisational efficiency [25]. In the
pharmaceutical industry, the blockchain can be utilised to improve control over the
medicines supply chain, and it can facilitate detecting fake medicines [26]. 2.3.
Benefits of Blockchain in the Manufacturing Sector Managing information in the
supply chain is challenging as real-time and reliable data are needed to avoid poor
performance, fraud, and risks [1,21]. There is a need to improve data reliability,
traceability, and authenticity by using better verifiability and information
sharing systems [1]. Blockchain connects supply chain stakeholders using a
distributed data structure where data are shared on a peer-to-peer network. All
stakeholders agree on predefined protocols, and data are communicated and validated
based on the proto- cols [27,28]. The decentralised structure of blockchain
supports transaction verification directly between stakeholders and eliminates the
need for intermediaries to verify transac- tions [19]. Blockchain enables companies
involved in the supply chain network to share, access, and verify information
securely as transactions and data are protected through advanced cryptography [28].
Advanced cryptography reduces the risk of losing and al- tering the information and
prevents any human errors in transactions [19,21]. Blockchain technology positively
influences the reliability and trustworthiness of supply chain trans- actions,
supply chain operations, time of supply chain activities, and decision-making
efficiency [13,21]. Transparency is one of the attributes of blockchain and refers
to the availability of information among the supply chain stakeholders [29].
Blockchain technology supports real-time information sharing among stakeholders
involved in the supply chain network, which increases transparency and
trustworthiness among supply chain partners and cus- tomers [1,11]. Blockchain
enables customers to obtain valid and accurate information about products and
processes [1,21]. Traceability is another attribute of blockchain and refers to
identifying and verifying the components and chronology of events in all steps of a
chain. Tracking the information in the entire chain is essential to verify
compliance with specifications and trace failure events [30]. Traceability allows
stakeholders to track and monitor items and shipments across all over the chain
[14,15]. The traceability at- tribute of blockchain enhances the transparency of
the supply chain activities, which in turn positively influences the level of trust
among supply chain stakeholders, including suppliers and customers, reduces
conflicts among them, reduces verification costs, and enable stakeholders to
identify unethical practices [11,13].
Blockchain Technology (BCT) has been widely embraced as a disruptive technology,
though it is still in a nascent stage; cf. Babich and Hilary (2018). Indeed, the
path to broad blockchain adoption looks brightly and strikingly well paved. In a
most recent survey for the PwC Annual Report 2018, out of 600 executives from 15
territories, 84% claim their organizations have had at least some involvement with
BCT. To seize on this innovative and disruptive technology, companies have either
dabbled in the lab with BCT, or have started to built proofs of concept; cf. PwC
(2018). 1 Electronic copy available at: https://ssrn.com/abstract=3295440 Chang,
Katehakis, Melamed and Shi Blockchain and Supply Chain 2 Gartner Inc. projects that
blockchain’s value-added business will grow to $176 billion by 2025, and that BCT
will generate an annual business value of more than US $3 trillion by 2030; cf.
Piscini et al. (2017). Optimistically, it can be imagined that 10% to 20% of the
global economic infrastructure will be running on blockchain-based systems by that
same year (ibid). Therefore, the ability to deploy BCT to create the next
generation of digital supply chain networks and platforms will be a key enabler in
business success; cf. Pawczuk (2017). This disruptive technology and its
proliferating implementations have also attracted the attention of academia. As
highlighted in Simchi-Levi (2018), it is imperative for the MS/OR community to
consider “the impact of emerging technologies such as Blockchain and the Internet
of Things (IoT) on the management of operations and supply chain”. Recently, Babich
and Hilary (2018) provide a broad depiction on the research directions of BCT in
the OM field. In particular, it is emphasized that OM researchers can apply
insights from the literature to quantify the value of the Blockchain technology in
operations. This study reaches out to this academic call in a timely manner. 1.1.
Introduction of Blockchain Technology Although the main idea behind BCT was
introduced in 1991, it only drew the attention of the public in 2009 with the debut
of Bitcoin. To date, there is very limited research offering a complete and
extensive study of BCT, especially with regard to its application in supply chain
management. Therefore, in this introductory section, we begin by providing a
holistic review of BCT. Blockchain technology refers to a distributed database that
maintains a continuously-growing list of data records that are secured from
tampering and revision. It consists of blocks holding batches of individual
transactions. Each block contains a timestamp and a link to a previous block; cf.
Nakamoto (2008), and Kim and Laskowski (2018). Traditional business models maintain
the entire history of activities in a single centralized database, which is very
vulnerable to cyberattack. BCT distributes databases (ledgers) to all users, which
introduces the consensus mechanism concept; since it is very difficult to attack
multiple databases simultaneously, the blockchain system is believed to be both
secure and transparent. The feature of consensus in blockchain system eliminates
any concern that a single centralized organization may manipulate transaction
information, or demand high fees for indispensable services, etc. Fig. 1 depicts a
generic blockchain system process. In general, BCT has the following salient
features and advantages: (i) Transparency: Because a blockchain utilizes the
concept of distributed consensus, all its users are capable of reading the entire
history of activities, which in turn greatly enhances data transparency. (ii)
Traceability: Access to timestamped records allows users to effectively and
efficiently trace information history. Electronic copy available at:
https://ssrn.com/abstract=3295440 Chang, Katehakis, Melamed and Shi Blockchain and
Supply Chain 3 (iii) Security: A distributed ledger greatly increases the
difficulty of staging a cyberattack, which significantly strengthens data security.
(iv) Efficiency: Because BCT replaces the need for a centralized database,
disintermediation can be achieved. That is, it is no longer necessary to have a
trustworthy intermediary, such as a bank, to maintain the database; hence, both
transaction processing time and cost can be significantly reduced. (v)
Confidentiality: A blockchain’s decentralized ledger greatly enhances security and
trans- parency; however, it raises other concerns as to confidentiality, since
every user on the network can view all activities. As a result, BCT tries to
preserve the privacy of users and their data by using pseudonymous addresses and
advanced cryptography to hide some aspects of their activities. (vi) Immutability:
Once a transaction or activity is validated by a blockchain system, it can no
longer be reversed or amended. In view of this, the integrity of its data can
substantially reduce the cost of auditing. Figure 1 The Blockchain Process 4. The
verified block is added to the chain, accessible from each user’s ledger INFO BLOCK
7 Verification 3. Users verify the block 2. The block is broadcasted to all users .
. . . . . . . 1. An info block is created INFO BLOCK 8 (Unverified) USER 1 USER 2
USER 3 INFO BLOCK 8 (Verified) . . . . . . . . USER 1 USER 2 USER 3 INFO BLOCK 8
INFO BLOCK 6 INFO BLOCK 5 INFO BLOCK 4 INFO BLOCK 3 INFO BLOCK 2 INFO BLOCK 1 A
block carried information is created by a user and then distributed to all users
for verification. Once the info block is verified by all users, it is then added to
the existing blockchain in all users’ ledgers. The distributed consensus concept
thus comes from the idea that information is no longer verified and maintained by a
centralized organization, but distributed to all Blockchain users. The entire
information history is visible to all users via distributed ledgers and is thus
representing information transparency. LEDGER FIGURE: Blockchain Characteristics of
Transparency: Distributed Consensus Given the aforementioned characteristics of
transparency, security, efficiency and immutability, BCT remarkably strengthens
trust among participants. If effectively applied, it is capable of guaranteeing
that all the information accessible by participants is reliable and has not been
subject to tampering in any way, which greatly resolves the problem of information
asymmetry. Electronic copy available at: https://ssrn.com/abstract=3295440 Chang,
Katehakis, Melamed and Shi Blockchain and Supply Chain 4 The first widely known
case of using BCT is in the financial services area, namely, the use of Bitcoin as
a now proliferating crypto currency. The aforementioned features of BCT enable
Bitcoin to process transactions in a highly secure and efficient way. Furthermore,
Bitcoin’s legendary (though controversial) success leads people to think of the
possibility of applying it in other contexts, such as in supply chain management.
Fig. 2 describes an application of BCT for organic fruits, such as apples. Figure 2
Blockchain Example in SCM: Organic Apple FIGURE: Blockchain Characteristics of
Traceability – Organic Apple Example SEED ORIGIN VARIETY DATE 2. Planting Info
Block FARM NAME FARM ADDRESS CERTIFICATION ON SITE INSPECTIONS 1. Farm Info Block
DATE METHOD BATCH SIZE 3. Harvest Info Block CONDITION ( TEMPERATURE, HUMIDITY,
ETC) LOCATION DURATION 4. Storage Info Block CONDITION ( TEMPERATURE, HIMIDITY,
ETC) CARRIER TRANSPORTATION MODE DURATION 5. Transportation Info Block NAME ADDRESS
6. Retailer Info Block BLOCKCHAIN LEDGER The accessibility of information for
organic apples has been theoretically and empirically proven to be critical for
market growth. With Blockchain technology, an organic apple may carry traceable and
immutable information of the entire history from farm to market place, which can
stimulate customers’ willingness to pay and boost market growth. 1.2. Blockchain
for SCM In contrast to its applications in the Financial sector, the application of
BCT in SCM is still in its infancy; with very few known cases in use up to now; cf.
Babich and Hilary (2018). The main difference between the use of BCT in Finance and
SCM lies in their core values. The core value for financial application is
information security, whereas the core value for SCM application is system
transparency and traceability. Typically, BCT could be adopted in SCM in three
compelling aspects: disintermediation, smart contracts and as a solution to
information asymmetries. In what follows, we shall expand on the particular
features that will motivate our modeling assumptions. The transparency feature of
BCT removes the necessity of an intermediary for paperwork processing (e.g.,
transportation, transactions, customs clearance, quality inspection, etc.), which
substantially enhances business efficiency. In this sense, BCT adoption could lower
the cost from suppliers. One of the well-known applications enabled by BCT is the
Smart Contract. Smart Contracts allow contracts to be automatically enforced and
executed immediately when predefined conditions/terms are met and verified. One
potential Smart Contract application is in the art Electronic copy available at:
https://ssrn.com/abstract=3295440 Chang, Katehakis, Melamed and Shi Blockchain and
Supply Chain 5 industry. Taking the music industry as an example, a Smart Contract
enables royalties to be automatically distributed among artists and songwriters in
real time, based on a predefined agreement between two parties. In light of the
Smart Contract, BCT adoption could secure high- quality supply and enhance both the
production and yield accordingly. In what follows, we shall focus on the
functionality of BCT for information asymmetry issues. Given that the quality of
information concerning a product or service is typically asymmetric between sellers
and consumers, it is shown, both theoretically and empirically, that quality mon-
itoring certified
by an authorized third party is the best solution to information asymmetry; cf.
McCluskey (2000), Giannakas (2002), Rousseau and Vranken (2013). Taking organic
food as an example with regard to the credence attribute, consumers are not able to
differentiate organic foods from conventional foods, either before or after
consumption. In addition, the production cost of organic foods is significantly
higher than that of conventional foods. As consumers have no means of
differentiating between them, they are only willing to pay the same for both kinds
of products, which in turn provides no incentive for suppliers to produce organic
foods, and thus the organic food market would probably fail eventually. In order to
stimulate the organic food market, a considerable amount of research proposed that
labeling certified by an authorized third party (e.g., FDA and USDA) is the only
solution for providing organic product information that will help consumers
differentiate. Several studies show that an increasing number of consumers are
interested in products produced in a social-, environmental-, eco- and health-
friendly way; ibid. Rousseau and Vranken (2013) show that consumers are willing to
pay an approximately 25% price premium for organic apples even without the
provision of information. With the provision of information on the actual
environmental health effects of organic apple production, the price premium grows
to about 42%. This result reveals two crucial aspects on price and demand: First,
consumers are willing to pay extra for organic foods; second, the provision of
information would boost demand. This will serve as an important assumption for
price-sensitive and blockchain-savvy consumers in our model, namely, that consumers
are sensitive to both selling price and blockchain adoption. Therefore, decisions
made on both selling price and BCT adoption are imperative to ensuring business
success. To capture the aforementioned major features of BCT, we consider a generic
model in §3, with cost saving, improvement of random yield, and enhancement of
uncertain demand stemming from BCT adoption. As already discussed,
disintermediation and having a Smart Contract can substantially improve operational
efficiency and enhance partnerships along the supply chain. Therefore, in our model
we firstly assume that BCT adoption can effectively reduce ordering and operational
cost, and that the higher the degree of BCT adoption, the more cost savings a
business can achieve. Secondly, thanks to the Smart Contract, we assume that the
supply yield is random Electronic copy available at:
https://ssrn.com/abstract=3295440 Chang, Katehakis, Melamed and Shi Blockchain and
Supply Chain 6 and positively correlated with the degree of BCT adoption. The
underlying rationale is that once a company decides to disclose more product
information to its potential suppliers, it is more likely to find a better supplier
that can offer a more preferable yield rate, reflecting a reliable supply along
with high quality. Thirdly, the traceability glinted by Blockchain technology’s
“proof of work” concept overcomes the information asymmetry issue among the
participants along the supply chain. Considering, blockchain-savvy (or, broadly
tech-savvy) consumers, we assume that the random demand can be boosted by BCT
adoption - the greater the degree of adoption, the greater the demand, in the
stochastic sense. In summary, thanks to the aforementioned features, BCT has been
embraced as a powerful tool to solve the problem of information asymmetry. Many
studies have shown that information availability and truthfulness are two major
forces for creating a thriving credence goods market. In this sense, we perceive
that BCT can serve as the best solution for sharing information throughout the
supply chain while at the same time ensuring its authenticity. The remainder of
this paper is structured as follows. In Section 2, we report on the literature
relevant to our study and clarify the contribution of this study. In Section 3, we
describe the problem and develop its mathematical model. In Section 4, we drive
some structural results. In Section 5, we address the blockchain design issues for
profit maximization. In Section 6, we offer an extensive numerical study with
useful managerial insights. Section 7 shows the robustness of the results for some
major extensions. Finally, Section 8 concludes the paper. 2. Literature Review BCT
essentially provides a platform that enables users to access secure, reliable and
tamper-proof information in an efficient manner. Currently, there is scant research
studying the impact of BCT and related design issues from management perspectives,
especially from the perspective of Supply Chain Management; cf. Simchi-Levi et al.
(2008). Most recently, Babich and Hilary (2018) provide a broad depiction on the
research directions stemming from BCT in the OM field. They identify five key
strengths and the corresponding five main weaknesses, and point out three research
themes for applying BCT to OM. Pun et al. (2018) examine how BCT can be used to
combat counterfeiting through a consideration of the interplay between a
manufacturer and a counterfeiter. Besides the aforementioned academic studies,
there are numerous technical reports pertaining to BCT, such as Staples et al.
(2017), Luu (Jan. 26, 2018), Geer (2018), O’Byrne (Mar. 27, 2018), Hertig (Mar 21,
2018), Pawczuk (2017) Piscini et al. (2017), Brody (2017), Casey and Wong (2017),
and many others. In contrast to the above literature, our study aims to investigate
the design of BCT for supply chain management through the development of a holistic
stochastic model, where the adoption of BCT impacts both the up-stream (suppliers)
and the down-stream (consumers). Electronic copy available at:
https://ssrn.com/abstract=3295440 Chang, Katehakis, Melamed and Shi Blockchain and
Supply Chain 7 Given that information transparency plays a key role in BCT, we next
focus on the literature pertaining to information sharing and information
asymmetry. Table 1 displays a side-by-side compar- ison of our study with existing
Information Sharing1 and Information Asymmetry2 literature. It also highlights the
contribution our study makes to the currently extant literature. 2.1. Literature on
Information Sharing The benefits of information sharing within a supply chain have
been widely analyzed and dis- cussed. Lee et al. (1997) show that the major cause
of the Bullwhip effect is variability of ordering, and Srinivasan et al. (1994)
propose that information sharing is an effective solution for the Bull- whip effect
so as to reduce order fluctuation. Additionally, Lee et al. (2000) build
mathematical models based on a two-level supply chain system comprised of a
manufacturer and a retailer, to demonstrate that information sharing would benefit
manufacturers by reducing inventory and saving cost. Yu et al. (2001) carry out a
rigorous analysis of supply chain strategic partner- ships, and show that an
information sharing-based partnership can effectively reduce inventory, save cost,
and improve the overall performance of a decentralized supply chain. The studies on
information sharing mainly focus on the partnership between the retailer and
wholesaler (or vendor/manufacturer) to analyze the value of demand information
sharing. Most studies draw the conclusion that a wholesaler would reap the benefits
of mitigation of order variation and reduction of inventory from the demand
information shared by a retailer, who has direct contact with the customers and is
thus more familiar with their tastes and demands. 2.2. Literature on Information
Asymmetry Information asymmetry is a prevailing and chronic phenomenon along the
length of the supply chain, spanning the whole way from upstream through to
downstream. For the upstream supply chain, supply contract design is developed
based on the asymmetric information of supplier reliability. Various supply risk
management tools are developed to this end, such as a penalty for shortfalls,
backup production (Yang et al. (2009)), outsourcing procurement service (Yang et
al. (2012)), monetary subsidy (Babich (2010)), etc. The objective of the supply
contract design is to improve buyers’ benefit/profit by revealing suppliers’ true
reliability based on the contract decisions made by suppliers. Yang et al. (2009)
studies the asymmetric information of supply disruption between a manufacturer and
a supplier, and concludes that “the quantity received by the manufacturer from the
supplier under symmetric information is stochastically larger than the quantity 1
Information Sharing literature includes but is not limited to Lee et al. (1997),
Srinivasan et al. (1994), Lee et al. (2000), Yu et al. (2001), Cui et al. (2015),
etc. 2 Information Asymmetry literature includes but is not limited to Akerlof
(1978), Kivetz and Simonson (2000), Rousseau and Vranken (2013), McCluskey (2000),
ect. Electronic copy available at: https://ssrn.com/abstract=3295440 Chang,
Katehakis, Melamed and Shi Blockchain and Supply Chain 8 received under asymmetric
information”. In other words, information disclosure improves supply yield. Our
study also assumes that the adoption of BCT enhances supply yield - the greater the
degree of adoption, the greater the yield rate, in the stochastic sense. As for the
downstream supply chain, Akerlof (1978) indicates that asymmetric information about
product quality could cause market collapse. In a market with asymmetric
information about product quality, such as the used car market, good quality
products would be driven out by bad ones, since consumers are not capable of
quality differentiation. Numerous empirical studies support that information
disclosure by labeling is an effective way to sustain markets having asymmetric
information about product quality. For example, Teisl et
al. (2002) provide market-based evidence supporting that the dolphin-safe label
increased the market share of canned tuna. Rousseau and Vranken (2013) find that
consumers are willing to pay a positive price premium of some 33 eurocent per
kilogram for labeled organic apples. In addition, truthfulness of information is
another critical issue. Giannakas (2002) indicates that labeling alone is not
enough to support a market with information asymmetry - consumers’ perception
toward the authenticity of information provided by labels would be a prerequisite
to sustaining the market. If mislabeling prevails, consumers will lose faith in the
labels, and the market will still fail. In other words, the aforementioned studies
support that accurate information (one of the salient features of BCT) plays a
crucial role in market success. 2.3. Literature on Blockchain-Based Business
Practices Many professional analysts claim that BCT will be the next technology to
revolutionize business and reshape business structures and ecosystems. Accordingly,
vast amounts of research and analysis have been made into Bitcoin and other crypto
currencies, each of which has BCT as its backbone. Recently, more and more
businesses have started to evaluate opportunities to apply BCT to improve their
supply chain performance. Walmart and Maersk recently teamed up with IBM to test
the implementation of BCT in improving operational efficiency. In particular,
Walmart’s pilot project shows that BCT can successfully reduce the time taken to
trace the origin of a bag of mangos from almost a week to just two seconds, which
translates in sizable cost savings. However, until now, only limited academic
effort has been put into analyzing blockchain applications in SCM. Among this
scarce research, most of them focus on blockchain-based business process design.
For example, Lopez-Pintado et al. (2017) propose a blockchain-based collaborative
supply chain ́ process. Tian (2016) investigates the potentiality of BCT enabled by
RFID to strengthen food safety, and a business process is proposed accordingly.
Mattila et al. (2016) claim that existing information integration between
participants within a supply chain is ineffective and inefficient, and proposes BCT
as an enabler for effective product-centric information sharing. Similarly, Korpela
et al. (2017) Electronic copy available at: https://ssrn.com/abstract=3295440
Chang, Katehakis, Melamed and Shi Blockchain and Supply Chain 9 Table 1 Literature
Comparison INFO. SHARING INFO. ASYMMETRY OUR PAPER SELLER-BUYER RELATIONSHIP
DEFINITION Seller: Vendor, supplier and manufacturer Buyer: Retailer Seller:
Suppliers of credence goods Buyer: Consumers of credence goods Any seller and buyer
within a supply chain INFO. FLOW Buyer to seller (Upward) Seller to buyer
(Downward) Seller to buyer (Downward) INFO. CONTENT Demand forecasting info
Product-centric info Product-centric info OBJECT OF INFO SHARING Adjacent upstream
partners Consumers of finished goods Any consumer (of raw material, semi-finished,
finished goods) within a supply chain RESEARCH FOCUS Optimization of business
decisions, e.g. lot size, safety stock, inventory level, production cycle, etc.
Reduction of Bullwhip effect Impact of information availability (via labeling,
warranty, branding, etc.) to market, demand, and willingness to pay Blockchain
design and optimization of adoption degree RESEARCH METHOD Optimization/game
theory, etc. Surveys/interviews/ game theory, etc. Optimization EXAMPLES Widely
discussed, including perishable/ nonperishable goods, service, etc. Credence goods
Search goods/ Experience goods/ Credence goods SOLUTION ERP, RFID, vendor managed
inventory (VMI), etc. Brand name, labeling, certificate, warranty, etc. Blockchain
Technology SUGGESTION A certain partnership within a SC is required Availability
and truthfulness of information is critical Different adoption degree of BCT is
proposed for different types of industry assert that a blockchain is a suitable
candidate for information integration within the supply chain, given its advantages
of cost-effectiveness and interoperability between different business entities.
They further identify different levels of needs and readiness by different
industries for digitization of supply chain network information, but fail to
further investigate the reasons behind it. It seems that the most fundamental
research topic has not yet been fully analyzed - whether or not BCT is beneficial
for all kinds of industries; if not, what is the level of information disclosure
that an industry/company/product should adopt when implementing BCT? This is one of
the core questions that this study aims to address. Electronic copy available at:
https://ssrn.com/abstract=3295440 Chang, Katehakis, Melamed and Shi Blockchain and
Supply Chain 10 2.4. Literature on Inventory Management and Pricing In terms of
methodology and modeling, our work is also related to the extensive literature on
joint pricing and inventory management under stochastic demand; cf. Li and Zheng
(2006), Roels and Perakis (2006), and Adida and Perakis (2010). The most complete
literature is that of Li and Zheng (2006), who also provide a comprehensive
literature review on joint pricing and inventory control. Interested readers are
recommended to refer to their work. Li and Zheng (2006) are the first to study the
joint inventory replenishment and pricing problem with both uncertain demand and
supply in multiple periods, and our model is built on theirs with a substantial
extension in depth of the long-term adoption of BCT, while focusing on the
blockchain designing for SCM. In the presence of uncertain supply and demand, they
show that, given different levels of inventory on hand, there exist optimal
ordering/production quantity and price/demand levels. Both optimal price and
ordering/production quantity decrease with the inventory level on hand.
Additionally, they conclude that uncertain supply always results in a higher price
and harms the expected profit of a company. Our study differs from Li and Zheng
(2006) in several ways. For example, we focus on the impact of BCT adoption on
optimal operational decisions. Importantly, we take it a step further, by
considering the design issue for the system. Our study is also related to the OM
literature on new technology adoption. For example, Liu et al. (2010) investigate
the impact of RFID on supply reliability. Both study the impact of the new
technology adoption on SCM, but RFID and BCT have different levels of impact along
the supply chain network. In particular, BCT will have a broader impact throughout
the entire supply chain, including both upstream (i.e., supply cost reduction and
yield improvement) and downstream (i.e., demand stimulation). Some related
literature include Feng and Shanthikumar (2018) considering big data, and Cohen et
al. (2015) considering green technology adoption. 2.5. Contribution to the
Literature The contribution our study makes to the literature is mainly in the
following four aspects. First of all, to the best of our knowledge, this is the
first study to systematically model and analyze the potentiality of blockchain
development from a supply chain perspective. Secondly, this paper breaks away from
the traditional way that supply chain management studies approach the issue of
information impact on supply chain performance. Instead of mainly focusing on the
impact of retailers’ upward demand information sharing to (adjacent) wholesalers,
our model can be generally applied to any parties within the supply chain; the
information flow of our study is in both directions, rather than upward only; the
content of information in this paper is supply (product- centric) information,
rather than demand information. Thirdly, this paper is interdisciplinary across
Electronic copy available at: https://ssrn.com/abstract=3295440 Chang, Katehakis,
Melamed and Shi Blockchain and Supply Chain 11 marketing, information system and
operations management, so we apply some study results from marketing, including
information asymmetry for credence goods, leveraging BCT to boost market growth,
etc. The conclusion made by many marketing studies that information availability
would boost demand and increase consumers’ willingness to pay (CWP) is applied as
an assumption by this paper to investigate the optimal information disclosure level
for suppliers. A business process implemented using BCT, as proposed by the
information study result, is applied by this paper to serve as a basis for
investigating information flow. Fourthly, this study provides a modeling framework
for BCT design by selecting the adoption degree to share information throughout
supply chain. 2.6. Practical Insights with Numerical Studies Based on previous
experience of new technological revolutions (e.g., those involving the Cloud
Computing, AI, Big Data, IoT, etc.), there appears to be a prevailing phenomenon in
the existing business environment that whenever new technology emerges, many
companies irrationally rush to be the first to implement it and exploit the first
mover advantage. Naturally, no one wants to be an abandoned loser. This study,
therefore, becomes of timely value, since it aims to serve as a guideline for
determining whether a business is suitable for using BCT, and if so, it then
suggests the proper level of adoption. To illustrate some useful managerial
insights, we conduct numerical studies in two dimensions: i) Vertically, we
consider different types of products; and ii) horizontally, we consider different
stages of a product lifecycle. First, for the vertical dimension, we look into
different goods that can be impacted by different blockchain-savvy buyers. Based on
the observability of quality, goods can be classified into three categories: 1)
search goods; 2) experience goods; and 3) credence goods 3 ;
cf. Nelson (1970), Darby and Karni (1973). 1) Search goods: There is perfect
information about quality for search goods, which means that consumers can easily
differentiate good from bad products before consumption. 2) Experience goods: It is
difficult or costly for consumers to examine the quality of experience goods prior
to consumption; whereas consumers can determine their quality after consumption. 3)
Credence goods: It is difficult or costly for consumers to determine the quality of
credence goods even after consumption. Examples of credence goods include works of
art (e.g., antiques), organic products, used cars, luxury goods (e.g., diamonds),
high end food (e.g., wine, seafood, beef), services (e.g., doctors and medical
services, auto mechanical service, lawyer service, donated eggs/sperm, etc). 3 SEC
classification is somewhat subjective, because the capability of evaluation of
product quality varies by persons. For example, a technology geek might view PCs as
search goods, but others, with limited computer knowledge, might consider PCs as
experience goods. Electronic copy available at: https://ssrn.com/abstract=3295440
Chang, Katehakis, Melamed and Shi Blockchain and Supply Chain 12 As one of the
major results, it is revealed that, subject to tech-savvy customer behavior, some
types of goods (e.g., credence goods and experience goods) benefit from the
application of BCT, but it may not prove beneficial to leverage BCT for some of the
others (e.g., search goods). For the horizontal dimension, we consider the
lifecycle of a typical product (e.g., experience goods), comprised of Introduction,
Growth, Maturity, and Decline. One major insight from this study leads to
recommending the adoption of BCT as early as possible and for adopting it to a
higher degree at an earlier stage.
Blockchains are regarded as public (and lately also private) ledgers containing
transactional data within their decentralized data structures, which form a series
of tightly connected blocks. Asymmetric cryptography and distributed consensus
algorithms are being deployed for achieving ledger consistency, data integrity,
auditability, non-repudiation, and authentication as part of the basic security
primitives [1]. The distributed and decentralized nature of blockchains makes them
immutable in the sense that transactions cannot be tampered once they are
officially validated by the peers of the network and registered in the block of the
chain. At the same time, reliability and robustness are ingredients that constitute
blockchains as highly trusted platforms implemented on open, trustless networks of
peers. During the last years, we experience significant research and development
efforts utilizing blockchains in financial services such as digital assets and
payment systems [1,2], smart contracts [3], logistics [4] Internet of Things (IoT)
[5,6], and reputation systems [7,8]. This is mainly due to the fact that
blockchains can allow transactions and payments to be implemented without any
intermediary, thus effectively disrupting the way traditional businesses are
working to date. Logistics 2019, 3, 5; doi:10.3390/logistics3010005
www.mdpi.com/journal/logistics Logistics 2019, 3, 5 2 of 17 Logistics and supply
chain management are regarded as domains where blockchains are good fits for a
series of reasons. During the lifecycle of the product, as it flows in the value
chain (from the production to consumption) the data generated in every step can be
documented as a transaction creating, and thus, a permanent history of the product.
Among others, blockchain technology can effectively contribute to: (i) Recording
every single asset (from product to containers) as it flows through the supply
chain nodes, (ii) tracking orders, receipts, invoices, payments, and any other
official document, and (iii) track digital assets (such as warranties,
certifications, copyrights, licenses, serial numbers, bar codes) in a unified way
and in parallel with physical assets, and others. Moreover, the blockchain can
contribute effectively, through its decentralized nature, in sharing information
about the production process, delivery, maintenance, and wear-off of products
between suppliers and vendors, bringing new modalities of collaboration in complex
assembly lines. Any system, in order to achieve traceability, is required for a
flow of information that records and follows the flow of products. The
interconnected structure of the supply chain makes it difficult to introduce a
centralized system in control of a third party, since a high level of trust is
required. The limited amount of trust concludes in separate systems that restrain
the possibility to accomplish traceability throughout the full supply chain. In
today’s world, supply chains end up to be complicated structures with multiple
involved participants and with a plethora of activities. Security and
organizational issues tend to enhance the need to build a supply chain management
system leveraging blockchain ledger technology. Regardless of the particularities
of the specific supply chain related application, blockchain can offer a wide set
of advantages. By registering and documenting a product’s lifecycle across the
supply chain nodes increases the transparency and the trust of the participating
actors. Moreover, elimination needs to have a trusted third party that can allow
for greater scalability, as any number of participants can virtually participate in
the chain with the appropriate level of trust, and increased innovation by
deploying the dynamics of blockchains as enablers of instant payments (through
cryptocurrency), smart contracts, and low transaction fees without having the cost
overheads of third parties. Last, but not least, a shared, immutable ledger with
codified rules can potentially eliminate the audits required by internal systems
and processes. While today we experience various research efforts on the analysis
of the blockchains in logistics and supply chain management and the adoption of
distributed ledger technologies and smart contracts, there has been no detailed
methodological approach on what elements of the blockchain are effecting the
particular stakeholders and what are the blockchain technical features that someone
has to pay special attention to for the wider real-life blockchain adoption in the
related business domain. At the same time, some high level conceptual
considerations on a blockchain based architecture for the supply chain management
is missing and needs to be the subject of further discussions so as to have a
reference blueprint for a potential further articulation with the legacy systems
owned by the related supply chain stakeholders. The remaining paper is structured
as follows: Section 2 provides an analysis on related work with respect to supply
chain management over blockchain technology and investigates, among others, recent
literature and implementations that try to utilize such technologies in the area of
logistics, product origin tracking, and supply chain management. Section 3
discusses the general concept and elements of blockchains that affect the supply
chain and its actors. Scalability, performance, consensus mechanisms, privacy,
location, and cost are further investigated, while an analysis of blockchain
features tradeoffs for supply chain is being presented. Section 4 provides
architectural assumptions and considerations for a generic modular and layered
architecture and how blockchain layer and a generic middleware layer have to be
placed and interact with each other for facilitating the needs of supply management
actors. Section 5 provides a discussion on current findings, challenges that
blockchains imply, and possible solutions that may be engineered for achieving a
global scale blockchain adoption for the supply chain and logistics industry.
