Is Blockchain a Silver Bullet for Supply Chain Management? Technical Challenges and Research Opportunities

Akhil Kumar, Rong Liu, Zhe Shan

Research output: Contribution to journalArticle

Abstract

Blockchain technology is based on the idea of a distributed, replicated, and immutable digital ledger that enables parties to conduct business in a trustful and transparent way without the need for a central authority or intermediary. Its most popular application thus far is in payment system applications, e.g., bitcoin. This disruptive technology is expected to contribute significant business value to multiple industry sectors, including supply chain management (SCM), where it can provide greater visibility, accountability and trust in interorganizational business collaboration. In this article, we review some fundamental concepts of Hyperledger Fabric, one of the most mature permissioned blockchain implementations. Further, we use the context of a food supply chain to highlight key design and implementation challenges for blockchain, and provide a strategic assessment of its prospects. Our aim is to dispel misguided notions and myths about blockchain as a silver bullet for all businesses. We believe it is important to penetrate the hype to allow a more realistic understanding of this technology. Blockchain is a high-cost, high-overhead storage medium. It is viable only when its higher cost is counterbalanced by the set of benefits that are identified by a careful and thorough analysis of the business. Thus, it will be used mainly for storing important data related to interorganizational transactions among partners where trust is lacking and provenance and visibility are critical. Our paper offers enterprises a systematic way to understand the real costs and risks of blockchain adoption. The insights gained in the SCM context also apply to other areas such as financial services and healthcare that could leverage the full potential of blockchain technology.

Original languageEnglish (US)
JournalDecision Sciences
DOIs
StatePublished - Jan 1 2019

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Supply chain management
Industry
Visibility
Food supply
Costs
Supply chains

All Science Journal Classification (ASJC) codes

  • Information Systems and Management
  • Business, Management and Accounting(all)
  • Management of Technology and Innovation
  • Strategy and Management

Cite this

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Is Blockchain a Silver Bullet for Supply Chain Management? Technical Challenges and Research Opportunities. / Kumar, Akhil; Liu, Rong; Shan, Zhe.

In: Decision Sciences, 01.01.2019.

Research output: Contribution to journalArticle

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