Blockchains for Value Creation and Supply Chain Optimization

Blockchains for Value Creation and Supply Chain Optimization

Arun N. Nambiar (California State University – Fresno, USA)
DOI: 10.4018/978-1-5225-9257-0.ch002

Abstract

Managing today's highly dispersed and intertwined supply chain in order to maximize the overall organizational benefit by leveraging partner competencies is a herculean task and one that is of ever-growing importance in a highly competitive and truly globalized market. Information technology in the form of point-of-sale data, materials requirement planning software, and enterprise-wide systems have often been leveraged to assist with this. However, with the proliferation of data, storing, managing, and analyzing data on a large scale is a challenge. Blockchains provide numerous benefits such as data transparency, immutability, and traceability that are so critical in building a cohesive cyberinfrastructure that facilitates cooperation and collaboration among supply chain partners. This chapter examines the characteristics of blockchain that make it suitable for supply chains and explore how the benefits afforded by blockchain can be leveraged to enhance value creation while optimizing the supply chain.
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Background

Blockchain is a technology that Satoshi Nakamoto (which is probably a pseudonym for a person or a group of people) invented to facilitate sharing of digital information while ensuring data security. The original premise of the technology (Nakamoto, 2008) dealt with cryptocurrency. However, since then, blockchain has found application in numerous realms for a wide variety of purposes. Before diving into the applications, it helps to examine the foundations of a typical blockchain.

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