Section 6 provides the final conclusions of the paper. Logistics 2019, 3, 5 3 of 17
2. Review of Literature Blockchain technology has been successfully used in several
industries, such as energy and finance. For the supply chain, solutions have been
proposed in a theoretical manner without significant results in real-world
conditions. In particular, recent literature studies have various aspects of the
specific domain. In Reference [9], the authors identify characteristic use cases
described for blockchain in the field of logistics and supply chain management and
analyze them regarding their mindful technology use based on five mindful
technology adoption principles: Engagement with the technology; technological
novelty seeking; awareness of local context; cognizance of alternative
technologies; and anticipation of technology alteration. Most cases demonstrate
high engagement with the technology, but there are significant differences when it
comes to the other mindful use principles. In Reference [10], the authors use the
methodology ‘attributes of innovation framework’ to identify the potential
blockchain applications and present a framework explicating four transformation
phases to subsequently categorize the identified areas of application according to
their effects on organizational structures and processes. Using academic and
practitioner literature, the authors classify possible applications for adoption
and provide a framework to identify blockchain opportunities in the logistics
industry. Such research studies can be particularly beneficial for high level
business executives to assess where to start building organizational capabilities
in order to successfully adopt and deploy blockchain technology. A fully
transparent and decentralized traceability system for the supply chain is proposed
in another paper called TRADE [4], which displays that it is feasible to apply
blockchain technology for the supply chain to obtain traceability. Consumers and
other participants can view all the system information and verify the product
assertions derived from actors. The authors focus on the trust aspect and a
transparent, decentralized traceability system for the supply chain. Each role
(actor) creates a transaction according to a product identifier (pid) that consists
of the full product data. A role signs the transactions they issue (digital
signature—providing non-repudiation, authenticity, integrity). All the legitimate
transactions are combined in a block and are broadcasted to the blockchain network.
End users are allowed to view the full life cycle of a product. Uniformity is
enforced in TRADE because each transaction, depending on the corresponding actor,
has an appropriate series of validation processes. In this study, various open
research questions for specific use cases are expressed, including, among others,
privacy. For certain supply chains, roles might compete with each other and not
approve the use of a transparent system, consequently, a privacy-preserving
traceability system should be designed. In 2016, Kim et al. presented a smart
contract design based on ontologies of an incepted traceability supply chain system
using blockchain technology. In this work, emphasis is given on the appliance of
ontologies in their context, rather than on blockchain technology for the supply
chain in the real-world [7]. RFID tags and blockchain technology is deployed in
order to create a traceability system for an agri-food supply chain in China.
Authors claim that a decentralized suggestion for traceability could solve the
problems in an approach that is centralized, particularly: Trust, fraud,
corruption, tampering, and falsifying information. While this analysis examines
blockchain technology and traceability as separate features, their combination
might present flaws concerning
feasibility and performance [11]. Abeyratne et al. presented a deep dive in
traceability and transparency [1]. In their work, transparency is discussed based
on the child labor scandal of Nike (1996), whereas freight sustainability is built
with an emphasis on the product life-cycle [2,3]. While Abeyratne et al. support
that the blockchain technology attributes can enhance trust through traceability
and transparency in supply chain use cases, their work discusses an example, rather
than a practical application of blockchain technology in the supply chain. The
applicability of blockchain technology in the Internet of Things sector is examined
in Reference [12]. Scalability and high costs issues of the IoT sensor networks are
mentioned and blockchain is suggested as a solution. Advantages that come from the
connection of IoT sensors to the Logistics 2019, 3, 5 4 of 17 blockchain include,
among others, the access to a convenient (existing) billing layer, which paves the
way for a marketplace of data sharing and services between devices. According to
this study, there are various limitations and issues still to be resolved. One
issue is that a blockchain solution will generally underperform, resulting in lower
transaction processing throughput and higher latencies, compared to a centralized
database solution. Another issue that may come up concerns privacy on the
blockchain, since blockchains by design expose information to everyone. The ZERV
Commerce Platform [13], enabled by an asset-based token and blockchain technology,
plans to be a decentralized trading platform. It intends to allow for frictionless
transactions between all key participants within the defense industry, including
manufacturers, suppliers, distributors, retailers, and consumers. However, as of
today, there is still no white paper describing any of the implementation details
of their suggested approach. 300Cubits [14] aims at revolutionizing the shipping
business by tokenizing the contract between customer and container liner. As a
solution to this supply chain issue, 300Cubits proposes a token deposit system,
which is organized as a tamper-proof Blockchain intermediary and utilizes a smart
contract. Bext360 [15] is an organization focused on developing technologies to
improve social sustainability in a supply chain. For that purpose, they developed a
blockchain to track and trace coffee beans on the complete route from farmer to
consumer. IBM and Walmart have developed and started testing a solution for a more
efficient data exchange, which is based on blockchain technology and enables them
to identify and track products faster (from six days to 2 s) and to remove recalled
goods from their shelves [16]. The solution requires data input for every product
into a private blockchain. Last but not least, an ongoing discussion is taking
place besides the technical aspects of supply chain management (whether fueled by
blockchain or not), which has to do with other societal goals. The articulation
between supply chain and ethics (as for example the discussion in Reference [17])
is something that is receiving significant attention in modern business ethics and
where blockchains can contribute through the traceability of the products and the
means of manufacturing.
According to CoinDesk (2017)–—which has traced prices from digital currency
exchanges including Bitfinex, Bitstamp, Coinbase, and itBit for the last decade–—
the price per bitcoin hit an all-time high of $17,872.56 on December 15, 2017. As
of September 2017, the total market value of all digital currencies surpassed $135
billion (Hackett, 2017a). Although the skyrocketing price tag of a bitcoin may not
reflect its true currency value, an astonishing rise in its price for a relatively
short period of time drew a frenzy of interest from many investors worldwide. As
the interest in bitcoin continues to grow, the blockchain technology (BT) that
powers the crypto- currency concept and underlying technology has become the center
of attention in the business community. For example, Juniper Research (Hold- en,
2017) revealed that 39% of approximately Business Horizons (2018) xxx, xxx—xxx
ScienceDirect www.elsevier.com/locate/bushor E-mail address: hmin@bgsu.edu KEYWORDS
Blockchain technology; Supply chain risk management; Cryptocurrency; Blockchain
architecture; Supply chain resilience Abstract With the soaring value of bitcoin
and frenzy over cryptocurrency, the blockchain technology that sparked the bitcoin
revolution has received heightened attention from both practitioners and academics.
Blockchain technology often causes controversies surrounding its application
potential and business ramifications. The blockchain is a peer-to-peer network of
information technology that keeps records of digital asset transactions using
distributed ledgers that are free from control by intermediaries such as banks and
governments. Thus, it can mitigate risks associated with intermediaries’
interventions, including hacking, compromised privacy, vulnera- bility to political
turmoil, costly compliance with government rules and regulation, instability of
financial institutions, and contractual disputes. This article unlocks the mystique
of blockchain technology and discusses ways to leverage blockchain technol- ogy to
enhance supply chain resilience in times of increased risks and uncertainty.
#2018Kelley School ofBusiness,IndianaUniversity. Publishedby ElsevierInc.Allrights
reserved. https://doi.org/10.1016/j.bushor.2018.08.012 0007-6813/# 2018 Kelley
School of Business, Indiana University. Published by Elsevier Inc. All rights
reserved. 400 company founders, executives, managers, and information technology
(IT) specialists it surveyed either considered deploying or were in the process of
deploying BT. BT started to gain traction from a growing number of supply chain
executives. The recent Eyefortransport (2017) report indicated that nearly 62% of
supply chain executives surveyed claimed to have engaged with BT. Overall, the
business value-add of a blockchain is expected to grow to more than $176 billion by
2025 and exceed $3.1 trillion by 2030 (Gartner, 2017). Despite this rosy outlook,
many firms are still either skeptical about blockchain’s face value or unfamiliar
with its inner workings and application potential. Although 88% of surveyed
marketers val- ued the potential of BT to disrupt current practices in
apositiveway, amere15%feltthey couldexplainthat technology to their clients
(Annalect, 2017). Similar- ly, 62% of the supply chain professionals surveyed by
Infosys Consulting did not know what to expect from BT (Langley, 2017). Since
unfamiliarity and misun- derstanding can derail the successful applications of BT,
there is a growing need to explain it. BTis a peer-to-peer(P2P) network ofIT that
keeps records of digital assettransactions using distributed ledgers in lieu of
traditional databases that are cen- trally controlled by intermediaries such as
banks, credit agencies, governments, and accountants. BT’s decentralized, open, and
cryptographic nature engenders trust and thus brings unprecedented secu- rity
benefits. Hacking attacks that commonly impact large centralized intermediaries
like banks would be nearly impossible as blockchain can keep track of all
transactions. If someone wanted to hack into a par- ticular block in a blockchain,
a hacker would not only need to hack into that specific block but also all the
preceding blocks in the entire history of that block- chain. As such, BT provides a
way to securely create a tamper-proof log of business activities and transac- tions
(Fallahpour, Shirmohammadi, Semsarzadeh, & Zhao, 2014; Lemieux, 2016). To further
enhance the security of a blockchain, blockchain networks can be private with
restricted membership similar to an intranet, restricting access to those networks
in lieu of making them public. The acceptance of BT as a tool to enhance secu- rity
benefits and revolutionize supply chain practi- ces would take a considerable
amount of time until its benefit potential is fully realized and backed by many
success stories. To speed up the BTapplication process, we need to understand how
BT typically works. Figure 1 demonstrates the inner workings of BT. As Figure 1
illustrates, no one owns a blockchain; no one can delete a block from the chain and
anyone can add to it. As such, the blockchain allows anyone to transfer his/her
assets–—including intangible as- sets–—without the risk of hacking and building
silos that limit interactions among trading partners. In addition to the security
benefit, BTcan bring a multitude of managerial benefits to everyday busi- ness
practices (Maruti Techlab, 2017; Takahashi, 2017), including: Reduced transaction
costs/time resulting from better-preserved blockchain platforms that do not
necessitate third-party involvement; Visibility improvement across the supply
chain, a result of increased transparency gained via open ledgers that any person
can see; and Improved connectivity among trading partners through the integration
of digital and physical worlds (Maruti Techlab, 2017; Takahashi, 2017), which
includes a shared visibility of transactions and information flows across the
supply chain. With the aid of technologies such as electronic data interchange
(EDI), extensible markup language (XML), and application programming interface
(API), BTcan facilitate faster, auditable interactions and the exchange of
immutable data among supply chain partners (IBM, 2017). Despite these potential
benefits, BT can pose a number of implementation challenges such as a lack of
organizational readiness or technical expertise/ infrastructure, issues with
scalability, and limited financial resources for BT investment. As such, there is
an urgent need for developing managerial strategies to help firms overcome those
challenges while fully exploiting the benefits of BT. Unfortunately, a vast
majority of blockchain research focused on bitcoin systems and anecdotal studies of
potential blockchain applications, including smart contracts, financial ser- vices,
and licensing (e.g., Crosby, Pattanayak, Verma, & Kalyanaraman, 2016; Mainelli &
Smith, 2015; Raval, 2016; Tapscott & Tapscott, 2016; Underwood, 2016; Yli-Huumo,
Ko, Choi, Park, & Smolander, 2016). Con- sidering theseresearchgaps andtheoverall
scarcityof blockchain research, in this article I present a block- chain
architecture and proposepotentialremedies for overcoming blockchain challenges. I
also offer ways managers can exploit BT to improve supply chain resilience from a
security perspective. In addition, I identify and investigate contextual variables
that may influence a firm’s decision to adopt BT. 2. Blockchain architecture Since
a blockchain is a decentralized mesh network of computers linked to each other
rather than BUSHOR-1529; No. of Pages 11 2 H. Min through a central server, there
are a number of layers that govern blockchain operations and create the protocols
for BTapplications. With this in mind, as displayed in Figure 2, I present a
blockchain architecture that consists of five modules: 1. Data source module, which
helps create a block- chain in shared, distributed databases (i.e., ledgers).
Unlike traditional databases, these do not use the client-server network controlled
by a designated central authority. As such, in provid- ing access to the databases,
there is no need for the authentication of a user’s credentials by the central
authority, which is often subject to hack- ing and tampering. Instead, all
participants in the P2P network verify new additions to the BUSHOR-1529; No. of
Pages 11 Figure 1. Basic inner workings of blockchain technology Blockchain
technology for enhancing supply chain resilience 3 blockchain based on consensus,
making it more difficult to tamper with data. In other words, every user is ensured
that that data he/she is retrieving is uncorrupted and unaltered as soon as it is
recorded. In this module, data can only be written and read through queries and
retrievals as opposed to being read, updated, and deleted. 2. Transaction module,
which allows for the vali- dation of a transaction and writing of a new
transaction. A transaction is a transfer of value between the seller and the buyer
and thus changes the state of data contained in the block. While past entries in
the block should always remain the same, a new entry can change the state of the
data in the past entries (Ray, 2017). This module begins with a transaction agree-
ment between the buyer and the seller. After reaching that agreement, this
transaction is broadcast to the P2P network and miners (i.e., computers on that P2P
network) collect that transaction and process the block with rewards. Once
verified, the miners will disseminate the new, unalterable block to the entire P2P
net- work. In this module, an input is a reference to an output from a previous
transaction (e.g., Output 1 in Figure 2). Multiple inputs are often listed in a
transaction. All of the new transac- tion's input (e.g., Input 2 in Figure 2)
values are added up. Herein, the total value of inputs must be equal to or exceed
the total value
of outputs. 3. Block creation module, which records transac- tion data permanently
in a file called a block. If a block is linked to preexisting blocks and then
organized into a linear sequence over time, the blockchain is created. However, it
should be noted that a new block cannot be submitted BUSHOR-1529; No. of Pages 11
Figure 2. A basic architecture of the blockchain technology 4 H. Min and added to
the P2P network without mining (i. e., the process of adding transaction records to
the public distributed ledger of past transactions by solving difficult
mathematical puzzles). 4. Consensus module, which confirms and validates
transactions using the proof of work, proof of stakes, or Byzantine fault tolerance
consensus algorithm. This module is crucial in maintaining the sanctity of the
transaction data recorded on the blockchain and safeguarding the transaction and
block order. As such, this module involves the optimal selection of a consensus
mechanism that avoids the corruption of data recorded on the blockchain. 5.
Connection and interface module, which facili- tates web interfaces among users–—
including ones without coding, technical, or legal skills–—while synchronizing and
integrating all the IT platforms, software (e.g., bitcoin wallets), and algorithms
needed for blockchain applications. This module should help provide real-time
information about contractual status and transaction tracking using mobile devices.
This module also facilitates the integration among different companies or indus-
tries that can communicate with each other and share digital assets with each other
seamlessly. As such, interoperability enhanced by this module makes itpossible
tobuildmorepartnerships among different companies and drive greater business value
with shared blockchain solutions. As discussed above, the collaborative supply
chain partnership is an important prerequisite to the successful establishment of
the BT architecture. The collaborative partnership, however, cannot be formed
without sharing common strategic goals (e.g., risk mitigation) and collectively
banding re- sources (e.g., IT investment funds) among the part- ners. In addition,
all partners across the supply chain need to share transaction data that may
contain proprietary and sensitive information. This begs the question: Who should
be the focal company in the P2P network and who are the trustworthy partners?
Herein, the focal company refers to a channel captain that owns abundant resources
and thus has a bargaining power over other actors such as its suppliers and
distributors in the supply chain. Leveraging its bountiful resources and bar-
gaining power, the focal company can lead the BT initiative and help its trading
partners embrace BT. In other words, the focal company is considered a facilitator
for establishing the BT architecture and aiding its supply chain partners in
exploiting BT. The typical profile of the focal company may be a large
multinational firm (MNF) that owns a network of manufacturing and/or distribution
facilities sup- ported by a well-established IT infrastructure and staff. The MNFs
that fit into this profile include Walmart, Dell, Sony, Samsung, Apple, Unilever,
Nestlé, Ford, Toyota, Hyundai, and other Fortune 500 companies. In addition to the
focal company, trustworthy partners (e.g., certified suppliers) can play an
important role in the P2P network by creat- ing or adding to a block in the
blockchain. 3. Blockchain applications to supply chain security A supply chain
often intersects business functions and national boundaries with an extensive
network of trading partners. These interactions increase the vulnerability of the
supply chain and can lead to its disruption. To reduce such vulnerabilities, supply
chain professionals need to identify potential weak links and assess their level of
risk. Generally, the risk assessment includes the following steps: 1. Identify
trading or supply chain partners. These partners may form dots (or nodes) in the
supply chain network and represent parties that can create supply chain contracts.
2. Create the supply chain or process map that shows a transaction and its related
information flows. Mapping these flows (e.g., cargo, contain- er, capital,
documents) provides clues to the potential chokepoints (i.e., weakest links) and
the degree of exposure to risks and threats, including cyberattacks. Figure 3 shows
many sources of supply chain risks. 3. Categorize and assess vulnerabilities.
Depending on the estimation of risks, those risks should be classified into
different categories (e.g., high, medium, low risk) or their risk levels should be
calculated with a probability if possible (C-TPAT Training Seminar, 2010). 4.
Develop action or contingency plans for risk mitigation. Based on the level of
security risks and vulnerability assessed by the previous step, appropriate risk
mitigation remedies should be developed with deadlines or timetables. In par-
ticular, timetables should be set for the estab- lishment of specific action plans,
assignment of responsibilities for detailed subplans, outlines of the
implementation process, and the delineation of expected outcomes. For example, by
adopting BUSHOR-1529; No. of Pages 11 Blockchain technology for enhancing supply
chain resilience 5 a radio frequency identification (RFID) system that can spot the
risks of potential security breaches and can capture the data regarding vehicle
movement (e.g., port entry/exit) auto- matically, security personnel or cargo
inspectors can match the captured data to the preregis- tered/documented data
(e.g., shipping docu- ments, manifests). Then, they can identify suspicious data
trends (e.g., points of origin from high-terror risk countries) in the incoming
cargo for red flags (Min & Shin, 2012). As such, port security can be beefed up
with the early detection of abnormalities that often cause se- curity failures. 5.
Implement a system for controlling and moni- toring risk mitigation efforts. Every
plan should be evaluated for its efficiency and impacts on security enhancement.
Also, it is necessary to check and see if such a plan is on schedule or reaches the
designated milestone for continuous monitoring and assurance of the progress. This
step includes the development of relevant per- formance metrics. Though it is
rarely utilized, BTcan play a significant role in the steps above; it can be used
to prevent security breaches while strengthening supply chain connectivity. BT is
hack-resistant, tamper-proof, and immutable due to its distributed ledger and
network verification process. BT also offers auto- matic traceability, since
append-only distributed databases of transaction records can be shared across the
entire P2P network and those historical records remain forever with permanent
footprints. Furthermore, as Figure 4 shows, a blockchain com- prised of nodes and
arcs can be embedded in the typical supply chain structure comprised of nodes and
arcs and thus can be utilized to capture both organizational and network risks
associated with the supply chain. Considering application potentials of BT for man-
aging supply chain risks, it is important to identify specific supply chain
activities for which risk can be reduced and then come up with viable remedies for
enhancing supply chain resilience. These remedies should comply with the following
underlying prin- ciples for enhancing supply chain resilience. 1. Prevent risk
occurrence. Identify risk sources to avoid risk. For example, avoid shipping routes
with high sea piracy or avoid seaports suscepti- ble to frequent bottlenecks and
labor strikes. 2. Reduce the impact of supply chain disruptions. Consider buffering
with additional safety stock, hedging against fuel price hikes for transportation
carriers, and risk transfer through insurance coverage. 3. Improve the flexibility
for coping with supply chain disruptions. Enhance the quick-response capability by
shortening recovery time from un- expected events such as disasters or shifting
sources of supply close to manufacturing plants (e.g., shifting from offshoring to
reshoring or near sourcing). 4. Change bad habits built by a business-as-usual
attitude. Since complacency or organizational resistance can stifle an innovative
idea for man- aging supply chain risks, supply chain professio- nals should be
open-minded about emerging concepts such as BT. Bad habits of conventional BUSHOR-
1529; No. of Pages 11 Figure 3. Various sources of supply chain risks 6 H. Min risk
management often originate from a set of preconceived notions and assumptions that
mar- ket behaviors are always rational, forecasts are reliable, random events are
rare, and buffering is the most effective way to handle risk. This conventional
type of risk management rests up- on remedies intended for mitigating tangible,
visible risks such as terrorism, theft/pilferage, accidents, and natural disasters.
These remedies tend to be more reactive (i.e., passive) than proactive and thus
focus on damage control after the fact. Many companies that rely on conven- tional
risk management are exposed to invisible risks such as cyberattacks, computer
hacking, counterfeiting, miscommunication, credit fail- ures, and contract frauds.
Under the many watchful eyes of the P2P network, BT helps reduce hidden, invisible
risks that cannot be easily detected by a limited number of partic- ipants (e.g.,
seller, buyer, financial institution) in typical business transactions or supply
chain activities. In other words, BT enables its adopter to exploit multiple
layered security measures. Figure 5 compares and contrasts conventional risk
management principles and BT-enabled risk management principles. With the above
principles in mind, we will elaborate on specific supply chain areas of
applications for BT in Sections 3.1.—3.4. 3.1. Smart contracts One of the first
steps
that triggers supply chain activities is contract formation. As such, contractu-
al disputes resulting from fraud, misunderstanding, and performance failures can
not only destroy the supply chain partnership but also disrupt supply chain
activities with prolonged time for resolution. One of the plausible ideas that was
put forward recently is to form a smart contract, which is a computer protocol
intended to facilitate, verify, or enforce contractual obligations by embedding
con- tractual clauses (e.g., collateral, bonding, delinea- tion of property rights)
in the computer system and then automating contract execution (Szabo, 1997). Thus,
smart contracts not only define the rules and penalties around a contractual
agreement in the same way that a traditional contract does, but they also enforce
those obligations automatically. Smart contracts are self-verifying and self-
executing agreements that can automate the contract life- cycle to improve
compliance, mitigate risk, and increase efficiencies across the enterprise
(Icertis, 2017). In a smart contract, a contract can be converted to computer codes
and then stored and replicated on the computer system and supervised by the network
of computers that run the blockchain. In particular, smart contracts can help you
exchange money, property, shares, or anything of value in a transparent, conflict-
free way while avoiding the services of a middleman (Blockgeeks, 2017). As a
result, transaction time and costs will be reduced, since smart contracts can
execute themselves. Al- so, by incorporating the Internet of Things (IoT) into the
blockchain, contractual fraud will be easily detected and prevented. Furthermore,
the integri- ty of asset transfer made by the contract will be improved with the
shared database confirmed by BUSHOR-1529; No. of Pages 11 Figure 4. The supply
chain structure with two types of potential risks Blockchain technology for
enhancing supply chain resilience 7 many network participants and the enhanced
secu- rity of a contract as shown in Figure 6. 3.2. Asset tracking Once assets–—
both tangible and intangible–—are listed on the blockchain, their ownership is
immu- table unless the owner verifies a change. The im- mutable and paperless
ledger in the blockchain cannot be altered and thus ownership history can- not be
fabricated. In addition, BT operates as a complete and publicly viewable ledger
that perma- nently tracks and records all the supply chain-re- lated activities for
a particular asset. BT allows its user to trace all the way back to the origin of
an asset. As such, blockchain not only prevents the transaction of fake or
counterfeit assets, but it also makes it easier to track goods as they move and
change hands in the supply chain. Indeed, the U.S. Department of the Treasury plans
to track and moni- tor the movement of physical assets in real time as they are
transferred from one party to another throughout the supply chain process using
digital records of asset transfers stored on the blockchain (Higgins, 2017).
Likewise, the BT can be utilized to track shipments in global logistics operations.
The shipment (i.e., asset) tracking capability of BT can reduce the risk ofloss and
damage during transit. For example, Maersk,the Danish shipping giant,recently
completed a 20-week blockchain proof of concept trialto track its cargo. BT’s
reliance on cryptographic signatures makes it difficult for anyone to tamper with
shipping labels or misplace shipments during transit, all while simplifying global
trade with added trust and transparency across the supply chain (Green, 2017;
Hackett, 2017b). BUSHOR-1529; No. of Pages 11 Figure 5. Evolution from conventional
risk management to BT-enabled risk management Figure 6. Convergence of the
blockchain with the Internet of Things 8 H. Min 3.3. Secure and error-free order
fulfillment With paperless and easy-to-access customer re- cords, BT can expedite
order fulfillment processes throughout the supply chain by quickly confirming
customer credit history, checking inventory status, verifying finances, notifying
order/shipment status, and offering transparency throughout the entire order
fulfillment process as highlighted with circles in Figure 7. By automating the
circled order fulfill- ment steps with accuracy and security, BT will not only
reduce order fulfillment errors but also speed up the order fulfillment process. In
addition, since the blockchain ledgeris open and can be seen by any P2P network
participant (e.g., both the buyer and the seller), blockchain transparency will
increase visibility of the order fulfillment process and thus reduce the risk of
fulfillment error. 3.4. Cybersecurity Cybercrime has been on the rise for the past
decade (CBS, 2015; Statista, 2016). The growing threat of cybercrime can cripple
supply chain activities in the stretched supply chain network. Despite countless
efforts (e.g., antivirus or malware software, pass- word protection, threat alerts)
to deal with such a threat, the risk of cybercrime has never been abat- ed. Another
viable solution may be the use of BT, which can remove the risk of a single point
of failure with its end-to-end encryption, visibility, and pri- vacy. The immutable
nature of a blockchain and the fact that every computer on the P2P network is
continually verifying the information stored on it makes BT an excellent tool for
mitigating the risk of cybercrime and hacking. In particular, the secure nature of
BT makes it useful for accounting and payment audits (e.g., freight payment audits,
in- ternational payment audits) because BTensures the integrity of transaction
records and no one–—not even the record owner–—can alter accounting re- cords once
they are locked in the blockchain. 4. Managerial challenges of the blockchain In
the previous section, we learned about the vari- ous managerial benefits of BT,
including reduced transaction fees, public transparency, asset integ- rity, fraud
detection and prevention, P2P connec- tivity, improved order fulfillment, and
increased trust among supply chain partners. However, BT is not without its
potential shortcomings and imple- mentation challenges due in part to its
revolution- ary concept and its sheer complexity. Some of those challenges are
displayed in Figure 8. The most pressing among these challenges are scalability,
interoperability, and government regulatory issues. In a blockchain, every node
needs to process and validate every single transaction, so the blockchain by its
nature requires enormous computing power and high bandwidth internet connection,
which is not easy to build with the current technology. If such a challenge forces
the blockchain to centralize its validation process, it may defeat its original
purpose. In addition, given the various platforms that BTcan use, finding the
optimal combinations of different platforms that are interoperable and com- patible
with each other would not be easy. Since BT relies on the distributed ledger that
can bypass the interference of a government, the gov- ernment may increase pressure
on BTusers through various forms of regulations and legal restrictions and thus may
hamper the usefulness of BT for BUSHOR-1529; No. of Pages 11 Figure 7. Part of
order fulfillment steps where BT can fit in Blockchain technology for enhancing
supply chain resilience 9 ensuring the integrity and privacy of transactions and
asset transfers. For example, despite the peti- tion made by the Korea Blockchain
Industry Promo- tion Association, the Korean government is reportedly looking to
cooperate with authorities in China and Japan to regulate or ban cryptocur- rency
exchanges powered by BT (De, 2018). Ironi- cally, added privacy can make it harder
for law enforcement officers to figure out who controls a digital wallet, which
increases its vulnerability to potential scammers’ plots to steal digital
currencies recorded on the blockchain (Hackett, 2017a).
In 2008, a person or a group of people known by pseudonym Satoshi Nakamoto created
“Bitcoin” a fully distributed digital currency using Blockchain Technology. The
Blockchain is a decentralized and distributed ledger that keeps records of digital
transactions in such a way that makes them accessible and visible to multiple
participants in a network while keeping them secure. As blockchain is a
decentralized database, no one regulates it or owns it, and once the data uploaded
on blockchain, it becomes immutable not allowing data to be tampered or falsify.
Blockchain also being a distributed ledger has a network of replicated databases
making it not to collapse, as in single point of breakdown making centralized
system to be crashed. Nowadays, businesses of all kinds are getting creative with
the blockchain ledger, as it can be used to track, record, and verify trades of
virtually anything that holds value. From e-commerce to cloud storage to voting,
companies in all industries are beginning to see blockchain’s potential and
integrating this technology into their functioning. One of such application is
implementing this technique into our regular rice supply chain system. In this
paper, we will discuss what benefits could blockchain brings to supply chain
industries and how it will help in addressing the problems related to rice supply
chain management. The main objective of this paper is Advanced Science and
Technology Letters Vol.146 (FGCN 2017), pp.125-130
http://dx.doi.org/10.14257/astl.2017.146.22 ISSN: 2287-1233 ASTL Copyright © 2017
SERSC to trace out the major issues in traditional rice supply chain management,
logistics industry and employ blockchain technology to resolve these issues. 2
Literature Review Bitcoin first appeared in 2008 white paper [1] authored by
Satoshi Nakamoto. The white paper explained about a peer to peer electronic cash
system called “Bitcoin” that enabled online payments to be carried out directly
without an intermediary like banks or central authority to be present. The
innovative technology behind bitcoin is Blockchain. Bitcoin is only one of the
thousandth applications that use blockchain technology. As in traditional databases
having a central authority or administrations (like banks, government accountants)
and taking care of all the transactions, blockchain here provides a distributed
ledger which has a network of replicated databases which are synchronized via the
internet and visible to anyone within the network [2]. Blockchain network can be
public and accessible to any person in the world and also can be private with
restricted membership as well [3]. Ethereum is considered to be a second generation
2.0 blockchain technology. It was developed by Vitalik Buterin [4]. It is designed
in such a way that any person with a basic level of computer skills can develop and
deploy their own decentralized applications on to the blockchain. It has its own
cryptocurrency called “Ether” and own virtual machine which is EVM (Ethereum
Virtual Machine). Ethereum also has its own programming language called “Solidity”
which is used in coding the applications. Other than this Ethereum gives an ability
to build a “Smart Contract” which is an autonomous computer system, written in code
that manages executions between individuals on to the blockchain [5]. These
contracts are powered by EVM and Ether. Blockchain platform also provides us to
manage IoT devices [6]. Blockchain will also help in developing a security
framework that integrates the blockchain technology with smart devices to provide a
secure communication platform in a smart city [7]. Blockchain can also be adopted
in various supply chain management systems, to create a decentralized network where
it can provide transparency, security, neutrality and reliability of all the
operations taking place in a supply chain [8] [9]. Medium.io is a start-up company
which presented a technique of combining IoT sensor devices with blockchain
technology to regulate the efficient functioning of pharmaceutical supply chain
[10]. Rice supply chain plays a major role in supplying rice from farmers to the
plates of every individual. Lack of mutuality and co-operation between the members
involved in rice supply chain is the main reason behind its inefficiency [11].
Hence a proper supply chain management system is essential for efficient
production, processing, distribution and retailing thus meeting the customer
demands and providing rice of premium quality [12].
