In the context of logistics, blockchain can help to increase end-to-end visibility along global supply chains. Thus, it can lead to improved tracking of goods and offer tamper-proof data to build trust among parties. Although a variety of blockchain use cases already exists, not all of them seem to rely on blockchain-specific features, but could rather be solved with traditional technologies. The purpose of this paper is, therefore, to identify characteristic use cases described for blockchain in the field of LSCM and to analyze them regarding their mindful technology use based on five mindful technology adoption principles: engagement with the technology; Technological novelty seeking; awareness of local context; cognizance of alternative technologies; and anticipation of technology alteration. The authors identified five blockchain case clusters and chose one case for each category to be analyzed in detail. Most cases demonstrate high engagement with the technology, but there are significant differences when it comes to the other mindful use principles. This paper highlights the need to understand the problem and to apply the right technology in order to solve it. When solving a problem, care should be taken to address a technologyâs unique features to ensure effectiveness and cost-efficiency.
Mario Dobrovnik, David M. Herold, Elmar FĂŒrst, Sebastian Kummer
Despite the claim that blockchain will revolutionise business and redefine logistics, existing research so far is limited concerning frameworks that categorise blockchain application potentials and their implications. In particular, academic literature in transport and logistics to date has not sufficiently distinguished between blockchain adoption (âwhat to adoptâ) and the identification of the right business opportunity (âwhere to startâ). In response, this paper (1) uses Rogersâ (2003) âattributes of innovation frameworkâ to identify potential blockchain applications and (2) presents a framework explicating four transformation phases to subsequently categorise the identified areas of application according to their effects on organisational structures and processes. Using academic and practitioner literature, we classify possible applications for adoption and provide a framework to identify blockchain opportunities in the logistics industry, thereby helping managers to systematically assess where to start building organisational capabilities in order to successfully adopt and deploy blockchain-based technology.
Traditional customer loyalty programs in the FastMoving Consumer Goods industry have several bottlenecks such as lost paper-based coupons and payback process complications. This paper presents the design of a blockchain-based customer loyalty program called Promotion Asset Exchange (PAX) framework, to solve bottlenecks in the traditional customer loyalty programs. PAX framework adopts the smart contracts of blockchain technology by using PAX token to digitalize transaction processes. It provides improved usability for users and more detailed information to be gathered from manufacturing companies' perspective.
A Supply Chain Finance (SCF) system involving and a commercial bank and a capital-constrained retailer is designed in the imperfect capital market with non-zero bankruptcy costs. A decentralized borrower-lender game is analyzed, and the optimal centralized strategy is developed for SCF from the perspective of multi-attribute utility (MAU) maximization, including maximizing the expected profit and the service level, as well as minimizing the bankruptcy cost. Furthermore, we analytically and numerically explore the coordination condition for SCF and conclude that the bank financing scheme with a suitable combination of decision preferences can realize coordination, even super coordination. Through sensitivity analyses and numerical experiments, we discuss the impacts of the borrower's initial capitals on the upstream firm's pricing decision and dig out why he has incentives to support the retailer's choice of adopting SCF. The findings of this study reveal that the capital-constrained retailer would require more initial capital when maximizing MAU than maximizing the expected profit, and thus the equilibrium order quantity and the bankruptcy risk would also be higher. Moreover, based on a suitable combination of decision preferences, our proposed bank financing scheme can realize coordination, even super coordination.
Since the increasing popularization of the emerging blockchain technology, blockchain mining has attracted more and more attention. Due to the difficulty of solo mining, typically miners choose to join a mining pool. As there are many mining pools and different mining pools may adopt different reward mechanisms, how to choose the appropriate mining pool has become one of the most important issues faced by miners, since miners can get different rewards in different pools. In practice, there are three commonly used reward mechanisms for the mining pools to distribute the reward among their miners, namely, the proportional mechanism, the pay-per-share mechanism, and the pay-per-last-N-share mechanism. In this paper, we study the pool selection problem faced by the miners, and model it as a risk decision problem since different reward mechanisms have different risks. We establish a pool selection model based on the maximum-likelihood criterion and also study the effect of N on the miners' optimal pool selection decisions. By utilizing the computational experiments approach, we validate our proposed pool selection strategies. Our results can provide important managerial insights for miners when making their pool selection decisions.
