Inspired by the practice of platform retailers cooperates with blockchain technology service providers to improve the recycling rate of waste products and solve the three bottleneck problems of recycling, this paper examines how the platform should optimize the combination of āblockchain & sales formatā to improve the economic, social and environmental (ESS) performance of the closed-loop supply chain (CLSC). Through analytical models, three major effects of blockchain are revealed, namely brand premium effect, forward and backward attraction effect, and optimal combined effect. Besides, intuition suggests that the retail price decreases with increasing of consumer sensitivity to reference price effects, this result occurs in cases where reference price effects dominate demand. When the brand effect dominates demand, the counterintuitive result emerges that firms can raise the retail price with increased sensitivity. The implementation of blockchain will amplify the changes through brand premium effect in two corresponding cases. Another interesting finding is that only when the commission rate is extremely low/relatively high, the CLSC member can reach a stable cooperation relationship with the platform selling/agency selling. At the same time, the optimal āblockchain & sales formatā of the platform that can achieve the triple benefits of EES in the CLSC is clarified. Furthermore, combined with the platform sales cases of different categories of products, this paper derives the āblockchain & sales formatā combination strategy of platform enterprises for the universality of different attribute products.
Blockchain is the foundational technology of various cryptocurrencies. It has features such as nontempering, decentralization, security, anonymity, etc. Its distributed ledger technology has received broad research and industry attention. Cryptography, hash functions, peer-to-peer (P2P) consensus and smart contracts are being used in a wide variety of applications across industries to solve various problems. Supply chain finance is a model in which various financial institutions connect with stakeholders in the supply chain to optimize working capital and liquidity invested in supply chain processes and transactions. The Air Cargo industry is one of the essential parts of various global supply chains. Consisting of multiple nodes, the complexity in its structure makes it difficult for credit risk analysis for the creditors. Information asymmetry leads to a lack of trust between companies and creditors. Frauds and disruptions in the Air Cargo industry make it vulnerable from the perspective of Financial Institutions. A platform for Air Cargo Financing using Blockchain (ACFB) is proposed in this study to solve these problems; this would make a supply chain more transparent, trustworthy, and efficient for all the stakeholders and financial institutions.
Abstract We develop a continuousātime control approach to optimal trading in a ProofāofāStake (PoS) blockchain, formulated as a consumptionāinvestment problem that aims to strike the optimal balance between a participant's (or agent's) utility from holding/trading stakes and utility from consumption. We present solutions via dynamic programming and the HamiltonāJacobiāBellman (HJB) equations. When the utility functions are linear or convex, we derive closeāform solutions and show that the bangābang strategy is optimal (i.e., always buy or sell at full capacity). Furthermore, we bring out the explicit connection between the rate of return in trading/holding stakes and the participant's riskāadjusted valuation of the stakes. In particular, we show when a participant is riskāneutral or riskāseeking, corresponding to the riskāadjusted valuation being a martingale or a subāmartingale, the optimal strategy must be to either buy all the time, sell all the time, or first buy then sell, and with both buying and selling executed at full capacity. We also propose a riskācontrol version of the consumptionāinvestment problem; and for a special case, the āstakeāparityā problem, we show a meanāreverting strategy is optimal.
The growth of the enterprise blockchain research supporting supply chain management calls for investigations of their impact and mindfulness of their design, use cases, and pilots. With a blockchain design for the Proof of Delivery (PoD) process management, this paper contributes to learning about performance measurement and the transaction costs implications during the development and application of smart contracts. An experimental design science approach is applied to develop an open-source blockchain to explore ways to make the delivery processes more efficient, the proof of delivery more reliable, and the performance measurements more accurate. The theory of Transaction Costs is applied to evaluate the cost implications of the adoption of smart contracts in the management of the PoD. The findings show that smart contracts make the delivery processes more efficient and proof of delivery more reliable. Yet, the methods and metrics are too complex and qualitative, limiting the smart contract’s capability to measure performance. Our findings indicate potential transaction costs reduction by implementing a blockchain-based performance measurement. The complexities of the delivery process and proof of delivery call for pre-contractual steps to identify the processes and performance metrics to design blockchains. Smart contracts need further development and digital aids to handle qualitative inspections and proof of delivery generation during the delivery process. The blockchain requires the system’s capacity to record off-chain transactions, such as in case of disputes resolutions. The authors extended blockchain research beyond the theoretical level, designing an open-source blockchain for supply chain management within the use case, pilot design, and case study.