In the recent competitive situation, SC management demands stern study attention,
as companies are confronted with discovering ways to encounter ever-rising customer
expectations at a practicable price. SC management involves the complete value
chain and addresses resources and supply management from the extraction of raw
materials to its end of useful life (Council of Supply Chain Management
Professionals) [1]. Businesses depend on their SCs to provide them with what they
need to survive and thrive. Several firms want to run their SC through many states
to obtain different parts of their goods. However, this brings in a large number of
complications. Remain aware that the suppliers are at massively dissimilar
topographical places, which makes it hard to coordinate and work together [2]. In
other words, it is indeed hard to distinguish whether they are performing their
jobs or not. Currently, many companies are working on how to minimize the cost of
SC [3] and increase transparency in information flow [4] and secure transaction
[5]. Every organization wants a good synchronized and flexible SC with minimum risk
to overcome the cut-throat competition of open worldwide markets. At present, there
are different techniques used in SC management to coordinate and handle every
member of SC. One of the most noteworthy change is the adoption of recent
technology to boost efficiency and accountability in the whole SC. Today, most of
the companies are adopting new technologies to evaluate their business’s risk
culture, to determine their willingness to discover and adopt evolving
contributions. The competitive advantages have been provided by strategic
technologies like artificial intelligence, advanced analytics, internet of things,
blockchain, etc. Some highly decentralized SC management functions, such as smart
Available online at www.sciencedirect.com ScienceDirect Procedia Manufacturing 00
(2019) 000–000 www.elsevier.com/locate/procedia 2351-9789© 2020 The Authors.
Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND
license https://creativecommons.org/licenses/by-nc-nd/4.0/)Peer-review under
responsibility of the scientific committee of the FAIM 2020. 30th International
Conference on Flexible Automation and Intelligent Manufacturing (FAIM2021)15-18
June 2021, Athens, Greece. Architecture to Enhance Transparency in Supply Chain
Management using Blockchain Technology Dnyaneshwar J. Ghodea , Rakesh Jaina *,
Gunjan Sonia , Sunil K. Singha , Vinod Yadavb a Malviya National Insititute of
Technology Jaipur, JLN Marg, Jaipur,302017, India b Manipal University Jaipur,
Jaipur,303007,India * Corresponding author. Tel.:+91-9549654503; .E-mail address:
rjain.mech@mnit.ac.in, djghode@gmail.com Abstract Precise information flow in a
supply chain (SC) improves profitability. Distorted information in SC results in
coordination and transaction issues that diminish trust between SC partners. The
prime objective of the present study is to enhance transparency in SC for both
suppliers and consumers and boost legitimate coordination within the SC network
using Blockchain Technology (BT). BT is a tool having an open-source,
decentralized, and distributed database for storing transaction information. It
allows two parties to perform direct transactions using their distributed ledgers
without the interference of a centralized third party to achieving more transparent
transactions than traditional systems. Consequently, the architecture of BT in SC
has been developed based on factors identified from the literature review that
leads to offering tracking and monitoring of entire SC. Subsequently, the
blockchain architecture has been tested considering transactions between
manufacturer, distributor, retailer, and customer to accomplish real-time
transparency. Accordingly, it has been observed that transaction errors have been
minimized, transparency has been improved in SC of the manufacturing industry using
BT. Moreover, this paper provides a productive relationship between BT and SC
management. © 2020 The Authors. Published by Elsevier Ltd. This is an open access
article under the CC BY-NC-ND license https://creativecommons.org/licenses/by-nc-
nd/4.0/) Peer-review under responsibility of the scientific committee of the FAIM
2020. Keywords: Blockchain Technology; Supply Chain; Transparency 1. Introduction
In the recent competitive situation, SC management demands stern study attention,
as companies are confronted with discovering ways to encounter ever-rising customer
expectations at a practicable price. SC management involves the complete value
chain and addresses resources and supply management from the extraction of raw
materials to its end of useful life (Council of Supply Chain Management
Professionals) [1]. Businesses depend on their SCs to provide them with what they
need to survive and thrive. Several firms want to run their SC through many states
to obtain different parts of their goods. However, this brings in a large number of
complications. Remain aware that the suppliers are at massively dissimilar
topographical places, which makes it hard to coordinate and work together [2]. In
other words, it is indeed hard to distinguish whether they are performing their
jobs or not. Currently, many companies are working on how to minimize the cost of
SC [3] and increase transparency in information flow [4] and secure transaction
[5]. Every organization wants a good synchronized and flexible SC with minimum risk
to overcome the cut-throat competition of open worldwide markets. At present, there
are different techniques used in SC management to coordinate and handle every
member of SC. One of the most noteworthy change is the adoption of recent
technology to boost efficiency and accountability in the whole SC. Today, most of
the companies are adopting new technologies to evaluate their business’s risk
culture, to determine their willingness to discover and adopt evolving
contributions. The competitive advantages have been provided by strategic
technologies like artificial intelligence, advanced analytics, internet of things,
blockchain, etc. Some highly decentralized SC management functions, such as smart
Dnyaneshwar J. Ghode et al. / Procedia Manufacturing 51 (2020) 1614–1620 1615 2
Author name /Procedia Manufacturing 00 (2019) 000–000 contracts or traceability and
authentication, are key contenders for blockchain [6]. Various business practice
cases are yet to be confirmed, but some initial pilot projects have appeared that
are experimenting with the potential of blockchain for SC. The entire idea of
adopting BT in SC management is to streamline the process, thus eradicating
redundancy. By permitting a seamless process, BT will support to lessen costs as
well as minimize the risks imminent in the SC. The proposed study aims to create
better coordination in SC management. The specific research objectives of the study
are:  To increase the transparency of information in SC management.  To build
trust between members of SC by using blockchain technology. Rest of the paper is
organized as follows: Section 2 throws light on literature review. In next section,
implementation of architecture of BT in SC is described. Section 4 provides testing
and analysis of BT in SC. Section 5 states the discussion. Section 6 states the
conclusion and future direction. 2. Literature review 2.1. SC information The
elementary idea behind the SC management is that various organizations involve
themselves in an SC by exchanging information concerning market variations and
production abilities. SC is the management of the flow of inventory, information,
and money between the different stakeholders of SC [7]. In general, information
sharing amongst network members can enhance the efficiency of inventory holding by
attaining improved quality forecasts of demand. It is seen that information
exchange of more associated demand of consecutive periods results in more impact on
the reduction of inventory level and overall cost of the suppliers, i.e., due to an
increase in successive demand, information sharing is further valuables the
correlation coefficient [8]. Moreover, there is a reduction in uncertainty and
smoothening operations in SC due to the exchange of information [9, 10]. As a vital
part of business practice, the exchange of information among the SC partners in the
SC network is getting high consideration because of complicated SC coordination of
a more complex business environment and strong competition. This paper reveals
about the type of information flow in global SC management information that can be
shared among all the stakeholders of SC. To increase the profit of the entire SC,
and hence maximizing the overall profit, SC information can effectually raise the
performance of SC partners in the SC network [11]. Considering the Deloitte’s SC
digitalization framework [12], the digitalization aiding technologies leads to
transfigure all the traditional SC processes of the SC plan, source, make, deliver,
return, and service into a combined SC system or digital supply network (DSN). Data
tampering, faulty entry of data, scam tries, superseded data, or data definition
misperceptions are some of the shortfalls that signify a challenge in SC
information management, which subsequently affect the SC processes. 2.2. Blockchain
BT is a distributed ledger technology that allows all participants to perform
secured transactions, and transfer of assets at a low-cost [13]. Traditional
business processes having centralized architecture needed third parties to
authenticate the transactions. Such traditional SC has been seriously disrupted due
to the introduction of BT, which can be operated in a decentralized manner with the
same level of certainty. The intrinsic features of BT provide transparency,
sturdiness, auditability, and security [14]. Currently,
different countries and different organizations work on BT in different sectors.
BT has a significant impact on various sectors and industries like banking,
government, healthcare, etc. as follows [15]:  Removes mediators, improving
efficiency, and speed.  Streamlines operations by reducing cost and time
associated with settlements and disputes.  Empowers new business models by growing
revenue and savings. As BT is a decentralized network of computers connected
through several layers administer process blockchain and produce the rules for BT
applications [16]. The process of blockchain development can be displayed through a
BT architecture [17], as shown in Fig. 1. Fig. 1 shows how to produce a blockchain
in shared distributed records with the help of a source module. In traditional data
management systems, validation is done by a central authority, which is frequently
subject to hacking and tampering. Nevertheless, in BT, there is no need to validate
the user’s authorizations by the central authority. In its place, all members in
the P2P network authenticate new additions to the blockchain-based on an agreement,
making it further tough to tamper the data. This system of BT ensured every user
about the retrieval of uncorrupted and unchanged data as soon as it is recorded.
Then, the validation of the new transaction is done and written by transaction
gate. A transaction changes the form of information contained in the block that is
happened due to the handover of an asset between the seller and the buyer. Once the
entries recorded in the block, it remains the same, and a new entry appended in
blockchain keeping past data remains the same [18]. Hereafter, the consensus
algorithm that helps to have a transaction between the buyer and the seller. After
fulfilling the conditions of consensus, the transaction is published to the P2P
network, and miners gather that transaction and create the block with rewards.
After validation, miners broadcast the new, unchangeable block to the entire P2P
network. In this module, the output of a previous transaction (e.g., Output 1 in
Fig. 1) is referred as an input. Many inputs are regularly recorded in a
transaction. Input values of all the new transactions are added up. Here, the total
input value must be equal to or exceed the total output value. The data is
permanently recorded to create a block. The blockchain is created by appending a
new block with previous blocks in linear sequence over time. Yet, it is needed to
keep in mind that without mining, a new block cannot be submitted and added to the
P2P network. A new transaction is confirmed and validated using the proof of work,
proof of stakes, or Byzantine fault tolerance agreement algorithm. This stage is
vital in keeping the holiness of the transaction data 1616 Dnyaneshwar J. Ghode et
al. / Procedia Manufacturing 51 (2020) 1614–1620 Author name / Procedia
Manufacturing 00 (2019) 000–000 3 Fig. 1. BT Architecture recorded on the
blockchain and protecting the transaction and block order. Intrinsically, this
module includes the optimal selection of a consensus mechanism that evades the
fraud of data recorded on the blockchain. In the last stage, actual information
about the contractual status and transaction tracing using internet capacity is
done. The integration of different organizations that can interact with each other
and share digital assets with each other continuously is facilitated.
Fundamentally, interoperability is improved by this module and assist in building
more partnerships among various organizations and driving better business value
with common blockchain solutions [19]. 2.3. Blockchain in SC D'heur [20] states
that the end-users frequently need information about the goods they have acquired
concerning the provenance and sustainability features. Branding of the organization
and improving efficiency of the system can be achieved using sustainability
features. All the partners of the SC network want to utilize the strength of
organizations to enhance the morale of all stakeholders to work proactively with
sustainability. One of the important features of BT is that single actors cannot
manipulate data, as the transaction data is shared with all the stakeholders of the
SC. Application to achieve transparency can be made with such a characteristic. As
every transaction in BT is time-stamped, the ledger has the ability to display all
the transactions that happened in the past. The point of error in BT can be traced
in pointedly as well. The strength of BT to show true data to the end-users improve
the confidence of the customer as well as organizations in the SC network [4].
Kairos Future [21] conducted a study associated with the usefulness of BT in SC of
the food industry for transparency. In many food industries, it is very hard to
audit where the quality of product, labor conditions, environment features are not
favorable, which cannot ensure the terms to be met. A higher level of transparency
can be achieved by adoption of BT in food SC that would benefit the food industry.
The quality of the goods can be verified through past data like a picture of fish
that can fulfill the terms. Though, it is not sure that the picture is connected to
the product or not, it lessens the risk. To check whether the photo is connected to
the need of the product or not, arbitrary audits are required. The study of BT in
various SC shows that there is very less work on the architecture of BT in SC that
helps to enhance the transparency. In this regard, the aim of this research is to
propose an architecture of BT in SC to enhance the transparency of transactions
within SC network. An illustrative example is considered to test the proposed
architecture. Theoretical framework, as shown in Fig. 2, provides an overall view
of the state of BT in SCs, concentrating only on the significant features of (1)
use of blockchain, (2) method to utilize them, (3) probable challenges, and (4)
benefits of BT implementation.
In January 2018 the stock market value of Kodak skyrocketed 200 percent (and has
since plummeted to its original value) after it announced plans to invest in
blockchain technology [1]. At the time of writing, blockchain is at the peak of the
Gartner Hype Cycle and, thus, at the peak of exaggerated expectations, credited
benefits, and capabilities [2]. The rumored potential to transform business is
comparable to some vaguely invented treatment that is already praised for curing
cancer in medicine. It is passed around as the business “silver bullet”, but can
this technology actually fulfill these promises? The publicity-pressured adoption
of technology resulting in ill-fitting implementations that do not provide the
promised and expected results has previously occurred in logistics and supply chain
management (LSCM). A prime example from the recent past is RFID technology, the
adoption of which, it has been suggested, was encouraged by overly positive
publicity and institutional pressure [3]. When considered in terms of the concept
of mindfulness (and its reverse, mindlessness), the adoption of RFID technology is
indicated as a technology that is in conflict with organizations’ LSCM strategies,
resulting in the absence of benefits [4]. As considered in the mindfulness
literature, issues with technologies that become public as bad examples discredit
the technologies’ reputations. This can be caused by badly designed use cases or a
lack of knowledge about a technology and the requirements for its successful
application—that is, by mindless use of the technology [5,6]. In addition to the
well-known examples in the field of cryptocurrency, there already exist a variety
of blockchain use cases in many other fields [7]. Examples include logistics and
supply Logistics 2018, 2, 20; doi:10.3390/logistics2030020
www.mdpi.com/journal/logistics Logistics 2018, 2, 20 2 of 19 chain management,
manufacturing, public transport, resource sharing, cyber security, and energy [8].
In order to examine whether a certain use case in the field of LSCM is suitable for
a possible blockchain implementation, it should be properly evaluated. The focus of
this research is to evaluate whether the proposed benefit of the blockchain is
achievable and, therefore, whether the technology is going to be the solution for
the problem—or whether it is, rather, a management or process gap. This would lead
to the conclusion that blockchain is not needed in this case and is only being
applied because of its hyped position in technology-driven markets. At a time when
blockchain is widely hyped across all industries, this paper will help
practitioners in the field of LSCM to analyze use cases regarding their fit with
blockchain technology and its potential benefits. The remainder of the article is
structured as follows: Section 2 summarizes technological aspects of the
blockchain, as well as the mindful technology adoption principles that are used to
evaluate the fit of blockchain technology with LSCM tasks in the intended use
cases. Section 3 explains the research approach to enable the case discussion
presented in Section 4; and the paper concludes in Section 5 with a discussion. 2.
Theory This section describes the features of blockchain technology and highlights
the unique implications that arise from the technology. To eventually evaluate
whether documented use cases utilize the technology to exploit unique features of
the blockchain, or whether use cases are driven by a bandwagon effect in which they
adopt or propose the adoption of the technology for reasons of adopting a novel
technology, this paper considers the concept of mindfulness. In addition, this
section presents a framework to evaluate whether the proposed use of blockchain
technologies in the identified use cases is mindful or mindless. 2.1. Attributes of
the Blockchain Technology The blockchain is, in essence, a technology to store and
access data. As such, each “block” stores a finite set of data and transactions,
while the “chain” connects all the blocks in a fixed order. The present dataset is
determined by following the chain from the first to the (current) last block and
resolving the transactions in each block. As a result, the blockchain not only
holds the present dataset, but also the complete transaction history. The way the
blockchain is built and operated offers a number of advantages when compared to a
classical electronic database or, unsurprisingly, a paper ledger. Most of
blockchain’s immediate advantages stem from one of the most basic principles around
which blockchain technology is developed: Decentralization [9]. In the authors’
opinion, decentralization in itself is not an advantage, but enables several others
to come into play. Decentralization of data leads to increased transparency
regarding the transaction history. Each participant in the blockchain network
shares the same dataset, meaning everyone holds the actual documentation of the
data. When data are changed, everyone receives the new status quo almost
immediately. This does not hold true for local copies of centralized data,
especially when it comes to transactions that are performed on paper. However, the
increase in transparency does not ignore the demand for privacy [10]. Data can be
made available only to the holders of permissioned access, e.g., by means of
cryptography. As a result, a properly set up blockchain is at the same time more
transparent than, and at least as private as, a conventional database. The shared
transaction history can only be updated through consensus [10]. The way this
consensus is reached depends on the validation method of a given blockchain. In the
case of the Bitcoin blockchain, the most prominent use of blockchain technology, a
“proof of work” algorithm is used. Consensus on the present dataset is reached by
the majority of calculating power in the network. The size of the network does have
an immediate effect on the robustness of the proof of work consensus: To attack the
Bitcoin blockchain is nearly impossible because the attacker would have to amass a
very large amount of calculating power to outscale the existing network. Private
networks that solely rely on proof of work do not, however, have the size required
and are more vulnerable to attackers. Logistics 2018, 2, 20 3 of 19 Other
algorithms include systems like “proof of stake”, where the number of relevant
holdings of a certain token or coin correlates with the influence on the consensus.
Another possibility is “proof of authority”, where consensus is agreed between a
relatively small number of authorized participants. Each algorithm has its own
advantages and disadvantages, and the choice of the consensus used depends greatly
on the use case of the blockchain in question. What holds true for all of the
algorithms is that changes to the data of the blockchain have to be agreed upon by
key subset of the networks participants. This ensures that present data is valid.
Past data is protected by the “block” and “chain” parts of the technology. Since
blocks are chained together and hold the information of the previous blocks, a
change to a transaction in one block of a blockchain also requires changes in each
block after that changed. To validate this changed dataset via consensus would
require the collusion of the largest part of the network [10]. The combination of
the visibility of the complete transaction history, the requirement for consensus
on transactions, and the fact that transactions are chained together, makes
tampering with the existing dataset virtually impossible and is a reason for
blockchain’s enhanced security and immutability. This immutability is particularly
useful when answering questions of ownership and identity, e.g., for a transfer of
land, the question: Who actually owns the land in question? With immutable data,
actors do not need to rely on trusted partners or intermediaries. The inability to
change data on the blockchain enables trustless partnerships because individual
actors can verify every transaction and the relevant data by themselves [9]. With
regard to data storage, decentralization of data storage and computing power makes
the system hard to attack and shut down, and offers redundancy of the stored data
[10]. Improved traceability is gained by the transaction history, which is always
available when dealing with the blockchain. It can be used to trace an item back to
its origin to verify its authenticity or, in the case of multi-party transactions,
to verify that a transfer of goods (e.g., money) has taken place. The transparent
and trustworthy historical transaction data help prevent fraud [10]. If the
blockchain is used to replace paper-heavy processes, it can offer vast increases in
efficiency and speed. The existence of only one ledger (in the form of the
blockchain) and no out-of-date local copies can, by itself, streamline many
processes to be more efficient. Without the need to reconcile numerous local
ledgers, confirmation times can be shortened. Since every participant can validate
the data, third-party intermediaries are superfluous. Immediate validation also
reduces the potential for human error. In general, using the blockchain to replace
traditional (paper) transactions can streamline the process and make transactions
not only safer, but also quicker, while maintaining the quality of the
documentation of the transactions [10]. The benefits discussed above can lead to
one of the most important advantages for businesses, possibly the key aspect that
may lead a business to decide to implement blockchain technology: Reduced costs.
The blockchain can offer a reduction in administrative work, such as matching data
among different ledgers and validating transactions and the need for third party
involvement, and can lead to reduced data errors and outages while at the same time
increasing
process speed and quality. 2.2. A Suitable Technology and Using Technology
Suitably Technologies have features and tools that are designed to support and
fulfill an intended use. The nature of this use can certainly be altered by
applying the technology differently than originally intended [11,12], but the use
cannot go significantly beyond what the technology features support. However,
organizations sometimes adapt technologies without regard to their features. One
phenomenon that has received a great deal of research attention is “bandwagon
behavior” [5]. This behavior stimulates technology adoption based on momentum
generated by prior adopters and success stories leading to adoption based on
account of justifications such as, “others are adopting it” and “we need to catch
up”, instead of objectively considering whether the technology is suitable for any
particular use in the organization (e.g., a problem, or a user requiring a
technology feature for efficiency). To extend this, this paper considers research
that can provide a theoretical basis to evaluate whether a technology is suitable
for what an organization is trying to achieve with the technology. Logistics 2018,
2, 20 4 of 19 The concept of mindfulness considers factors that describe whether
the decision to adopt is objectively reasonable and therefore well-thought-out
[13]. For that purpose, considerations include actively gathering information about
the technology and comparing the technology to alternatives. The concept of
mindfulness originates in psychology and describes an individual’s cognitive
qualities of being alert and having a lively awareness [14]. It is a state that is
characterized by, among other characteristics, an individual’s abilities to process
information and awareness of multiple perspectives. Concerning the individual, Dane
[15] suggested that mindfulness influences an individual’s performance on a task
but is dependent on the task’s environment and the individual’s expertise with the
task. Researchers have extended the concept from individuals to organizations.
Swanson and Ramiller [5] review the application of the mindfulness concept to
organizations which have high cost or impact of errors and, thus, for which being
mindful in process creation is an absolute necessity to avoid errors. The research
aspires to an improved understanding of what mindful behavior is in a practical
environment. However, mindfulness has increasingly been applied to the adoption of
technology, especially information technology, in which mindfulness is assumed to
contribute to the avoidance of economic costs [5,6,13,16]. The contrasting behavior
to mindfulness is mindlessness. Preempting that their readers might suggest
organizations always make rational—or, rather, mindful—decisions regarding
technology adoption, Swanson and Ramiller [5] present several examples of the
absence of mindfulness and argue for mindlessness being commonplace. They summarize
mindless behavior to be observable in organizations that are not actively paying
attention to developments in information technology, because of not valuing IT as a
distinctive competence or expecting others to call attention to innovations for
them when needed. Mindlessness can further be observed in organizations adopting
technologies based on momentum from mindful innovators while being blinded by
success stories and uncritical of the technology. It can further be seen in
organizations implementing “vanilla” versions of technologies without regard to
individual requirements or context. Finally, mindlessness is observable in
organizations unaware of technology assimilation issues, leaving users in
frustration and confusion as they do not pay attention to users’ concerns or blame
them for inappropriate use. Thus, mindlessness is the state of reliance on past
categories, acting automatically, and fixating on single perspectives without being
aware of things possibly being different [17]. The behavior is rigid and lacks
variance, although with an appearance of being relatively effortless—and, thus,
tempting—while limiting potential [14]. The difference thereby is not just the
quantity of information considered, but also the quality. A number of scholars have
investigated the evaluation of mindful technology adoption. Sun [13] extracted four
dimensions of mindful technology adoption based on the prior research of Langer
[18], which this paper now considers in detail: 1. Engagement with the technology
concerns the active gathering of information about the technology and exploration
of details. As a result, functionality and features are known more thoroughly, and
the understanding of the technology is comprehensive. 2. Technological novelty
seeking describes concisely comparing a technology with existing technologies to
identify the uniqueness—or, rather, the novelty—of the technology, enabling the
creation of new categories relating the technology to existing technologies. 3.
Awareness of local context considers the alignment—or fit—of the tasks, the
technical environment, and the work domain a technology is designed for with the
local specifics, including needs, learning abilities, technical support,
compatibility with implemented technologies, and possible reactions of different
stakeholder to the novel technology. The consideration of local context assures
awareness of how the novel technology may help the organization, how it might
change the way of work, and which inconveniences may result from adoption. 4.
Cognizance of alternative technologies characterizes the comparison to existing
technologies, especially by establishing the awareness of alternative views of the
novel technology, including advantages and disadvantages. Further, as the name
suggests, the characterization is made by comparison to alternative technologies.
As a result, realistic expectations about the novel technology emerge and critical
conclusions about it are reached. Logistics 2018, 2, 20 5 of 19 Considering the
prior research of Langer [14,18], the model developed above is missing the aspect
of “orientation in the present.” Elaborated by subsequent scholars [19], this
aspect describes the behavior of paying attention to the present surroundings and
consequently acting in a more appropriate fashion, described by analogy to a
pedestrian in a dangerous city paying more attention and consequently being more
aware of risks as compared to mindless pedestrians. Taking the notion of awareness
of an implied change in the previous example and abstracting from that description,
the dimension of “anticipation of technology alteration” is developed: 5.
Anticipation of technology alteration describes the awareness of possible changes
of the task the technology is chosen for and how the technology can be adapted to
such changes, and how it cannot. The concept of mindfulness has been linked to
task/technology-fit theory [13], which considers the fit of a technology with
certain features of a task that is proposed to be supported by the technology [11].
This can be applied on an aggregated level, considering fit profiles [11], or on a
granular level, considering details, especially about information requirements and
information supply and characteristics [20]. The theory considers tasks as actions
carried out by individuals or groups in turning inputs into outputs. These are
anticipated to be supported by technologies, which are tools used by individuals,
but referring in particular to computer systems, as well as user support services
that assist users in their tasks [11,21]. The general idea behind the
task/technology-fit theory implies a positive effect on task performance if
technology functionalities align with the requirements of the task [21]. In detail,
the fit is the degree of correspondence between the task requirements, individual
abilities, and functionalities provided by the technology. In addition to
performance, task/technology-fit has been investigated for its ability to predict
utilization, perceived usefulness, perceived ease of use, and satisfaction [22].
However, as Ziguris [11] emphasizes, the theory is embedded in a larger context
concerning the fit of task and technology in an institution and, thus, in a social
context, which influence the actual effect of the fit. In somewhat provocative
words, a perfect fit of task to technology might not compensate for the performance
effects of bad management. Several authors have proposed the measurement of fit
according to distinct levels; for example, for information systems, researchers
have suggested that fit should be measured on a very granular level, taking account
of aspects such as data quality, accessibility of data, and systems reliability
[20,21]. However, these components require an existing adoption and user experience
with the system, therefore evaluation of task to technology can only be executed
post-adoption. Other authors have proposed evaluation of the fit on an aggregated
level for group support systems [11,23]. Thereby, the task and technology are
categorized; fit profiles of the categories to each other are developed; and these
are used to categorize the fit. These profiles allow an evaluation of the fit in a
pre-adoption phase based on comparison of intended technology use to task
characteristics. However, these profiles ignore whether the task is meaningful and
its execution relevant to a problem, and do not consider whether the technology’s
intended application is a fit with the capabilities of the technology. Thus, while
this approach to taking the task/technology-fit into account is theoretically
suitable for this research, the researchers assessed it as not applicable to this
study. 2.3. Evaluating the Mindful Use of Blockchain Technology Use Cases Based on
the theoretical background presented in the previous sections, the authors
developed a framework
to evaluate planned use cases of blockchain technology. For a use case in which
the use of blockchain technology is the proposed option, this framework is proposed
to give guidance to allow practitioners to reflect on whether the preference for
the technology results from it being the best option, or whether its consideration
as the preferred choice is driven by some kind of wish to find a suitable case to
use the novel technology. Thus, the investigation is carried out by considering a
technology that is currently at the peak of the hype-cycle, has been publicized
with over-exaggerated expectations, and therefore is prone to bandwagon behavior by
organizations, resulting in mindless Logistics 2018, 2, 20 6 of 19 technology
adoption. For this purpose, the authors considered the following factors for
inclusion in the framework presented in Figure 1: (1) engagement with the
technology; (2) technological novelty seeking; (3) awareness of local context; (4)
cognizance of alternative technologies; and (5) anticipation of technology
alteration. In this paper, this framework is used to evaluate use cases in LSCM
which intend to adopt blockchain technology in terms of the mindfulness presented
by the case organizations. The mindfulness demonstrated in the presentation of the
use case can suggest either a mindless use of the technology or an over-exaggerated
role of the technology under consideration, creating increased interest in the use
case. Consequently, the results of this research are intended to provide managers
who are planning to adopt a blockchain use with cases or solutions from other case-
study organizations to allow them to identify weak-spots or misleading
representations. Logistics 2018, 2, x FOR PEER REVIEW 6 of 20 allow practitioners
to reflect on whether the preference for the technology results from it being the
best option, or whether its consideration as the preferred choice is driven by some
kind of wish to find a suitable case to use the novel technology. Thus, the
investigation is carried out by considering a technology that is currently at the
peak of the hype-cycle, has been publicized with over- exaggerated expectations,
and therefore is prone to bandwagon behavior by organizations, resulting in
mindless technology adoption. For this purpose, the authors considered the
following factors for inclusion in the framework presented in Figure 1: (1)
engagement with the technology; (2) technological novelty seeking; (3) awareness of
local context; (4) cognizance of alternative technologies; and (5) anticipation of
technology alteration. In this paper, this framework is used to evaluate use cases
in LSCM which intend to adopt blockchain technology in terms of the mindfulness
presented by the case organizations. The mindfulness demonstrated in the
presentation of the use case can suggest either a mindless use of the technology or
an over-exaggerated role of the technology under consideration, creating increased
interest in the use case. Consequently, the results of this research are intended
to provide managers who are planning to adopt a blockchain use with cases or
solutions from other case-study organizations to allow them to identify weak-spots
or misleading representations. Figure 1. Framework to evaluate the mindful use of
blockchain technology in LSCM. Applying the theory from the previous section to
this study, the task of evaluating the mindfulness of a technology adoption for
itself corresponds to a judgment task [11,24] and is characterized by uncertainty,
especially concerning the information about potential use cases. In addition, this
evaluation concerns fuzzy tasks for the design of blockchain applications, with
associated uncertainty of the solution scheme and the anticipated outcome from the
solution scheme, especially while the technology is in an early stage.
Consequently, resulting evaluations of mindfulness are conjectures, which are,
however, made in a systematic and informed way to ensure objectivity. In this
sense, the technology will be considered based on its features. As discussed in the
previous research, the purpose of a technology intended by the designer can be
diverted by the user [11,12]. However, the features of a technology limit this
diversion, at least to a certain degree technically, if not
Industrial activities are a major cause of the global prob- lems of environmental
degradation and resource depletion/scarcity (Jackson, 2009; Sachs, 2015). The
concept of circular economy (CE) has been developed over the past decade to help
deal with these problems (Geissdoerfer et al., 2017). The definition of CE varies
because each stakeholder has its own perspective and perception of it. For example,
Kirchherr et al. (2017) developed an integrative concept of CE by synthesizing 114
relevant definitions, describing CE as: An economic system that replaces the ‘end-
of-life’ concept with reducing, alternatively reusing, recycling and recovering
mate- rials in production/distribution and consumption processes. It operates at
the micro-level (products, companies, consumers), meso-level (eco-industrial parks)
and macro-level (city, region, nation and beyond), to accomplish sustainable
development, thus simultaneously creating environmental quality, economic
prosperity and social equity, to the benefit of current and future ∗ Corresponding
author. E-mail addresses: bill.wang@aut.ac.nz (B. Wang), clark.luo@wintec.ac.nz (W.
Luo), abraham.zhang@aut.ac.nz (A. Zhang), zonggui0802@gmail.com (Z. Tian),
piersli@foxmail.com (Z. Li). generations. It is enabled by novel business models
and respon- sible consumers (p. 229). CE differs from the traditional linear
economic model (make- use-dispose) in two key aspects. Firstly, the linear model
focuses on how to use resources efficiently, while CE focuses more on how to use
them eco-effectively. Secondly, the linear model can only downcycle discarded items
to make something with less value than the original. By contrast, CE focuses on
upcycling discarded items to make something with a higher value (MacArthur, 2013;
Sariatli, 2017). The regeneration and usage of waste can make the organi- zation
more competitive by enhancing resource efficiency, saving total costs, improving
the organization’s reputation, and minimiz- ing environmental burdens (Ferreira et
al., 2017; Masi et al., 2017; Zhu et al., 2017). When all supply chain stakeholders
work systematically to inte- grate the CE conceptin the entire supply chain
process, ideally,they can develop innovative business models and relevant supply
chain functions to achieve zero-waste by upcycling all relevant resources,
throughout the supply chain life cycle (Farooque et al., 2019b). This idea is
called circular supply chain management (CSCM), and it is required for
operationalizing CE at a micro-level. Implementing it brings the challenges of
tracking how to upcycle materials over multiple life cycles across multiple supply
chain stakeholders. The typical challenges are related to culture and society,
government regulation and policy, technology, knowledge and skill, circular
https://doi.org/10.1016/j.compind.2020.103324 0166-3615/© 2020 Elsevier B.V. All
rights reserved. B.Wang,W. Luo,A. Zhang et al. Computers in Industry 123 (2020)
103324 economic framework, and market (Govindan & Hasanagic, 2018; Mangla et al.,
2018; Ranta et al., 2018). Many approaches have been tested and applied to deal
with these challenges (Govindan & Hasanagic, 2018). Among these approaches,
Blockchain technology (BCT) has received particular attention for two reasons.
