Nowadays, the small and medium-sized enterprises (SMEs) are frequently confronted with the difficulty of financing hard and financing expensive. This paper investigates a financing strategy called the purchase order financing together with reverse factoring financing strategy, which is able to fulfill the financing demands of SMEs at different stages. Numerical experiments are conducted in order to compare the supply chain performance and efficiency between this financing strategy and the purchase order financing models in decentralized and centralized decision-making situations, which concludes that models considering the reverse factoring financing, i.e., purchase order financing together with reverse factoring financing two-stage decision-making model and the global decision-making model, have better supply chain efficiency than the benchmark model that only considers the purchase order financing, and the choice between two candidates depends on the standard deviations and the retailer prices.
Purpose There is a lot of interest in blockchain in the supply chain and several papers call it a disruptive technology. Existing research, however, is mostly conceptual and focused on use-case development and early pilots. This paper aims to report the findings from a workshop with managers aimed at empirically exploring what adoption rates and focus areas are for blockchain in the supply chain, what drives blockchain in the supply chain applications and what barriers are to the implementation of blockchain in the supply chain. Design/methodology/approach A workshop with managers was organized to empirically explore blockchain adoption levels and focus areas in the supply chain, as well as drivers and barriers of implementation. Findings Workshop participants reported that adoption of blockchain in the supply chain today is very limited but actively considered by many. Drivers for this consideration include achieving greater transparency and visibility, as well as, improving processes and reducing costs. Participants identify many barriers, including a lack of understanding of costs and benefits of blockchain in the supply chain. Interestingly, participants report less concern about the feasibility of the technology implying managerial consideration if progressing beyond the technology and into the potential adoption of it. As a result, participants may be moving beyond the hype surrounding blockchain and giving consideration to the many remaining questions. A working technology does not yet mean that there is a feasible supply chain adoption. As a result, it may be too early to tell whether blockchain will be a disruptive technology. This paper identifies several fruitful areas for further consideration by management and in research. Originality/value As there is little empirical research on blockchain in the supply chain, this paper moves beyond use-case development and the exploration of pilot cases and studies how companies may consider supply chain adoption beyond the pilot and the early development of blockchain. Although only offering an initial exploration, this paper uncovers progress being reported in industry and many areas where further consideration and research can help advance thinking and practice.
Problem definition: Blockchain is a form of distributed ledger technology. While it has grown in prominence, its full potential and possible downsides are not fully understood yet, especially with respect to operations management (OM). Academic/practical relevance: This article fills this gap. Methodology: After briefly reviewing the technical foundations, we explore multiple business and policy aspects. Results: We identify five key strengths, the corresponding five main weaknesses, and three research themes of applying blockchain technology to OM. The key strengths are (1) visibility, (2) aggregation, (3) validation, (4) automation, and (5) resiliency. The corresponding weaknesses are (1) lack of privacy, (2) lack of standardization, (3) garbage in, garbage out, (4) black box effect, and (5) inefficiency. The three research themes are (1) information, (2) automation, and (3) tokenization. Managerial implications: We illustrate these research themes with multiple promising research problems, ranging from classical inventory management, to new areas of ethical OM, and to questions of industrial organization.
Blockchain innovations are having a profound effect on the global financial industry, yet little is known about how the emerging technology can potentially disrupt other industries. The supply chain industry represents a prominent and very promising application scenario for blockchain to enable transparency among untrusted stakeholders as well as increased efficiency and traceability throughout production and distribution processes, however there is a lack of empirical research available in that field. The primary purpose of this research is to address that research gap by exploring the application of blockchain technologies in supply chains. First, this research examines recent literature to identify current inefficiencies in existing supply chain information technologies. Secondly, key features of blockchain are identified to provide a clear understanding of the technology. Thirdly, current applications are documented and categorized to identify where blockchain applications can have the most impact on the three flows of the supply chain. The analysis shows most of the process areas in supply chain that blockchain is expected to improve are informational, which given the large amount of interdependencies between flows, has a positive impact on the subsequent financial and material flows. Finally, recommendations for future research are given to address further research questions.
Shailesh J. Divey, Mert Hakan Hekimoğlu, T. Ravichandran
The blockchain is a distributed digital ledger technology that is maintained and governed by a consensus mechanism. While the technology took root in the financial services industry, supply chain and logistics industry are considered to be the next promising use case for this fast-evolving technology. This paper recaps, reviews, and discusses key research issues that needs to be explored pertinent to application of blockchains in supply chains and logistics.