On September 15, 2022, the Ethereum network adopted a proof-of-stake (PoS) consensus mechanism. We study the impact on the network and competing platforms in a two month event window around the Beacon chain merge. We find that the transition to PoS has reduced energy consumption by 99.98%. Miners have not transformed into validators, and total block reward income (in USD) has fallen by 97%, though transaction fees (in ETH) for Ether have increased nearly 10%. The Herfindahl index for the top 10 is 1,009; the network is 19% less concentrated after the merge. Ethereum supply growth has been deflationary since the merge. The time between consecutive blocks is now steady at 12 seconds and transactions per day are up 7.0%. On Polygon, Matic fees rose but token fees fell. Polygon also slows, processing 3.3% fewer transactions per day. Solana's fees fall by $0.0003, and transactions per day are down 48%. Stablecoin transfer volumes fall on Ethereum and Polygon, but rise on Solana.
Nowadays, Information Technology (IT) is changing the way traditional enterprise management concepts work. One of the most dominant IT achievements is the Blockchain Technology. This technology enables the distributed collaboration of stakeholders for their interactions while fulfilling the security and consensus rules among them. This paper has focused on the application of Blockchain technology to enhance one of traditional inventory management models. The Vendor Managed Inventory (VMI) has been considered one of the most efficient mechanisms for vendor inventory planning by the suppliers. While VMI has brought competitive advantages for many industries, however its centralized mechanism limits the collaboration of a pool of suppliers and vendors simultaneously. This paper has studied the recent research for VMI application in industries and also has investigated the applications of Blockchain technology for decentralized collaboration of stakeholders. Focusing on sustainability issue for total supply chain consisting suppliers and vendors, it has proposed a Blockchain based VMI conceptual model. The different capabilities of this model for enabling the collaboration of stakeholders while maintaining the competitive advantages and sustainability issues have been discussed.
Ilhaam A. Omar, Raja Jayaraman, Mazin Debe, Haya R. Hasan Ā· 6 authors
Information sharing is essential for coordination and stakeholder integration and is crucial to achieving sustainable supply chain operations. Furthermore, improved information sharing assists retailers by reducing the time spent looking for alternative suppliers to meet the unexpected demand surge during pandemics. Recent advances in networking and distributed ledger technologies have enabled secure, improved information communication and broader connectivity. However, due to system interoperability, information quality, confidentiality, and trust, information cannot be exchanged seamlessly, resulting in the inefficiency of managing supply chain operations. In this paper, we propose a blockchain-based inventory sharing approach based on smart contracts using a private Ethereum network to link suppliers and retailers. Our approach combines blockchain technology with decentralized storage to increase transparency, trust, and security of supply chain transactions. We present a generalized mechanism for secure information sharing that includes comprehensive algorithms to capture supply chain stakeholder interactions that enhance trust among participating entities. The smart contract was developed and validated using the Remix IDE, and the code is made publicly available on Github. We analyze the solution for various security vulnerabilities and provide a detailed cost analysis for various stakeholder transactions in the supply chain. Our solution demonstrates that a blockchain-based approach reduces inefficiencies, is economical, commercially viable, and provides improved information connectivity among supply chain stakeholders in a trusted and secure way.
