Chapter 20: Blockchain Applications in Supply Chain

Since the invention of the blockchain technology and introduction of bitcoin in 2008 (Nakamoto 2008), researchers and corporations have been looking at adopting the technology in the supply chain space. Adoption of this technology is still new. Although many companies are in the early stages of determining the paths to adopting this technology, studies indicate the potential of adopting blockchain (Moore 2018). Given that the technology provides the potential for major benefits across multiple companies within a supply chain, the future of adopting blockchains in supply chains looks promising (Pawczuk, Massey, and Schatsky 2018).

Adopting blockchain technology in supply chains has the potential to generate substantial benefits for companies in the supply chain.Current supply chains, with their distributed systems of intracompany enterprise planning systems, do not integrate seamlessly across disparate systems. Even where such systems are connected through interfaces, transaction records reside in multiple systems, and no single mechanism ensures that the data at any particular point in the supply chain are accurate. Likewise, no mechanism controls changes to the information related to a product entity from the stage where the product's components are sourced to its assembly stages to the distribution stages. A company in such a supply chain can alter the information related to the product based on its own needs and issues. Other companies in the supply chain that are either upstream or downstream of this specific company can do the same. However, all companies in the supply chain would have to rely on the information provided by the other supply chain partners without a recourse to any assurance that the information is accurate. As a result, many cases of fraud, deceptive practices, and risks exist across many supply chains (Hoffman 2008; Cohn 2016).