This paper presents how blockchain can be leveraged in the domain of trade finance, to provide an adept model, which simplifies the end-to-end process. The paper elaborates upon the integration of the components of trade finance with blockchain. We discuss the traditional trade finance model and how the integrated blockchain model helps mitigate its pain points. Using this integrated model, a trade transaction that would normally take close to a week can be successfully executed in, approximately, a quarter of a day. The process flow of the events of a transaction powered by blockchain are elucidated upon. This paper highlights how distributed ledgers, smart contracts, events, and system integration will power trade finance. The key features which are focused on include - authentication, decentralization, immutability, and consensus mechanisms. Furthermore, we explore the benefits and functionalities of adopting blockchain, which includes - efficiency, transparency, collaboration, and auditability and the way they can be achieved without compromising security, confidentiality, and interoperability. The objective of the paper is to illustrate how blockchain technology can reshape the landscape of Trade Finance and improve financial mechanisms.
Roberta Pellegrino, Nicola Costantino, Danilo Tauro
The purpose of this paper is to study how advanced information about customer needs obtained through an Advance Purchase Discount (APD) contract can be exploited to coordinate the capital flow and enhance the efficiency of a two-stage supply chain (SC) under decentralized control in cases of stochastic customer demand. We developed an APD model in the form of an option contract, where the model and evaluation include the flexibility for the upstream firm to decide whether to provide a discount for an advance purchase at its own discretion. Applying the model to a Fortune 100 company, a leader in the Fast Mover Consumer Goods (FMCG) industry, showed that under certain conditions, and with suitably chosen contract parameters, management of decentralized control via APD contracts can lead to system-wide efficiency, and the individual decision makers pursue their own best interests, ensuring a win-win condition.
Purpose The purpose of this study is to analyze blockchain (Bc) platforms in order to expand knowledge about the functionalities applied to supply chains (SCs). Therefore, this research seeks to address what these functionalities are and whether they are aligned with the theory. Design/methodology/approach The research utilizes a literature review on Bc in SC (Bc-SC) and an exploratory study focusing on the developers of Bc platforms. Findings The research maps and synthesizes concepts and applications of the platforms for SC. The platforms involved with the development of solutions with Bc technology are relatively representative (138 found by this research, and 47 offer solutions in SC), as well as the diversity of solutions and application (101 applications), covering different activities and areas of the SC. Research limitations/implications Despite extensive research and data analysis, there may be other platforms and solutions not analyzed in this paper. Practical implications The narrative and the different examples provided contribute to managers' understanding of the different possibilities for Bc-SC. Studying the services offered by the various platforms also enables managers to better understand what options exist and could potentially be utilized. Originality/value This is one of the first papers in a leading international OSCM (operations and supply chain management) journal to analyze the Bc platforms in SC and thereby has its relevance by synthesizing the knowledge that is dispersed in software developers (platforms).
Blockchain was first used in finance, but nowadays this technology is expanding its roots in several areas including retail industry, which is always changing and transforming the way retailers proceed in order to earn customer confidence and build consumer loyalty at a time when it has become easily broken. Nowadays more enterprises are trying to integrate blockchain technology in their systems to improve the performance of their supply chain, although the retail sector has modernized enormously in recent years, despite those progresses blockchain still needs to be developed from retail market perspective. This paper presents an introduction to blockchain technology in a simple way, it also analyses the impact of blockchain technology integration of business processes in the retail industry and tries to study how companies can implement blockchain in the retail industry in order to increase customer loyalty and improve the retail supply chain management. This work adds an interesting contribution of blockchain technology to the existing studies with concerns performance in the supply chain within the retail industry.
The current supply chain of agricultural products is a complex ecosystem involving multiple stakeholders, which makes it difficult to verify several important characteristics, such as the origin of products, the growth stage and quality of crops. In this paper, we propose a method to efficiently execute agricultural products transaction by using consortium blockchain and smart contract, so as to track agricultural products in the whole supply chain. Our solution eliminates the need for trusted centralized authorities and agents, and provides trusted transaction records to improve the integrity, reliability and security of transactions. The proposed solution focuses on the use of smart contracts to manage and control all interactions and transactions between all participants in the supply chain. All transactions are recorded and stored in the immutable ledger of the blockchain, thus providing a high level of transparency and traceability to all supply chain ecosystems in a secure, credible, reliable and efficient manner.
