Is Blockchain a Silver Bullet for Supply Chain Management? Technical Challenges and Research Opportunities

Abstract

Blockchain technology is based on the idea of a distributed, replicated, and immutable digital ledger that enables parties to conduct business in a trustful and transparent way without the need for a central authority or intermediary. Its most popular application thus far is in payment system applications, e.g., bitcoin. This disruptive technology is expected to contribute significant business value to multiple industry sectors, including supply chain management (SCM), where it can provide greater visibility, accountability and trust in interorganizational business collaboration. In this article, we review some fundamental concepts of Hyperledger Fabric, one of the most mature permissioned blockchain implementations. Further, we use the context of a food supply chain to highlight key design and implementation challenges for blockchain, and provide a strategic assessment of its prospects. Our aim is to dispel misguided notions and myths about blockchain as a silver bullet for all businesses. We believe it is important to penetrate the hype to allow a more realistic understanding of this technology. Blockchain is a high‐cost, high‐overhead storage medium. It is viable only when its higher cost is counterbalanced by the set of benefits that are identified by a careful and thorough analysis of the business. Thus, it will be used mainly for storing important data related to interorganizational transactions among partners where trust is lacking and provenance and visibility are critical. Our paper offers enterprises a systematic way to understand the real costs and risks of blockchain adoption. The insights gained in the SCM context also apply to other areas such as financial services and healthcare that could leverage the full potential of blockchain technology.

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

“…Further analysis on how the combination of blockchain technology and IoT would affect the SC performance should be conducted ( Rejeb et al, 2019 ). Another need is the exploration on whether a common standard across different blockchain platforms should be developed to link them at the global level ( Kumar et al, 2020 ). The respective pros and cons should also be examined.…”

“…Table 6 discusses some of the challenges for blockchain implementation in SCs ( Allen et al, 2019 , Hartley and Sawaya, 2019 , Kumar et al, 2020 , Wang et al, 2019a ). Note that in the literature, a unified theory of acceptance and use of technology model has been established to study the adoption factors (see Queiroz et al, 2019 ).…”

“… 20 Hoek (2019a) This paper introduces a framework for conscious adoption of blockchain for the SC problems and emphasizes the need to understand that blockchain might not be right technology for all SC problems. 21 Kumar et al (2020) The paper offers a systematic way to weigh in the economics of block chain technology adoption in terms of cost and risk from the context of a food SC. It recom mends that the blockchain solutions should be used selectively and should not be applied in all the business problems.…”

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

“…The use of the Gcoin blockchain to store the data flow of drugs is expected to bring transparency to drug-transaction data [181]. A strategic assessment of the prospects of using a distributed ledger like Hyperledger Fabric, which is a permissioned blockchain implementation, found it to be one of the best blockchain implementations [182]. Blockchain is a costly storage medium, and hence the set of benefits it brings to the business should more than offset its overhead costs.…”

Blockchain in the Tourism Industry—A Review of the Situation in Croatia and Macedonia

“…Iansiti and Lakhani [9] stated that blockchain technology represents a digital ledger that allows separate companies to do business in a transparent and trustful way without the necessity of the central node of control. This is a new way of organizing‚ recording‚ and processing information in blocks which are provable‚ reliable and long-lasting [10]. Rejeb and Rejeb [11] stated that blockchain will influence tourism by building trust with the following components: transparency, control, influence and recourse.…”