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From the last few years, supply chain management has become an area of academic study, research, and business practice. Many companies analyzed their supply chain based on experience and intuition. Very few process tools and analytical models were used for the analysis. Effective models and decision support systems have been developed for improving analysis and insight in supply chain management.
Today competition among businesses has become fierce to offer better customer service, product quality, and marketing. The reason for increased competition is heightened customer expectations. Buyers demand the best solution suitable for their specific needs. This customer’s behavior has forced business enterprises to invest in, and focus attention on, their supply chain. Along with this, communication and transportation technologies have also motivated the continuous evolution of supply chain management techniques
Supply chains have been improved over the years but the challenge is not only quantitative but also qualitative (Chamoun & Sokhn, 2019). The main challenges of supply chains are traceability and data management. There are various sectors such as healthcare, financial, food, and education where management of Information system is centralized. Supply chains with a centralized mechanism are exposed to fraud, tampering, and corruption. There is a requirement of a trusted ecosystem between the suppliers and the customers that focus on transparency for accurate data collection and secure data storage.
The Blockchain is a promising technology in supply chain management for embedding transparency, authenticity, and trustworthiness into the chains. This technology existed since the introduction of bitcoins in 2009 (Tönnissen & Teuteberg, 2020). Blockchain is suitable for many applications after attaining its maturity level. The Blockchain is a distributed system between participants in a network that can be used to know who is performing what actions. Additionally, time and location of the actions can be determined (Kshetri, 2018). This technology can solve dynamic and complex issues faced by supply chains (Kouhizadeh et al., 2020). The decentralized mechanism of Blockchain has the potential of bringing high levels of efficiency in SCM (Wamba & Queiroz, 2020).
Blockchain is a distributed ledger that can record data between two parties in an efficient way. Each block contains data, hash, and hash of previous block. Data stored inside the block depends on the type of Blockchain. Bitcoin Blockchain (public Blockchain) for examples stores details about a transaction such as sender, receiver, and amount of coins transferred in a transaction process. Second element is the hash is always unique and can be compared to a fingerprint. It identifies the block and all of its contents. Once the block is created, its hash is being calculated. Any changes made inside the block will cause the hash to change. Thus, hashes are useful in detecting a change inside the block. Third element is the hash of the previous block. The hash of the first block is not stored in any other block therefore called genesis block. When the data is changed in any block the hash of the block is changed which will cause all the following blocks invalid because it will no longer store the valid hash of the previous block. Thus, a chain of blocks is created which keeps this technique secure.
The Blockchain also requires the involvement of Internet of Things (IoT). This technology can be seen as a revolution of internet. The main objective behind IoT is to exchange information between real-world objects present around us by tracking radio-frequency identification (RFID) tags, sensors, barcodes, GPS tags and chips, product’s location, package and shipping containers. IoT is a form of machine to machine communication (Rejeb et al., 2019). There are several benefits of using IoT with Blockchain in supply chain management such as reduced monitoring time, accurate and faster processing and delivery of information, etc.