We propose blockchains and smart contracts as enabling technologies for an innovative type of supply chain management, with the goal of achieving higher levels of collaboration between the companies participating in the chain, which in turn pays in the form of higher levels of profitability and economic health for the participating enterprises. Our proposal goes far beyond simply using blockchains as decentralized systems to track the origin and delivery of goods, which is what most of the current blockchain projects on supply chains are focused on. In fact, we introduce a type of smart contract aimed to solve two of the main problems that hinder the efficiency and effectiveness of supply chains, namely trust and coordination . Solving the problem of trust amounts to the capability of establishing quickly and cheaply contractual relationships based on convergent business needs among parties that may not know each other, and therefore need to protect themselves from opportunistic or incorrect behavior. Solving the problem of coordination consists in creating, at convenient management costs, a control system capable of directing the objectives of the supply chain as a whole, so as to achieve a greater common good in the medium term, as an alternative to the state of affairs in which each participant pursues, on its own behalf, lower but immediate returns. Our smart contracts for innovative supply chain management replace human coordinators in tackling the problems above, thus eliminating one major obstacle to their effective solution, namely the need to trust the coordinator itself. Furthermore, in this way, by automating the process of coordination, they unburden the supply chain of a considerable management cost. Contracts of this kind not only automate contract execution as in standard smart contracts, but also adjust costs and compensations of the members of a supply chain, effectively taking up the role that was of human coordinators. Thus, we refer to them as “intelligent smart contracts.” In the course of the paper, we will illustrate an innovative supply chain architecture based on intelligent smart contracts running on blockchain, we will detail the algorithmic methodologies underlying the decision-making process of these contracts and we will outline the wider socio-economic perspectives opened by our approach.
Purpose The purpose of this paper is to analytically examine the viability of using blockchain technology (BT) in a public distribution system (PDS) supply chain to overcome issues of shrinkage, misplacement and ghost demand. Design/methodology/approach The authors use a standard news vendor model with two objectives, the first of which includes a reduction of the total cost of stock, while the second includes minimization of the negative impact of human suffering due to the nonavailability of subsidized food supplies to the needy people. Findings The authors applied the model to a real-life case to draw meaningful insights. The authors also analyzed the cost/benefit tradeoff of adopting BT in a PDS supply chain. The results show that the adoption of BT in a charitable supply chain can reduce pilferage and ghost demand significantly. Originality/value The paper is positioned for utilizing inventory visibility via consistent and tamper-resistant data stream flow capability of BT to enhance the overall efficiency of PDS. Notably, Indian PDS faces three major challenges in terms of its supply chain efficiency.
Self-executing smart contract is believed to revolutionize global procurement by eliminating payment delay and enhancing transaction efficiency. This paper studies the value of smart contract in global procurement, and how the tariff regulations (specific tariff and ad valorem tariff) would affect the retailer’s preference of adopting smart contract.
Compared to traditional contract, the adoption of smart contract alleviates the supplier’s cost pressure while induces the retailer’s cash opportunity cost. Therefore, whether to adopt smart contract in global procurement becomes the retailer’s strategic and practice-relevant decision. The investigation of import tariffs also appears new in the literature.
We develop a game-theoretical model consisting of a retailer and an overseas supplier, where the retailer resells the supplier’s products and also sells self-brand products under the regulation of either a specific or an ad valorem tariff. Under both the tariffs, the retailer adopts either the traditional contract or smart contract to procure from the supplier.
We identify interesting interactions among tariff regulations, the supplier’s pricing decisions, and the value of cash opportunity cost (information update) under smart contract (traditional contract). We find that an increased specific tariff reduces the retailer’s incentives to adopt smart contract, while an increased ad valorem tariff could strengthen the retailer’s incentives to adopt smart contract. Interestingly, we find that, if the retailer faces high demand uncertainty, smart contract could be more profitable given the retailer’s low cash opportunity cost and a moderate ad valorem tariff rate.
