Blockchain technology: implications for operations and supply chain management

Abstract

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.

The Impact of Blockchain Technology Application on Supply Chain Partnership and Performance

“…Consumer network (consisting of both firm-and individual-level participants) and technology-driven value transaction initiatives are beginning to compel changes in business strategy. Competitive advantages in the present context cannot be successfully achieved without successful integration of technology and SCM [4]. Despite the excitement surrounding BCT introduction, SCM researchers are currently facing a significant gap in the literature in examining the opportunities and challenges presented by BCT.…”

“…Blockchain is an electronic database system that records and distributes transactional data, which is secured by cryptography and governed by a consensus among the participants involved in a system [4]. The chain refers to a list of data entries that system participants maintain using a computer network, whereas the block refers to the real time data that are updated by the system participants [4]. The benefits of BCT application have been primarily centered around how it can provide identical and verified information to supply network participants or members.…”

“…Tijan et al [5] noted that this emerging technology provides a basis for transactional data sharing across supply network without requiring trusted participations in food safety management. Regardless of the ongoing investigations on the depth of technology application, Cole et al [4] emphasized the need to develop a new way to create trust for today's complex manufacturing ecosystem and lack of visibility across multiple tiers.…”

“…In light of the above observation, firms differ in the pervasiveness of technology integration along the value chain. However, BCT application is highly beneficial to all participants in the operations and SC network [4]. Though the possible applications of BCT and its barriers and challenges have undergone extensive investigation [16], Hackius and Petersen [7] pointed out the infancy of logistics and SCM research in blockchain.…”

“…Both technology service providers and researchers have positive outlooks for BCT-enabled opportunities, despite the immediate challenges of its use. Its benefits are identified as enhancements of product safety and security, quality management, illegal counterfeiting reduction, SC sustainability, inventory management and replenishment advancement, new product design and development, and SC transaction cost minimization [4]. Moreover, blockchain-based collaborative activities can lead to another level of SC partnership advantage, providing strategic benefits over competitors in the marketplace, namely, partnership efficiency and partnership growth.…”