Managing Supply Chain Digitalization With Blockchain Technology

Introduction

As a result of changes in the economic, environmental, and business environments, the modern manufacturing industry appears to be riskier than ever before, which created a need for improving its supply chain privacy and security. These changes are for several reasons. First, the increasing global economy produces and depends on people's free flow of goods and information. Second, disasters have increased in number and intensity during recent decades. Natural disasters such as earthquakes, floods, or pandemics (e.g., coronavirus) strike more often and have a more significant economic impact. Simultaneously, the number of human-made disasters such as industrial sabotage, wars, and terrorist attacks that affects manufacturing supply networks has increased (Colema, 2006). These factors have created significant challenges for manufacturers, the country, and the global economic condition. Simply put, manufacturers must deploy continuous improvement in business processes, which improve both supply chain activities execution and security enhancement.

Besides, today's manufacturing industry (e.g., apparel, automobile) is inclined to worldwide business operations due to the socioeconomic advantage of the globalization of product design and development (Pal, 2020). For example, a typical apparel manufacturing network consists of organizations' sequence, facilities, functions, and activities to produce and develop an ultimate product or related services. The action starts with raw materials purchased from selective suppliers and products produced at one or more production facilities (Pal, 2019). Next, these products are moved to intermediate collection points (e.g., warehouses, distribution centers) to store temporarily to move to the next stage of the manufacturing network and finally delivered the products to intermediate storages or retailers or customers (Pal, 2017) (Pal, 2018).

This way, global manufacturing networks are increasingly complicated due to a growing need for inter-organizational and intra-organizational connectedness enabled by advances in modern Information technologies (e.g., RFID, Internet of Things, Blockchain, Service-Oriented Computing, Big Data Analytics) (Okorie et al., 2017) and tightly coupled business processes. Also, manufacturing business networks use information systems to monitor operational activities in nearly real time.

Digitalizing business activities attract attention from manufacturing network management, improving communication and collaboration, and enhancing trust within business partners due to real-time information sharing and better business process integration. However, the above new technologies come with different disruptions to operations and ultimate productivity. For example, some operational disruptions are malicious threats that hinder the safety of goods and services, and ultimately customers lose trust in doing business with the manufacturing companies.

As a potential solution to tackle security problems, practitioners and academics have reported attractive research with IoT and blockchain-based information systems for maintaining transparency, data integrity, privacy, and security-related issues. In a manufacturing data communication network context, the Internet of Things (IoT) system integrates different heterogeneous objects and sensors which surround manufacturing operations (Pal, 2019) and facilitates information exchange among the business stakeholders (also known as nodes in networking terms). With the rapid enlargement of the data communication network scale and the intelligent evolution of hardware technologies, typical standalone IoT-based applications may no longer satisfy the advanced need for efficiency and security in the context of the high degree of heterogeneity of hardware devices and complex data formats. Firstly, centralized architecture's burdensome connectivity and maintenance costs result in its low scalability. Secondly, centralized systems are more vulnerable to adversaries' targeted attacks under network expansion (Pal & Yasar, 2020).