This paper studies a fundamental problem regarding the security of blockchain PoW consensus on how the existence of multiple misbehaving miners influences the profitability of selfish mining. Each selfish miner (or attacker interchangeably) maintains a private chain and makes it public opportunistically for acquiring more rewards incommensurate to his Hash power. We first establish a general Markov chain model to characterize the state transition of public and private chains for Basic Selfish Mining (BSM), and derive the stationary profitable threshold of Hash power in closed-form. It reduces from 25% for a single attacker to below 21.48% for two symmetric attackers theoretically, and further reduces to around 10% with eight symmetric attackers experimentally. We next explore the profitable threshold when one of the attackers performs strategic mining based on Partially Observable Markov Decision Process (POMDP) that only half of the attributes pertinent to a mining state are observable to him. An online algorithm is presented to compute the nearly optimal policy efficiently despite the large state space and high dimensional belief space. The strategic attacker mines selfishly and more agilely than BSM attacker when his Hash power is relatively high, and mines honestly otherwise, thus leading to a much lower profitable threshold. Last, we formulate a simple model of absolute mining revenue that yields an interesting observation: selfish mining is never profitable at the first difficulty adjustment period, but replying on the reimbursement of stationary selfish mining gains in the future periods. The delay till being profitable of an attacker increases with the decrease of his Hash power, making blockchain miners more cautious on performing selfish mining.
Serkan KarakaÅ, A. Zafer Acar, Berk KĆ¼Ć§Ć¼kaltan
The supply chain is an important source of knowledge that enables potential emerging technologies and, in this ecosystem, logistics are regarded as an intermediary for disseminating innovative solutions in a coordinated manner. As an emerging solution in the supply chain area, blockchain has recently been discussed as a disruptive technology and has received growing attention from academics and practitioners. Despite this interest, insufficient knowledge on the potential benefits and risks of blockchain technology causes vagueness for its successful implementation. Therefore, since effective management of logistics and supply chain operations through advanced solutions is of utmost importance, adopting an innovative approach rather than providing anectodal evidences or narrative expressions plays a critical role in blockchain adoption. Accordingly, this research aims to an in-depth analysis of the blockchain in logistics and supply chain by investigating enablers, barriers, and risks of this adoption. To this end, through employing both the Methodi Ordinatio and the narrative network analyses, the future direction of blockchain adoption is presented in light of the presented current state of knowledge. Consequently, the obtained findings offer academic and practical insights into the ambiguous, insufficiently explained, and conflicted areas in the relationship between blockchain technologies and logistics and supply chain contexts.
The use of blockchain technology in supply chain finance promises to solve existing inefficiencies of conventional supply chain finance methods. With the help of a systematic literature review, these issues are uncovered, showing how blockchain could solve them. The main problems include the non-transparency of complex networks, insufficient risk control, information asymmetries, and inefficient processes. Blockchain-based SCF platforms can solve these problems with key features such as decentralization, transparency, traceability, and automation capability.
A robust traceability system would help organizations in inventory optimization reduce lead time and improve customer service and quality which further enables the organizations to be a leader in their industry sector. This research study analyzes the challenges faced by the automotive industry in its supply chain operations. Further, the traceability issues and waiting time at different nodes of the supply chain are considered to be priority issues that affect the overall supply chain efficiency in the automotive supply chain. After studying the existing blockchain architectures and their implementation methodology, this study proposes a new blockchain-based architecture to improve traceability and reduce waiting time for the automotive supply chain. A hyper ledger fabric-based blockchain architecture is developed to track the ownership transfers in inbound and outbound logistics. The simulation results of the proposed hyper ledger fabric-based blockchain architecture show that there is an improvement in the traceability of items at different nodes of the supply chain that enhances the Inventory Quality Ratio (IQR) and the mean waiting time is reduced at the factory, wholesaler, and retailer, which thereby improves the overall supply chain efficiency. The blockchain embedded supply chain is more capable to eliminate the risks and uncertainties associated with the automotive supply chain. The benefits of adopting blockchain technology in the automotive supply chain are also described. The developed blockchain-based framework is capable to get more visibility into goods movement and inventory status in automotive supply chains.
