Challenges of Using Blockchain Technology in Supply Chain Management: A Systematic Review

The Rise of Blockchain in Supply Chain Management

Blockchain, the revolutionary distributed ledger technology, has gained significant attention in the world of supply chain management. As globalization and technological advancements continue to transform industries, supply chains have grown increasingly complex, with multiple stakeholders and factors involved. Traditional supply chain systems have struggled to provide effective and reliable traceability solutions, especially as the demand for transparency and accountability in the supply chain has escalated.

Blockchain technology, with its inherent features of immutability and transparency, has emerged as a promising solution to address the challenges faced by modern supply chains. By creating a dependable and secure system for tracking products across the entire supply chain, blockchain ensures complete control over traceability from the origin to the final consumer.

This comprehensive systematic review delves into the evolving landscape of blockchain-based supply chain frameworks, exploring the capability of this innovative technology to revolutionize the industry. The research examines the current state of blockchain-based supply chain solutions, identifies areas for improvement, and investigates the potential synergies between blockchain and other emerging technologies of Industry 4.0 and Web 3.0.

Understanding the Technological Landscape

Industry 4.0: The Convergence of Physical and Digital Worlds

The first three industrial revolutions were marked by the use of steam engines, electronics, and information technology, respectively, leading to the mechanization, mass manufacturing, and automation of production. Industry 4.0, or the Fourth Industrial Revolution, signifies a new era characterized by the convergence of the physical and digital worlds, known as Cyber-Physical Systems (CPS).

CPS enable the interaction between digital infrastructure and physical objects, making information and services concurrently accessible for various purposes. Industry 4.0 technologies encompass a wide range of innovations, including but not limited to additive manufacturing (3D Printing), artificial intelligence (AI), Global Positioning System (GPS), big data and analytics (BDA), Radio Frequency Identification (RFID), blockchain (BC), cloud computing (CC), Internet of Things (IoT), simulation, augmented reality, robotics, and unmanned vehicles.

Web 3.0: The Decentralized Future of the Internet

The convergence of these technologies is facilitated by numerous internet-based innovations, collectively referred to as Web 3.0. This includes artificial intelligence (AI), machine learning (ML), big data, decentralized ledger technology (DLT), metaverse, decentralized applications (dApps), Semantic Web, edge computing, and non-fungible tokens (NFTs).

Web 3.0 aims to enhance the security and privacy of the decentralized internet through the use of blockchain technology. This contrasts with the current Web 2.0, which is regulated by a few large tech companies, offering a more user-centric, secure, and transparent experience. Web 3.0 applications, known as decentralized apps (DApps), function on decentralized networks made up of peer-to-peer nodes or blockchains, eliminating centralized decision-makers and regional restrictions.

Methodology: A Systematic Review Approach

To address the research questions and explore the challenges of using blockchain technology in supply chain management, a systematic review was conducted following the guidelines outlined by Kitchenham and Charters, Tranfield et al., and the recommendations of the Preferred Reporting Items for Systematic Reviews (PRISMA).

The review process involved the following key stages:

1. Defining the Objectives and Methods: The research questions were formulated to guide the systematic review, focusing on the application of blockchain technology in supply chain management, the areas of its adoption, current limitations, and future research directions.

2. Literature Search and Screening: Relevant literature was identified by searching the Scopus database using a predefined search string. Inclusion and exclusion criteria were established to ensure the relevance of the selected studies.

3. Quality Assessment and Selection: A comprehensive quality assessment was performed on the identified studies, and a ranking system was applied to retain only the high-quality papers. Forward and backward snowballing techniques were used to identify additional relevant studies.

4. Data Extraction and Synthesis: The selected studies were classified by topic and research focus to address the research questions. The findings were analyzed to gain insights into the challenges, limitations, and future research directions.

Findings and Discussion

The systematic review process yielded a total of 54 blockchain-based supply chain frameworks that were thoroughly analyzed. The key findings and insights are as follows:

Blockchain Adoption in Supply Chain Management

The interest in blockchain-based supply chain solutions has grown exponentially since 2016, with a surge in the number of publications in this field. India and China have emerged as the leading contributors, with researchers from these countries producing the most publications on this topic.

The review identified four primary areas where blockchain technology has been applied in supply chain management:

1. Counterfeit Prevention: Blockchain’s ability to ensure transparency and traceability has been widely explored to combat the issue of counterfeit products infiltrating supply chains.

2. Product Distribution: Blockchain has been utilized to streamline the distribution process, enhance visibility, and improve the overall efficiency of supply chain operations.

3. Tracking and Tracing: The immutable nature of blockchain has been leveraged to provide end-to-end traceability of products, ensuring compliance and addressing issues related to product recalls and quality control.

