Blockchain and Supply Chain Management

Abstract

The use of blockchain technology as an end-to-end quality assurance monitoring tool is bound to become increasingly popular in the years to come, as evidenced by its successful adoption by such major entities as Walmart, Maersk, and DeBeers Jewelers. Blockchain addresses a significant constraint in supply chain management; namely the fact that often organizational information systems in a supply chain may not communicate fully, or at all. This constraint has traditionally limited the monitoring capacities of entities along a supply chain in some significant ways. This chapter discusses the various types and components of supply chains and identifies their major fraud risks, such as counterfeit goods, fraudulent billing, false claims, and misappropriation of assets. The chapter also provides an overview of some common food fraud schemes, such as product substitution, mislabeling, and adulteration. Most importantly, blockchain implementation benefits within various supply chains are outlined, discussed, and further demonstrated by looking at several case studies. The benefits of using blockchain technology for supply chain monitoring purposes include a higher level of quality assurance through more granular tracking and identity management, more effective and secure communication among various supply chain stakeholders, lower supply-chain related expenses – especially lower external failure costs – and more efficient administration of the entire supply chain.