Firstly, this technology has shown rapid growth in supporting supply chain
traceability, sustainability, and information security over the last decade
(Francisco & Swanson, 2018; Saberi et al., 2019). Secondly, this technology can be
used to cope with multiple CE challenges at the same time (Casado-Vara et al.,
2018; Kouhizadeh & Sarkis, 2018; Kouhizadeh et al., 2019a, 2019b). Some recent
studies have developed frameworks to guide the implementation of BCT in assessing
how the product life cycle can have better environmental performance (Liu et al.,
2020; Zhang et al., 2020). However,there has been limited research on exploring the
use of blockchain to enable CSCM in specific industries. While the life cycle
assessment method is well established, CSCM is still an emerging concept which
requires further investigation. Moreover, there is no study about how blockchain-
enabled CSCM can impact managerial and policy decision-making to advance the
develop- ment of CE. This research focuses on the fast-fashion industry and has the
following objectives: • To develop a system architecture of blockchain-enabled CSCM
in fast fashion • To discuss theoretical and managerial implications of applying
blockchain to advance CSCM Theultimate target ofCE andCSCMis zero waste (Farooque
et al., 2019a). This researchfocuses onthe fast-fashionindustry because it is
notorious for poor environmental sustainability (Joy et al., 2012). Therefore, this
industry is an ideal field in which to investigate the development of blockchain-
enabled CSCM. Although this is a pioneering conceptual work, the designed system
architecture has been validated by two BCT and supply chain management (SCM)
experts. The remainder of the paper is organized as follows. Section 2 reviews the
relevant literature on BCT and CSCM. Section 3 describes the sustainability
challenges in the fast-fashion industry. Based on Sections 2 and 3, Section 4
presents a system architecture of blockchain-enabled CSCM. Section 5 discusses
managerial and policy implications. Section 6 concludes the research. 2. Literature
review 2.1. Blockchain technology Nakamoto first proposed the concept of BCT in
2009. He defined this concept as a technology using data mining and bitcoin
techniques to develop data structure and encode the transac- tion of information
(Nakamoto, 2009). The information within a blockchain will be stored online
permanently, with high trans- parency and security (Li et al., 2018). The key
characteristics of BCT include decentralization, distrusting, transparency,
traceable and unforgeable transactions, anonymity, and credibility (Lu, 2019). Lu
(2018) argues that BCT may be applied in different platforms: “Blockchain
technology is notlimited to crypto currency and capital markets. It also conducts
in-depth practice on smart contracts, net- work security and privacy, and other
applications and platforms” (p. 238). Specifically, with the development of
Internet of Things (IoT), the application of BCT can help organizations to develop
col- laborative services (Da Xu & Viriyasitavat, 2019). In this situation, the
architecture of service has also been updated because of BCT’s fast development
(Viriyasitavat et al., 2019). Beyond facilitating traditional business and
services, BCT has also supported the transition to a circular economy (CE). 2.2.
Blockchain technology and circular economy Although the transition to CE is a trend
for the fashion industry and supply chain, there are a number of barriers for this
transition (Debacker et al., 2017) 1) Lack of standard policy 2) Higher complexity
leads to resistance to changing the traditional linear economy and industry models
3) Protection of intellectual property 4) High costs 5) Lack of quality assurance
for recycled materials and re-used products 6) Most consumers have no idea about CE
Practitioners and academia have applied a number of approaches to deal with the
barriers. BCT provides some practi- cal support for CE transition. First of all,
BCT can help to integrate and share information along the whole supply chain
process. As a result, the exchange of materials and products can be smooth
(Alexandris et al., 2018). Moreover, BCT offers higher security in relation to
keeping and managing information online. This charac- teristic can preventthe
leaking of confidential information and help to protect organizational intellectual
property (Kouhizadeh et al., 2019a, 2019b). Finally, all supply chain members,
especially con- sumers, can access more information quickly from the upstream, such
as aspects relating to design, raw materials and manufacturing processes. BCT can
facilitate consumer understanding of the whole supply chain and hence improve the
integration and collaboration between supply chain members (Rusinek et al., 2018).
2.3. Blockchain technology for traditional supply chain There are five common
strategic objectives in traditional supply chain management. BCT can provide
potential support to help to achieve these objectives effectively (Kshetri, 2018).
• Cost—BCT can generate a unique code for each transaction. It facilitates a
comprehensive check of the financial flow within the whole supply chain process; •
Speed—BCT can increase process speed by minimizing physical interactions and
communications; • Risk control—With BCT, transactions can only occur when all
related parties acceptitin specific touchpoints within the BC net- work. This
function helps to control the risk of data for all supply chain transactions; •
Sustainability—BCT can help to develop measurable and mean- ingful performance
measurement indicators for environmental, economic, and social sustainability; •
Flexibility—BCT can help the consumer to track and trace their orders and from
upstream to downstream. This enables con- sumers to make changes easily and for
suppliers to also adjust to the changes immediately. Existing research on BCT
applications in supply chain contexts can be roughly divided into four main
categories: descriptive, con- ceptual, predictive, and prescriptive research (Wang
et al., 2019). Table 1 summarizes some recent studies on BCT applications. Most of
these studies are conceptual or based on a general supply chain context. For
example, Treiblmaier (2018), Van Hoek (2019a), and Batwa & Norrman (2020) use or
develop frameworks/theories to study BCT from different perspectives. However, they
do not inves- tigate how to specifically apply BCT to solve SCM challenges in a 2
B.Wang,W. Luo,A. Zhang et al. Computers in Industry 123 (2020) 103324 Table 1 A
summary of research studies on BCT in SCM. Study Focus Industry
Apte and Petrovsky, 2016 Verification of material ingredients Pharmaceutical Tian,
2017 Model to apply BCT Food Hull et al., 2017 Implementing smart contract General
distribution Mansfield, 2017 Fundamental concepts Multiple Patel et al., 2017
Technical fundamentals, especially digitalized transactions Multiple Treiblmaier,
2018 Comparison of applying four different theories in BCT study General supply
chain Cole et al., 2019 Technology acceptance model General supply chain Martinez
et al., 2019 Combining BCT with Resource Based View (RBV) and Information
Processing Theory (IPT) Heavy-assets equipment manufacturing Saberi et al., 2019
General BCT adoption model and barriers Food & Beverage van Hoek, 2019a Framework
developed from BCT implementation cases Multiple van Hoek, 2019b BCT implementation
issues Multiple van Hoek, 2019c Adapting RFID implementation framework for BCT
implementation General supply chain Batwa & Norrman, 2020 Overall BCT case study
framework General supply chain particular industry. As recommended by Wang et al.
(2019) and Queiroz et al. (2019), in comparison with current studies about drivers
and potential outcomes of applying BCT in the supply chain context, it is also
meaningful and critical to investigate how to apply BCT in SCM step by step for
overcoming existing SCM chal- lenges. Therefore, this study aims to address this
gap by developing an architecture that illustrates the application of BCT in the
fast- fashion supply chain, with a focus on enabling CSCM to improve the
environmental sustainability of the industry. Before examining studies on BCT
application in circular sup- ply chains in the fast-fashion industry, this paper
provides context about the needs of the industry to move to a circular economy and
how BCT is beneficial in this regard. 2.4. The fashion industry, circular economy,
and blockchain technology The fashion industry contributes more than $450 billion
in sales globally (Resta et al., 2016), making it one of the most significant
industries across the world. However, it has also been shown to be the most harmful
industry for the environment and has faced ongoing pressure to move to a more
circular economic model (Koszewska, 2018). From the initial stages of design
through to manufacturing (Moorhouse & Moorhouse, 2017; Bocken et al., 2018) and to
the final service stages, CE ideas compel the fashion industry to priori- tize
sustainability in terms of focusing more on long-life products, using and reusing
materials, and giving consideration to end-of-life products (Earley & Goldsworthy,
2015). Concepts such as upcycling and recycling materials and products feature in
the fashion indus- try’s transition to CE and a major challenge concerns the
alignment of values across the supply chain, particularly with those of the
consumer (Todeschini et al., 2017). As consumers become increasingly concerned with
issues of sustainability, practices such as the upcycling or recycling of mate-
rials grow in popularity. However, within the fashion industry, consumers are
typically aware of what happens only at the retail stage and have limited
information about how their purchasing Table 2 Focus of applying BCT to developing
sustainability in fast-fashion industry. Research Focus Fu et al., 2018 Carbon
emissions and related scheme Elmessiry & Elmessiry, 2018a; Sacha, 2019 Intellectual
property, infringement, legal regulations Elmessiry & Elmessiry, 2018b; Nyman, 2019
Transparency, and prevention of unethical actions decisions impact on other parties
and parts of the supply chain. In being able to enhance the transparency of
practices and processes across the supply chain, BCT is a practical means of
increasing the alignment between consumer values and demand with the inter- ests of
other parties in the supply chain, prompting a move to a CE model (Vehmas et al.,
2018). Several studies (summarized in Table 2 below) have investi- gated the
application of BCT in the fashion industry from the CE perspective. However, none
of these studies include architecture that shows the application of BCT from
upstream to downstream. The existing studies on BCT, CE, and the fashion industry
have not combined all three dimensions in their examinations, which this paper sets
out to do. This paper shows a connection between BCT, fast-fashion industry, and
circular supply chain management (CSCM)—a brand new concept which views SCM from a
CE perspec- tive. The next two sections review the concept of CSCM and the
application of BCT in CSCM, which provide the principles guiding this study. 2.5.
Blockchain technology for circular supply chain management The traditional
sustainable supply chain management (SSCM) concept focuses on minimizing waste, but
not the reuse and refurbishment of raw materials and waste. The concept of CSCM
integrates circular thinking and the essence of CE into SCM (Farooque et al.,
2019a). The goal of CSCM is to develop a zero- waste supply chain through all
supply chain functions and within each stakeholder’s realm (from the raw material
suppliers to the final consumers) (Farooque et al., 2019b). 2.5.1. Key areas of
applying BCT in CSCM • Data Management Resource Deployment Sound data management
can help all stakeholders to make changes quickly (Kouhizadeh & Sarkis, 2018).
Blockchain can help CSCM by speeding up resource deployment, reducing waste and
enhancing the resilience and flexibility of circular supply chains (Masi et al.,
2017). • Supplier selection and development BCT can create platforms and databases
by recording all suppli- ers’ historical performance data. As a result, customers
can quickly identify the most suitable suppliers (Saberi et al., 2019). In
addition, BCT helps customers and suppliers to develop smart contracts to trace and
benchmark supplier performance (Kouhizadeh & Sarkis, 2018). • Procurement BCT can
track and analyze the life cycle of products, so all CSCM stakeholders can develop
resource efficiency and material supply resilience simultaneously in the
procurement process (Dobrovnik et al., 2018; Witjes & Lozano, 2016). 3 B.Wang,W.
Luo,A. Zhang et al. Computers in Industry 123 (2020) 103324 • Production and
operations BCT can fully integrate the data of internal production and oper- ations
and that of external supply chainrequirements. Therefore, all CSCM stakeholders can
precisely align and audit their production and operations to satisfy the 3R rules
ofthe CE concept(Kouhizadeh et al., 2019a, 2019b). • Materials management in the
logistics process BCT makes products and materials highly traceable, minimizing the
amount of products and materials lost through handling in the logistics process. As
a result, the lead time can be shortened and resource efficiency improved in the
logistics process (Dobrovnik et al., 2018). • Reverse logistics Characteristics of
reverse logistics show close resemblance to recycling, recovering, and reusing
materials, products, and waste. However, traditional reverse logistics suffers from
difficulty in obtaining accurate information regarding the time, location, qual-
ity, and condition of the materials, products, and waste. The root cause is the
complicated nature of the multi-tier supply chain processes (Kouhizadeh et al.,
2019a, 2019b). BCT can track alltrans- actions in a supply chain. Therefore, CSCM
stakeholders can easily monitor and controlthe entire reverse logistics process to
reuse and refurbish wastes and to return components (Kouhizadeh & Sarkis, 2018). •
Supply chain control Supply chain stakeholders can obtain better control of the
efficiency of inventory, resource usage, and processes via the traceability and
transparency of transactions in blockchain (Tseng et al., 2018). Moreover,
information transparency can also mini- mize stakeholders’ opportunistic behavior
(Lindström et al., 2018). Finally, data sharing in blockchain can facilitate supply
chain col- laboration (Saberi et al., 2019; Tian et al. 2020). • Green product
management Information about green products is difficultto obtain and man- age. BCT
can be used to obtain and store data on green products. For example, BCT can
monitor gas emissions, enabling customers to see whether a product is green or not
(Rosencrance, 2017). • Reusing waste across different circular supply chains BCT
can provide a platform to encourage the integration of the CE concept across
different circular supply chains and all relevant stakeholders. For example, when
two companies from different cir- cular supply chains need each other’s waste or
used components, they can make transactions and free exchanges without any mid-
dleman. Thus, BCT can benefit multiple circular supply chains atthe same time
(Kouhizadeh et al., 2019a, 2019b). 2.5.2. Barriers in applying BCT in CSCM However,
the application of BCT in developing a sustainable supply chain is not without
barriers (Saberi et al., 2019): 1) Intra-organizational barriers, such as
resistance to change, lack of resources to apply BCT, lack oftraining to use BCT
(Govindan & Hasanagic, 2018; Pan et al., 2015; Sternberg & Baruffaldi, 2018); 2)
Inter-organizational barriers, such as conflict of interests, arm’s- length
business relationships, and lack of common interests and mutual trust (Lambert &
Enz, 2017); 3) Technical barriers, such as IT, software and hardware equipment
issues and lack of alignment between the systems of differ- ent organizations
(Abeyratne & Monfared, 2016; Sternberg & Baruffaldi, 2018; Farooque et al., 2020);
4) External barriers, including government regulations and poli- cies, unique
industry standards, etc. (Mangla et al., 2018; Saberi et al., 2019; Farooque et
al., 2020) Of the identified barriers, the technical barriers are the most
challenging as BCT combines different components of the latest information
technology (i.e., bitcoin, internet, cloud, etc.) (Saberi et al., 2019). This
study, therefore,
identifies some related techni- cal barriers and potential solutions in addition
to developing the architecture for BCT applications for CSCM in the fashion indus-
try. It is, therefore, imperative to first understand the challenges of managing
the fast-fashion supply chain from a CE perspective.
To have an appreciation of the problem we are addressing, we need first to visit
the current status in the textile industry and then provide an understanding of
what blockchain technology is. 1.1 Textile Quality In the textile industry, the
low-cost players have forced many manufacturers to compromise on quality to be more
cost competitive in the face of global compe- tition. Currently, due to the
inefficient quality monitoring systems, the cost of poor quality is at an average
of 14% of sales for textile and apparel industries versus to other industries
(6.5%) [1]. Several papers [4,6] attained the quality of various products flow in
the textile production chain. The evaluation of the quality control principles
through the application of statistical quality control, statistical processes
control, total quality control, total quality management and Six Sigma are static
systems. The dynamic quality control system was suggested but not fully developed.
Traditionally, high variability has been known to result in a substantial loss due
to the existence of several nonconforming units in a highly variable process [22].
The On Line Quality Control System comprises with the raw material quality control
and process. Control is the target for controlling the level of the quality in the
production line [11,17]. Despite the advancements in technology and production-
monitoring systems, these quality requirements seem to be a distant task as on-line
systems for monitoring the quality of material at different stages of processing
have not yet received due importance. One of the key issues for failure that has
been identified is the incongruent application of current static control systems in
the complex textile production environment [9,18,21,22]. The quality of the final
product is a function of the qualities of the sub prod- uct that accommodate the
complex, dynamic and interactive nature of the textile production environment.
Consequently, the single stage control algorithms usu- ally lead to loss of
production, material and profit. It was revealed that the total quality of a
product is a dynamical function and depends on the transfer function of the
sequential process involved in its production [8,21]. To solve this problem,
several attempts were successfully made to measure the quality param- eters on
line, such as trash %, number of neps, sliver evenness, yarn evenness, and real-
time fabric inspection [3,4]. Thus, there is a need and requirement for development
of new methods for modeling and automated monitoring of key parameters in the
textile processing industry to optimize quality of the product, which consequently
will improve profits. 1.2 Textile Supply Chain We can view the textile supply chain
in a simple view consisting of two main activities: Blockchain Framework for
Textile Supply Chain 215 Primary Activities. Inbound Logistics - involve
relationships with the suppli- ers and include all the activities required to
receive, store, and disseminate inputs. Operations - are all the activities
required to transform inputs into outputs (products and services). Outbound
Logistics - consist of all the activ- ities required to collect, store, and
distribute the output. Marketing and Sales - activities inform buyers about
products and services, induce buyers to pur- chase them, and facilitate their
purchase. Service - includes all the activities required to keep the product or
service working effectively for the buyer after it is sold and delivered. Secondary
Activities. Procurement - is the acquisition of inputs, or resources, for the firm.
Human Resource Management - consists of all the activities involved in recruiting,
hiring, training, developing, compensating and (if nec- essary) dismissing or
laying off personnel. Technological Development - per- tains to the equipment,
hardware, software, procedures and technical knowl- edge brought to bear in the
firm’s transformation of inputs into outputs. Infrastructure - serves the company’s
needs and ties its various parts together. It consists of functions or departments,
such as accounting, legal, finance, planning, public affairs, government relations,
quality assurance and general management. Raw Material. The ability to have full
transparency into the raw material is critical and can lead to huge impact such as
in the case with false advertisement. A case point is that in the week since Indian
textile maker Welspun was called out by Target for mislabeling sheets and pillow
cases as premium Egyptian cotton products, the company’s shares have collapsed.
While Target has severed all ties and Walmart and J.C. Penney have announced their
own reviews, Bed Bath & Beyond has appointed an independent auditor. A year ago,
Welspun, one of the world’s largest manufacturers of home textiles, was boasting of
a durable competitive advantage over Chinese rivals. The latter, it claimed, had
higher labor costs and were dependent on stockpiled Chinese fiber, which tended to
lint. Manufacturing. Communication and coordination are vital in streamlining goals
and ensuring timelines are met. Effective coordination will result into successful
and smooth order processing. Generally, it has been seen that ship- ment delay is
only the result of poor coordination of merchandisers with another department.
Factory buyers largely depend on factory merchandisers. By increas- ing knowledge
sharing, communicating best practices and developing functional coordination
platforms, merchandisers can place themselves in a better position to create plans
and execute the same as per requirements. Garments. The dictionary definition of
garment is “an article of clothing”, however, from a textiles supply chain point of
view, garments are the end product of a very long and complicated process. The
quality of a single finished garment 216 M. ElMessiry and A. ElMessiry depends on
several quilts of subproducts and materials. This made the second quality and waste
in each sector depend on the previous processes [1,11]. Huge efforts and cost are
spent on the inspection of the quality of the product in the textile chain, which
started with the raw material and is finished by the final garment product. For
example, the garment industry inspected all the fabric imported and number of
defects which are visually inspected before the purchase. Defect assessment is
conducted on between 10%–50% of the produced products where visible flaws such as
stains, stitching, incorrect color variations, patterns, sizes, and poor alignment,
etc., are tested. The American Apparel Manufacturers (AAMA) point-grading system
for determining fabric quality is the most recommended fabric inspection [13]. The
work presented in [14] provides a good example of the garment value chain structure
as shown in Fig. 1, demonstrating complicated relations between the different
elements of supply chain with each of them having their own quality control system
on their product which reacts on the final quality of the final garment [12]. The
cost of the quality control in the garment industry varies from 11% up to 39%. Fig.
1. The garment chain structure. Fashion. Fighting fake is not the only benefit that
blockchain technology can offer the fashion world, it also gives consumers and
brands the opportunity to track and display supply chain information [10]. Making
this possible is a Blockchain Framework for Textile Supply Chain 217 company called
Provenance. They have used blockchain to build a traceability data system that will
securely store information that is inherently auditable, unchangeable and open.
Their objective is to work towards an open traceability protocol that allows them
to tell every product’s story using blockchain technol- ogy in a way that enables
secure traceability of certifications and other infor- mation in the supply chains.
It answers the question, where does my product come from? As one of the new
emerging technologies, blockchain technology is empowering brands to take steps
towards greater transparency. Should you ever want to trace the origins, footprint
and histories of that cute dress you have your eye on, then blockchain technology
will be able to tell you the product’s story which leaves us wondering, is fashion
ready to be that honest and transparent? They do this by making sure that every
physical product comes with a “digital passport” that not only proves the product’s
authenticity, but also creates an auditable record of the journey the product took.
The quality data hub in various points of the quality chain has several types of
data about the sub product. 1.3 Blockchain Blockchain technology is a form of an
encrypted distributed ledger, essentially a distributed database of records, or
public ledger of all transactions that are shared among participating parties
[5,24]. Consensus of a majority of the participants in the system is the main mech-
anism by which each transaction in the public ledger is verified. Once the trans-
action is deemed verified, it is then admitted to all the records and can never be
erased. The verified transactions are put in a queue to be committed to the next
block. The data is secured using a hash function which is any function that can be
used to map data of arbitrary size to data of fixed size, more formally defined by
Eq. 1, where H is the hash and n is number of bits returned by the hashing function
[15]. H : K × M → {0, 1} n (1) A block consists of the following main parts:
Payload, which contains the actual data to be committed to the blockchain. Previous
Block Hash, the digital fingerprint of the previous block. Current Block Hash, the
current digital fingerprint of the current block pay- load and the previous block
hash. The main concept of the blockchain can be illustrated in Fig. 2. The
transactions can be traced back to the original first block, commonly called the
genesis block.
The genesis block is the only block that does not refer- ence an actual previous
block hash. Blockchain contains a certain and verifiable record of every single
transaction ever made. The first example of a widely used blockchain application is
Bitcoin, the decentralized peer-to-peer digital currency. The central hypothesis is
that the blockchain provides a system of a distributed consensus in the digital
universe, removing the need for trust and transferring it 218 M. ElMessiry and A.
ElMessiry Fig. 2. Conceptual illustration of the blockchain. to a binding contract,
which assures the users that a digital event occurred by creating an irrefutable
record in a public ledger [23]. The blockchain can be viewed as a global computing
machine with near 100% uptime due to the fact that the contents of the database and
ledger are copied across thousands of computers. Thus in case of 99% of the
computers running it were taken offline, the records would remain accessible and
the network could rebuild itself. The distributed nature of the blockchain also
means that a local copy can exist at or near the user. This is a very important
practical consider- ation as many of the textile facilities are located in
developing countries with very limited bandwidth. Having a local copy that auto
updates reduces potential failure due to Internet bandwidth. The central feature of
the blockchain technology is an immutable ledger [19]. Immutable means that the
contents of the payload of each block cannot be changed after it is committed to
the chain. This is due to the fact that each block hash is computed based on the
payload of the block and the hash of the previous block as shown in Fig. 2. If we
want to tamper with block i, we will need to recompute the hash of block i. That
will require us to recompute the hash of every and all subsequent blocks as
changing one hash will invalidate all subsequent hashes. Now, because the ledger is
distributed, we will need to gain control and change the hashes of at least 51% of
the entire network. The sheer amount of required effort renders it practically
impossible. One model of understanding blockchain is through comparing it to the
new application layer for Internet protocols because blockchain can enable both
immediate and long- term economic transactions, and more complicated financial
contracts. It can be a layer for transactions of different types of assets,
currency or financial contracts. Moreover, a registry and inventory system for
recording, tracking, monitoring, and transacting of all assets could be managed
with blockchain. Consequently, blockchain can be used for any form of asset,
including every area of finance, economics, and money [16]. Blockchain Framework
for Textile Supply Chain 219 1.4 Blockchain in Textiles There are many benefits of
blockchain. Yet, there is little to no adoption of blockchain technology in the
textiles supply chain domain. Blockchain technol- ogy presents many features and
characteristics that can be useful in textile indus- try aspects such as:
compliance, transparency, tracking, tracing, error reduction, payment processing,
and many others [20]. IBM has revealed its intention to lead an “industry-wide
collaboration” to create a supply chain and trading ecosystem built on IBM
blockchain technology. It will use the Hyperledger Fabric, which provides a
foundation for developing blockchain solutions with a modular archi- tecture,
pluggable implementations and so-called container technology. There are numerous
organizations, processes, systems, and transactions involved from field to fabric.
Located at the intersection of agriculture, finance and technology, the Seam with
the help of IBM, is in a unique position to introduce blockchain technology to
cotton-affiliated companies around the world. In conjunction with IBM, the Seam
wishes to create a supply chain and trading ecosystem built on IBM blockchain using
the hyperledger fabric. This new technology will be transformational for the cotton
industry. There are numerous organizations, pro- cesses, systems and transactions
involved from field to fabric. The Seam and IBM launched the first cotton industry
blockchain consortium.
There is a surge in the interest in distributed ledger technologies (DLTs) in the
construction sector 49 (Elghaish et al., 2020; Li et al., 2019a; Nawari and
Ravindran, 2019; Wang et al., 2020). DLT is a digital 50 system for recording the
transaction of assets in which the transactions and their details are recorded 51
in multiple places at the same time on a network of computers (Kuo et al., 2017).
One specific type of 52 DLT that has recently gained prominence is blockchain, a
peer-to-peer, distributed data storage 53 (ledger) structure that allows
transactional data to be recorded chronologically in a chain of data 54 blocks
using cryptographic hash codes. It is the underpinning technology of the world’s
first 55 cryptocurrency, Bitcoin (Nakamoto, 2008). When a transaction is executed
over blockchain, the 56 transaction is packed with other transactions in a block.
The validator nodes (miners) – computers 57 connected by a specific blockchain
network - analyze the transaction and validate the block by a 58 predefined
consensus protocol. Each identified block is then recorded with a unique crypto-
identifying 59 hash code and linked with the preceding chain of blocks on the
network. The key aspects of blockchain 60 are (Turk and Klinc, 2017): (i)
decentralization, functioning across a peer-to-peer (P2P) network built 61 up of
computers as nodes; (ii) immutability, once blocks are chained; (iii) reliability,
provided all nodes 62 have the same copy of the blockchain that is checked through
an algorithm; and (iv) a proof-of-work 63 procedure that is applied to authenticate
the transactions and uses a mathematical and deterministic 64 currency issuance
process to reward its miners. Blockchain’s core innovation lies in its ability to
65 publicly validate, record and distribute transactions in immutable ledgers
(Swan, 2015). Therefore, 66 many regard blockchain as a disruptive technology and
believe that it will have profound effects on 67 various sectors by allowing
individuals, organizations and machines to transact with each other over 68 the
internet without having to trust each other or use a third-party verification (Wang
et al., 2019). 69 Construction is deemed to be a low-productivity/low-innovation
sector (Ozorhon et al., 2014) 70 with one the lowest research and development
activity (Oesterreich and Teuteberg, 2016). McKinsey 71 Global Institute reports a
global productivity gap of $1.6 trillion USD can be tackled by improving the 72
performance of construction (Barbosa et al., 2017). For blockchain to gain a
foothold in the sector, it 73 needs to address some of the key challenges in
construction such as structural fragmentation, 74 adversarial pricing models and
financial fragility (Hall et al., 2018), dysfunctional funding and delivery 75
models, lack of trust and transparency (Li et al., 2019a), inability to secure
funding for projects 76 (Woodhead et al., 2018), corruption and unethical behavior
(Barbosa et al., 2017), and deficient 77 payment practices leading to disputes and
business failures (Wang et al., 2017). 78 As of January 2020, a blockchain keyword
search yields approximately 8700 publications on the 79 Scopus database; only a
very few of which are within the construction and built environment (BE) 80
domains, despite the recent interest in blockchain research and application (start-
ups) (Lam and Fu, 81 2019; Li et al., 2019a). Moreover, most of the existing
blockchain discussions in construction are 82 conceptual (Hunhevicz and Hall, 2020;
Li et al., 2019a). Lack of empirical discussions, working 83 prototypes and actual
implementation cases are conspicuous (Hunhevicz and Hall, 2020). Collecting 84
empirical evidence and insights for blockchain in construction is therefore
necessary (Das et al., 2020; 85 Shemov et al., 2020). Hence, this paper presents
some empirical discussions as research outcomes on 86 the implementation of
blockchain in SCM in construction. The aim of the study is to explore whether 87
blockchain can help the construction sector overcome some of its key challenges by
developing and 88 collecting feedback for three blockchain-based SCM models
(working prototypes) for empirical 89 research. The contribution of this research
is: (i) identification of three opportunities in SCM workflows 90 for blockchain;
(ii) development of blockchain-based working prototypes on Ethereum for the SCM 91
opportunities (models), (iii) collection of feedback for the requirements, utility
and applicability of the 92 models for practical implementation in real-life; and
(iv) identification of a set of benefits, 93 opportunities and general requirements
as well as challenges for blockchain in construction over the 94 models. The rest
of the paper is structured as follows. The next section presents the blockchain 95
research background, introducing the SCM workflows the models were developed for.
The section 96 that follows describes the research methodology used in conducting
the study, followed by the 97 explanation of the models’ requirements and details.
The empirical findings from the focus groups 98 and workshop are presented in the
next section. The final section provides a discussion and summary 99 of the
findings with conclusions. 100 Research background 101 Blockchain deployment
outside finance has been experimental with testing efforts by large 102
organizations like Hyundai, Walmart, Tata Steel, BP and Royal Dutch Shell (Kshetri,
2018; Wang et al., 103 2019). SCM is a strong fit for blockchain and will be
affected by it (Kshetri, 2018; O'Leary, 2017; 104 Treiblmaier, 2018; Wang et al.,
2019), where blockchain may facilitate the main SCM targets of 105 regulatory cost
reduction (O'Leary, 2017), speed (Perera et al., 2020), dependability, risk
reduction, 106 sustainability (Kshetri, 2018), flexibility (Kim and Laskowski,
2018), transparency (Francisco and 107 Swanson, 2018), sense-making, trust-building
and reduction of complexities (Wang et al., 2019). 108 The technology will affect
the structure and governance of supply chains as well as relationship 109
configurations and information sharing between supply chain actors (Wang et al.,
2019). It is therefore 110 important to experiment with new SCM models for
blockchain to better understand its implications 111 (Queiroz and Wamba, 2019;
Treiblmaier, 2018). There are also serious challenges before blockchain 112
implementations in SCM (Kshetri, 2018; Sulkowski, 2019): complex, multi-party
global supply chain 113 environment operating on diverse laws and regulation,
integration challenges relating to bringing all 114 the relevant parties together,
and controlling the boundary between the physical and virtual world for 115
fraudulent activities. Wang et al. (2019) group these challenges under five main
categories: (i) cost, 116 privacy, legal and security issues; (ii) technological
and network interoperability issues; (iii) data input 117 and information sharing
issues; (iv) cultural, procedural, governance and collaboration issues; and (v) 118
confidence and related necessity issues. 119 Blockchain research in the BE is
progressing over seven strands (Li et al., 2019a): (i) smart 120 energy; (ii) smart
cities and the sharing economy; (iii) smart government; (iv) smart homes; (v) 121
intelligent transport; (vi) Building Information Modeling (BIM) and construction
management; and (vii) 122 business models and organizational structures. Despite
blockchain’s potential, various general 123 challenges and requirements for
blockchain have been identified for the construction sector such as 124 identifying
high-value application areas (Wang et al., 2017), developing practical
implementation 125 strategies and plans, ensuring resource, process and workforce
readiness (Li et al., 2018), compliance 126 with regulations and laws (Li et al.,
2019b), upscaling the legacy IT systems, and capturing and 127 documenting benefits
and issues in practice (Tezel et al., 2020). The potential blockchain benefits and
128 challenges outlined for construction supply chains are in line with the
blockchain discussions in the 129 general SCM literature (Heiskanen, 2017; Perera
et al., 2020). Procurement (Barima, 2017; Heiskanen, 130 2017), payments (Barima,
2017), financing of projects (Elghaish et al., 2020; Wang et al., 2017), and 131
real and digital product/component tracking (Turk and Klinc, 2017; Wang et al.,
2020) come to the 132 fore as potential blockchain application areas for
construction supply chains. 133 A key area of interest in this domain is the
application of smart contracts with blockchain 134 (Ahmadisheykhsarmast and Sonmez,
2020). A smart contract is a self-executing contract with the 135 terms of the
agreement between buyer and seller being directly written into lines of code. The
code 136 and the agreements contained therein exist across a DLT (Mason, 2017).