4. Safety and Security: Blockchain’s cryptographic features have been employed to enhance the security of supply chain systems, protecting against theft, unauthorized modifications, and the introduction of counterfeit goods.

Interoperability with Industry 4.0 and Web 3.0 Technologies

The systematic review identified the integration of various Industry 4.0 and Web 3.0 technologies within the blockchain-based supply chain frameworks, including:

• Near-Field Communication (NFC): NFC-enabled devices can track and authenticate products throughout the supply chain, enhancing traceability and security.
• Big Data Analytics (BDA): The combination of blockchain and BDA offers opportunities to improve supply chain visibility, optimize logistics, and enhance food safety through comprehensive data analysis.
• Artificial Intelligence (AI): AI algorithms integrated with blockchain can provide valuable insights for decision-making, optimize supply chain operations, and enhance product quality.
• Global Positioning System (GPS): GPS integration with blockchain enables real-time tracking of product movement, improving supply chain management and logistics.
• Cloud Computing (CC): Cloud platforms provide the necessary infrastructure for handling large volumes of supply chain data and facilitating data analysis and decision-making.
• Internet of Things (IoT): IoT sensors and devices connected to blockchain networks can provide real-time monitoring and data collection, enhancing supply chain visibility and automation.
• Edge Computing: Edge computing can complement blockchain by processing data closer to the source, reducing latency and improving efficiency in supply chain operations.
• Interplanetary File System (IPFS): IPFS offers a decentralized storage solution to complement blockchain, addressing the limitations of on-chain data storage.
• Metaverse: The convergence of the physical and virtual worlds in the metaverse presents opportunities for supply chain stakeholders to enhance product experiences and traceability.

However, the review also identified that the integration of some emerging technologies, such as DeFi, DApps, NFTs, and Digital Twins, remains limited in the current blockchain-based supply chain frameworks.

Limitations and Challenges

The systematic review revealed several limitations and challenges associated with the current blockchain-based supply chain frameworks:

1. Data Management and Scalability: The increasing volume and complexity of supply chain data pose challenges in terms of data management, accessibility, and scalability for blockchain-based systems.

2. Interoperability and Standardization: Achieving seamless interoperability between blockchain and other emerging technologies, as well as establishing industry-wide standards, remains a significant hurdle.

3. Computational Complexity: The decentralized nature of blockchain and the need for extensive computational power to ensure security and immutability can lead to performance and efficiency issues, especially in the context of big data and edge computing.

4. Regulatory and Governance Frameworks: The lack of well-defined regulatory and governance structures for the adoption of blockchain in supply chain management can hinder its widespread implementation.

5. User Adoption and Trust: Overcoming the resistance to change and building trust among supply chain stakeholders in the adoption of blockchain technology remains a challenge.

Future Research Directions

The systematic review highlights several promising avenues for future research in the realm of blockchain-based supply chain management:

1. Enhancing Interoperability: Exploring the seamless integration of blockchain with a wider range of Industry 4.0 and Web 3.0 technologies, such as DeFi, DApps, NFTs, and Digital Twins, to create more sophisticated and comprehensive supply chain frameworks.

2. Addressing Computational Complexity: Developing adaptive blockchain architectures and innovative data management solutions to handle the computational demands of big data and edge computing in supply chain applications.

3. Regulatory and Governance Frameworks: Investigating the development of standardized regulatory and governance structures to facilitate the widespread adoption of blockchain technology in supply chain management.

4. User Acceptance and Change Management: Examining strategies to overcome the resistance to change and build trust among supply chain stakeholders in the adoption of blockchain technology.

5. Practical Case Studies and Pilot Projects: Conducting in-depth case studies and pilot projects to validate the real-world applicability and benefits of blockchain-based supply chain solutions, further driving their adoption.

Conclusion

The systematic review highlights the significant potential of blockchain technology to revolutionize supply chain management. By providing transparency, traceability, and security, blockchain has the ability to address the challenges faced by modern supply chains, including counterfeit prevention, distribution optimization, and end-to-end product tracking.

The integration of blockchain with emerging Industry 4.0 and Web 3.0 technologies, such as NFC, BDA, AI, GPS, CC, IoT, and edge computing, further enhances the capabilities of blockchain-based supply chain frameworks. However, the review also identifies various limitations and challenges, including data management, interoperability, computational complexity, and user adoption, which present opportunities for future research and development.

As the adoption of blockchain in supply chain management continues to grow, researchers and practitioners must work together to address these challenges and unlock the full potential of this transformative technology. By developing innovative solutions and fostering industry-wide collaboration, the supply chain industry can harness the power of blockchain to achieve unprecedented levels of transparency, efficiency, and resilience.