In order to help track and disclose environmental performance across the textile and apparel supply chain, DLT is proposed as an ideal tool for information storage and communication in a highly transparent network. Every participant in the network can get access to the information for supply chain process, and eventually build a high level of trust on suppliers' environmental governance. This paper aims to bring out the potential of DLT technology on the textile and apparel supply chain. We discuss how to utilize the unique characteristics of DLT for achieving low carbon emissions during textile and apparel manufacturing through better supply chain transparency. In details, an overview of DLT technology is provided in this paper by showing the design, business implications and opportunities in the textile and apparel supply chain. In addition, a case study is illustrated on DLT technology in the textile and apparel supply chain transparency for World Wide Fund for Nature (WWF)'s Low Carbon Manufacturing Programme (LCMP).
Smart operation and maintenance (O&M) service is the major industrial service in Industry 4.0, but it's not easy for manufacturers to achieve high returns. Regularly manufacturers can't set a higher service price due to customer's perception of the service value; a new revenue model is urgently needed. In this study, we develop a value-based contract for smart O&M service based on equitable entropy. Firstly, we summarise the characteristics of smart O&M service's value creation and acquisition. And the service value is measured under the PaaS model by calculating the maximum revenue gap of the customer in the two cases of customer self-O&M and manufacturer's smart O&M service. Then a revenue-sharing model is built based on equitable entropy which the criterion is the valid data provided by each party. The results show that by signing a value-based contract, the smart O&M service can not only significantly improve the customer's revenue by downtime losses reduction and productivity improvement, but also create higher returns for the manufacturer. In addition, the fairest revenue sharing coefficient and relatively fair interval for revenue sharing decision can be accurately calculated by equitable entropy. These conclusions provide a theoretical basis for the manufacturer to better implement smart O&M service.
Purpose This paper aims to encourage the study of blockchain technology from an operations and supply chain management (OSCM) perspective, identifying potential areas of application, and to provide an agenda for future research. Design/methodology/approach An explanation and analysis of blockchain technology is provided to identify implications for the field of OSCM. Findings The hype around the opportunities that digital ledger technologies offer is high. For OSCM, a myriad of ways in which blockchain could transform practice are identified, including enhancing product safety and security; improving quality management; reducing illegal counterfeiting; improving sustainable supply chain management; advancing inventory management and replenishment; reducing the need for intermediaries; impacting new product design and development; and reducing the cost of supply chain transactions. The immature state of practice and research surrounding blockchain means there is an opportunity for OSCM researchers to study the technology in its early stages and shape its adoption. Research limitations/implications The paper provides a platform for new research that addresses gaps in knowledge and advances the field of OSCM. A research agenda is developed around six key themes. Practical implications There are many opportunities for organisations to obtain an advantage by making use of blockchain technology ahead of the competition, enabling them to enhance their market position. But it is important that managers examine the characteristics of their products, services and supply chains to determine whether they need or would benefit sufficiently from the adoption of blockchain. Moreover, it is important that organisations build human capital expertise that allows them to develop, implement and exploit applications of this technology to maximum reward. Originality/value This is one of the first papers in a leading international OSCM journal to analyse blockchain technology, thereby complementing a recent article on digital supply chains that omitted blockchain.
Purpose The purpose of this paper is to understand the enabling and constraining roles of blockchain technology (BCT) in managerial work practices and conceptualise the technology–performance relationship in supply chain management (SCM). Design/methodology/approach A structured literature review and a theory-driven approach are used. A set of propositions are developed, suggesting how the use of BCT in supply chains can be understood to simultaneously enable and constrain SCM and performance. Findings The analysis identifies four enabling and three constraining blockchain identities to explain how the technology either “facilitates” or “impedes” SCM and supply chain performance. Traceability, which emanates from its ability to provide data immutability, ranks highly as a core innovation of the technology. The blockchain is mainly seen as an opportunity to exploit existing supply chain resources and competencies. Research limitations/implications One limitation of the research is its conceptual nature. Future research should test the developed propositions empirically. Further research should focus on BCT as an opportunity to explore and as a relationship-building technology. More research is also needed focussing on the complex and simultaneous enabling and constraining effects of BCT in supply chains. Originality/value The paper shows the important and complex Janus-faced implications of embedding BCT in supply chains and demonstrates how organisational theory can be applied to explore the relationship between blockchain and SCM.
Vendor-managed inventory (VMI) is a widely used collaborative inventory management policy in which manufacturers/vendors manage the inventory of retailers and take responsibility for making decisions related to the timing and extent of inventory replenishment. There exist several prerequisites for a successful VMI strategy implementation like information sharing, trust, systems integration and long-term collaboration. However, in nowadays logistics flows, complex processes, high number of participants and complex distribution channels impede the successful adoption of VMI strategies. In this paper, we propose a new interaction framework based on smart contracts and blockchain for governing the relationship between the vendor and the buyer. A use-case VMI scenario is presented along with a functional smart contract. Tests performed using a local private blockchain illustrate the applicability of the proposed architecture along with the significant benefits for each participant.