Through recent progress, the forms of modern supply chains have evolved into complex networks. The supply chain management systems face a variety of challenges. These include lack of visibility of the upstream party (Provider) to the downstream party (Client); lack of flexibility in the face of sudden variations in demand and control of operating costs; lack of reliance on safety stakeholders; ineffective management of supply chain risks. Blockchain (BC) is used in the supply chain to overcome the growing demands for items. The Internet of Things (IoT) is a profoundly encouraging innovation that can help companies observe, track, and monitor products, activities, and processes within their respective value chain networks. Research establishments and logical gatherings are ceaselessly attempting to answer IoT gadgets in supply chain management. This paper presents orderly writing on and reviewing of Blockchain-based IoT advances and their current usage. We discuss the smart devices used in this system and which device is the most appropriate in the supply chain. This paper also looks at future examination themes in blockchain-based IoT, referred to as the executiveās framework production network. The essential deliberate writing audit has been consolidated by surveying research articles circulated in highly reputable publications between 2016 and 2021. Lastly, current issues and challenges are present to provide researchers with promising future directions in IoT supply chain management systems.
Horst Treiblmaier, Abderahman Rejeb, Remko van Hoek, Mary C. Lacity
Background: Companies partaking in modern supply chains face numerous intra-and interorganizational barriers when it comes to the adoption of blockchain technology. Empirical research is missing that explores how exactly these barriers can be overcome. In this paper we first explore barriers that organizations need to overcome to successfully deploy blockchain technology. In a second step, we investigate the agrifood industry and highlight differences in coping strategies between incumbents and start-ups. Methods: We conducted a quantitative survey with 190 supply chain experts to identify barriers and an in-depth qualitative study that included 10 expert interviews to better understand the current situation in agrifood organizations. Results: The findings from the quantitative study show that the most relevant organizational barrier to blockchain adoption is the widespread lack of understanding of the technology and its potential benefits. In the qualitative study we illustrate how various intra-and interorganizational barriers can be overcome and how the resources and capabilities differ between incumbents and start-ups. Conclusions: Our results provide academics with a better understanding of the relevant barriers and bridges of blockchain adoption. Practitioners benefit from learning about the resources and capabilities they need to deploy in order to benefit from blockchain technology.
Abstract Blockchain is one of the technologies that can support digital transformation in industries in many aspects. This sophisticated technology can provide a decentralized, transparent, and secure environment for organizations and businesses. This review article discusses the adoption of blockchain in the ports and shipping industry to support digital transformation. It also explores the integration of this technology into the current ports and shipping ecosystem. Besides, the study highlighted the situation of the supply chains management in ports and shipping domain as a case study in this field. The investigated studies show that blockchain can be integrated into processes such as financial and document workflow. This review contributes to research by focusing on the adoption of blockchain in the ports and shipping industry to support digital transformation. It also aims to understand the existing port practice and map it with current tendencies based on blockchain. This study gives insight analysis to incorporate blockchain technology into ports and shipping processes globally.
As blockchain technology has already become a critical priority for enterprises, it is acknowledged that it might be as much important as to reform and reconstruct businesses in the near future. In this paper we review the strengths and weaknesses of the blockchain technology, and present an example application in supply chain management. We start by presenting the key characteristics of the blockchain technology, and then summarize its advantages and vulnerabilities. We also describe some of the existing solutions to known vulnerabilities. Finally, we review and discuss in detail the example of a decentralized application for the supply chain of a frozen food factory. This includes a scenario presenting the implementation of this solution, the steps for the development of the idea, and the constraints of the requirements.
