Distributed ledger technology in supply chains: a transaction cost perspective

Abstract

With the emergence of distributed ledger technology (DLT), numerous practitioners and researchers have proclaimed its beneficial impact on supply chain transactions in the future. However, the vast majority of DLT initiatives are discontinued after a short period. With the full potential of DLT laying far down the road, especially managers in supply chain management (SCM) seek for short-term cost-saving effects of DLT in order to achieve long-term benefits of DLT in the future. However, the extant research has bypassed grounding long-term as well as short-term effects of DLT on supply chain transaction with empirical data. We address this shortcoming, following an abductive research approach and combining empirical data from a multiple case study design with the corresponding literature. Our study reveals that the effects of DLT on supply chain transactions are two-sided. We found six effects of DLT solutions that have a cost-reducing or cost avoidance impact on supply chain transactions. In addition, we found two effects that change the power distribution between buyers and suppliers in transactions and a single effect that reduces the dependency of supply chain transactions on third parties. While costreducing and avoidance as well as dependency-reducing effects are positive effects, the change in power distribution might come with disadvantages. With these findings, the paper provides the first empirical evidence of the impact of DLT on supply chain transactions, which will enable managers to improve their assessment of DLT usage in supply chains.

Reinvigorating the Study of Opportunism in Supply Chain Management

“…Opportunism has traditionally been associated with a heavy reliance on third parties—such as banks, financial bookers, and auditing firms—and limited transparency among the parties. The removal of intermediaries and enhanced transparency support the common expectation that the automation of transactions will decrease, if not eliminate, concerns about opportunism (Roeck, Sternberg, & Hofmann, ; Saberi, Kouhizadeh, Sarkis, & Shen, ).…”

Blockchain technology in supply chain operations: Applications, challenges and research opportunities

“…Blockchain changes organizational boundaries, and affects the contractual agreements between companies due to its inherent nature of security. This feature helps blockchain to minimize transactions costs by reducing the costs for searching information, negotiation, decision-making, control, adjustment in the process of a transaction ( Roeck et al, 2019 ). In the literature, a mathematical model based on M/M/1 queue model has also been developed to assess the processing time required for transactions ( Srivastava, 2019 ).…”

Blockchain Technology for Sustainable Supply Chain Management: A Systematic Literature Review and a Classification Framework

“…While smart contracts and tokens digitize all points of conflict, collaboration is required to arrive at a consensus regarding the rules that need to be digitized. Blockchain-based disruption in supply chain transactions can be attributed to cost and dependency reduction [67]. However, blockchain changes the power distribution, which might come with disadvantages.…”