Smart-contracts are created 137 by accounts (addresses) and can only be updated by
their owners. There exists among practitioners a 138 fear of the unknown and the
doubt that a full contract automation and reduction in contractual 139 disputes are
possible when value (money) transaction is involved in particular, with an 140
acknowledgement that smart contracts and blockchain could be beneficial for simple
supply-type 141 contracts and for reducing the amount of paperwork involved in
contract administration (Cardeira, 142 2015; Mason, 2017; Mason and Escott, 2018).
Although their outputs are not directly observable, Badi 143 et al. (2020) suggest
that smart-contracts can be applied to construction in a bilateral fashion between
144 supply chain actors. 145 The fragmentation of construction requires a higher
integration and trust in supply chains for 146 better sector performance (Koolwijk
et al., 2018). From a wider perspective, trust-building in 147 construction supply
chains has been mostly
narrated through a relational view focusing on the actors 148 and their
interrelations to improve trust and information flows across supply chains (Maciel,
2020). 149 Blockchain shows potential in transforming the trust in construction
supply chains from relational to 150 technological (Qian and Papadonikolaki, 2020).
In short, blockchain applications can contribute to 151 building system-and
cognition-based trust in construction supply chains reducing the need for setting
152 up relation-based trust (Qian and Papadonikolaki, 2020). 153 The research
project of which this paper is one of the outcomes is concerned with developing 154
blockchain-based SCM models for the construction sector. They are very few
discussions available in 155 the literature on models or working prototypes in this
respect (Wang et al., 2020; Woodhead et al., 156 2018). Furthermore, it is
recommended that researchers and practitioners validate first whether a 157
blockchain-based solution would be suitable for their needs using one of the DLT
decision-making 158 frameworks (Li et al., 2019a; Mulligan et al., 2018). Following
that validation process, Li et al. (2019a) 159 previously identified the
suitability of Project Bank Accounts (PBAs) for blockchain; however, the 160
authors did not present any model or working prototype for PBAs. Building on these
scarce discussions 161 in the field, the authors of this paper initially ran a two-
day scoping workshop in Northern England in 162 early spring 2019 with two
experienced construction project managers with interest in and knowledge 163 of
DLTs, and two experienced DLT developers. After reviewing and exploring some
available 164 candidates from the literature and practice in terms of technical
feasibility, value and validity, three 165 blockchain-based prototypes for Project
Bank Accounts (PBAs) for supply chain payments, Reverse 166 Auction-based Tendering
for procurement and bidding, and Asset Tokenization for project financing 167
(crowdfunding) were developed for blockchain integration. There is an optional link
between the PBA 168 and Reverse-Auction based Tendering model as explained in the
subsequent sections (see Figure 8). 169 The Asset Tokenization model was envisioned
on the premise that funders or donators are part of a 170 project supply chain.
Similarly, the models were developed targeting mainly 171 clients/owners/developers
as the main users. The models are grouped under the general name of 172 SCM as the
main domain, as payment, procurement and project financing practices can be
categorized 173 under SCM in construction (Briscoe and Dainty, 2005). 174 For the
blockchain infrastructure of the prototypes, the public and permissionless Ethereum
175 blockchain was adopted for its scalability, relatively fast processing times
and transaction affordability 176 (Yang et al., 2020). As of October 2019, the
Ethereum blockchain could process about 50 transactions 177 per second with an
average time of 20 to 60 seconds for a transaction (Etherscan, 2019). The situation
178 of a transaction can be easily tracked online (e.g. https://etherscan.io/)
using crypto addresses or 179 transaction hash codes. As of October 2019, the
average and median fees for an Ethereum transaction 180 were $0.119 USD and $0.066
USD respectively (BitInfoCharts.com, 2019). As explained in the research 181 method
section, the models were coded with Ethereum integration, deployed online as
prototypes 182 and tested/reviewed with practitioners and academicsfor feedback
after this initialscoping workshop.
Since its creation in 1990, companies are using the World Wide Web to exchange
information. The revolutionary system opened the doors for the business
productivity improvement and competitiveness. Nowadays, new technologies like the
ones applied in social media, machine learning, robotic process automation, and
blockchain are improving the business environment and bringing a large way to
exchange information One of the newcomers is blockchain. Initially, blockchain was
focused on money exchange. Bitcoin, the electronic money exchange created by
Satoshi Nakamoto (2008) opened the possibility to send and receive money without
any financial intermediary. The “peer-to-peer electronic cash system” (Nakamoto,
2008), sends payments from one peer to other through a very high safety model using
data encrypted that cannot be modified. Blockchain has grown in popularity due to
its characteristic features such as immutability, incorruptible and the capability
to enable absolute transactional transparency. It is no doubt that blockchain has
the power to transform every aspect of the logistics and supply chain industry.
Currently, developments are underway to ensure that blockchain systems will be able
to work in tandem with data drawn from IoT devices used in logistics and supply
chain. The inefficiencies of the current data exchange systems and the trust of the
information allow the identification of the value of blockchain in supply chain
management. The opportunity of paperless bureaucracy and cost reduction accelerate
the identification of the new challenges. Unlike traditional centralized database
systems, blockchain validates the data in the ledger using a cryptographic
consensus mechanism. The proposal of blockchain is to encourage trust across peers
and create safety networks to exchange information. It means no authority or
participant can control or manipulate what is recorded by blockchain technology
(Mougayar,2016). The transparency was initially considered as the important aspect
of adopting the technology, as well as improving the data exchange, disrupting the
traditional way of sending and receiving information. Another important feature
clearly recognized is the speed of transactions that also contribute to reduce
costs. There is also a growing trend of consumers demanding information about the
provenance of products. The facilities identified in Blockchain are quickly adapted
to supply chain operations, mainly due to the product traceability. One of the best
examples is the food chain, where the customer can be confident about the
authenticity of goods, including the environmental impacts and workers conditions
during the entire production process (Kshetri, 2018). Other examples are medicine
and cosmetics, where blockchain improves the value percept from the customer side
and give better business results (Aptea & Petrovskyb, 2016). Other benefits already
identified include the simplification of the settlement of claims, increasing
transaction security, accelerating payments and reducing fraud, reducing the cost
of compliance and regulatory requirements, elimination intermediaries thereby
cutting costs and improving tracking of items throughout the supply chain. To
support blockchain implementation in logistic and supply chain management, a smart
contract is required. A smart contract is a condition of the operation written on a
code. The smart contract automatically executes the transactions and record the
information onto the ledger without any human intervention. The aim of smart
contracts is to provide security, which is superior to traditional contract law and
to reduce other transaction costs associated with contracting (Tapscott 2016: 105-
108). Buterin explains it as: “ then we can cut costs to near-zero with a smart
contract.” (Parker 2016). Networked members mutually agree on the smart contract.
It is a key component for establishing trust and efficiency between parties. Smart
contract eliminates all the paperwork, streamlining the entire process and saving
time and money. The scope of this paper is restricted to discuss the blockchain
application to the supply chain world and the benefits that can be obtained in such
application. It is not an intention of this paper to evaluate the blockchain
technology and the different kinds of software used for its implementation.
Blockchain is everywhere. Invented by Satoshi Nakamoto, one or more mysterious
individuals unmasked until today, it has been more of an insider’s tip for the
longest part of its existence. It became known to a larger audience in September
2015: nine financial companies – Goldman Sachs, Barclays, J.P. Morgan, and others –
joined forces to build a new Blockchain-based infrastructure for financial services
(Underwood 2016). By then, Blockchain had become the latest hype in Fintech, with
almost daily announcements of new startups and corporate projects. It took longer
until the logistics and supply chain management (SCM) community caught on and
slowly realized the impact Blockchain might have on their industry. One major
promise of Blockchain is to create transparency – every member of the network has
access to the same data, providing a single point of truth (Tapscott & Tapscott
2016). Supply chain transparency is one of the most important and hardest to
achieve improvement areas for logistics and SCM (Abeyratne & Monfared 2016). It
comes as no surprise that some logistics experts consider Blockchain to offer
“enormous potential” (O’Marah 2017), to be a “much-needed platform for economic
renewal” (Casey & Wong 2017), and to “transform the supply chain and disrupt the
way we produce, market, purchase and consume our goods” (Dickson 2016). Taken
together, Blockchain might be nothing less than the “holy grail” (Popper & Lohr
2017). However, as it often is the case with emerging technology, the hype around
Blockchain seems primarily driven by technology providers, consultants, and
journalists. Logistics operators – especially small and medium-sized companies –
declare to have little knowledge about Blockchain (Kersten et al. 2017). This can
be explained through the novelty of the technology but also through the lack of
convincing use cases that clearly show Blockchain’s benefit over existing IT
solutions. Logistics and SCM research on Blockchain is still in its infancy (Zhao
et al. 2016) and ought to look into possible applications (Yli-Huumo et al. 2016).
The research questions for this paper emerge: “What might be suitable applica-
tions for Blockchain technology in logistics and SCM?” and “Should Blockchain in
logistics and SCM be considered a treat or rather a trick?” The remainder of the
pa- per is structured as follows: First, we summarize the basic features of
Blockchain. Then, we introduce four use case exemplars explored in theory and
practice. Subsequently, we present the findings of an international survey we
conducted within the logistics industry to look into the prospects of the four use
cases and expectations and apprehensions towards Blockchain. We conclude by
discussing 4 2 Basics of Blockchain the findings and daring a prognosis on the
future of Blockchain in the logistics industry. 2 Basics of Blockchain The
Blockchain is a distributed digital ledger of transactions that cannot be tam-
pered with due to the use of cryptographic methods (Pilkington 2016). This short
explanation includes the three most important properties of a Blockchain: de-
centralized, verified, and immutable (see Figure 1). (1) It is decentralized
because the network is entirely run by its members, without relying on a central
author- ity or centralized infrastructure that established trust. To add a
transaction to the ledger, the transaction must be shared within the Blockchain’s
peer-2-peer network. All members keep their own local copy of the ledger. (2) It is
verified be- cause the members sign the transactions using public-private-key
cryptography before sharing them with the network. Therefore, only the owner of the
private key can initiate them. However, the members can stay anonymous because the
keys are not linked to real-world identities. (3) It is immutable through its con-
sensus algorithm: One or more transactions are grouped together to form a new
block. All members of the network can verify the transactions in the block. If no
consensus on the validity of the new block is reached, the block is rejected. Like-
wise, if consensus exists that the transactions in the block are valid, the block
is added to the chain. A cryptographic hash is generated for each block. Each block
not only holds transaction records but also the hash of the previous block. This
creates a block interdependency linking up to a chain – the Blockchain. Altering a
through signatures Verified through peer-2-peer network Decentralized through
consensus algorithm X X Immutable + + Figure 1: Basic Properties of Blockchain 5
Blockchain in Logistics and Supply Chain: Trick or Treat? transaction on the
Blockchain retroactively would require not only to alter the local records on most
of the networks members’ devices but also altering the cryptographic hash of every
block down the chain. A distributed system, like a Blockchain, holds benefits over
centralized architec- tures as it provides the same, verified information to all
network members. It creates trust between the parties by eliminating the need for
trust. Blockchain can record the transfer of assets between two parties, without
the need of a trusted intermediary. Such assets could be digital money, but also
carbon credits or other deeds of ownership (Tapscott & Tapscott 2016). The Bitcoin
Blockchain is the first implementation of the Blockchain principles and only
supports simple transactions. It also shows how reliable Blockchain is, as it has
run error-free since January 2009 and has a current market capitalization of over
35 bn. Euro. Centralized infrastructures, on the contrary, are increas- ingly
hacked – classic middlemen, like banks or dating websites, provide ample examples
(Tapscott & Tapscott 2016). Today, many more advanced Blockchain implementations
exist. While most are open to the public (permissionless), there are also private
(permissioned) Blockchain implementations, where the rights to read and write are
controlled by a central authority (Pilkington 2016). Some Blockchain
implementations support so-called “smart contracts” or applications living on the
Blockchain (Christidis & Devetsikiotis 2016). Smart contracts are con- ditions
written in code. The delivery of a parcel can serve as a simple example: To counter
the risk of a loss, a smart contract can be designed such that the payment by the
sender is only released once the shipping company confirms the delivery. This
allows for a transaction to be automated, yet documented and controlled. Of note,
Blockchain provides not only benefits but also has challenges attached to it
(Petersen et al. 2016; Yli-Huumo et al. 2016; Xu 2016). Most result from the early
maturity phase of the technology. While these challenges (e.g., lim- ited
throughput) have to be addressed from a technological perspective, they should not
distract possible users from evaluating the benefits of the underlying principles.
3 Blockchain in Logistics and SCM As introduced, Blockchain is considered to offer
large potential for improving processes and enhancing business models in logistics
and SCM. However, accord- 6 3 Blockchain in Logistics and SCM Global container
shipping still involves a lot of paperwork – costing time and money. Also, paper-
based freight documents like the bill of lading are prone to loss, tampering, and
fraud. 1 Ease Paperwork Processing Counterfeit medicine is a growing problem for
pharmacy supply chains. This especially pertains to expensive, innovative medicine
like cancer drugs. Pharmacies have to make sure to sell “the right thing” to the
consumers. 2 Identify Counterfeit Products In the food supply chain, foodborne out-
breaks are a challenge for retailers. They have to get a quick overview of where
the food came from and which other products are also affected and have to be
removed from the stores. 3 Facilitate Origin Tracking More and more logistics
objects are equipped with sensors that generate data along the supply chain – e.g.
about the status of a shipment. This data has to be stored in an immutable,
accessible way. 4 Operate the Internet of Things Figure 2: Overview of Use Case
Exemplars ing to a recent study on trends in logistics and SCM, Blockchain is only
known to some logistics experts and even fewer pursue implementation plans (Kersten
et al. 2017). In this section, we shed light on Blockchain’s potential through
intro- ducing use case exemplars. These exemplars represent four major ideas
currently explored in both theory and practice. They are also four single ideas out
of a yet unmapped sea of opportunities. In choosing them, we tried to collate a
broad and multifaceted picture later used for investigating the prospects of
Blockchain for logistics and SCM. Figure 2 summarizes the use case exemplars. They
are introduced in more detail in the following sections. 3.1 Ease Paperwork
Processing in Ocean Freight International container transports have a long trail of
paperwork associated with them. For example, shipping refrigerated goods from East
Africa to Europe re- quires stamps and approvals from around 30 people and
organizations that must 7 Blockchain in Logistics and Supply Chain: Trick or Treat?
interact with each other on over 200 occasions. Also, documents like the bill of
lading might be subjected to fraud (Popper & Lohr 2017). Taken together, the cost
of the trade-related paperwork processing is estimated to be between 15 and 50
percent of the costs of the physical transport (Groenfeldt 2017; Popper & Lohr
2017). To tackle such process inefficiencies and digitize paper records, IBM and
Maersk joined forces in 2015. They eventually settled for a permissioned Blockchain
solution as means to connect the vast global network of shippers, carriers, ports,
and customs. The implementation details still must be worked out. However, a round
of pilots in 2017 has succeeded. In these pilots, every relevant document or
approval
was shadowed on the Blockchain, meaning the legacy IT systems were not replaced
but augmented. Using a standardized interface, every partner is empowered to have
full visibility of the container status (Allison 2017). Until the end of 2017,
Maersk hopes to shadow one in seven of their container shipments on the Blockchain
– around 10 million boxes per year (Groenfeldt 2017). The problems associated with
extensive paperwork are not limited to this specific use case but hamper all kinds
of trade flows (Chu et al. 2016; Morabito 2017). 3.2 Identify Counterfeit Products
The provenance of high-value items often relies on paper certificates that can get
lost or tampered with: whether a diamond’s certificate is genuine or fake – and if
the diamond was stolen – is not always easy to determine. The same holds true for
expensive wine, watches, or handbags (Lomas 2015). Since, for example, a diamond’s
serial number can easily be cut, the startup Everledger takes an alternative
approach and records 40 data points that uniquely identify a diamond. Using these
publicly available records on the Blockchain, a potential buyer can clearly
determine if the seller is the actual owner of the diamond and can also make sure
he is not buying a “blood diamond” mined in a war zone (Underwood 2016). Everledger
plans to extend this fraud detection system into a provenance platform for many
high-value items (Lomas 2015). In the medical sector, counterfeit drugs are a known
problem that – for example with anti-cancer drugs – can even have lethal
consequences if patients do not receive the treatment as prescribed (Mackey &
Nayyar 2017). Blockchain could improve patient safety through establishing supply
chain transparency from manufacturers through wholesale and pharmacies to the
individual patients. Through barcodes or auto ID technology, patients could be
empowered to check whether they received the actual drugs (DeCovny 2017; Mackey &
Nayyar 2017). Blockchain is considered to 8 3 Blockchain in Logistics and SCM make
it much more difficult to tamper with products or to channel in products of illegal
origin (Sutherland et al. 2017; Apte & Petrovsky 2016; Morabito 2017). 3.3
Facilitate Origin Tracking If faced with a foodborne disease outbreak, retailers
have a hard time figuring out where the bad ingredients came from and to which
stores they were delivered (Tian 2016). Today, it can take weeks to track down the
source of the contamina- tion and restore consumers’ confidence in food safety
(Popper & Lohr 2017). To facilitate origin tracking for food items, Walmart
partnered with IBM in 2016. Like with Maersk, Blockchain is used to augment the
supply chain partners’ existing IT systems through a transparent, superordinate
ledger, tracking the movements of food items. This shared forum is considered a
substantial improvement over Walmart’s earlier trials involving barcodes or auto ID
technology – solutions that required central databases and trust between the
participants (Hackett 2016). In some first pilots, Walmart and IBM digitally
tracked both domestic movements – pork from small Chinese farms to Chinese stores –
and international movements – produce from Latin America to stores in the United
States (Popper & Lohr 2017). In these pilots, data like the farm origin, batch
numbers, factory and processing data, expiration dates, and shipping details were
written on the Blockchain and instantly became available to all network members.
With a foodborne disease outbreak, this data enables Walmart to track down the
origin in a matter of sec- onds. During the year, further pilots with more data
attributes are scheduled. Ultimately, Walmart believes Blockchain could also reduce
food waste if the newly available data on shelf life is used as a parameter for
supply chain optimization (Shaffer 2017). 3.4 Operate the Internet of Things The
Internet of Things (IoT) means everyday objects – essentially everything with a
plug – get equipped with electronics and can exchange data over the internet. A
Gartner report estimates there will be over 20 billion connected things by 2020
(Gartner 2015). However, the current internet architecture with its server
infrastructure might not handle such an amount of devices and data (Eastwood 2017).
Single servers represent a single point of failure and raise data security
concerns. The public Blockchain ledger is considered a solution to connect and 9
Blockchain in Logistics and Supply Chain: Trick or Treat? manage IoT devices
reliably (Pilkington 2016; Christidis & Devetsikiotis 2016). Given the large amount
of possible IoT objects (vehicles, shipments, etc.), logistics might be one of the
most promising applications for IoT and Blockchain (Zheng et al. 2017). First large
companies start to work in this area. For example, Walmart was recently granted a
patent that aims at improving last mile logistics through connecting delivery
drones to the Blockchain (Hackett 2017). Such IoT devices connected to the
Blockchain could also be provided with a digital currency. This would enable them
to interact autonomously with other parties and – through smart contracts – to pay
fees and duties by themselves, e.g., for priority access to restricted air
corridors (Christidis & Devetsikiotis 2016; Petersen et al. 2016).
Blockchain deployment outside finance has been largely experimental. Some of the
most promising non-finance applications of blockchain are expected to include those
in supply chain, power and food/agriculture. These areas are arguably strong fits
for blockchain. These industrial use cases are believed to deliver real ROI at an
early stage of blockchain development (Bünger, 2017). Among many activities that
are likely to be transformed by blockchain, supply chain thus deserves special
attention. An increasing reliance on the use of Internet-of-things (IoT)
applications is among the trends that will affect supply chain management (SCM).
With IoT, radio-frequency identification (RFID) tags, sensors, barcodes, GPS tags
and chips, the locations of products, packages and shipping containers can be
tracked at each step. This allows an enhanced, real-time tracking of goods from
their origins. In this regard, for one thing, there is a deep thirst for a
foolproof method for confirmed identity in IoT applications. The first of
blockchain's direct benefits is that it provides a possible solution to identity
management (Alam, 2016). Blockchain can be used in a supply chain to know who is
performing what actions. Additionally, time and location of the actions can be
determined. Blockchain facilitates valid and effective measurement of outcomes and
performance of key SCM processes. Once the inputs tracking data are on a blockchain
ledger, they are immutable. Other suppliers in the chain can also track shipments,
deliveries, and progress. In this way, blockchain produces trust among suppliers.
By eliminating middleman auditors, efficiency can be increased and costs can be
lowered. Individual suppliers can perform their own checks and balances on a near
real time basis (Koetsier, 2017). Blockchain also provides an accurate way of
measuring product quality during transportation. For instance, by analyzing data on
the travel path and duration, stakeholders in a supply chain can know whether the
product was in a wrong place or whether it remained in a location for too long.
This is especially important for refrigerated goods, which cannot be left in warm
environments. This value proposition is even more appropriate for countries such as
China, where meat smuggling has led to serious health risks and a significant loss
in tax revenue. In this way, blockchain-based solutions may give the consumers more
confidence that the products are genuine and of high quality and make them
significantly more willing to purchase the brand. In order to emphasize the
importance of blockchain in food supply chain, the proponents of blockchain offer
an example of the 2015 E.coli outbreak at Chipotle Mexican Grill outlets. The
crisis left 55 customers ill. The company suffered a reputation loss due to
negative news stories, restaurant shutdowns, and investigations. Sales reduced
dramatically and its share price dropped by 42%. The roots of the problem lie
partly in the reliance of Chipotle and other food companies on multiple suppliers
to deliver parts and ingredients. There is a severe lack of transparency and
accountability across complex supply chains. Food companies such as Chipotle are
not in a position to monitor their suppliers in real time. It is thus impossible
for Chipotle to prevent the contamination or contain it in a targeted way after it
is discovered (Casey and Wong, 2017). Chipotle’s value proposition is centered on
fresh and locally sourced ingredients. The non- blockchain methods of securing the
Chipotle food supply chain are expensive and cumbersome. The process involves
manual verification and massive record keeping. Blockchain can reduce the workload
and ensure traceability. Besides the obvious value of traceability, huge benefits
can be reaped in terms of reduced labor costs and food wastes. The above examples
can be generalized to any industry such as aircraft, electronics or drugs. In
short, blockchain-led total value chain visibility can offer huge gains to
operations for any firm (O’Marah, 2017). These benefits accrue to all the parties
involved in the supply chain such as the retail warehouses and individual stores.
For instance, stores know the details of arrival of a shipment so they are prepared
to receive it (Groenfeldt, 2017). In the food product supply chain, for instance,
when it is confirmed that a load of apples would arrive at a juice factory, a code
is generated and stored remotely. The code is available for verification at any
time. Information about the apples and the factory that receive them is ‘chained’
together by this code. Theoretically the data can be portrayed as color-coded maps
of inputs, conversion steps and outputs from “farm to fork” (O’Marah, 2017). Prior
researchers have noted various key objectives of supply chain. They include cost,
quality, speed, dependability, risk reduction (Baird & Thomas, 1991;Bettis &
Mahajan,1985), sustainability (Bowen, Cousins, Lamming, & Faruk, 2001) and
flexibility (Goldbach, Seuring, & Back, 2003; Kovács, 2004, Meyer and Hohmann,
2000, Rao and Holt, 2005, White, 1996). The above discussion suggests that
blockchain has a potential to help achieve these objectives. Some have touted
blockchain as the biggest innovation in computer science (Tapscott, 2016). Others
consider this technology to be “the biggest disruptor to industries since the
introduction of the Internet” (PWCHK.com, 2016). The World Economic Forum (WEF,
2015) considers blockchain to be among six computing “mega-trends” that are likely
to shape the world in the next decade. It would be unreasonable to expect that
blockchain can transform key supply chain activities. Researchers have begun to
grapple with this nascent trend of blockchain deployment in various organizational
objectives, but scholars have not systematically assessed the effects of blockchain
on supply chain. In light of the above observations, a key objective of our
research is to illustrate blockchain’s impact in SCM. To achieve this, we offer a
framework1 that considers how blockchain can help firms meet key SCM objectives.
This article therefore offers the promise of filling many important gaps in the
sparse literature on blockchain deployment in supply chain. The paper is structured
as follows. We proceed by first providing a literature review of key supply chain
objectives. Next, we discuss the methods employed in the paper. Then, we provide
brief descriptions of the selected cases. The section following this looks at the
roles of blockchain in achieving various strategic supply chain objectives. It is
followed by a section on discussion and implications. The final section provides
concluding comments. 2. Literature review: supply chain objectives Logistics
services often play a key role in a firm’s ability to deliver customer value
(Mentzer, Flint, & Hult, 2001). Among the key goals of an effective logistics
within supply chain management involves getting the product in the right condition,
in a timely manner and at the lowest possible costs (Flint, 2004). Measurement of
supply chain management performance is often described in terms of objectives such
as quality, speed, dependability, cost and flexibility (Kovács, 2004, Meyer and
Hohmann, 2000, Rao and Holt, 2005, White, 1996). In addition to the above
objectives, prior researchers have addressed the role of supply chain management
for sustainable products, which has become a notable research area in marketing and
supply chain management (Bowen et al., 2001). This trend is partly driven by
consumers’ increasing concern about the source of their food and beverages (Scott,
2017). Quak and de Koster (2007) looked at retailers’ sustainability policies in
logistics by focusing on social and environmental issues such as those related to
noise pollution, congestion, and carbon dioxide emissions. Prior researchers have
also argued that sustainability-related issues in supply chain, which often deal
with natural environment and social causes are less quantifiable (Linton, Klassen,
& Jayaraman, 2007). Global supply chains are complex and face multiple
uncertainties (Manuj & Mentzer, 2008). A major objective of supply chain management
is also to reduce risks. Among the various risks that organizations face include
relational risks such as a business partner’s engagement in opportunistic behavior
(e.g., cheating, distorting information) (Baird & Thomas, 1991;Bettis & Mahajan,
1985). According to Svensson (2000), the sources of risk in supply chains can be
classified into two main categories, namely, atomistic or holistic. In order to
deal with atomistic sources of risk, a selected and limited part of the supply
chain need to be looked at in order to assess risk. This approach is suitable for
components and materials that are of low-value, less complex, and easily available.
On the other hand, holistic sources of risk require an overall analysis of the
supply chain in order to assess risk. This approach is preferable for high-value,
complex, and rare components and materials (Svensson, 2000). To achieve the various
objectives noted above, it is important to evaluate suppliers. Due to increased
competition, globalization and outsourcing, the number of players in a typical
supply chain has increased significantly. In response, firms have introduced
supplier evaluation programs using environmental and social criteria (Beske,
Koplin, & Seuring., 2008; Koplin, Seuring, & Mesterharm, 2007). Some use supplier
self-evaluation, in which supply chain partners declare how they have tackled
environmental and social issues (Trowbridge, 2001).
Today, the vast majority of traditional logistic information systems in Agriculture
and Food (Agri-Food) supply chains merely track and store orders and deliveries,
without pro- viding features as transparency, traceability and auditability. These
features would surely improve food quality and safety, therefore they are more and
more requested by consumers [1]. Thus, several Research & Development communities
are con- centrating their efforts on adopting some specific Internet of Things
(IoT) technologies such as RFIDs and Wireless Sensor Networks, or everyday-cheaper
connected devices, to enabled remote monitoring of the conditions in food
transportation scenarios and at a very fine granularity along the whole Agri- Food
supply chain, e.g., from production to consumption [2]. However, the majority of
the current IoT solutions still rely on heavily-centralized cloud infrastructures,
where there is usually a lack of transparency, and by nature presents security
threats including availability, data lock-in, confidentiality and auditability [3].
In the Agri-Food domain, in order to maintain trust and reliability along the whole
supply chain, it is essential for the stored records to be tamper-proof, while the
best case would be if each actor issuing transactions could do that without relying
on any centralized third-party intermediary. A potential solution to alleviate all
of such issues and concerns is the Blockchain technology, which is a peer-to-peer
digital ledger that does not rely on centralized servers. Since all the records
stored in a blockchain are based on a consensus reached at least by the absolute
majority of peers of the network itself, this distributed ledger is immutable by
design and offers an auditable and transparent source of information. And from an
IoT perspective, instead of requiring connectivity to a central cloud, sensor
networks in a blockchain-based traceability solution would only require stable
connection to their closely located peer. Thus, blockchains exposes all the
required properties for decentralizing food traceability systems, while making
traceable data available at every step of the supply chain. In this paper, we
present AgriBlockIoT, a fully- decentralized traceability system for the Agri-Food
supply chain management. Specifically, the proposed solution can rely either on the
Ethereum1 or the Hyperledger Sawtooth2 publicly available blockchain
implementations, while it is able to integrate various IoT sensor devices. By
directly producing and consuming valuable information from the IoT devices along
the whole supply chain and storing such data directly in its underlying blockchain,
AgriBlockIoT guarantees transparent and auditable asset traceability. To assess the
feasibility of the proposed solution, we engineered and deployed the so- called
from-farm-to-fork use-case: a classical food traceability scenario fostering
certified traceability of food along the whole supply chain, e.g., from
agricultural production (the farm- side) to consumption (the fork-side). Then, we
compare the two implementations, in terms of three performance metrics, namely
latency, CPU load, and network usage. The remaining of this paper is organized as
follows: Sec. II summarizes the current state of the art in the adoption of
blockchains as an enabling technology for the traceability in Agri-Food supply
chains; Sec. III describes the system architecture of AgriBlockIoT; Sec. IV
contains the analysis of our preliminary results; Sec. V concludes the paper.
This paper focuses on business to business (B2B) integration within the supply
chain, referring to the electronic data exchanged over the internet between
business partners and value-added service providers. Even the biggest organizations
lack the power, knowledge or capability to themselves design or deploy end-to-end
information integration trough supply network. For that reason, companies have
collaborated to accelerate integration under the concept of the Digital supply
chain (DSC). DSC collaboration is a multi-stakeholder environment involving
different needs and goals, in which big companies are seen as hub organizations
that lead the integration work, along with their main suppliers. Even competing
companies are collaborating to pursue integration of the entire supply network.