Our results can be insightful for the retailers who plan to adopt smart contract but worry about the cash opportunity cost issues. We uncover the rationales of import tariffs promoting or hindering the FinTech (Financial Technology) adoption in global procurement.
This paper presents the value proposition of blockchain for Port Community Systems (PCS) by dissecting the business processes in port logistics and unfolding functionalities of blockchain in lowering the transaction cost. This paper contributes to the research by a detailed technical assessment of the plethora of currently available blockchain platforms and consensus mechanisms, against the identified requirements in this specific use case. The results of this technical assessment highlight the central value proposition of blockchain for landlord ports, which is independency from a central authority as the controlling agent. Bridging between two research domains of Information Technology and Logistics, this paper proposes the preferred architectural design requirements of a blockchain-based PCS, including provisioning private sidechains, modular design with inter-chain interoperability, and encrypted off-chain data storage. Availability—the readiness for correct service, and reliability—the continuity of correct service, are heavily reliant on the right choice being made for blockchain design for such a complex use case. A preliminary comparative analysis among different decentralisation levels in this paper suggests that a permissioned public blockchain offers the best trade-off in performance measures for this use case. This technical review identifies six research agenda from a design perspective.
Abstract Managing the integrity of products and processes in a multi-stakeholder supply chain environment is a significant challenge. Many current solutions suffer from data fragmentation, lack of reliable provenance, and diverse protocol regulations across multiple distributions and processes. Amongst other solutions, Blockchain has emerged as a leading technology, since it provides secure traceability and control, immutability, and trust creation among stakeholders in a low cost IT solution. Although Blockchain is making a significant impact in many areas, there are many impediments to its widespread adoption in supply chains. This article is the first survey of its kind, with detailed analysis of the challenges and future directions in Blockchain-enabled supply chains. We review the existing digitalization of the supply chain including the role of GS1 standards and technologies. Current use cases and startups in the field of Blockchain-enabled supply chains are reviewed and presented in tabulated form. Technical and non-technical challenges in the adoption of Blockchain for supply chain applications are critically analyzed, along with the suitability of various consensus algorithms for applications in the supply chain. The tools and technologies in the Blockchain ecosystem are depicted and analyzed. Some key areas as future research directions are also identified which must be addressed to realize mass adoption of Blockchain-based in supply chain traceability. Finally, we propose MOHBSChain, a novel framework for Blockchain-enabled supply chains.
Nowadays, supported by the blockchain technology, initial coin offering (ICO) has emerged as a way to finance projects via crowdfunding. In this article, by building stylized theoretical models, we examine the product development project financing problem under the traditional bank case (Model TBK) and ICO case (Model ICO). Under a commonly used demand function in which product quality scales the price-dependent market demand, we theoretically derive and compare the optimal pricing and quality decisions for the project under both models. We identify the feasible conditions, which govern the feasibility of each financing model. We then develop the optimal rule, in the form of an algorithm, to determine the optimal financing choice. To show the robustness of the results and test the impacts of having a different form of demand function, we examine in the extended models the case when demand function is linear-additive to both price and quality. We find that the major results derived from the main models scenario remain valid in the extended models scenario. Some interesting subtle differences between the two models are also revealed. We conclude by highlighting that the two financing modes (TBK and ICO) are very different and have a substantial impact on the optimal pricing and quality decisions as well as the start-up company's profitability.
Temporary fork is a fundamental phenomenon in many blockchains with proof of work, and the analysis of temporary fork has recently drawn great attention. Different from existing efforts that focus on the blockchain system factors such as block size, network propagation delay or block generation speed, in this paper we explore a new key dimension of computing power from the miners' perspective. Specifically, we first propose a detailed mathematical model to characterize the impact of computing power competition of the mining pools on the temporary fork. We also derive closed-form formula of the probability of temporary fork and the expected mining reward of a mining pool. To reveal the long-term trends on the computing power distributions over the competing mining pools, we then develop an evolutionary game framework based on the temporary fork modeling and accordingly characterize the set of stable evolution equilibriums. Both extensive numerical simulations and realistic blockchain data based evaluation provide evidence to support our theoretical models and discoveries.
