Journal writing StabilityLewis A. Njualem of California State University in San Bernadino, California, has explored the application of blockchain technology for improving supply chain sustainability.
Study: Using Blockchain Technology in Supply Chain Sustainability: An Origins Perspective. Image credit: elenabsl/Shutterstock.com
What is Blockchain?
Blockchain is an emergent, disruptive technology. While significant focus has been placed on its use for cryptocurrencies in the media in recent years, blockchain technology has numerous potential benefits for many industries.
Blockchain technology uses a distributed, decentralized database or ledger to store information digitally. The main benefit of blockchain technology is to guarantee data security and integrity, generating trust without the need for a third party. Data is stored in chronological blocks, which are chains of data sets that, when complete, link to other blocks. This forms a chain of data, which is known as a blockchain.
With blockchain, digital information can be recorded and shared, but not modified. This creates an immutable ledger which is available forever as it cannot be changed or deleted. For this reason, another name for blockchains is distributed ledger technology.
Initial article search results by source. Image credit: Njualem, LA et al., Sustainability
Supply Chains: Requirements and Challenges
Supply chains are an integral element of every industry, from manufacturing to the energy sector, mining, transportation and the biomedical industry. Commercial goods come from a variety of sources and can end up in many places where the end user is located. Supply chains are complex and time-sensitive in nature, especially in today’s hyper-globalized world.
Flexible manufacturing and the stretched nature of the supply chain produce numerous challenges for delivering commercial goods to customers. For example, one of the main challenges facing supply chains is changing consumer preferences, especially in terms of sustainability and provenance. Consumers are increasingly demanding knowledge of where their products originate and their carbon footprint.
Track and trace are essential elements of supply chain distribution that help meet these customer demands and improve provenance. However, this can be complicated by a number of factors. Different bills of material are used for many components and raw materials, which is a common practice in the automotive industry, for example.
In the case of the automotive industry, some alternative components are available for customization purposes, which can further complicate provenance challenges, as customers do not always know exactly where these components originate. Improving provenance information helps inform consumers and downstream companies about the sustainability of the products they buy.
The result for the year of publication of the article. Image credit: Njualem, LA et al., Sustainability
The paper evaluated the use of blockchain technologies to increase provenance and sustainability in manufacturing supply chains. So far, there is a lack of research on the use of blockchain outside of the financial and cryptocurrency sectors. The study aims to help fill this important knowledge gap, recognizing the potential of blockchains to improve multiple industries.
Studies on the application of blockchain technologies outside the financial sector have also largely focused on specific supply chains. This is usually from an industry perspective and does not take into account the effects on supply networks. The new document aims to address provenance issues across the value chain in relation to raw materials, ingredients and finished products.
Three main questions were investigated within the research. First, the paper investigates how much research has been conducted on the use of blockchain technologies for improving supply chain sustainability. Second, the study explores the technology’s known benefits for visibility within the supply chain. Third, it explores current challenges related to origins.
Appropriate methodologies were used in the research to create a platform for analyzing current research in this nascent field. A content analysis method was applied to the current literature. Textual analysis is used to enable data collection, analysis and key concept synthesis.
Through thorough analysis and interpretation of current research, the study aims to motivate future studies in the application of blockchain technology to issues of provenance and supply chain sustainability.
A conceptual model for sustainable supply chain visibility enabled by blockchain. Image credit: Njualem, LA et al., Sustainability
Study findings and conclusions
The complexities in the modern and globalized supply chain, which affect sustainability and provenance, have been the main drivers of the exploration of innovative solutions such as blockchain technology, leading to an increasing paradigm shift. Numerous studies in recent years have demonstrated the growth of research interest in the application of these technologies in this sector.
Blockchain technologies offer enhanced capabilities to meet these requirements compared to other disruptive innovations, such as IOT and RFID, due to decentralization and immutability. This capability allows blockchains to improve security, trust, transparency and accountability. Indeed, some companies have already entered the application of blockchains, such as Walmart and IBM.
However, there are some challenges with this nascent research field. First, since it is in its infancy, the studies are limited. In addition, there are technical issues with control, regulation, scalability and knowledge, which affect factors such as the visibility of sustainable supply chains.
Other barriers exist in origin, such as criminality, different government regulations and culture, which must be taken into account by researchers. The innovation of the technology may cause some challenges, but the field is very promising. The analysis and observations of the paper help to lay the groundwork for future study and help identify new trajectories in research.
Njualem, LA (2022) Using blockchain technology in supply chain sustainability: an origin perspective Durability, 14(17), 10533 [online] mdpi.com. Available at: https://www.mdpi.com/2071-1050/14/17/10533