Background: In relevant research, blockchain technology (BCT) is credited with great potential for supply chain management (SCM). However, even after more than 10 years of the technologyās existence, it is barely used for any self-sustaining applications. This raises the question of why BC cannot prevail against its alternatives. With this paper we want to identify criteria by which the added value of BCT can be measured. Furthermore, we want to evaluate how well the different supply chains (SC) exploit the added values of BCT. Methods: For this, we identified real-world examples and case studies for luxury, food, and healthcare SCs. These examples are described in detail and then analyzed for their added value compared to possible alternatives. Results: The results show that in the clusters of food and healthcare SCs, no general added value of BC over current best-practice solutions could be verified. Luxury SCs manage valuable products that are typically traded in small quantities. It is within this cluster that the implementation of BC can be justified best. Conclusions: In conclusion, this study shows that the application of BCT is especially beneficial for goods with a high value and low trade volume. In addition, the interface between reality and the digital twin should be as secure as the database or BC solution itself. Furthermore, the demand for transparency and immutability of data should be more important than the need to protect sensitive data. Finally, SC participants, especially the end customer, must also be able to appreciate the advantages of BCT.
David M. Herold, Sara Saberi, Mahtab Kouhizadeh, Simon J Wilde
Purpose In response, the purpose of this paper is to provide theoretical frameworks about the organizational uncertainty behind what and when to adopt blockchain technology and their implications on transaction costs. The immature nature and the absence of standards in blockchain technology lead to uncertainty in government organizations concerning the adoption (āwhat to adoptā) and the identification of the right time (āwhen to startā). Design/methodology/approach Using transaction cost theory and path dependency theory, this paper proposes two frameworks: to assess transaction cost risks and opportunities costs; and to depict four different types of transaction costs outcomes regarding blockchain adoption. Findings This paper identifies various theoretical concepts that influence blockchain adoption and combine the two critical constructs of ābounded rationalityā and the ālock-in effectā to categorize the multiple transaction costs outcomes for blockchain adoption. Research limitations/implications Although existing research in blockchain highlights mainly the potential benefits of blockchain applications, only a little attention has been given to frameworks that categorize potential transaction costs outcomes under uncertainty, in particular from organizational theorists. Originality/value Both frameworks advance the understanding of the decision-making behind blockchain adoption and synthesize the current literature to offer conceptual clarity regarding the varied implications and outcomes linked to the uncertainty regarding transactions costs stemming from blockchain technology.
Blockchain is a disruptive technology, which is crucial for business operations. In this article, we analytically explore how two manufacturers can achieve efficient buffer stock sharing using the blockchain technology (BCT). We first build an analytical basic model with a deterministic lead time for material replenishment and quantify the benefit of adopting a buffer stock sharing scheme. In the absence of BCT, we demonstrate the natural occurrence of a cheating problem. We analytically derive the overall value of blockchain technology (OVBCT) for the buffer stock sharing scheme and highlight the conditions under which it is increasing or decreasing in demand uncertainty. We also show how the buffer stock service level can be improved with the use of BCT. To show robustness of the analytical findings, several extended cases are explored. Novel buffer stock division rules are then generated under the proposed buffer stock sharing scheme, which makes the alliance profitable. In addition, an n-manufacturers alliance is further analytically explored. We find that the core findings from the basic model continue to hold in the extended models. Finally, we establish the conditions for achieving Pareto improvement with the use of BCT by considering the logistics services adopted.
Nowadays, using Blockchain Technology (BCT) is growing faster in each country. It is essential to apply BCT in Supply Chain Network Design (SCND) and is considered by the designer and manager of SC. This research indicates Viable Supply Chain Network Design (VSCND) by applying BCT. A new form of two-stage robust optimization is suggested. Facility locations and activation BCT for VSCND is the first stage of decisions; finally, we determine flow transshipment between components in the next stage. The GAMS-CPLEX is used for solving the model. The results show that running BCT will decrease 0.99% in costs. There is an economic justification for using BCT when demand is high. A fix-and-optimize and Lagrange relaxation (LR) generate lower and upper bound to estimate large scale in minimum time. The gap between the main model and fix-and-optimize is better than the LR algorithm. Finally, this research suggests equipping VSCND by BCT that becomes more resilient against demand fluctuation, sustainable, and agile.