Ilhaam A. Omar, Mazin Debe, Raja Jayaraman, Khaled Salah · 6 authors
The COVID-19 pandemic has severely impacted many industries, in particular the healthcare sector exposing systemic vulnerabilities in emergency preparedness, risk mitigation, and supply chain management. A major challenge during the pandemic was related to the increased demand of Personal Protective Equipment (PPE) resulting in critical shortages for healthcare and frontline workers. The lack of information visibility combined with the inability to precisely track product movement within the supply chain requires an robust traceability solution. Blockchain technology is a distributed ledger that ensures a transparent, safe, and secure exchange of data among supply chain stakeholders. The advantages of adopting blockchain technology to manage and track PPE products in the supply chain include decentralized control, security, traceability, and auditable time-stamped transactions. In this paper, we present a blockchain-based approach using smart contracts to transform PPE supply chain operations. We propose a generic framework using Ethereum smart contracts and decentralized storage systems to automate the processes and information exchange and present detailed algorithms that capture the interactions among supply chain stakeholders. The smart contract code was developed and tested in Remix environment, and the code is made publicly available on Github. We present detailed cost and security analysis incurred by the stakeholders in the supply chain. Adopting a blockchain-based solution for PPE supply chains is economically viable and provides a streamlined, secure, trusted, and transparent mode of communication among various stakeholders.
The growing attention to emerging technologies has raised several doubts regarding the sustainability aspects. Among the new technologies, blockchain has laid the foundations for a revolution in the financial field but also in the energy, tourism, medical, industrial and supply chains sectors. Through a systematic literature review, 37 documents were analyzed to describe the sustainable aspects generated using blockchain in supply chains. Therefore, the results achieved provide two levels of analysis. The former highlights the impact of the adoption of blockchain in supply chains based on the three dimensions of sustainability: environmental, economic and social. The latter shows the positive and negative impacts of each form of sustainability. The purpose of the work is to summarize the current state of the art in order to propose a future development agenda based on the need to simulate and define a measurability for each dimension of sustainability. Finally, the study provides a broad overview of practical and managerial implications for entrepreneurs and researchers. On the one hand, the work shows how the use of blockchain improves the profits and reputation of companies. On the other hand, it highlights several research gaps to be investigated and considered by researchers.
La blockchain est une technologie « peer-to-peer » qui enregistre de manière sécurisée et immuable les transactions entre les parties dans des blocs. La blockchain est supposée fournir un environnement fiable et transparent où les intermédiaires qui étaient historiquement nécessaires pour valider et enregistrer les transactions ne sont plus nécessaires dans un monde de plus digitalisé. La blockchain a divers domaines d’application en supply chain. Récemment, de nombreux projets de blockchain ont vu le jour dans le monde notamment en Europe et en Amérique du Nord. Dans cet article, nous présentons l’état de l’art sur potentiel de la blockchain à disrupter les modèles logistiques actuels. Nous illustrons son application actuelle dans le secteur de l’industrie et le commerce de détail. Nous proposons une approche originale basée sur un modèle de jeu en ligne en cours de développement et proposant un scénario de simulation pour tester et apprendre comment la technologie blockchain peut affecter l’efficacité de la supply chain.
Blockchain technology is a disruptive technology that changes business and supply chain models. Using distributed software architecture and advanced computing, blockchain can change the way information is exchanged between actors in the chain. Blockchain technology provides a platform for solving the problem of tracking product information in supply chain management. Accordingly, the present study aims to provide a model for evaluating the maturity of blockchain technology in the agricultural supply chain. The present research is applied that has been done in three stages. In the first phase, the dimensions of the blockchain are ranked by agricultural experts using the SWARA method. The research experts are 13 faculty members of the department of agriculture active in the field of technology application. In the second phase, a model is designed to evaluate blockchain maturity using each dimension of blockchain technology and maturity dimensions. In the third phase, the proposed model is tested using data collected by a questionnaire in the supply chain of a company active in the agriculture sector. The research findings show that smart contracts, Internet of Things (IoT), and transaction records are of the highest importance among the blockchain dimensions. Also, the supply chain under study is in a good condition in digital documents. Theoretically, the originality aspect of the research is that it determines the importance of blockchain dimensions in the field of agriculture and from an applied point of view, it introduces the maturity model of blockchain in supply chain management.