Value-added service providers play different roles, collaborating with common
interests to establish interoperability of systems across organizations. DSC should
offer companies competitive advantage: intermediates should offer fast integration;
logistics partners should offer visibility of deliveries, using tracking and
tracing features; information and communication technology (ICT) companies should
develop cost-effective cloud solutions; and finance providers should offer working
capital through the transaction banking services. The empirical study reported here
is a case study of a consortium of companies operating in global supply chain
environments. The project’s main objective was to move all stakeholders jointly
toward standardized integration of business transactions and collaboration
processes. The key interest was to implement common solutions, technology and
standards for integrating business processes within a large supply chain. The
consortium included large companies, suppliers, logistics service providers,
intermediate companies and banks providing supply chain finance. As the focus was
on system-to-system integration, the case is representative of DSC initiatives. In
DSC transactions, organizations currently execute process and data integration
through the trusted third parties, most often through the trade finance services of
banks. However, several advocates of blockchain technology (BC) have promised to
change this [1] by minimizing unnecessary use of third party intermediaries.
Advantageous features of BC include a public ledger of transactions without
transaction party identities, the use of public key infrastructure (PKI) to notify
counterparties about executable transactions and the concept of the smart contract.
The present article investigates how blockchain technology might support digital
supply chain integration. The main research questions are i) how can we accelerate
DSC integration and ii) how will blockchain technology support that integration?
Blockchain technology is regarded as a potential means of enhancing the security
and cost effectiveness of DSC transactions. In general, blockchain technology is
used to establish integration over the internet and can be understood as a many-to-
many integration model, deployed in the public cloud to conduct secured
transactions rapidly and at low cost. To develop a clear understanding of
blockchain design principles and functionalities, the present study is grounded in
a literature review and interviews with international experts in blockchain
technology. The field study included focus group sessions with highly experienced
business managers. While blockchain technology can clearly be used in both business
to business (B2B) and Internet of Things (IoT) machine-to-machine (M2M)
integration, this research focuses only on B2B transactions. In Section 2, we
describe digital business ecosystem (DBE) architecture as a framework for designing
requirements and functionalities for Digital supply chain integration. In Section
3, we describe the research process, including data collection and research
methods. Results are presented in Section 4, followed by discussion and conclusions
in Section 5. 2. Digital supply chains The benefits of Digital supply chain (DSC)
include cost-effectiveness of services and value-creating activities that are
advantageous to many actors in the ecosystem, including firms and their suppliers,
employees and customers [2]. According to Mentzer et al. (p.4.) [3], a supply chain
can be defined as a set of three or more entities (i.e., organizations or
individuals) directly involved in the upstream and downstream flows of products,
services, finance, and/or information from a source to a customer. This definition
highlights the role of information flows between firms, especially at activity and
business process levels. It follows that effective integration between actors
requires the integration of processes [4] and information [5] in the supply chain.
The DSC is characterized by the strategic and operative exchange of information
between suppliers (financial, production, design, research, and/or competition) to
enhance communication between actors in the chain [6]. In general,
interorganizational coordination is achieved by means of electronic links between
information systems, enabling automated and digitalized processing of source-to-pay
processes involving suppliers and customers in the supply chain [7]. This supply
chain information sharing and processing is not confined to the business process
level but also includes a vast amount of data from devices and sensors (IoT) and
from social media applications. Integrated supply chain information models are
essential in modern DSCs, and the role of information integration and service
automation has been identified as an important business driver [8]. The benefits
and value drivers of digitalization for supply chains are considerable. According
to Santos and Eisenhardt [9], the key motivation for supply chain integration is
the efficiency associated with minimizing governance costs, including the costs of
exchange with other ecosystem participants and with those within the individual
organization. Information technology-based cost savings enable more information to
be processed more accurately and more frequently, from more sources around the
world [10]. When properly automated, these information flows eliminate the need for
manual data entry and so reduce human error [11]. While it is widely acknowledged
that B2B integration builds supply chain efficiency [12, 13, 14, 15, 16, 17, 18],
current low levels of system interoperability continue to cause high investment
costs, and the potential benefits have not yet been realized [19, 20]. Other
identified benefits of DSC include reduced product or service costs, creating
competitive advantage and barriers to competition, reduced supply chain lead times
and increased flexibility in supply chain design [21]. Effectiveness of information
sharing refers to how information brings new value to customers and supply chain
actors in terms of services, decision making, visibility and prediction. Here, the
key capability is to deliver the right information to the right people at the right
time for decision-making purposes [22]. Previous research has highlighted how
information integration and service automation serve as important drivers of
business value in supply chains [23, 24, 21]) Additional value drivers include the
systemic integration and bundling of information about products and services to
create additional value for customers [24]. The present study continues to examine
how value can be created from big data in industrial B2B supply network
environments, and how interorganizational integration based on blockchain
technology should be organized in this new economy. Novel information exchange
services are likely to have a significant effect in broadening the functioning of
supply chains and related business models. For example, Kagermann et al. [26] noted
that, in Industry 4.0 environment, “manufacturing systems are vertically networked
with business processes within factories and enterprises and horizontally connected
to disperse value networks that can be managed in real time. Solid information
integration introduces new systemic value elements, both for service providers and
for industrial and public service users. Developing digital ecosystems for value
creation in transactional supply chain business processes leads to significant
business opportunities for actors in the ecosystem. Earlier findings related to
systemic global supply chain integration [8] identified four transformation
requirements for digital business ecosystems, which constitute a foundation for
business and innovation development, and for the present research. 4183 1) Business
model development: Companies must develop strategies and business models that
maximize innovation and effectiveness in leveraging digitalization and supply chain
integration services in their business offerings. 2) Information model platforms:
Appropriate information models are needed to collect, store and deliver information
in supply chains. This often requires the development of platforms and integration
between multiple platforms. 3) Business process standards for supply chain
connectivity: New competencies and solutions are needed for the development of
business process connectivity and standards. This relates to how trading partners
in the supply chain can be digitally connected to business process transactions. 4)
Operator services for data transfer between actors: Integration channel
intermediaries (e.g., operators) are needed to transfer and integrate information
across actors and systems. DSC establish the swift from manual transactions to
digitalized information flows in both intrafirm and interfirm operations.
Technology offers companies the option of reducing internal management costs and
increasing efficiency through the digitalization or sustaining competitiveness by
digitalizing external networks.
These intra- and interfirm relations relate to such decisions as “make or buy”, as
extensively discussed in Transaction Cost Economics (TCE), In Coase’s [26] theory,
the “make-or-buy” decision concerns whether a firm executes business activities in-
house or outsources them to the market [27]. In valuing and balancing factors in
this decision, firms weigh the governance costs involved in production (the “make”
decision) against the market transaction costs associated with market profits (the
“buy” decision). In brief, the TCE perspective is that the firm economizes on
transaction costs through the selection of internal governance costs for handling
market transaction costs [28]. Technology focuses on where a transaction occurs and
when goods, services or information are transferred across activities and systems.
Well- designed interfaces enable this transfer to occur smoothly [29]. Global trade
practices typically involve a range of business processes across organizational
boarders. Data model needs to be designed so that the information flow can be
transferred electronically end- to-end to secure interoperability within systems,
as discussed in the electronic data integration literature. The level of B2B
integration and investment can be estimated by means of different models. The
concept of investment cost is based on three variables: a) integration volume, b)
total amount of process integration and c) volume of transactions. In terms of
technology, standardization and service development, B2B integration models are
categorized as Manual operations, EDI, HUB and Cloud models. These integration
models are briefly described with the formula: Manual transaction integration: At
either end of this process, information has to be manually transferred from the
document to the receiving system. Integration volume is formulated as I = ∑t x 2,
where t represents each process transaction. EDI B2B integration model (Point-to-
point): all integration has to be design between all companies and the number of
processes integrated into the system. Integration volume is formulated as i = n2,
where n represents each process integration. Hub B2B integration model (one-to-
many); A single company can establish business process connections with
intermediates. Integration volume is formulated as i , where n represents each
process integration. Cloud B2B integration model (Many-to-Many): Software as a
service (SaaS) is operated over the internet and integration can be delivery to all
users. Integration volume is formulated as i = where n represents each cloud
process integration. While two organizations may exchange supply chain documents
directly via a document exchange platform, specialized intermediate companies are
often used to conduct supply chain transactions with related exchange of documents
[30, 31]. As well as the exchange of documents, payment(s) may form part of the
transaction. Payment(s) and exchange(s) of supply chain document(s) can be
conducted as a single (payment) transaction or as multi-tranche (payment)
transactions. Where payments are involved, financial institutions (banks) usually
act as the intermediate company (so-called “trusted third parties”). Banks refer to
this line of business as trade finance [32], usually involving one bank for the
seller and another for the buyer. In general, the seller’s bank provides guarantees
that the seller can supply and has delivered what was agreed, and the buyer’s bank
guarantees that the buyer has received what was delivered and is able to pay. Banks
may provide letters of credit, document collection, buyer/seller credit, bank
guarantees, trade insurance, factoring, forfaiting and other trade finance services
to their customers (see [1] for instruments used). Although these trade finance
services are well established for the financing of domestic and international
trade, they have significant limitations from a DSC perspective. First, fully
automated data transfer between organizations—in traditional trade finance
contexts, from the seller to the seller’s bank, from the seller’s bank to the
buyer’s bank and from the buyer’s bank to the buyer, or vice versa—is possible 4184
for payments and to a lesser degree for invoices. Although document collection and
especially letter of credit transactions may involve significantly more complicated
exchange of trade documents between the parties, such as bills of lading, shipping
documents and/or various certificates, a high proportion of supply chain documents
are still exchanged using a computer- paper-computer manual operation model.
Furthermore, both the letter of credit and document collection are trade finance
services designed to release a payment (tranche) by detecting that certain
conditions have been met—for example, that a shipment has been made and a bill of
lading has been sent. These services were not designed for the exchange of supply
chain documents between seller and buyer. As a consequence, a lot of documents are
produced using the seller’s information systems and are delivered on paper or in
electronic formats incompatible with the buyer’s information systems, requiring
manual entry or scanning into those systems. Second, the involvement of four
parties in a transaction, and in the exchange of supply chain documents, makes such
transactions cost-ineffective and slow. Although trade finance transactions are not
bank-mediated securities trade transactions with strict post-trade clearing and
settlement procedures, these models influence banks’ thinking, and so many things
can go wrong in the clearing and settlement of trade finance transactions that are
in part manually executed. A third limitation relates to cybersecurity. Banks’
information systems are among the most secure; data transfers of payments,
invoices, settlement and clearing instructions between banks are conducted using
standardized encrypted messages and message checking procedures over secure data
transmission platforms such as SWIFT. Nevertheless, criminals have been able to
exploit the vulnerabilities of these international banking networks to steal money
[1]. Enhanced security programs, such as the recently launched SWIFT security
programme, improve security but at the expense of cost and ease of use. The
promoters of blockchain technology suggest that the underlying reason for security
breaches is that the identities of parties to the transactions (and especially of
trusted third parties or banks) are known. It is argued that because these data
(including the bank account and security data of seller and buyer) form part of
electronic transactions, it makes sense to cyber criminals to break in and steal
such data, no matter how secure information systems are or how securely
transactions are transmitted. To address the limitations described above, we
consider the use of blockchain technology [1], the following features of which can
be seen as potential solutions: a public ledger of transactions copied to all nodes
of the blockchain network without transaction party identities [34]; the use of
public key infrastructure (PKI) to decrypt and encrypt a transaction and to notify
counterparties about the existence of an executable transaction with unique single-
time keys [34, 35]; and the concept of the smart contract [35]. One of the key
features of blockchain technology is that it maintains an open distributed ledger
of transactions without identifying parties to the transaction. In addition, the
ledger is copied to all nodes of the network [1, 35]. If a transaction is changed,
a new block is created and chained to previous blocks. Ledger data between nodes of
the blockchain network are matched at random intervals (every ten minutes on
average). As the consequence, there is no point in breaking into the ledger, as the
data are already public and do not include information about the identities of the
parties or their bank accounts. Even if one were able to break into the ledger data
and change a transaction or add a new one, matching of the ledger data between
nodes of the network would nullify such changes as invalid ledger transactions. At
the same time, the seller may notify the buyer (or parties may notify each other)
about the transaction and verify its existence from the public ledger. This
blockchain feature may superficially appear a significant departure from current
practice, where the identities of seller and buyer are known. In practice, a
traditional business transaction involves two parts: a public ledger entry about
the transaction and private messages between the parties about their identities,
with security keys for transaction data and location [36]. Combining these makes it
possible to bypass the trusted third party and to execute the transaction rapidly
at very low cost. The initiating party (seller) and the DSC document exchange need
to notify the other party about the existence and exchangeability of documents,
using public key infrastructure messaging. The initiator of the transaction
(seller) sends the other party (buyer) a piece of PKI software to decrypt and
encrypt the transaction identifier(s) attached to the documents exchanged. If the
receiving party forgets this single key security message, the transaction must be
repeated. This creates a new blockchain entry and a new security message. The
solution depends on combining public and private keys [34]. To conduct DSC
transactions and document exchange, parties must agree how that is to be done; this
is where smart contracts enter the picture [35]. According to Zsabo’s definition
from the 1990s, “a smart contract is computerized transaction protocol that
executes the terms of a contract. The general objectives of smart contract design
are to satisfy 4185 common contractual conditions (such as payment terms, liens,
confidentiality and even enforcement), minimize exceptions, both malicious
and accidental, and minimize the need for trusted intermediaries. Related economic
goals include lowering fraud loss, arbitration and enforcement costs, and other
transaction costs.” [1] Blockchain technology has made smart contracts possible for
single and multi-tranche transactions or document exchanges. In multi-tranche
transactions, each tranche can be separately dealt with as part (i.e., sub-
contract) of a smart contract. Clearly, there is a similarity between the concept
of smart contract and letter of credit and documentation collection trade finance
services. However, smart contracts, are extremely flexible and can be used to
automate DSC transactions at a very detailed level. For example, a smart contract
could be used to enable programmable transactions and machine-to-machine
communication in IoT; one such platform is IBM’s ADEPT (Autonomous Decentralized
Peer-To-Peer Telemetry) project. In general, requisite software components include
ledger (e.g., Enigma), security (PKI) and smart contract (e.g., Ethereum or ADEPT)
platforms, as well as software connectors [35]. Although some advocates of
blockchain technology strongly commend the ability to avoid trusted third party
intermediaries, this is not entirely necessary. Using a smart contract, the seller
and buyer can mandate a trusted intermediary to “supervise” the execution of a
transaction as in trade finance services. As part of a smart contract, the parties
may even agree that the trusted third party receives necessary security key(s) to
perform its role. Clearly, this is unnecessary in the context of direct exchange of
documents between two organizations, whether at physical or IoT document level. In
summary, blockchain technology appears capable of providing security and
flexibility at lower cost than traditional transactions. On the other hand,
blockchain technology cannot meet the need for standardization of electronic supply
chain documents; international document standards must be relied on for that
purpose, probably requiring their further development to ensure fully automated
transfer of documents between organizations. It should then be possible to use
blockchain to execute transactions and document exchange quickly, reliably and at
low cost. This synthesis of the literature suggests that cost- effective DSC
integration could be based on a cloud integration model, with ERP solutions based
on a private cloud and SME suppliers based on public cloud services, using
blockchain as an intermediate solution based on cloud integration. Our empirical
research addresses these requirements and functionalities in more detail.
About two decades ago, the internet emerged as an unprecedented and highly
disruptive technology that shook the foundations of many established businesses.
This upheaval proliferated throughout many supply chains (SCs) and led to the
restructuring of complete value networks (Yao et al., 2009; Dresneret al., 2001).
While the use of network technology to exchange data electronically (e.g. EDIFACT)
had existed long before, it was the widespread adoption of the internet for
commerce (both B2B and B2C) that heavily impacted supply chains (Lancioniet al.,
2003). The current blockchain development somewhat resembles those early days of
internet adoption, which was slow at first. The roots of the ARPANET, which was an
early packet switching network based on TCP/IP, date back to the end of the 1960s.
It was not until the commercial potential of the internet was fully realized in the
1990s that the World Wide Web yielded many user-friendly applications with both
positive and negative implications for businesses and individuals (Kambil, 1995).
With widespread adoption, the internet had a significant impact on supply chain
management by creating electronic marketplaces, helping to realize cost reductions,
increasing productivity, enabling e-procurement, integrating business processes and
allowing for the creation of customized services (Lancioni et al., 2003). It is now
the blockchain which offers similar promises, and a rigorous academic investigation
is needed into the extent to which it may help businesses to create value. The
general pattern of interest in the blockchain exhibits several years of slow
adoption followed by exponential growth starting at the end of 2015 and a spike of
the end of 2017, which was caused by massive public interest in Bitcoin (Google
Trends, 2018). Similar to the internet, the blockchain is not a single technology
but rather operates on a stack of technologies that includes the internet as an
infrastructure and uses the blockchain protocol for storing transaction records and
establishing consensus rules. Various applications such as smart contracts can be
operated on the application layer, yet the full range of potential applications is
still unclear (World Economic Forum, 2017). Proponents of the blockchain point out
that it enables the creation of a so-called “Internet of Value” (Deloitte, 2016),
through which property rights can be transferred online. This marks a key
development from the “Internet of Information”, in which users can share
information but cannot be prevented from creating infinitely many copies. The
ongoing discussions regarding the potential impact of the blockchain and lack of
research on this topic notwithstanding, many companies are investing huge sums of
money in blockchain- based solutions that bear the potential to revolutionize SCs.
According to Juniper Research, which conducted a study amongst 369 company
founders, executives, managers and IT experts, 76 per cent of respondents believe
that the blockchain could be “very useful” or “quite useful” for their company, 35
per cent expect significant internal disruptions and 51 per cent anticipate
significant disruptions to their partners or customers (Holden and Moar, 2017). An
IBM study reports that one-third of organizations are considering or actively
engaged with blockchain technology, with numbers varying by industry. Using input
from 2,965 C-suite executives the IBM study reports that early adopters
(“explorers”) are experiencing disruptions in their industry twice as often as so-
called “passives” (60 vs 30 per cent) and that explorers are much more likely to
disrupt a market or industry themselves by “changing the rules of the game” (21 vs
5 per cent) (IBM, 2017, p. 7). The whole blockchain market size is estimated to
grow from US$210.2m in 2016 to US$2,312.5m by 2021, at a compound annual growth
rate of 61.5 per cent (Markets and Markets, 2016). The academic relevance of the
blockchain has already been acknowledged for supply chain management (SCM) and
logistics (Kshetri, 2018). Furthermore, a substantial number of publications in
academic conferences and white papers are already being published which critically
investigate the blockchain (Romano and Schmid, 2017) and its potential applications
in the field of SCM/logistics (Hackius and Petersen, 2017; Oakley, 2017). For
academic research to be able to make impactful contributions that benefit the
industry, it is crucial that researchers apply their core competence of rigorous
research methodology to scrutinize blockchain and its potential implications on
SCM. The aim of this paper is threefold. First, following the suggestion from
MacInnis (2011) that conceptual contributions necessitate the identification,
delineation and differentiation of the particular entity or a domain, this paper
seeks to clearly define and delimit the domain occupied by the blockchain. Second,
to demonstrate the applicability of the blockchain within the field of
SCM/logistics, the basic functionality of the blockchain is explained to provide
some indication of the blockchain’s potential future impact on supply chains.
Third, the major goal of this paper is the development of a theoretical framework
for further research that allows the derivation of research questions which are
based on theory and enable methodologically rigorous research designs. The
framework we elaborate is based on four widely used general theories – principal
agent theory (PAT), transaction cost analysis (TCA), also called transaction cost
theory, resource- based view (RBV) and network theory (NT) (Halldorsson et al.,
2007) – which can be applied to explore the implications of the blockchain. The
combination of these four theories allows for the simultaneous consideration of
structural as well as managerial aspects from the perspective of new institutional
economics. This framework, which is made up of research questions pertaining to the
respective theories, allows for the further creation of middle-range theories and
propositions that can later be empirically tested and provides an initial
understanding of the “inner workings within key relationships” (Stank et al., 2017,
p. 6). It will therefore enable researchers to systematically investigate the
blockchain phenomenon and its potential implications from varying theoretical
standpoints. More specifically, it will help to answer two overarching research
questions: RQ1. How to structure a supply chain that incorporates the blockchain?
RQ2. How to manage a supply chain that incorporates the blockchain? Questions
regarding how to structure a supply chain (SC) are primarily addressed using PAT
and TCA, while questions about what is needed for managing such structures fall
under the domain of RBV and NT. This paper ends with a brief discussion of
theoretical and managerial implications and suggestions for future research. The
basic unit of a blockchain is a single transaction that involves one or more
entities. This could be a payment process but might as well be a transfer of
information. A cryptographic hash function, which takes an input and returns an
alphanumeric string of fixed length, is used to create so-called transaction hashes
that encode the contents of this transaction. These transaction hashes cannot be
used to recreate the original transaction and are visible in case the blockchain is
public. Several transactions are subsequently combined into one single block, which
in most cases is verified by so-called miners who deploy computing resources that
compete amongst each other to create the next block. If a block is successfully
validated, it is appended to the chain of previous blocks, hence the term
blockchain. A new block is connected with previous blocks in a way that makes it
increasingly hard to remove from the total chain. The whole process of validating
transactions and adding blocks in a public blockchain is fully distributed such
that no single controlling authority exists (Nakamoto, 2008; Raval, 2016).
Sophisticated procedures exist to circumvent fraud (e.g. double spending) which is
why it is sometimes written that the blockchain leads to trustless consensus. An
important characteristic of blockchains is their resistance to the modification of
data. Transactions on the blockchain cannot be later modified or removed because of
the linking of the blocks together. The longer the chain, the harder it is to make
modifications in previous blocks, and thus the higher the level of trust (Narayanan
et al., 2016). Impact of the blockchain on the supply chain Horst Treiblmaier
Supply Chain Management: An International Journal Volume 23 · Number 6 · 2018 ·
545–559 546 We thus define the blockchain as a digital, decentralized and
distributed ledger in which transactions are logged and added in chronological
order with the goal of creating permanent and tamper- proof records.
Decentralization refers to a situation whereby no single entity controls
transaction processing, while distribution relates to the computational work that
is divided between several computers. Distributed Ledger Technology (DLT) is a
broad term which describes all technologies that distribute information across
multiple sites, countries or institutions and which includes the blockchain. If a
dedicated group of owners or users exists, the ledger is permissioned and private
(e.g. a clearing or settlement network). If the usage is public, but the integrity
is maintained by trusted ledger owners, it is called a permissioned, public shared
ledger (e.g. a global financial transaction system). Finally, if the integrity is
ensured by the users themselves through untrusted consensus, this is called an
unpermissioned public shared ledger (e.g. a cryptocurrency such as Bitcoin) (UK
Government, 2016). 2.1 Industry adoption of the blockchain It was Bitcoin, a
cryptocurrency application of the blockchain,
which first drew public attention to this technology. In 2008, a seminal paper
entitled “Bitcoin: A Peer-to-Peer Electronic Cash System” was published under the
name of Satoshi Nakamoto, (Nakamoto, 2008), and in January 2009, the first open
source Bitcoin client was released with Nakamoto, himself being the first miner.
This name was later revealed to be a pseudonym and the actual inventor (or group of
inventors) of Bitcoin still remains unknown. In the years to follow, it was the
computer science and cryptography communities that were most occupied with the
technology, but attention broadened around 2010/2011 when Bitcoin started to take
off with exponential trade volumes and a dramatic price increase (Alabi, 2017).
Bitcoin has paved the way for a multitude of so-called Altcoins to follow, many of
which were actually derived (“forked”) from the original Bitcoin implementation.
Those Altcoins serve different purposes ranging from replacing fiat money to more
specific applications such as supplanting the use of the USA dollars in the
container shipping industry with tokens launched by open-source blockchain-based
platforms (MarEx, 2017). Current use cases go far beyond simply using the
blockchain as a technological platform for currencies and have now started to
include the implementation of so-called smart contracts, for example, on the
Ethereum platform. This was made possible by an extension of the basic
functionality of the blockchain that enabled the implementation of complex business
logic. Smart contracts are agreements between two or more contracting parties which
can be automatically enforced without any intermediaries. These agreements exist in
the form of software code on the blockchain platform, which ensures their autonomy
and self-executive nature based on predefined rules (Savelyev, 2017). The
blockchain is frequently labeled a “disruptive” technology, but, as Iansiti and
Lakhani (2017) point out, it would be more appropriate to call it a foundational
technology, as it can create new foundations for social and economic systems.
Although at present the full range of potential blockchain applications is still
unclear, many use cases have been suggested for various kinds of industries. A
notable example in manufacturing, SCM and logistics involves combining the internet
of things (IoT) and the blockchain. This combination has the potential, for
example, to enable connected vehicles that automatically communicate their current
status and smart locks that give access to real-world objects. Blockchain platforms
can also be used for SC tracking applications which keep a formal product registry
and are able to track possession of goods at different stages in the chain. Other
ideas include smart diagnostics, which will enable machines to monitor their state
and diagnose problems and smart contracts between manufacturers and vendors for the
procurement of supplies and service of machinery (Bahga and Madisetti, 2016).
Additionally, it would be possible to track the identity and reputation of
suppliers and to use smart contracts to automatically negotiate best prices in real
time while taking into account the seller’s reputation (Bahga and Madisetti, 2017).
On a more general level, Field (2017) predicts that the blockchain will lead to
improved SC visibility, SC optimization and better demand forecasting, as increased
transparency will make it possible to react in real time to unforeseen events. This
will also have a positive effect on inventory management. The general expectation
is that the blockchain will help to reduce fraud and errors, reduce transit and
shipping costs as well as waste and improve inventory management (JOC, 2017).
Blockchain is firstly invented by Satoshi Nakamoto in 2008 as a cryptocurrency
called “Bitcoin” [1]. It is proposed as a public ledger in a peer-to-peer (P2P)
distributed network. Despite an idea to replace the existing fiat currency,
blockchain is known as a great innovation to record and store data on a distributed
ledger with an effective protection mechanism. The blockchain technology provides a
novel approach to building trust in a trustless environment and thereby guarantees
data integrity, availability, traceability and security in data management [2].
Since the debut of Bitcoin, blockchain technology has experienced several rounds of
evolution in the past decade. At the beginning, most of the blockchain applications
are de- veloped as cryptocurrencies. The first milestone in blockchain evolution is
the introduction of Ethereum in 2014, where the concept of distributed contract has
been firstly applied into blockchain [3]. From then on, the blockchain is no longer
limited to recording financial transactions but a platform to execute arbitrary
code on distributed applications [4]. How- ever, the cryptocurrency is still a
compulsory component in Ethereum to maintain the trust and consensus among the dis-
tributed network. In December of 2015, the Linux Foundation announced the creation
of the Hyperledger project, which marks another significant evolution of blockchain
technology. The Hyperledger is advertised as an umbrella project of open source
blockchain and related tools. It supports multi- ple execution platforms and offers
developers a wide range of API choices in different programming languages [5]. In
Hyperledger projects, the cryptocurrency ceases to be a native and mandatory
component and instead the concept of “smart contract” becomes the core feature of
blockchain projects. The blockchain is placed into a context of pervasive
computing, and those distributed applications in blockchain system are enabled to
interact with the physical world through ubiquitous IoT devices [6]. Nowadays, a
blockchain application could be analyzed from 4 perspectives – (1) a distributed
ledger, (2) the cryptography behind, (3) the choice of consensus protocol and (4)
the smart contracts [7]. In blockchain, all the data is inserted into and
maintained by a public distributed ledger in form of transactions [8]. The ledger
consists of a series of blocks in irrevocable order and open to access by any
participants within the network. The transaction is the smallest unit to record
data in the blockchain system. Every a fixed number of transactions will be
enclosed into a block. Consensus is another key component of a blockchain system to
ensure the distributed network is able to eventually reach an agreement although
there are some malfunctioning parties. The consensus protocol is an algorithm
essentially designed to solve the Byzantine General Problem in a distributed
collaboration and it is critical to maintain the fairness and liveness of a
blockchain system [9]. The best known consen- sus protocols includes proof-of-work,
proof-of-stake, practical byzantine fault tolerance (PBFT), etc [7], [10].
Cryptography is used in blockchain to guarantee the data integrity and security.
Each transaction or block contains a unique digital signature, which allows an
arbitrary user to easily verify its authenticity [8]. Moreover, the integrity of a
block and all enclosed transactions is protected by a Merkle Delivery Performance &
Risk Analysis Report Staff Manual Input System Status Update Data Input GPS
Location Environmental Data Layer Transaction Layer Ledger Layer Block #n Timestamp
Block Hash Previous Block Hash Digital Signatures Transactions Digest (Merkle Tree
Root Hash) Critical Data Identification & Collection Business Intelligence Layer
Quantification of Performance Data Evaluation of Smart Delivery Performance
Contract Layer Finance & Accounting Manufacturing Strategic Planning Logistics
Operation Customer Relationships Supplier Liaison Transaction Series Number
Timestamp Digital Signatures of the Author Author ID (Staff or device) Data Payload
Raw Data Input Block Mining & Verification Business Analysis Smart Contract
Execution Transaction Creation BUSINESS PROCESSES BLOCKCHAIN FRAMEWORK Fig. 1: The
Layered Architecture of DelivChain and Corresponding Business Processes in Supply
Chain Management tree root hash. Any alteration in that data will result in a
completely different hash value. As each block contains the hash value of its
previous block, any modification made on the data within it will destroy all the
subsequent blocks on the same ledger. For those reasons, it makes an attacker
impossible to forge or tamper the data stored in the ledger [7]. Lastly, smart
contract could be understood as an event- driven program to be executed at the
moment a transaction is taking place. A smart contract exists as a reusable
compiled source code stored in the blockchain system which could be automatically
triggered to perform one or multiple contractual clauses at some specific
circumstances. A smart contract could be simple as digital signature validation or
financial balance checking. However, the complexity of smart contract grows rapidly
along with the evolution of blockchain from a cryptocurrency to an integrated
solution system in nowadays industry and business. II. BLOCKCHAIN FRAMEWORK In
supply chain management (SCM), the most commonly used metric for delivery
performance is so called “OTIF” (On- Time In-Full). The OTIF is a percentage value
calculated from the division of the number of deliveries on-time in- full over the
total number of planned deliveries. It transforms delivery performance from a
qualitative description to a quan- titative value and thereby facilitates the SCM
in evaluation of the overall business performance [11]. The classic OTIF model has
a limitation that it only enables business organi- zations to passively evaluate
its delivery performance at post- delivery stage. Moreover, the lack of
transparency and trust in traditional SCM makes business organizations difficult to
obtain the data from other parties in a timely manner, and consequently influences
the feasibility of real-time delivery performance evaluation. Under such
circumstance, we pro- posed a blockchain framework for SCM called “DelivChain”, and
we explained the assessment model for real-time delivery performance evaluation in
the previous literature [12]. DelivChain is designed as a consortium chain that
only allows access and contribution from permissioned users, which makes it
different with popular open access blockchain plat- forms like Bitcoin and
Ethereum. A DelivChain instance is initialized for a specific contract that
involves a group of organizations spanning over different stages in a supply chain.
The staff and all data input devices belonging to the partic- ipating organizations
are considered as users of DelivChain so that each of them is assigned to an
account to access and contribute to the ledger. Prior to joining in the network,
each user needs to generate a public and private key pair by following a commonly
agreed encryption algorithm, share its public key across the network and meanwhile
ensure the private key would not be known by any others. The network is usually led
and regulated by the final manufacturing party that integrates all materials and
semi-finished products into the final product for the customer delivery. The
functionality of DelivChain is implemented to capture all the data related to the
latest status or progress through- out the supply chain and finally transform those
raw data into analytics reports and profitable business intelligence. We show the
layered architecture of DelivChain framework and corresponding business processes
in F) Fig. 2: Merkle Tree Hash Root Algorithm of Transactions in a Block The data
input layer of DelivChain defines the source of raw input data that can be used in
subsequent layers. The raw data comes from both production and delivery happening
in the supply chain. It could be recorded manually by staff, or automatically by
the system. All the raw data captured are later formatted into a data structure
called “transaction” in the next layer. A transaction is usually created
immediately after a raw input data entity has been obtained, and then broadcast to
the network for verification. A DelivChain transaction instance contains one raw
input data entity and other relevant details includes the ID of input staff or
device, the tracking number, a timestamp and an optional note-to-user. All the
transactions which have passed the verification are distributed in the network and
sorted in chronological order by their timestamps. Smart contract is the core
functionality of DelivChain to bring benefits to stakeholders of the supply chain.