Blockchain has many benefits including decentralization, availability, persistency, consistency, anonymity, auditability and accountability, and it also covers a wide spectrum of applications ranging from cryptocurrency, financial services, reputation system, Internet of Things, sharing economy to public and social services. Not only may blockchain be regarded as a by-product of Bitcoin cryptocurrency systems, but also it is a type of distributed ledger technology through using a trustworthy, decentralized log of totally ordered transactions. By summarizing the literature of blockchain, it is found that more papers focus on engineering implementation and realization, while little work has been done on basic theory, for example, mathematical models (Markov processes, queueing theory and game models), performance analysis and optimization of blockchain systems. In this paper, we develop queueing theory of blockchain systems and provide system performance evaluation. To do this, we design a Markovian batch-service queueing system with two different service stages, while the two stages are suitable to well express the mining process in the miners pool and the building of a new blockchain. By using the matrix-geometric solution, we obtain a system stable condition and express three key performance measures: (a) The number of transactions in the queue, (b) the number of transactions in a block, and (c) the transaction-confirmation time. Finally, We use numerical examples to verify computability of our theoretical results. Although our queueing model is simple under exponential or Poisson assumptions, our analytic method will open a series of potentially promising research in queueing theory of blockchain systems.
Capital constraints exist in many supply chains. We examine a low carbon distribution channel that consists of a manufacturer and a retailer, in which the retailer is constrained by capital. The retailer can be financed by bank credit from a competitive bank market. A Stackelberg model is developed to analyze the integrated decision-making process of ordering, financing, and emission reduction. By comparing the decentralized and centralized channels, we obtain that the manufacturerâs green technology investment should be linearly proportional to the retailerâs order quantity in both channels. Thus, a large order quantity leads to increased efforts to reduce emissions. Results further show that the centralized channel in some cases has fewer emissions and can generate more profits for the whole supply chain compared with the decentralized channel. We therefore propose a revenue sharing contract with a function form to coordinate the distribution channel. When the government allocates appropriate quotas to the supply chain, high carbon price can benefit the environment and supply chain efficiency.
In a country like Ghana where Tilapia is the most preferred and cheapest source of animal protein, closer attention must be paid to the supply chain of such a product. This paper examines the major issues and problems in Tilapia supply chain and logistics in Ghana, and it suggests the intervention of the new and disruptive technology of blockchain. Blockchain technology can have the potential to revolutionize the supply chain of Tilapia in Ghana and bring many advantages to the flow of Tilapia from farmers till the end consumers. Besides, it highlights the role of blockchain in ensuring food safety and in rebuilding a trustful network of Tilapia distribution between producers and customers. A model of Tilapia supply chain based on blockchain technology will be exhibited and explained to provide relative solutions to supply chain management processes of Tilapia.
The topic of blockchain has been inundated with the fanaticism of cryptocurrencies' enthusiasts in recent years. In fact, the theory of blockchain and technologies behind are more worthy to be discussed to bring revolution to nowadays business operation. In this paper, we conduct an interdisciplinary study on business logistics as well as the cutting edge information technologies. We discuss the ongoing projects of blockchain in business industry, and then we propose our assessment model and blockchain framework to seek an enhanced metric for delivery performance with real-time feature and higher accuracy. Based on the our analysis, we identify the shortcomings of traditional assessment on delivery performance in contemporary global supply chain management and we discuss the potential benefits brought by adoption of our proposed framework.
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
Blockchain based supply chain systems benefit from immutability and auditability properties. We develop and implement a blockchain based supply chain system in Ethereum platform. We find and address several challenges both in system design and performance issues. We focus on system design for transaction validation, information retrieval efficiency and fault-tolerant query mechanism. We describe our implementation details to bypass some of the limitations in Ethereum and smart contracts. We design a smart contract to efficiently organize miners' local data structure for transaction validation and information retrieval. We design Ethereum smart contract that allows transaction validation based on a priori knowledge of product life cycle. Our system achieves constant time latency per query independent of the blockchain length. We also consider supply chain systems with malicious miners that respond with false data upon query. We develop a sampling query and majority voting method accordingly. We evaluate our system's performance in emulated setting and show that even with 30% malicious miners, we still achieve reasonable accuracy in only 0.0723 seconds response time on average.