The circular economy (CE) is an emergent concept to rethink and redesign how our economy works. The concept recognizes effective and efficient economic functioning at multiple scales—governments and individuals, globally and locally; for businesses, large and small. CE represents a systemic shift that builds long-term resilience at multiple levels (macro, meso and micro); generating new business and economic opportunities while providing environmental and societal benefits. Blockchain, an emergent and critical technology, is introduced to the circular economy environment as a potential enabler for many circular economic principles. Blockchain technology supported information systems can improve circular economy performance at multiple levels. Product deletion, a neglected but critical effort in product management and product portfolio management, is utilized as an illustrative business scenario as to blockchain’s application in a circular economy research context. Product deletion, unlike product proliferation, has received minimal attention from both academics and practitioners. Product deletion decisions need to be evaluated and analyzed in the circular economy context. CE helps address risk aversion issues in product deletions such as inventory, waste and information management. This paper is the first to conceptualize the relationships amongst blockchain technology, product deletion and the circular economy. Many nuances of relationships are introduced in this study. Future evaluation and critical reflections are also presented with a need for a rigorous and robust research agenda to evaluate the multiple and complex relationships and interplay amongst technology, policy, commerce and the natural environment.
Based on the influence of block chain technology on information sharing among supply chain participants, mean-CVaR (conditional value at risk) is used to characterize retailers’ risk aversion behavior, while a Stackelberg game is taken to study the optimal decision-making of manufacturers and retailers during decentralized and centralized decision-making processes. Finally, the mean-CVaR-based revenue-sharing contract is used to coordinate the supply chain and profit distribution. The research shows that, under the condition of decentralized decision-making, when the retailer’s optimal order quantity is low, it is an increasing function of the weighted proportion and the risk aversion degree, while, when the retailer’s optimal order quantity is high, it is an increasing function of the weighted proportion, and has nothing to do with the risk aversion degree. The manufacturer’s blockchain technology application degree is a reduction function of the weighted proportion. When the retailer’s order quantity is low, the manufacturer’s blockchain technology application degree is a decreasing function of risk aversion, while, when the retailer’s order quantity is high, the manufacturer’s blockchain technology application is independent of risk aversion. The profit of the supply chain system under centralized decision-making is higher than that of decentralized decision-making. The revenue sharing contract can achieve the coordination of the supply chain to the level of centralized decision-making. Through blockchain technology, transaction costs among members of the supply chain can be reduced, information sharing can be realized, and the benefits of the supply chain can be improved. Finally, the specific numerical simulation is adopted to analyze the weighted proportion, risk aversion and the impact of blockchain technology on the supply chain, and verify the relevant conclusions.
Thomas K. Dasaklis, Fran Casino, Constantinos Patsakis
Identifying the optimal granularity level of traceable units is necessary when implementing traceability, particularly in food supply chains. In this paper we propose a generic framework for defining granularity levels based on product's unique characteristics, supply chain processes and stakeholders engagement. We determine different levels of granularity by using smart contracts within a blockchain-enabled supply chain traceability architecture. The granularity relates to different levels depending on the application of information within a company and between companies across complex supply chain networks. The applicability of the proposed framework is demonstrated with a food supply chain use case scenario by developing a local private blockchain-enabled architecture. The overall benefits of the proposed model are discussed along with several fruitful areas for further research directions.
Adrián E. Coronado Mondragón, Christian E. Coronado Mondragon, Etienne S. Coronado
Distributed ledger/blockchain has emerged as an important technology that can have a significant impact on the management of supply chains. This paper investigates the feasibility of adopting blockchain technology in both manufacturing and perishable goods supply chains. Two cases are used to illustrate the approach proposed in this work. The first case addresses the use of blockchain technology in the supply chain of composite materials in order to facilitate the certification process of components made of carbon fiber employed in the aerospace sector. The second case investigates the feasibility of adopting blockchain technology in the supply chain of live seafood. In the first case blockchain technology has the potential to be used by industry peers to perform experimental validation tests including flammability, crashworthiness, operational, etc. Additionally in both cases blockchain technology can be used for transportation, handling and storage, not to mention tamper proof checks, product history and provenance tracking.