In Deliv- Chain, a smart contract is performed right after the submission of a new
transaction. The smart contract completes all role- based logical operations to
select useful raw data from the ledger and then transfer those real-time raw data
to a series of values which are properly formatted for business analytics. In
ledger layer, all the recently created transactions are placed in a distributed
pool across the network and wait for the next block miner to package all of them
into a new block and append into the ledger. As in Fig. 2, those transactions as-
sociated with one block are not saved as text but a hash digest generated by
calculating the root of a Merkle Tree. DelivChain is designed as a consortium
blockchain where a certain level of trust exists among the participants. For that
reason, it adopts Practical Byzantine Fault Tolerant algorithm as the consensus
protocol. The miner of next block could be elected from the active participants at
the moment of new block being appended to the ledger. Moreover, there could also be
an administrative
account randomly determines and appoints the miner of the next block. In this way,
a block, including all the transactions associated with it, becomes permanently
immutable after being appended into the distributed ledger. The business
intelligence layer at the top denotes the application deployed upon our DelivChain
system to perform business analytical tasks. It could be done purely automati-
cally by using a business analytics software, or mixture of systematic analytics
and manual analysis. The goal of this layer is to transform real-time quantitative
values that reflect the estimated delivery performance to a periodical qualitative
report written in business readable language and expression.
A supply chain (SC) is an essential aspect of every business that consists of down-
stream and upstream activities between various organizational stakeholders across
functional verticals, generating value through the efective and efcient delivery *
Satish Kumar skumar.dms@mnit.ac.in Extended author information available on the
last page of the article S. Sahoo et al. 1 3 of products (e.g., goods, services)
[1, 2]. However, SC activities can produce not just desired but also undesired
consequences [3, 4], raising concerns about its sus- tainability on a range of
economic, environmental, regulatory, and social issues [5, 6]. Furthermore,
customers may lose trust in a frm and stop investing in it if they feel that the
frm has not kept itself sufciently accountable to the preservation of cultural
diversity, the environment, and other societal expectations [2, 3, 7]. In this
regard, frms are increasingly engaging in sustainability practices and demanding
that their SC partners practice the same in order to satisfy their social
responsibility and sustain their competitiveness in the marketplace [4, 8, 9]. The
idea and practice of sustainable SC management (SSCM) has gained signif- cant
traction, with numerous frameworks developed, introduced, and implemented across
various sectors [10–13]. In essence, SSCM is characterized by the triple bottom
line (TBL) model that aims to accomplish an equilibrium between environ- mental
protection (planet), social responsibility (people), and economic prosperity
(proft) while managing the SC [5, 14, 15]. The agreement among SC partners and
their commitment that raw materials, products, procedures, and practices within the
SC adhere to sustainability requirements and regulatory compliance are crucial cri-
teria for SSCM [3, 4, 15]. In this regard, concerns have been raised as to whether
traditional information technology (IT) systems can facilitate and support the fow
of sustainability details across multi-echelon SC (upstream and downstream) for the
safe, transparent, and reliable authentication of product/process exchanges among
SC partners [1, 14]. Emergent information and communication technologies (ICTs)
have been touted as solutions to complex issues in SSCM, though the growing
penetration of ICTs in SC activities has also led to increasing operational
complexity for business across all sectors [16–19]. Specifcally, emergent ICTs are
undermining traditional workplace activities, forcing frms to change or modify SC
strategies in light of digitization [20, 21]. Given that ICTs are becoming
inextricably linked to SSCM [22], a new era of functional integration (e.g.,
enterprise resource planning system) involving block- chain tags that embed
accountability and transparency in end-to-end SC transactions between members in a
multi-tier SC is rapidly emerging [2, 23, 24]. A noteworthy exemplary is smart
contracts, which are programs recorded on a blockchain that get activated when
certain criteria are satisfed [9, 20]. Smart contracts are often used to automate
the implementation of an agreement with efciency and security, thereby instilling
confdence among transacting parties with no intermediary participation or time
wasted [12, 14]. Blockchain is a state-of-the-art technology emerging from the
Fourth Indus- trial Revolution (IR4.0) [25–28] that holds immense potential in the
digitization of SC [29, 30], with features such as data immutability, operational
consistency, record tracking, and a consensus mechanism that creates a trusted
business eco- system built on cryptographic evidence with fewer or no
intermediaries [1, 31]. Specifcally, blockchain operates on a highly secure and
live distributed ledger database that facilitates informational exchanges among SC
partners to allow them to track the assembly of products from the moment they are
procured until they reach the end user [28, 32, 33]. For example, the distribution
of COVID- 19 vaccines worldwide has been powered by blockchain, enabling
manufacturers 1 3 Blockchain for sustainable supply chain management: trends... to
proactively monitor its delivery and manage undesirable incidents (e.g., drug
recall), and instilling a sense of confdence among consumers in the traceability of
the vaccines that they receive [34, 35]. In this regard, blockchain empowers all
members in the SC with real-time visibility into SC activities, thereby optimizing
inventory management and improving response to SC issues [28, 36–38]. More
importantly, incorporating cutting-edge ICTs such as blockchain in SSCM can address
not only the barriers to accountability and traceability in SC [39], but also
promote coordination and improve transparency as SC members around the world become
more integrated through its use [32, 40, 41]. As policymakers and regulators
increase pressure on focal frms to take sus- tainability actions, focal frms must
direct each member in their SC to follow a common set of sustainability guidelines,
which must be traceable, validated, and authenticated by SC members within focal
frms’ network [42, 43]. Using cryp- tographic keys, blockchain is capable of
recording all transactions within a SC network, protecting it with a hash pointer
function in each block of transaction [43–46]. In other words, blockchain operates
on secured frameworks necessary for sustainability management within the SC network
to prevent data falsifcation by SC members or cyberattacks such as identity
impersonation and sybil attacks [47–49]. The distributed and irreversible ledger of
blockchains also renders trans- actions among SC partners and focal frm
irremovable, thereby providing a com- plete record where every activity within the
SC can be tracked for compliance in the long run [5, 50]. In this regard,
blockchain provides visibility and trans- parency while protecting privacy of SC
exchanges among SC partners and focal frms [51–53], thereby signifcantly
contributing to SSCM [33, 54, 55]. To gain a deep and high-quality understanding of
the application of blockchain for SSCM, this paper conducts a systematic literature
review of articles published in high-quality journals to unpack the distinctive
peculiarities characterizing high-quality research at the intersection of
blockchain and SSCM. The focus on “high-quality” is important given the increasing
importance of quality in schol- arly research and the rise of predatory journals
[43]. Though several reviews on blockchain and SC management avail, which were
mostly concerned about the present state of blockchain adoption and future
opportunities in SC [23, 48, 49, 56], and the technical advantages and challenges
of blockchain implementation in SC [33, 39, 47, 57], few reviews sought to explore
and link blockchain’s tech- nological capability to SC sustainability, albeit
scantly [39, 43, 56], with only a single review involved in an explicit
investigation, albeit narrowly to the circu- lar economy [33] (see Table 1).
Noteworthily, no review, to date, has attempted to take stock of the extant
literature relating to the application of blockchain for SSCM, which leaves
understanding of the utility of blockchain for sustainable practices in SC
incomplete. Similarly, no review has focused solely on articles published in high-
quality journals, which leaves readers of reviews susceptible to low-quality
insights of the feld [43]. This is especially concerning in instances where
multiple databases were used (see Table 1), which leaves greater room for errors
and inefciencies to manifest due to the large extent of duplication that emerges
from such a review strategy [58, 59].
In the past, most manufacturers produced almost everything in house. But now, high
pressure on the prices and the global competition forced them to focus on their
core competences like engineering and final assembly as original equipment
manufacturers thus outsourcing almost the whole manufacturing operations. These
higher levels of complexity are the result of dramatic changes in manufacturing and
distribution, including globalization and outsourcing. As a result, independent
firms manage different parts of global supply chains. Each firm in the supply chain
sets strategic and operational goals to maximize its own profit by using local
information such as cost structures, profit margins and forecasts. Even though
advances in information technology enable firms to collect, process, and share
information, firms may be reluctant to do so because of conflicting incentives.
Aligning incentives improves firms’ profits and sustains the use of information
technology. In this situation, it is important to build competitive supply chain.
To build it, Information in supply chains is one of the most valuable resources for
manufacturers. Due to the huge amount of produced and exchanged data needed for the
production activities, it is essential to identify the most useful ones and to
focus only on the "strategic transaction" leading to potential improvements at the
supply chain level. The coordination of information, as well as operations and
logistics optimization, has become increasingly more difficult with recent
increases in supply chain complexity. We need to discuss incentive problems to a
major risk imbalance such as capacity risk. Because of the imbalance, the impact of
capacity risk is more severe for a decentralized supply chain than for a vertically
integrated supply chain. To solve this problem, we propose a blockchain based
solution to address the double marginalization problem. The structure of the paper
is as follows; Section II describes the problem of supply chain; section III
proposes our solution, whereas section IV describes related works, and concluding
remarks are found in section V. II. PROBLEM OF SUPPLY CHAIN Demand forecasting is
becoming difficult because of short product life cycles and long production lead-
times. Then, supply chains face the risk of either excess capacity due to low
demand realization or lack of product availability. In a decentralized supply
chain, lack of proper capacity risk sharing increases the cost of capacity risk. To
deliver on time, the contract manufacturer secures capacity in advance of an
original equipment manufacturer order. For such a supply chain, if consumer demand
turns out to be high, both the contract manufacturer and the original equipment
manufacturer face upside capacity risk. However, if consumer demand turns out to be
low, only the contract manufacturer faces downside capacity risk. To reduce
capacity risk for each party depends on the contractual agreements. Under a
wholesale price contract, the original equipment manufacturer pays a wholesale
price w to the contract manufacturer for each unit ordered and sells the product to
the market at r per unit. The contract manufacturer secures capacity at a unit cost
of c, which could represent an equivalent annual cost of capacity. So, the contract
manufacturer's marginal profit w-c is less than the vertically integrated supply
chain's marginal profit r-c. This difference is known as double marginalization.
The contract manufacturer protects itself by securing less capacity than what would
be optimal for a vertically integrated supply chain. The original equipment
manufacturer may eliminate this adverse effect of decentralization by sharing the
contract manufacturer's upside 2017 IEEE 19th Conference on Business Informatics
2378-1971/17 $31.00 © 2017 IEEE DOI 10.1109/CBI.2017.56 140 capacity risk. Thus,
the contract manufacturer's marginal cost is c, whereas the original equipment
manufacturer's marginal cost is zero. To maximize profit of each party, the
original equipment manufacturer can agree to pay back p per unit of unused
capacity. This would reduce the contract manufacturer's marginal cost to c-p and
induce the contract manufacturer to build a higher capacity, thus aligning
incentives. We refer to this as a payback contract. The severity of the risk
depends on demand forecast information asymmetry. For example, under a wholesale
price contract, the original equipment manufacturer may influence the contract
manufacturer’s capacity decision by increasing the demand forecast. Increasing the
demand forecast does not change the original equipment manufacturer's behavior by
capacity risk but reduces its capacity risk exposure. Then, the contract
manufacturer does not consider forecast information by the original equipment
manufacturer to be credible. Under a wholesale price contract, lack of credible
forecast information sharing makes insufficient capacity when the original
equipment manufacturer places actual orders. Since forecast manipulation is
widespread in many industries, most manufacturers often submit "phantom orders" to
induce their suppliers to secure more capacity. Through observation of several
industries, the unit cost of capacity and the degree of forecast information
asymmetry are two primary drivers of capacity risk. There exist two types of
contracts that enable credible forecast information sharing. The first contract
type is a capacity reservation contract, which holds the original equipment
manufacturer accountable for its forecast information by requiring a fee for
reserving capacity. The contract manufacturer provides this contract as a menu of
fees for corresponding capacity level that the original equipment manufacturer may
reserve. The optimal reservation price has the characteristics of a quantity
discount. The second contract type is an advance purchase agreement, which provides
an option to the original equipment manufacturer to place firm orders at an advance
purchase price before the contract manufacturer secures capacity. This agreement
credibly signals the original equipment manufacturer’s forecast and induces the
contract manufacturer to secure the necessary capacity. Depending on the per unit
cost of capacity and the degree of forecast information asymmetry, original
equipment manufacturer and contract manufacturer can choose among structured
agreements that enable a mutually beneficial partnership. When degree of forecast
information asymmetry is middle level, capacity reservation contract is preferred.
And when degree of forecast information asymmetry is high and capacity expansion
cost is low, Advance purchase contract is preferred. When forecast information
between the parties is highly imbalanced and per unit cost of component capacity is
low, then these agreements allow that the advanced purchase contract generates
higher profits for both parties. However, supply chain is complicated by today's
global trading systems as shown at the top in Figure 1. International Global Supply
Chain Figure 1: Shared Transaction on Supply Chain Management Information sharing
of SCM Data cooperation of conventional SCM VMI VAN EDI POS Primary supplier
Secondary supplier Manufacturer Wholesaler Retail Store Primary supplier Secondary
supplier Manufacturer Wholesaler Retail Store 141 shipment cost is becoming
expensive and more variable than a domestic shipment. Then we need to improve the
contract types to reduce capacity risk for global supply chain. As shown at the
middle in Figure 1, there are many data exchange systems for Supply Chain
Management such as POS (Point of Sales), EDI (Electronic Data Exchange), VAN (Value
Added Network) and VMI (Vendor Managed inventory). These systems realize only
systematization of current applications and the individual optimization within the
company. The information about object (material, product etc.) is succeeded between
players like a baton relay on the supply chain. furthermore, peculiar judgment and
intention are added by each player. In other words, object is only one from
beginning to end of supply chain, but several kind of information will exist on
supply chain. Therefore communication takes more time and the freshness of the
information is declined. When it can keep the freshness of the information, Supply
chain earns the benefits as shown in figure 2. For supplier and manufacturer, it is
possible to adjust production with manufacturers because supplier can acquire
downstream information more from makers. Supplier will always take stock risks when
manufacturer produce product based on the predictive information from the maker as
before, but he can avoid it by information sharing. For Retailer, because supply
chain can share ordering from the situation of POS in real time, it is possible to
supply product to a store automatically. It can reduce supplement lead time and
loss of sale opportunity. The operation cost can decrease by omitting ordering
duties. Transport business can optimize both duties in the storage and arrangement
of the asset (person and truck) by sharing the plan information of the shipment at
an early stage. Collection, delivery and transportation on time make reduction of
transportation cost and improve distribution service level. We can explain another
benefit of information sharing as well. For example, In case of some components’
delay, manufacturer may order substitutes according to the estimated delay time.
But it is difficult to estimate the arrival time without finding material flow on
real time. As a result, it makes loss of sales opportunity and manufacturing cost.
In case of global supply chain, physical transport and logistics activities become
widespread. There are the parties concerned and each party grasps material flow
within its responsibility. It means shipping agent grasps their ship’s location
information
and land cargo carrier traces their truck’s position, but nobody can understand
the status of whole supply chain. There needs efforts to find material flow because
each agent provides only web service to trace each flow. To reduce inventory
carrying costs and improve supply chain efficiencies, “Visibility” of supply chain
is needed. Visibility of supply chain is defined as the openness of specific
information related to product orders and physical shipments, including transport
and logistics activities. Visibility makes reducing costs and improving operational
performance via multi-tiered global supply demand networks. It is necessary to
consider accurate analytics to reduce variability and eliminate dwell time as well.
To optimize trade lane performance, you also need accurate visibility into
individual order and shipment status. And it must realize flexible inventory
adjustment via global supply chain. For optimized inventory management, it is
necessary to find the status of inventory as "what, where and how many" on real
time. We need to discuss how to realize the situation.
It was found that the application of blockchain technol- ogy in various industrial
segments is nowadays a growing trend. This technology supports a decentralized
digital ledger system that provides trustworthy information exchange be- tween one
party and another. This trustworthy decentralized ledger system can be applied to
logistics and supply chains to provide mutual benefits. Supply and logistics chains
are becoming more digitalized day by day due to the advent of up-to-date
technologies. This technological support may en- sure dynamic supply chains, where
communications among the stakeholders and information exchange can be orches-
trated in a real-time environment. Such a real time commu- nication pattern enables
the logistics and supply chain to be more transparent to the end users (Addo-
Tenkorang et al., 2012; Addo-Tenkorang and Helo, 2016; Stevens and John- son,
2016). In order to achieve authentic and real time infor- mation exchange between
supply chain stakeholders, it is necessary to adopt useful technologies such as
sensor-ena- bling technology, the internet of things and cloud database systems
(Morten, 2018). The integration of these technolo- gies with the supply network
offers easy access to customer needs through effective sharing of the tracking
information of the product or service deliveries. Often this technological
integration typically causes high costs with slow diffusion (Korpela et al., 2017).
This study researches supply chain and its integration with blockchain technology.
This technol- ogy can support achievement of disruptive transformation in digital
supply chain networks via visibility. Continuous monitoring can be provided with
such visibility to ensure im- proved supply chain performance. Today’s supply
chains are inherently complex, consist- ing of multi-echelon, geographically
disjointed entities com- peting to serve consumers (Saberi et al., 2019).
Globaliza- tion, government policies, and diverse cultural and human behavior make
the evaluating of information and managing risk in supply chains very difficult
(Ivanov et al., 2018). Bet- ter information sharing and verifiability can overcome
such risk, which is caused by inefficient transactions, fraud, pil- ferage, and
poorly performing supply chain management. Traditional transactions of luxury and
high value items mainly rely on paper certificates and receipts, which can eas- ily
be lost or altered. In fact, lack of transparency in the sup- ply value of any item
prevents supply chain entities and cus- tomers from verifying and validating the
true value of that item. The cost associated with handling such transparency
reliably also complicates the managing of traceability within the supply chain.
These issues create questions as to whether the existing information systems can
support getting the re- quired information for the timely provenance of goods and
services in a secure manner, and in a way, which is clear and robust enough to
trust (Saberi et al., 2019). The solution to Sivula, et al.: Requirements for
Blockchain Technology in Supply Chain Management: An Exploratory Case Study 40
Operations and Supply Chain Management 14(1) pp. 39 – 50 © 2021 these complicated
problems can be ensured through improv- ing supply chain transparency, security,
durability, and pro- cess integrity. Blockchain technology may be the answer to
this problem. The concept of blockchain, which is an appli- cation of new
technological developments and applications, supports these improvement objectives
in being more organ- izationally, technologically, and economically feasible (Swan,
2015; Abeyratne and Monfared, 2016). Blockchain technology provides a decentralized
“trust- less” database that permits global-scale transactions and de-
centralization amongst various supply chain parties (Crosby et al., 2016; Helo and
Shamsuzzoha, 2020) and it is making a substantial impact in logistics and supply
chain manage- ment. Nowadays supply chain managers are starting to rec- ognize the
possibilities of this new technology which has high potential to increase
transparency in the supply chain (Francisco and Swanson, 2018). In meeting
consumers’ de- mands for supply chain transparency, the arrival of this tech-
nology seems timely (Francisco and Swanson, 2018). In a supply chain context,
transparency refers to the information available to companies related to
operationalizing the origins of raw materials and providing the context for final
products or services (Skilton and Robinson, 2009). There are several use cases that
exemplify the possibilities of and concerns with blockchain technology. For
instance, the container man- agement of the Maersk company and its partnership with
IBM is conducted cost effectively through blockchains (Groenfeldt, 2017). The
management of its sea food supply chain with transparency and the validity of
sustainable prac- tices has been conducted by Provence, a blockchain service
provider (Steiner and Baker, 2015). The examples show the potential uses of
blockchain have been discussed extensively in the literature in terms of the issues
associated with envi- ronmental, economic or social aspects. In the case of supply
chain management, it is necessary to maintain supplier-customer relationships,
process syn- chronization and data harmonization in a complex, dynamic network that
is susceptible to vulnerabilities in a global en- vironment (Wamba et al., 2017).
In order to ensure such a relationship, supply chain stakeholders need to consider
real- time communication, collaboration, trust and transparency, which yield
mutually beneficial outcomes and competitive advantage. Today’s advancement of
technologies enables faster communication amongst supply chain stakeholders through
big data (Addo-Tenkorang and Helo, 2016; Huang and Handfield, 2015; Kache and
Seuring, 2017; Barbosa et al., 2018), the internet of things (IoT) (Qiu et al.,
2015; Bag et al., 2018; Papetti et al., 2019; Usama & Ramish, 2020) and blockchain
(Mainelli and Milne, 2016; Jordan and Ras- mussen, 2018; Kshetri, 2018), amongst
others. This study particularly focuses on the application possibility of block-
chain technology to improve global logistics and supply chain network. To maintain
supply chain integrity, authenti- cation and trust, stakeholders are advancing
toward the adop- tion, development and implementation of blockchain tech- nology as
a backbone of their business operations. Blockchain is a technology, which allows
digital infor- mation to be distributed and it exists as a shared database, which
is not stored in any single location but remains truly public and easily verifiable
(Nakamoto, 2008). Blockchain can be applied successfully to execute supply chain
manage- ment more efficiently. From the three studied cases, it is no- ticed that
there are further opportunities and the potential to apply blockchain in supply
chain management. This technol- ogy also provides added benefits to different types
of pro- jects with respect to the transparency and visibility in the to- tal value
chain. Considering the unique features of block- chain technology, the objectives
of this study can be formu- lated as: 1. To analyze the key technical and economic
aspects of blockchain 2. To identify the barriers and obstacles to blockchain ac-
ceptance in the global marketplace 3. To harness the implementation possibility of
block- chain in supply chain management The paper is organized as follows. Section
2 outlines the literature review related to the basic architecture of blockchain
and its application to supply chain management. Research methodology is highlighted
in Section 3, while three use cases of blockchain in the supply chain are illus-
trated in Section 4, along with accompanied opportunities and challenges including
various managerial aspects of ap- plying blockchain in the supply chain. The
overall research findings are discussed and concluded with future research di-
rections in Section 5. 2. LITERATURE REVIEW The research background and associated
literature are reviewed based on basic concept of blockchain, its architec- ture,
and its application in supply chain. During this literature research, focus was
given on the operation strategy of block- chain and its suitability to manage
global supply chain with respect to transparency, authenticity and trust. During
litera- ture research several keywords were used such as block- chain, its
architecture, blockchain in supply chain, technical and economic aspects of
blockchain and smart contract. Such keywords help to identify suitable and recent
references on blockchain technology and its progress so far. Blockchain is a new
technological revolution, basically a growing list of records, called “blocks”,
which are con- nected by cryptography (Narayanan et al., 2016). Bitcoin, a first
digital cryptocurrency, was first introduced by using blockchain technology in 2008
(Batwa & Norrman, 2020). This distributed ledger system is typically managed by a
peer-to-peer network collectively adhering to a protocol. It consists of blocks of
chain, which are marked with a timestamp and are literally tamper-proof (Nguyen,
2016). Each block is considered as a single database, which is then publicly
distributed (Sadouskaya, 2017). There are three types of blockchain namely, public,
pri- vate and hybrid. The public blockchain allows anyone to par- ticipate as
users, miners, developers or community members, while in private one, users need
permission to join the net- works. The hybrid blockchain combines the privacy
benefits of a permissioned and private blockchain with the security and
transparency benefits of a public blockchain. This kind of blockchain increases the
security of transactions and of- fers benefit from the combined hash-power being
applied to the public chains (Bussmann, 2017; Smith, 2020). 2.1 Basic Architecture
of Blockchain
Blockchain technology is considered as a distributed ledger system, which is the
culmination of a decade’s work by “an elite group of computer scientists,
cryptographers, and mathematicians” (Gupta, 2019). In such a distributed Sivula, et
al.: Requirements for Blockchain Technology in Supply Chain Management: An
Exploratory Case Study Operations and Supply Chain Management 14(1) pp. 39 – 50 ©
2021 41 ledger system, each party initiates a transaction process by creating a
block, which is then verified by multiple comput- ers within the distributed
network. This verified block then is considered as the starting point for the
consecutive blocks within a chain, and its contents are passed from party to party
in the chain. Necessary information within the block is stored across the
blockchain in multiple copies, thereby creating an indestructible single unique
record. The data or information stored within a block generally can never later be
changed or falsified, until and unless by changing or falsifying every sin- gle
copy of the ledger distributed across the net, which is ef- fectively impossible
(Apte and Petrovsky, 2016). The architecture of blockchain consists of a sequence
of interconnected blocks. The basic idea of the architecture is a connected series
of blocks using the hash of previous blocks that ensure the integrity of the
blocks. Figure 1 pre- sents an example of blockchain architecture. From Figure 1,
it is noticed that each block consists of a block header and transaction counter.
Each block header is composed of a block version, Merkle tree root hash, time
stamp, nBits, nonce and parent block hash. Figure 1 Basic architecture of the
blockchain (Zheng et al., 2017) The blockchain is a digital ledger that stores
various transaction information publicly after verifies the transaction by nodes.
Figure 1 visualizes the basic structure of the blockchain technology. Each of the
transaction within the blockchain is validated by the nodes. All the transactions
are secured by using the hash function, which is cryptograph- ically protected. Any
transaction is connected by its previous transaction through its hash value (Tama
et al., 2017). In this way, transactions are securely integrated with each other
and maintains its authenticity. Due to such security pattern, once a transaction is
added to the blockchain no one can modify or alter it. In addition to such security
of transaction, block- chain also uses some of the concepts such as proof of
concept and proof of work as well as proof of stake concept to vali- date the
transaction (Mohanta et al., 2018). 2.2. Application of Blockchain in Supply Chain
Management Delivering and producing goods involve several points and, therefore,
have several stages and locations. Several challenges exist in supply chain
networks related, for in- stance, transparency and performance monitoring. These
can cause several problems like misunderstanding between or- ganizations (Burgess
et al., 2006; Williams, 2015). Tracking of the products and goods are important for
customers and these problems can be a major issue, for instance, in quality and
condition monitoring (Dickson, 2016). Quality manage- ment is crucial in supply
chains (Shaiq et al., 2020). Fast data distribution between different organizations
creates transpar- ency between organizations and, therefore, improve the effi-
ciency in the supply chain networks. The utilization of block- chain provides
transparency and security for logistics, which have been seen a good solution
(Earls, 2016). The blockchain technology provides an excellent traceability
features for lo- gistics (e.g. goods and different items) easily even with sim- ple
applications. Product and service tracking is possible in several ways. All
organizations in supply chain can partici- pate due the technological nature of
blockchain. Security is as well in an excellent level because of blockchain’s immu-
table technology. A technology like blockchain further facilitates the achieving of
real-time granular visibility, ensures trust, and enforces security using a
chronological order of transactions verified by a unique spendable crypto-digital
currency, such as bitcoin. Figure 2 and Figure 3 display traditional and
blockchain-based supply chain management respectively (adapted from Saberi et al.,
2019). From Figure 2, it is seen that in traditional supply chain networks, the
process starts with materials suppliers, which is followed by the manufac- turer,
distributors, wholesalers, retailers and consumers. The information flow transmits
sequentially from materials sup- pliers to consumers. Figure 2 Traditional supply
chain management Materials suppliers Manufacturer Distributors Wholesalers
Retailers Consumers Sivula, et al.: Requirements for Blockchain Technology in
Supply Chain Management: An Exploratory Case Study 42 Operations and Supply Chain
Management 14(1) pp. 39 – 50 © 2021 Figure 3 Blockchain-based supply chain
management (adapted from Saberi et al., 2019) In the case of a blockchain-based
supply chain network, there are six major entities playing a role which are not
seen in the traditional supply chain network. The six entities are registration,
maintaining standard, visualization of product information, authentication,
transfer of ownership and prod- uct delivery with quality certifications. The
registration pro- cess provides unique identifications to each of the actors in the
supply chain, while maintaining standard entity ensures the standard of the
supplied products following blockchain policies and technical requirements. All
necessary infor- mation of the supplied products is visualized with the neces- sary
authentication process as seen in Figure 3. In a block- chain-based supply chain,
ownerships are transferred be- tween supply chain actors, including manufacturers,
retailers and consumers (Saberi et al., 2019). Final products are de- livered to
the consumers with quality certifications as pro- vided by the standard
organizations (Steiner and Baker, 2015). In blockchain-based supply chains every
product may have a digital identification to ensure that all relevant supply chain
actors can have direct product profile access. This product identification process
provides the necessary secu- rity measures with the correct digital keys to have
access to a product. This digital key works as an information tag at- tached with a
product, which represents an identifier that links physical products to their
virtual identity in the block- chain (Abeyratne and Monfared, 2016). In order to
access a product’s profile and to transfer or sell a product to another actor in
the supply chain, there may be a need to sign a digital contract between both
actors. This digital sign is managed by an entity known as a smart contract, which
ensures the nec- essary permission following agreements and consensus among supply
chain actors. Smart contracts help to maintain interaction amongst the supply chain
actors and within the system. Smart contracts support network data sharing be-
tween supply chain actors and continuous process improve- ment. In a blockchain-
based supply chain, smart contract gov- ernance and process rules can manage the
supply chain ac- tors by providing certification and approval. Such certifica- tion
and approval allow supply chain actors to have access and to execute necessary
processes, which are mainly de- pendent on the supply chain type. The supply chain
actors cannot change the rules required for certification and ap- proval without
some form of consensus process (Maurer, 2017). In addition to supply chains,
applications of smart contracts are seen in the procurement segment. In the case of
purchasing, two trading partners can legally update the auto- mated record of what
goods were bought, sold, and delivered in real-time through a smart contract. A
smart contract has great potential in terms of the continuous improvement of supply
chain processes, design and real-time implications, beyond just product delivery
and governance concerns (Sa- beri et al., 2019).
The continuous emergence of counterfeit products and product quality scandals has
revealed the importance of quality management from a supply chain perspective.
According to "The Economic Daily", China's manufacturing industry suffers a direct
loss of over 170 billion RMB yearly from quality problems in supply chains [1].
There is also an indirect loss of more than 1 trillion RMB due to their negative
influences on downstream supply chains, including loss of market share and costs on
pollution controls. How to solve the problems of products qualities in supply
chains has become a key issue in acquiring manufacturing power from strategy
implementation in China, and has drawn attention of scholars in various fields
recently. Although there have been many related research projects and studies, to
resolve the series of problems in supply chain quality management arising from the
lack of trust is still a difficult problem for the technology used nowadays. The
root cause is that the traditional centralized trust mechanism cannot completely
solve these three challenges: 1) the self-interests of the supply chain members [2]
[3]; 2) the information asymmetry in the production process [4][5][6][7]; 3) the
cost of quality testing and technical limitations [8][9] [10][11]. The emergence of
blockchain technology has brought innovative possibilities to Supply Chain Quality
Management (SCQI). In a Bitcoin system, blockchain demonstrates the characteristics
such as trust machine [12], decentralized governance [13], traceable transactions
[14]. The applications have been extended from financial services to supply chain
management, intelligent manufacturing and Internet of Things (IoT), etc. How to use
the technology of blockchain to solve the problems caused by distrust in supply
chain quality management and to achieve the intelligent management of products
qualities has become a feasible research proposition. Firstly, blockchain is a kind
of new Information Technologies (IT) used in supply chain quality management. It
solves the issues of distrust on the basis of unchanged information and traceable
records through standardized norms and agreements. By setting up automatic
executions of quality management contracts, it is possible to develop an auto-run
intelligent system. Secondly, blockchain has brought a new mechanism and ways of
thinking to supply chain quality management. Blockchain technology adopts the
governance model of human society in IT systems, and further develops the
traditional centralized system to a multi-centered or decentralized system that
enables different interest groups to share power in the same IT system. This system
also improves the qualities of products and services in supply chains by contracts.