Maximilian Klƶckner, Christoph G. Schmidt, Stephan M. Wagner
Blockchain is a prominently discussed technology in operations and supply chain management and firms increasingly engage in blockchain initiatives. Yet, an understanding of the technology's financial value remains elusive. Based on 175 firm announcements between 2015 and 2019, we conduct an international event study to estimate the impact of blockchain initiatives on the market value of the firm. We empirically demonstrate that blockchain announcements are associated with a significant average abnormal return of 0.30% on the announcement day, and that there are indications of positive longāterm effects on shareholder value. We further demonstrate how blockchain use case, project, and firm characteristics affect the stock market reaction. Specifically, we find that the stock market reaction to blockchain announcements is less positive when blockchain is used to trace physical objects or to share sensitive data, providing empirical evidence for the risk associated with current challenges in the design of blockchain use cases. Our results also suggest that the involvement of an external information technology service provider in a blockchain project attenuates the positive stock market reaction. Interestingly, more innovative firms do not experience a stronger stock market reaction to blockchain announcements. Leveraging the international scope of our sample, we further shed light on how the firm's competitive (i.e., industry factors) and macro environment (i.e., country factors) affect the stock market reaction. Our findings indicate that the industry's R&D intensity and the country's data restriction level play a crucial role in driving the value attributed to blockchain initiatives.
Abstract Smart manufacturing focuses on maximizing the capabilities to increase multiple objectives, like cost, delivery, and quality, in manufacturing enterprises. This requires implementing product development lifecycle, production system lifecycle, and business cycle for supply chain management. In short, a considerable amount of data is generated in a given manufacturing enterprise. Likewise, progress has been made to adopt blockchain in financial industries, but the adoption is slow in non-financial sectors. The article elaborates a methodology for the realization of a traceable and intelligent supply chain. First, the methodology elaborates on the realization of traceability of enterprise entities, which are an integral part of the supply chain. In this case, each participating stakeholder of the supply chain is required internally to realize a smart manufacturing system with an extension to write critical control data to the blockchain (i.e., a subset of process data). Artificial Intelligence (AI) is being adopted in most industries. A supply chain stakeholder has access to its data and can employ AI to derive new insights. The data available with the stakeholder provides a narrow context. With blockchain, all the stakeholders have access to the data from other stakeholders. Subsequently, the insights derived by a stakeholder will be more meaningful. This will assist in realizing an intelligent supply chain.
Because of the risks existing in supply chain finance, taking accounts receivable factoring business as the research object, this paper uses the evolutionary game method to analyzes the factors affecting the decision-making of the participants in supply chain finance, constructs an evolutionary game model between small and medium-sized enterprises and financial institutions, and analyzes the mechanism of blockchain to solve the financial risks of the supply chain by comparing the changes of evolutionary stability strategies before and after the introduction of blockchain technology. This paper aims to reduce financing risks by analyzing the mechanism of blockchain technology in supply chain finance. It is found that, firstly, blockchain technology can reduce the credit risk of financial institutions and solve financing problem. Credit risk plays a decisive role in whether financial institutions accept financing business decisions. Blockchain technology can reduce the operational risk of financial institutions and improve the business income of financial institutions. Secondly, the strict regulatory environment formed by blockchain technology makes the default behavior of small and medium-sized enterprises and core enterprises in a high-risk state at all times. No matter the profit distribution proportion that small and medium-sized enterprises can obtain through collusion, they will not choose to default, which effectively solves the paradox that small and medium-sized enterprises cannot obtain loans from financial institutions despite the increased probability of compliance. Then, the evolutionary game between financial institutions and small and medium-sized enterprises is balanced in that financial institutions accept business applications, small and medium-sized enterprises abide by the contract, and the convergence effect is better. Therefore, blockchain technology not only reduces the financing risk of financial institutions but also helps to solve the financing problems of small and medium-sized enterprises.