Zhijie Li, Haoyan Wu, Brian King, Zina Ben Miled · 6 authors
Optimizing physical goods distribution by providing increased visibility to trading partners can directly impact product cost. However, current supply chain information systems often lack the ability to cost-effectively relay ground truth information in near real time to all stakeholders and most importantly to the supplier and the customer during the transport of the shipment. This paper presents a solution that addresses this gap through a peer-to-peer architecture that can support the increasing demand for visibility and timely delivery of information during the physical distribution phase of supply chain. Additional features of the proposed solution include scalability, privacy and validity of the information that is delivered to the trading partners. The solution enables small, medium and large businesses to interact in a dynamic and shipment-centric manner through a private blockchain sub-ledger that digitizes the transfer of custody chain for each shipment. Information in this private ledger is augmented by a public event ledger that reflects the movement of the shipment in near real time. Third party monitors are engaged in the validation of the geolocation of the shipments by posting their physical proximity in the form of events to the public ledger.
Lin Chen, Lei Xu, Zhimin Gao, Yang LĂŒ · 5 authors
Proof-of-work was originally proposed by Dwork and Naor in 1992 and has proved its powerfulness in Bitcoin as a decentralized mechanism for blockchain construction. Proof-of-work is the basis of most popular cryptocurrencies and smart contract systems, where participating miners are required to solve difficult mathematical problems to validate transactions. One of the major challenges that proof-of-work faces is the 51% attack, i.e., if an adversary controls more than half of the computation power, he/she can control the blockchain construction and determine which blocks will be included. This is not a major concern when the number of miners is large. However, for an early stage blockchain system with a limited number of users, it is relatively easy for an attacker to launch the 51% attack. To mitigate such risk, we propose a new hybrid blockchain construction scheme that uses the combination of proof-of-work and the stake, which is the number of coins produced by a miner, to determine whether this miner is allowed to construct a block. We prove that stakes play an important role in the hybrid scheme at the beginning, so that an attacker is not able to launch the 51% attack even if he/she controls the majority of the computational power. Meanwhile, the hybrid scheme will converge to pure proof-of-work after sufficiently many blocks are generated, and thus captures the desired properties of proof-of-work. Most importantly, such a convergence is "smooth" in the sense that neither changes in the rules nor parameters are introduced, and thus no hard/soft-forks will be triggered. We also demonstrate the effectiveness of the new scheme using simulations with different configurations, which can help a designer to select adequate parameters for a specific blockchain application.
Purpose
The purpose of this paper is to develop a business theoretical foundation for distributed
ledger technology (DLT) in supply chain management. This consists of describing the
theoretical impact of DLT on transaction cost economics, agency theory and network theory
from a SCM perspective.
Design/methodology/approach
We conduct five explorative case studies of five different DLT-based solutions that are
implemented in current supply chains. The authors interrogate DLT providers as well as
users. Based on the empirical data, the authors derive the impact on three major theories in
the field of supply chain management.
Findings
The paper reveals the theoretical impact of DLT on the above-mentioned theories in the field
of SCM. DLT-based solutions reduce the transaction costs and provides new options to
coordinate market solutions better than implied before. Furthermore, in contrast to
existing implications of network theory, DLT benefits from the size of the network as
they reduce the chances for opportunistic behavior and provide more transparency.
Research limitations/implications
The paper is based on findings of early stage applications of DLT in supply chain
management. Thus, theoretical impacts are expected to be added at an advanced stage.
However, at this point of time the article builds a theoretical foundation for future research
on DLT.
Practical implications
The identification of theoretical impacts helps to understand the practical value of DLT in
supply chain management.
Original/value
This is one of the first papers to add a theoretical foundation to DLT research in supply chain
management that is dominated by application-oriented contributions.