These two aspects of IT and management mechanisms are exactly the two domains in
which management science and information management systems are exploring in supply
chain quality management, and also interprets the value of blockchain in the
research of this field. In order to improve supply chain quality management with
the blockchain technology, this study proposes the framework and system
architecture for blockchain-based supply chain quality management. The rest of the
paper is organized as follows: we introduce the framework in Section 2, and use a
case to illustrate the framework in Section 3. We conclude the target contributions
and future research directions in the final section.In this section, we propose a
blockchain-based SCQI framework. Based on blockchain technology [15], a new supply
chain system can be built in which information sharing and quality control are
assured. Apart from enterprises on the supply chain, this framework consists of
blockchain, smart contracts and various IoT sensors. blockchain provides safe
distributed ledger with various quality information, assets information, logistics
information and transaction information. Smart contracts bring privacy protection,
automation and intelligence into this system, while IoT sensors gather various data
from the real world. The framework and the corresponding system architecture are
composed of four layers based on different functions, as seen in Figure 1. The
bottom layer is IoT Sensor Layer. In this layer, GPS is used to locate the products
in logistics process. Quality information, assets information and transaction
information is recorded with RFID technology. Considering the relatively higher
cost of RFID, barcode can be used alternatively in some processes when the standard
of accuracy is not very strictly required and the kinds of data is not a lot. In
addition, various sensors will be used to gather the information about temperature,
vibration, humidity and so on [16][17]. Last but not least, considering many
enterprises and numerically controlled machines have their own information systems,
it is more efficient to develop some interfaces for acquiring information from
these different information systems [18]. The second layer is Data Layer, including
blockchain and safe distributed ledger. In blockchain, there are four kinds of
data: quality data, logistics data, assets data and transaction data. Furthermore,
all the enterprises keep a copy of data on supply chain including supplier,
manufacturer, logistic operator, retailer and financial institutes. With these data
or information, smart contracts are used to execute quality control and improve the
efficiency of supply chain. The third layer is Contract Layer. Only data sharing is
not enough. Data gathering in the layers above not only facilitate data sharing but
also aims to assist quality control and improve efficiency of supply chain. The
first concern about the data sharing may be the privacy issues. Privacy issues need
to be considered for data sharing. Because competitive enterprises are operating on
the same supply chain, some information needs to keep confidential for their own
competitive advantages. Therefore, digital identity is used to control the access
authority to the data. With the real time data about qualities, smart contracts can
execute real time quality monitoring and control. With the logistics data, smart
contracts are able to plan logistics automatically. Moreover, commercial contracts
can execute automatically and efficiently with transaction data and smart
contracts. Smart contracts also facilitate requirements of customers transmit from
retailers to manufacturers and then to suppliers. There are many functions that
smart contracts can achieve with the data in blockchain. For example, with the
retailers' transaction data, smart contracts analyze the ultimate customers'
demands automatically and provide suggestions about purchasing and producing to
manufacturers and suppliers. The top layer is Business Layer. This lay includes
various business activities in enterprises. Each enterprise on supply chain is able
to control and manage the products qualities with the support of blockchain and
smart contracts. They also make decisions on purchasing and manufacturing
activities based on the suggestions provided by the smart Digital Identity Real
Time Quality Monitoring & Control Logistics Planning Contract Automation End
Customer Demand Analysis & Feedback Supplier Manufacturer Logistic Operator
Retailer Financial Institutions Data Layer Contract Layer Business Layer Quality
Data Logistics Data Transaction Data Assets Data Product, Time, Temperature,
Route ... Physical Quality, Service Quality Date, Money, Participants, Contract ...
Product, Equipment, Capital ... IOT Sensor Layer GPS RFID Sensor Barcode Other IS
Logistics Process Selling Process Manufacture & Quality Inspection Process Figure
1. system architecture diagram 173 contracts. In this way, efficiency and profits
are improved in these enterprises.
Today, the process of supply involves multitiered suppliers, manufacturing sites,
contract manufacturers, distributor warehouses, regional, national and local
distribution centers, and scattered inventory across third-party logistics
providers (3PLs). The cost of inventory is a concern for all industries [16]. With
the advent of omnichannel distribution, the marketing, sales, and dis- tribution of
products become extremely complex and involve higher num- ber of business partners
and associates. This results in poor supply visibility. To adopt lean philosophies
such as zero inventory, just-in-time (JIT) manufacturing, and single piece flow,
inventory must always be available in the required quantity. This mandates deep
trust among partners and the assurance of product availability at the right time
and in the correct quan- tity. Failing to meet these demands can result in tough
penalties. By ensuring supply commitments and supply visibility across
manufacturing sites and contract manufacturers, companies can drive supply chain
transparency, thereby reducing administrative effort, cost, and counterfeit
products. Open and permissioned blockchains can enable these high level of supply
visibility. As there are limited stakeholders to share the supply data, a per-
missioned blockchain is more suitable. In a permissioned blockchain, all
stakeholders can be part of the node that shares information when needed. Such data
sharing can be set up and managed through smart contracts where the required node
shares relevant information in adequate frequency. The best way of sharing
information is by connecting the transactional ERP sys- tem to the blockchain.
Adopting blockchain for supply visibility through the connected ERP system delivers
significant benefits such as: (a) Reduced counterfeiting: Providing product
provenance details helps partners trace the origin of the product, its ingredients,
ownership, and storage details, thereby eliminating counterfeit products. (b)
Enabling digital: Product details and its lifecycle are stored within the system in
a digital format, eliminating product ambiguity. (c) Improved sourcing: While
implementing blockchain among all part- ners will be challenging, particularly for
multiple and multilayer sup- pliers, it will drive long-term benefits of
transparency, sustained growth, and accountable and responsible sourcing. (d)
Faster operations: Transparent auditing improves compliance with governmental
regulations and accelerates customs clearance. Blockchain will eliminate the need
to file for country of origin reports and other customs/border clearance papers.
All these information will be readily 14 Arnab Banerjee ARTICLE IN PRESS available
in blockchain for instant access by governmental agencies. An example here is the
Port of Rotterdam Authority in Netherlands that has launched a field lab to explore
blockchain technology. The idea is to use blockchain for customs scanning to reduce
vessel turnaround time in the port. (e) Higher growth: Transparency among all
stakeholders and partners will drive sustained growth with immutable, secure, and
mutual data exchange. (f ) Faster supply availability: As higher number of
enterprise and supply generating systems like ERP, MES, etc., get connected to
blockchain, data availability becomes more real time and transparent. Thus,
blockchain can provide macro- as well as microvisibility across mul- tiple
suppliers from agri produce goods to high-tech manufacturing. It can also integrate
with ERP to provide seamless data exchange and stakeholder interactions.
1.1 Traceability and its effect on Supply chain Traceability can be defined as
(Shields, 2014) the ability to trace the history, location, and distribution of
products, parts, and materials by means of the documented record identification.
Traceability can be explained in many ways, but they all refer to a process by
which a product moves from its original raw material extraction and production
phase to the final customer. A system is required to maintain records and follow
the pathway as raw materials, parts, and products come from suppliers and are
processed and ultimately distributed as end products to ensure traceability in the
supply chain. Traceability not only provides information on the components of
products, parts, and materials, but it also information on transformations
throughout the value chain. As discussed by (Opara, 2003) traceability contributes
to the demonstration of the transparency of the supply chain through the use of
verifiable records and labeling. Traceability increases the financial worth of the
overall quality management system by acting as a linkage for identifying, verifying
and isolating sources of disagreement to agreed standards and customer
expectations. Traceability has grown its importance as the global supply chain is
evolving into a tangled web as companies are expanding to meet the increasing
demand of the population (Fisher, 2015). Because of this tangled web of the global
supply chain, it has become very difficult to trace the origins and history of the
product in the supply chain. When it comes to food safety, the likelihood of safety
problems is rare but they do occur; here public health, life and the livelihood of
the companies are at stake. Proceedings of the International Conference on
Industrial Engineering and Operations Management Washington DC, USA, September 27-
29, 2018 2 © IEOM Society International One good example to showcase the importance
of traceability in the supply chain would be the 2006 spinach outbreak that
occurred in North America. In September 2006 there was a foodborne illness caused
by E. coli bacteria found in uncooked spinach. E. coli is some potentially deadly
bacteria which causes dehydration and diarrhea. This outbreak affected 26 states
causing illness to 200 people including three deaths and 31 kidney failures.
Washing the spinach was not a solution because the bacteria was not only outside
the spinach but also inside that is absorbed through the roots. So, the U.S. food
administration called a ban on eating fresh spinach or any product which contains
fresh spinach (Calvin, 2007). This caused a huge breakdown in the spinach supply
chain as they could not trace the origins and history of the spinach which was
infected by the E. coli bacteria. It took the U.S. food administration two months
to trace the source of the infected spinach which was one farm in San Benito,
California. If there was better traceability in spinach supply chain it would not
have taken two months for the food administration to locate the source of the
infected spinach, also there would not have been a need to ban spinach all over the
U.S. 1.2 Blockchain Technology The concept of blockchain technology emerged after
the innovation of Bitcoin in 2008 by Satoshi Nakamoto (Nakamoto, 2008). Bitcoin is
an electronic cash that allows online transactions from one party to another
without any involvement of any third party such as banks. The transactions take
place through a network generally called a blockchain network. Basically, a
blockchain network provides a storage space for data, which are secured, immutable
and decentralized (Xu et al., 2016). This means that the database can only be
entered or updated but cannot be edited once it gets into the blockchain system.
The data is only updated in the system if there is a consensus between the whole
responsible network. The problem of double-spend is eliminated by the blockchain
technology with the help of some cryptographic key (Pilkington, 2016). Each
responsible people at the nodes of the blockchain network is provided with a
private key and the public key is shared with all the other person. As soon as the
future owner of cryptocurrency (digital tokens or digital representation of some
other asset) shares his/her public key to the original owner, the transaction gets
initiated. This transaction gets packaged with other awaiting transactions which in
turn creates a “Block”. Now there is a possibility that many blocks are created at
the same time by different nodes. To decide which block should be the next block in
the blockchain a mathematical puzzle was introduced, which is also known as “proof
of work” (Crosby, Pattanayak, Verma, & Kalyanaraman, 2016). After the position of
the “block” is decided, it is further sent forward in the blockchain system’s
network of participating computers which evaluates the transactions and determines
the validity of the database through mathematical calculations. This stage is
called the verification stage where evaluation is done based on agreed-upon rules
when consensus has been achieved. The verified blocks are then time-stamped with a
cryptographic hash, which also has a reference to the previous block’s hash. This
forms an immutable “chain” of records. After all of these stages, the transaction
is finished. Figure 1. Shows the basic flow diagram of simple blockchain network.
Figure 1. Flow diagram of the blockchain. The main purpose of the blockchain, which
evolved with bitcoin, was to provide a secure network in order to transfer the
digital currency. But, now because of the benefits, like immutability of data,
transparency, traceability and many more, blockchain technology has started to
revolutionize commerce and industry. Blockchain technology is still believed to be
in its novel stage of evolution and not much research has been done in this field.
It will take several years for the potential users of this technology to completely
rely on it and make full use of it. Marco Iansiti and Karim R. Lakhani (Iansiti &
Lakhani, 2017) did a very good job in explaining the phases of technology adoption
by giving an example of the phases involved in the adoption of Transmission control
protocol/Internet Protocol, which were the foundation of the internet. After
getting introduced in 1972, it took more than 30 years for TCP/IP to pass through
all the adoption phases and reshape the economy. The recent applications of
blockchains can be seen in healthcare (Mettler, 2016), banking sectors (Guo &
Liang, 2016) and supply chain (Abeyratne & Monfared, 2016). This paper will fully
focus on the application of blockchain in the supply chain. Transaction Block
Verification Execution Hash Proceedings of the International Conference on
Industrial Engineering and Operations Management Washington DC, USA, September 27-
29, 2018 3 © IEOM Society International 1.3 Blockchain for Traceability in Supply
chain In the current world of constant competition, it is essential for companies
to know about the recent technological innovations and trends. Incorporating modern
technologies in the supply chain can create better visibility, thereby helping
companies to have better control over their business. There is a high need for the
supply chain to be flexible, innovative and transparent in order to keep up with
the technological trends and stay competitive in the market. There is no denying
the fact that, the technology has the potential to simplify the supply chain and to
help the business function more efficiently, but to identify and appropriately
choose the correct technology is very important. We know that the main aim of any
business or company is to enhance customer satisfaction and retention, which can
only be achieved if their supply chain is efficient and stable). As any product has
a life cycle (i.e. introduction stage, growth stage, maturity stage and the decline
stage, similarly, technology also has a life cycle. According to Ralph Schneider-
Maul (Schneider-Maul, October 2017), it is Innovation Trigger : In this phase the
technology gets introduced into the market with very high expectations, Peak of
Inflated Expectation: Here the expectations reaches the maximum and starts to
decrease as the first hype settles, Trough of Disillusionment: Further decline in
the expectations with some negative consequences, Slope of Enlightenment: Rise in
expectation again due to evolution of the trend, and Plateau of Productivity: The
trend becomes mainstream and many companies starts using them. The author termed
this as the Cap Gemini consulting’s hype cycle for supply chain technologies. He
also talked about the four trend categories i.e. new, fast-moving, mature and out,
which is somewhat similar to the product lifecycle and gave an example of
blockchain technology being in the mature trend, where the technology gets
acknowledged in the market and can be considered mainstream. According to
McDermott, (Patrick, 2017), the three main issues in the supply chain are; process
optimization, data visibility, and demand management. These issues can be solved by
integrating blockchain in the supply chain. Implementing blockchain can solve the
main problem of data visibility. There are two most important factors that build a
strong bond in the supply chain, they are transparency and trust and blockchain can
be used as an intermediary for building such bonds. Financial services companies
started to show interest in this technology ever since IBM launched its blockchain
hyper ledger (Brakeville & Perepa, 2016), which is a Linux based open source to
create a blockchain for business –to- business and business- to- customer
transactions. Blockchain technology can provide with a traceability system in order
to track the products across a complex supply chain. By tracking the product, it
means tracing their origin until the point it gets
delivered to the customer. After these scandals, people have really become very
concerned about the products that they buy from the stores and are demanding for a
system in order to know about the originality of the product. In response to this
many companies have started to test the blockchain technology in order to track the
products. (The food institute, 2017) Walmart partnered with IBM to test the
shipments with pallets of mangoes tagged with numeric identifiers. At each
checkpoint, the status of the pallets was updated, right from the farmer to the
store. Upon checking the shipment, it was possible to know about the day the
mangoes were harvested, the location, the pests used in order to grow these mangoes
and much more till the date the shipment arrived at the Walmart store. (Manilla
Bulletin, 2018) Even Logistics companies like MAERSK with the support of IBM have
started testing blockchain to track its shipments and coordinate with customs
officials (Lu & Xu, 2017). OriginChain is a platform which employs a geographically
distributed private blockchain at the traceability service provider company. The
main aim is to create a trustworthy traceability platform that covers not only the
organizations but also includes government-certified labs, big suppliers, and
retailers having a long-term relationship with the company. There is much more such
research and testing going on related to the application of blockchain in the
supply chain where traceability is the prime focus. Figure 2. Below shows the basic
flow diagram of a supply chain network and the need for traceability at each node
i.e. either from supplier to the customer or from customer to the supplier. In the
next section, we will highlight a few case studies and the importance of
traceability in them. Figure 2. Traceability in Blockchain Manufacture Distributer
Retailer Customers Traceability Traceability Supply Proceedings of the
International Conference on Industrial Engineering and Operations Management
Washington DC, USA, September 27-29, 2018 4 © IEOM Society International Blockchain
provides more people into supply chain network in a hassle free way with its
intelligent business processes as result of its distributed trust and transparency,
said Sanjay Almeida, senior vice president and chief product officer of Network
Solutions for SAP (Scott, 2017). The combination of various tracking devices with
blockchain technology will help in the high-level tracking of goods from the place
where it originates to its delivery making the entire process legitimate and
foolproof. One of the blockchain's major benefits towards management is that it
provides a preferable better and possible solution for identifying with what and
where the problem exactly lies (Alam, 2016). Blockchain can be utilized in a supply
chain to know whereabouts of the goods and also the quality of the assigned work
completed, and thereby correcting or identifying the problem if any. Uncertainty
hampers the smooth functioning supply chain. The transactions among a network of
the supply chain which includes manufacturers, suppliers, distributors, providers,
and clients must happen using a central third-party entity, instead of direct
transactions with each other. This makes the transactions to be a lengthy procedure
with a number of steps, which is the cause for the payments between a manufacturer
and a supplier, distributor, or a vendor to take a number of days. The contracts
and agreement which involves lawyers and bankers, with respect to industrial
equipment’s, consumer goods, food products, or digital offerings add to the extra
cost and delay. Blockchain could be the solution to many of these issues, it can be
used in any kind of exchange, agreements or tracking. Blockchain which is enhanced
by electronic tracking technology can help speed up supply chains while adding
greater intelligence along the way. The use of smart contracts over blockchain in
supply chain reduces the additional cost and delay, resulting in a more efficient
supply chain. The smart contracts are the contracts written in the digital form on
top of blockchain technology. Dynamic demand chain produced by the smart contact is
more efficient than the already existed rigid supply chain to maintain the online
distributed ledger that keeps the online transactions on track (Mckendrick, 2017).
The history of the products from the manufacturer to sell, along with transactions
could be documented as the product passes from one node to another node in supply
chain network. This makes the supply chain process more efficient and trustworthy
by reducing time delays, added costs, and human error. Blockchain will work on
enabling more intelligent business processes because of its distributed trust and
transparency, which in turn will bring more people into connected supply-chain
networks as e-commerce, food, and warehousing. Blockchain eliminates the middleman
auditors, and by allowing all the nodes in the supply chain network. Every supplier
can validate the product and track them by their own and the result balances on a
near real-time basis (Koetsier, 2017). It builds trust among the suppliers as once
the data (example-contracts, tracking data) are on the blockchain ledger, they are
fool proof and cannot be tampered or destroyed. Blockchain also provides great
accuracy in details of the product by continuously monitoring the product quality
also during shipment by analyzing data on the travel path and time period. The
stakeholders linked with the supply chain can know exactly whether the product was
in a wrong place or whether it remained in a location for too long by checking with
the predefined condition and time period at that particular place. It is especially
important for refrigerated goods, where the temperature at which goods are placed
plays a major role. The customer value depends majorly on the ability on the
logistics service within the supply chain management of the company to deliver the
product to the customer in a timely manner, high quality and in a cost-effective
way (Flint, 2004). The performance of supply chain management is described as the
performance with respect to quality, speed, dependability, cost, reliability, and
flexibility (Rao & Holt, 2005). Apart from these objectives, the recent research in
supply chain management has addressed the role of supply chain in sustainable
products because of the rise in demand of the customer’s eagerness to know the
source of the products consumed by them from the retailers (Quak & De Koster,
2007). Global supply chains are complex and they face umpteen uncertainties.
Another major aim of the supply chain management is to reduce the risk involved
such as cheating, distorting information etc. in logistics. To rule out the risks
involved and achieve the listed objectives, suppliers are to be evaluated (Manuj &
Mentzer, 2008). Increased outsourcing and competition, the number of competitors
have increased significantly. In the act of satisfying a contract the quality from
the players, firms have introduced supplier evaluation programs using social
criteria and environmental sustainability in which the suppliers are bound to
explain how they tackle the issues related to social and environmental
sustainability issues (Beske, Koplin, & Seuring, 2008). In the era of continuous
development across the world, the standard of living of the people has improved
significantly, thereby changing the consuming habit of the consumer. The consumers
have started giving attention towards food safety and quality. However, there have
been a lot of food-related accidents or scandals that happened in past few years.
Some of them are Chinese Milk scandal, 2008 (Huang, July 2014), where high levels
of the industrial chemical were found in the powdered and ordinary milk resulting
in a serious health-related problems and even death, the south Proceedings of the
International Conference on Industrial Engineering and Operations Management
Washington DC, USA, September 27-29, 2018 5 © IEOM Society International Wales E-
coli Tragedy, 2005 (Honish et al., 2005), which was considered Wale’s largest E.
coli outbreak which resulted in a tragic death of a five-year-old child and many
more school children and adults were seriously ill during the outbreak. According
to Matty (2011), 76 million Americans suffer from food poisoning each year. Many
people are hospitalized every year for food-related illnesses and some even die. It
has become very important for the customers to know about the origin of the food
and the way it was manufactured. Could these scandals have been avoided? Probably,
yes, if the blockchain would have been a part of the supply chain, but if not, at
least it would have helped in tracking the cause of the issue in a much faster way
than the usual way of tracking by going through all the suppliers one by one.
Supply chain management is responsible for the management of the flow of millions
of products and services every day, and traceability is one of the most important
aspects of it. In accordance with ISO1 , traceability is the ability to trace the
history, application or location of an entity, by means of recorded identifications
(International Organization for Standardization, 1994). Product traceability can be
distinguished in two types: 1 The International Organization for Standardization 2
● Forward traceability, which is the ability to find locality of products from one
or several given criteria, at every point of the supply chain (Jansen-Vullers et
al., 2003) ● Backward traceability, which is the ability to find origin and
characteristics of a product from one or several given criteria, at every point of
the supply chain. Jansen-Vullers et al. (2003) also suggests the four elements of
traceability (Jansen- Vullers et al., 2003): 1. Physical lot integrity, which
determines the traceability resolution; 2. Collection of tracing and process data;
3. Product identification and process linking; and 4. Reporting/system data
retrieval. Based on the above elements they provide a reference data model, which
enables traceability information modelling and covers the requirements that their
study produced. The problem with traceability industry applications arises with the
centralization of these systems which introduces a central point of failure. The
use of databases and other centralized technologies, to store and manage
traceability data that users will be able access, results in certain drawbacks
since it is too expensive to use and support for such a centralized approach is
prone to vulnerabilities. This work proposes a decentralized approach which tries
to address the problem of the single point of failure. To address this issue, the
proposed work leverages the blockchain technology, which enables transparency,
immutability integrity and openness of the data that we need to manage in a
traceability application (Zheng et al., 2016). This technology was introduced by
Bitcoin and Satoshi Nakamoto with the paper “Bitcoin: A Peer-to-Peer Electronic
Cash System” (Nakamoto, 2008) which explained a new open decentralized currency,
backed up by cryptography, machine to machine interactions and consensus algorithm
research, merged to produce a new and innovative technology. A blockchain, can be
explained as a ledger which keeps track of transactions happening on the
decentralized network of bitcoin. Every user needs a public-private key-pair2 which
will act as the user’s identity, and this makes the bitcoin network pseudo-
anonymous (Koshy et al., 2014). Bitcoin and blockchain technology in general, has
been exploited in the past in many ways, to decentralize processes that was
centralized until now. This mainly happened because of the ability to include
metadata in the transactions happening. This can be achieved in the Bitcoin
network, by leveraging a scripting language that is included in the network and the
2 Public-key, or asymmetric, cryptography is an encryption scheme that uses two
different keys. A private key which is known only by the owner of these keys, and
the public key which results from the private key with a one-way algorithm, and can
be known by anyone (Nechvatal, J., 1991). 3 OP_RETURN3 opcode in it. That way, data
can be included in the immutable and decentralized ledger which can be trusted
blindly due to the consensus model that the network is using. The maximum amount of
data that can be included in a Bitcoin transaction is 80 bytes (Bartoletti, 2017),
but several transactions can be used in order to store more data. In many
applications developed with blockchains, data do not get stored entirely, but only
the hash of the needed data are stored, which give users the assurance that the
data they are using are the actual data, by comparing the hash with the actual
data, and that no tampering has happened. In this paper we will present a method
for achieving decentralization in a traceability application, which results in
transparency, immutability, openness and security in the data that are crucial to a
product's life cycle and are important to several users of these applications.
In 2008, Satoshi Nakamoto created a fully distributed digital currency system using
Blockchain technology. For several years, this system was unnoticed by the society,
but after the breakthrough of Bitcoin, many scientists and developers became
interested in the technology that allowed Bitcoin be the best cryptocurrency in the
market. Nowadays, a large amount of people think that Blockchain could be as
revolutionary as Internet was. They see many ways to adopt such technology.
Therefore, many different applications appear on the market. One of such
applications excited me – an application for logistics and supply chain. The
current situation of these industries can be described as challenging. There are
many difficulties concerning the transparency, security and visibility of various
operations across the supply chain or transportation. Therefore, I decided to study
this sphere and find out what benefits blockchain could bring to these industries
and which problems solve. Blockchain, the technology underlying Bitcoin, is a type
of Distributed Ledger Technology that has been defined as a “distributed, shared,
encrypted database that serves as an irreversible and incorruptible repository of
information” (Wright, 2015, 8-9). Every 10 minutes, it is constantly growing by
adding new blocks to the chain. Miners do it to record the most recent
transactions. All blocks are in the Blockchain in a chronological order. Every node
has a copy of the Blockchain that is automatically downloaded when the miner enters
the Bitcoin network. All information about all transactions ever executed is
recorded in the blockchain. (Swan, 2015, 10). Once the information was entered, it
could never be deleted or changed. Blockchain is both the network and database,
secure and integrate. Blockchain is able to build the transactions based on rules
defined mathematically and enforced mechanically. (DTCC, 2016, 6) The main point is
that blockchain does not have one definition because of its various dimensions,
including technological, operational, legal and regulatory. One model of
understanding blockchain is through comparing it to the new application layer for
Internet protocols because blockchain can enable both immediate and long-term
economic transactions, and more complicated financial contracts. It can be a layer
for transactions of different types of assets, currency or financial contracts.
Moreover, a registry and inventory system for recording, tracking, monitoring, and
transacting of all assets could be managed with blockchain. 8 Consequently,
Blockchain can be used for any form of asset, including every area of finance,
economics, and money.
Trust relations in the construction industry concern people from organisations such
as clients, contractors, subcon- tractors, and suppliers (Lau and Rowlinson, 2010).
Previous studies have shown that mutual trust helps to smooth the construction
process, allows flexibility for facing uncertainty, increases efficiency and
sustains long- term relationships. In practice, formal contractual rules are always
developed to legitimise behaviors and strategies at odds (Kadefors, 2004). However,
current contractual relationships are mainly based on confrontational situa- tions
that reflect the level of trust (or mistrust) in the contract documents, which can
be the driver to increase the total cost of a specific project (Zaghloul and
Hartman, 2003). Today international contracting becomes common and the complexity
of the construction projects is increasing (Lau and Rowlinson, 2010). These
projects require not only advanced construction technology transfer but also a
shared project information environment with fair data exchange. Conventional
contracting methods and information exchange technologies are far from the industry
needs. Blockchain technology which started with the popular crypto currency Bitcoin
allows digital information to be distributed without copied or altered. In the
conventional construction industry, data are stored at a central database which can
be accessed from various places. The security problem is the main concern because
the transaction data could be altered by a hacker. The blockchain technology is
different, which can be treated as a database that is shared on a peer-to-peer
network. Transactions are grouped together in blocks in a certain time and then
added to a permanent chain. These blocks cannot be altered once they are added to
the chain, which makes the chain of transactions publicly verifiable and totally
unhackable (Taylor, 2017). Trust is the key feature of blockchain technology. If
the construction business or activities are executed on a blockchain system,
participants involved don't need to have an established trust relationship if they
trust the blockchain itself. In addition, blockchain technology takes care of the
information exchange by making every participant of the project a custodian of all
the information flowing through the project lifecycle. Unlike Internet information
exchange where information is passed from point to point, in Blockchain, the same
information is passed across to the whole system. Therefore, no persons including
the sender have more information than others. A construction project is a network
of hundreds of processes, participants, products, and materials. Money transaction
and/or data exchange are frequently performed along with project progressing. There
are a significant number of disputes and litigations occurring during construction.
Although things like payment terms and data confidentiality are outlined in a
contract or an agreement, disputes often arise over the stipulations of the agreed
protocols (Taylor, 2017). Current research of the Blockchain technology is limited
to the digital currency (i.e. Bitcoin system) though the technology is applicable
in other industries (Yli-Huumo et al., 2016). The purpose of this paper is to
introduce the concept of Blockchain technology and investigate its potential
applications in the construction sector to avoid these disputes. Three types of
blockchain-enabled applica- tions are proposed and demonstrated in this paper
including blockchain-enabled contract management, blockchain-enabled supply chain
management, and block- chain-enabled equipment leasing. Challenges of block- chain
implementation are also discussed at the end of this paper.Blockchain, mostly known
as the technology running the Bitcoin cryptocurrency (Nakamoto, 2008), is a public-
permissioned-distributed ledger system maintaining the integrity of transaction
data (Yli-Huumo et al., 2016). According to the Allens (2016), the distributed
ledger can be public or private. A public ledger has no central owner which can be
accessed and maintained by any member of the public. Identical copies of the ledger
are distributed to everyone in the network. A private ledger is one with limited or
pre-selected participants that are authorised to transact and interact while
subject to some form of external control. The blockchain information exchange is
disinterme- diated and every individual in the ecosystem has access to the same
information as the other participants. The essential feature of blockchain is the
maintainability of the data and information without any organizations or
governmental administration in control. Swan (2015) classified the blockchain
technology into three categories: Blockchain 1.0, 2.0 and 3.0. Each of them is
explained in detail as follows. Blockchain 1.0 is for the decentralisation of money
and payments. Bitcoin is a typical application in this category. The core
functionality of blockchain 1.0 is that any transactions can be sourced and
completed directly between two individuals over the Internet. Unlike fiat
currencies for which governments can print more money, the money supply of Bitcoin
grows at a predetermined rate. The new currency is being issued at a regular and
known pace, with about 13.5 million units currently outstanding, growing to a
capped amount of 21 million units in 2040. Blockchain 2.0 is for the
decentralisation of markets more generally, and contemplates the transfer of many
other kinds of assets beyond currency using the block- chain, by the creation of a
unit of value whenever it is transferred or divided. Blockchain 2.0 can include
Bitcoin 2.0 and its protocols, smart contracts, smart property, Decentralised
Applications (Dapps), Decentralised Auton- omous Organizations (DAOs), and
Decentralised Auton- omous Corporations (DACs). All financial transactions could be
reinvented on the blockchain, including stock, private equity, crowdfunding
instruments, bonds, mutual funds, annuities, pensions, and all manner of
derivatives. Public records (i.e. property ownership certificates, busi- ness
licenses, and vehicle registrations), digital identities (i.e. identity cards,
passports and driver licenses), and private records (i.e. loans, signatures and
escrows) can be Jun WANG et al. The outlook of blockchain technology for
construction engineering management 69 migrated to the blockchain and stored.
Attestation can be executed via the blockchain for proof of insurance, proof of
ownership, and notarised documents. Physical assets such as houses and cars, and
intangible assets such as patents and copyrights, can also be encoded, protected,
and transferred via the blockchain. Blockchain 3.0 is for the justice applications
beyond currency, economics and markets, particularly in the areas of government,
health, science, literacy, culture, and art. The freedom attribute associated with
the blockchain becomes more pronounced in Blockchain 3.0, which is fundamentally a
new paradigm for organizing activity with less friction and more efficiency. The
coordination and acknowledgment of all manner of human interactions, and a higher
order of collaboration between human and machine can be significantly facilitated
through the blockchain 3.0. Blockchain government is an important application of
the blockchain 3.0, which uses the blockchain as a universal, permanent,
continuous, con- sensus-driven, publicly auditable, redundant, record-keep- ing
repository to provide decentralised government services.