Chandra Narayanaswami, R. Nooyi, S. R. Govindaswamy, Ramesh Viswanathan
Increasing globalization, e-commerce usage, and social awareness are leading to increased consumer demand for variety, value, convenience, immediacy, verifiable authenticity and provenance, ethical materials sourcing and manufacturing, regulatory compliance, and services after sales. Fulfilling this increased complexity of consumer demand has required supply chains to evolve into multienterprise networks with numerous flow paths in production, merchandising, and fulfillment involving many organizational/institutional handoffs, to effectively manage a large number of complex products with shorter life cycles and high transaction volumes. The supply chain management models of today place higher demands on automation and require a transition from the traditional paradigm of planning followed by long-loop execution for a handful of segments to a paradigm of managing a portfolio of end-to-end instrumented data-rich microsegmented supply chains that are monitored and adjusted in near real time. These essential aspects and challenges of supply chain management require the supporting information technology to also evolve. In this paper, we propose a novel reference software architecture to address the complex requirements of modern supply chains that also integrates blockchain into several layers of the stack. We present several examples where this reference architecture is applicable, and then demonstrate through a use case in production that integrating blockchain technology helps with providing visibility, documenting provenance, and allowing permissioned data access to facilitate the automation of many high-volume tasks such as reconciliations, payments, and settlements.
Maciel M. Queiroz, Renato Telles, Sílvia H. Bonilla
Purpose This paper aims to identify, analyse and organise the literature about blockchains in supply chain management (SCM) context (blockchain–SCM integration) and proposes an agenda for future research. This study aims to shed light on what the main current blockchain applications in SCM are, what the main disruptions and challenges are in SCM because of blockchain adoption and what the future of blockchains holds in SCM. Design/methodology/approach This study followed the systematic review approach to analyse and synthesise the extant literature on blockchain–SCM integration. The review analysed 27 papers between 2008 and 2018 in peer-reviewed journals. Findings Blockchain–SCM integration is still in its infancy. Scholars and practitioners are not fully aware of the potential of blockchain technology to disrupt traditional business models. However, the electric power industry seems to have a relatively mature understanding of blockchain–SCM integration, demonstrated by the use of smart contracts. Additionally, the disintermediation provided by blockchain applications has the potential to disrupt traditional industries (e.g. health care, transportation and retail). Research limitations/implications The limitations of this study are represented mainly by the scarcity of studies on blockchain–SCM integration in leading journals and databases. Practical implications This study highlights examples of blockchain–SCM integration, emphasising the need to rethink business models to incorporate blockchain technology. Originality/value This study is the first attempt to synthesise existing publications about the blockchain–SCM integration, shedding light on the disruption caused by, and the necessity of, the SCM reconfigurations.
Products and associated materials are important supply chain flows. Product management greatly influences supply chain performance. Supply chain information is also critical for sound product management. Product deletion, rationalization, or discontinuation research is an important dimension often overlooked in product management. It is a critical issue for many managerial reasons, many espoused in this article. Product deletion is typically a multi-staged process including recognition, analysis and revitalization, evaluation and decision formation, and implementation. Each stage requires complicated information and data support from supply chain activities. Failure in information generating, understanding, and accuracy can prove risky for rational product deletion. Blockchain technology may help address information challenges. Blockchain technology provides traceability, transparency, security, accuracy, and smart execution, which can all contribute to the product deletion and rationalization decision. Application recommendations and managerial insights into product deletion decision making processes with blockchain technology are provided.
Integrating triple bottom line (TBL) goals into supply chains (SCs) is a challenging task which necessitates the careful coordination of numerous stakeholders’ individual interests. Recent technological advancements can impact TBL sustainability by changing the design, structure, and management of modern SCs. Blockchain technology enables immutable data records and facilitates a shared data view along the supply chain. The Physical Internet (PI) is an overarching framework that can be applied to create a layered and comprehensive view of the SC. In this conceptual paper, I define and combine these technologies and derive several high-level research areas and research questions (RQ) to investigate adoption and management as well as structural SC issues. I suggest a theory-based research agenda for the years to come that exploits the strengths of rigorous academic research, while remaining relevant for industry. Furthermore, I suggest various well-established theories to tackle the respective research questions and provide specific directions for future research.
Blockchain possesses the potential of transforming global supply chain management. Gartner predicts that blockchain could be able to track $2 T of goods and services in their movement across the globe by 2023, and blockchain will be a more than $3 trillion business by 2030. Nowadays, a growing number of blockchain initiatives are disrupting traditional business models in each sector. In this paper, we provide a timely and holistic overview of the state-of-the-art, challenges, gaps and opportunities in global supply chain and trade operations for both the private sector and governmental agencies, by synthesising a wide range of resources from business leaders, global international organisations, leading supply chain consulting firms, research articles, trade magazines and conferences. We then identify collaborative schema and future research directions for industry, government, and academia to jointly work together in ensuring that the full potential of blockchain is unleashed amidst the socioeconomic, geopolitical and technological disruptions that global supply chains and trade are facing.