Purpose Blockchain technology has fascinated researchers and industry professionals. Since its birth, the attention for blockchain has been exponentially increasing, however, most of the industries are still skeptical in adoption for value creation. The purpose of this study is to analyze the actual level of implementation and diffusion of blockchain technology within the logistics and transportation industry by comparing and using the collective intelligence of academic literature and industry practices of implementation of blockchain in this domain. Design/methodology/approach This study uses the methodology of systematic literature review along with inductive reasoning. The systematic literature review of academic and industry frontiers together has brought a bigger and real picture into consideration. Findings The results highlight that, within the transportation sector, currently there is a very low diffusion of blockchain, although applications show immense promises for the future. The various application where blockchain technology can make a significant impact are also identified. Research limitations/implications Due to the early stage of experimentation with blockchain technology, high-quality data which is relevant to the optimized usage of this technology in the logistics and transportation industry is not available. Practical implications The study will help the practitioners in identifying additional avenues in which they could implement blockchain for the effectiveness, efficiency and growth of the logistics and transportation industry. Originality/value The analysis of mixed sources of information for undertaking systematic literature review by assessing academic and trade publications is a novelty of this study.
Purpose Information sharing helps improve the efficiency of the supply chain. However, there are some problems in the multi-stage structure supply chain, such as untimely information feedback and distortion. Despite recent progress in ensuring improved collaboration in the past decade or so, the inefficiency status continues to persist. It is also difficult to add value to the supply chain. The information sharing framework and decentralized model designed in this paper are to deal with existing problems. Design/methodology/approach This paper is based on the theoretical research of supply chain information asymmetry and synergetics. We attempt to introduce blockchain technology into supply chain operation management, reconstruct information sharing architecture and provide a new decentralized mode to promote the collaborative operation of all nodes. The information sharing and decentralization operational model are built, which has changed the hierarchical relationship between upstream and downstream enterprises, regarding customers as the center of the whole system and effectively reducing the bullwhip effect. Finally, we selected the home supply chain as an example design and performed system dynamics simulation on the blockchain-based operation process. Findings The model of setting up the scene application mode based on blockchain is helpful to realize the goal of supply chain management to reduce cost, improve quality and enhance the overall efficiency of the system. Originality/value Based on the blockchain technology, this paper constructed a new supply chain operation mode and used the synergetic theory and the concept of the product–service system to explain the process of value increment in detail.
Purpose The purpose of this study is to identify and prioritize the factors that can positively influence the implementation of a blockchain-based supply chain via an integrated framework. To the best of the authors' knowledge, no previous study has focused on prioritizing these factors. Design/methodology/approach First, this study conducts a multivocal literature review, and a total of 48 success factors (SFs) are identified and mapped into 11 categories. Second, the identified success factors and their categories are further validated by industry practitioners using a questionnaire survey approach. Finally, this study applies an analytical hierarchy process to prioritize the identified SFs and their categories and to assess their importance for successful blockchain implementation in the supply chain management process. Findings The “Accessibility” category has the highest importance, and the “Overall efficiency” category has the second highest rank. As far as the success factors are concerned, “Trackability” and “Traceability” are considered to be the prime success factors of a blockchain-based supply chain. The taxonomy of the categories and their success factors provide an outline for supply chain organizations to establish a strategy to implement blockchain technology. Practical implications This technology can be practically applied in a sustainable supply chain. Another vital application of this blockchain technology is in banking and finance because of the blockchain's immutable data recording property. Originality/value To the best of the authors' knowledge, there is no previous study focused on building a taxonomic model that allows supply chain organizations to compare this paper's model with existing models and outline the necessary actions to improve supply chain activities. The questionnaire-based survey developed to validate the success factors in real-world practices and the factors' prioritization can help academic researchers and industrial practitioners to set their strategic goals accordingly.