Jen-Hung Tseng, Yen-Chih Liao, Bin Chong, Shih-Wei Liao
As a trust machine, blockchain was recently introduced to the public to provide an immutable, consensus based and transparent system in the Fintech field. However, there are ongoing efforts to apply blockchain to other fields where trust and value are essential. In this paper, we suggest Gcoin blockchain as the base of the data flow of drugs to create transparent drug transaction data. Additionally, the regulation model of the drug supply chain could be altered from the inspection and examination only model to the surveillance net model, and every unit that is involved in the drug supply chain would be able to participate simultaneously to prevent counterfeit drugs and to protect public health, including patients.
Open-access blockchains based on proof-of-work protocols have gained tremendous popularity for their capabilities of providing decentralized tamper-proof ledgers and platforms for data-driven autonomous organization. Nevertheless, the proof-of-work based consensus protocols are vulnerable to cyber-attacks such as double-spending. In this paper, we propose a novel approach of cyber risk management for blockchain-based service. In particular, we adopt the cyber-insurance as an economic tool for neutralizing cyber risks due to attacks in blockchain networks. We consider a blockchain service market, which is composed of the infrastructure provider, the blockchain provider, the cyber-insurer, and the users. The blockchain provider purchases from the infrastructure provider, e.g., a cloud, the computing resources to maintain the blockchain consensus, and then offers blockchain services to the users. The blockchain provider strategizes its investment in the infrastructure and the service price charged to the users, in order to improve the security of the blockchain and thus optimize its profit. Meanwhile, the blockchain provider also purchases a cyber-insurance from the cyber-insurer to protect itself from the potential damage due to the attacks. In return, the cyber-insurer adjusts the insurance premium according to the perceived risk level of the blockchain service. Based on the assumption of rationality for the market entities, we model the interaction among the blockchain provider, the users, and the cyber-insurer as a two-level Stackelberg game. Namely, the blockchain provider and the cyber-insurer lead to set their pricing/investment strategies, and then the users follow to determine their demand of the blockchain service. Specifically, we consider the scenario of double-spending attacks and provide a series of analytical results about the Stackelberg equilibrium in the market game.
Maged M. Eljazzar, Mohamed Amr, Sally Kassem, Mohamed Ezzat
Technology has been playing a major role in our lives. One definition for technology is all the knowledge, products, processes, tools,methods and systems employed in the creation of goods or in providing services.This makes technological innovations raise the competitiveness between organizations that depend on supply chain and logistics in the global market. With increasing competitiveness, new challenges arise due to lack of information and assets tractability. This paper introduces three scenarios for solving these challenges using the Blockchain technology. In this work, Blockchain technology targets two main issues within the supply chain, namely, data transparency and resource sharing. These issues are reflected into the organizations strategies and plans.
In recent years, with the growth of international trade and development of economies, the volume of container throughput at China's ports has grown rapidly. Yet, the business process for the Less Container Load (LCL) transport industry in most ports of China still remain complicated and inefficient. In this article, the authors see numerous opportunities for process improvement by integrating the information among the various actors using the blockchain concept. In this paper, the authors propose to build a LCL Export Platform (LEP) using the blockchain concept to optimize the LCL operations for international trading, by integrating and sharing information among forwarder agencies and their clients.
Blockchain technology, popularized by Bitcoin cryptocurrency, is characterized as an open-source, decentralized, distributed database for storing transaction information. Rather than relying on centralized intermediaries (e.g., banks) this technology allows two parties to transact directly using duplicate, linked ledgers called blockchains. This makes transactions considerably more transparent than those provided by centralized systems. As a result, transactions are executed without relying on explicit trust [of a third party], but on the distributed trust based on the consensus of the network (i.e., other blockchain users). Applying this technology to improve supply chain transparency has many possibilities. Every product has a long and storied history. However, much of this history is presently obscured. Often, when negative practices are exposed, they quickly escalate to scandalous, and financially crippling proportions. There are many recent examples, such as the exposure of child labor upstream in the manufacturing process and the unethical use of rainforest resources. Blockchain may bring supply chain transparency to a new level, but presently academic and managerial adoption of blockchain technologies is limited by our understanding. To address this issue, this research uses the Unified Theory of Acceptance and Use of Technology (UTAUT) and the concept of technology innovation adoption as a foundational framework for supply chain traceability. A conceptual model is developed and the research culminates with supply chain implications of blockchain that are inspired by theory and literature review.