Is your supply chain ready to embrace blockchain?

• Author: Cynthia L. Shavers,Naeem Bajwa,Kyleen Prewett
• Published date: 01 April 2020
• Date: 01 April 2020
• DOI: http://doi.org/10.1002/jcaf.22423

BLIND PEER REVIEW

Is your supply chain ready to embrace blockchain?

Naeem Bajwa

1

| Kyleen Prewett

2

| Cynthia L. Shavers

2

1

Department of Management, University of Arkansas at Little Rock, Little Rock, Arkansas

2

Department of Accounting, University of Arkansas at Little Rock, Little Rock, Arkansas

Correspondence

Naeem Bajwa, College of Business, University of Arkansas at Little Rock, 2801 South University Avenue, Little Rock, AR 72204.

Email: anbajwa@ualr.edu

Since its introduction in 2009, businesses have been

exploring blockchain use in myriad ways. According to a

Deloitte, 2019 global blockchain survey of almost 1,400

executives in a dozen countries, the question for execu-

tives is no longer, “Will blockchain work?”but, “How

can we make blockchain work for us?”Fifty-three per-

cent of respondents stated that blockchain will be a top-

five strategic priority for their organization, an increase

of 10% points over 2018 results (Deloitte, 2018). More-

over, industry giants such as IBM, Amazon, Microsoft,

Deloitte, EY, and PWC are investing heavily in business

applications of the technology. Finally, Gartner, a global

research and advisory firm, predicts that the business

value added by blockchain will grow to slightly more

than $176 billion by 2025 and exceed $3.1 trillion by 2030

(Kandaswamy, Furlonger, & Stevens, 2019).

One blockchain use case that holds a great deal of

promise is supply chain management. Managing today's

supply chains is extraordinarily complex, sometimes

paper-intensive, and often inefficient. Depending on the

product, a given supply chain can span over hundreds

of stages, multiple geographical (international) loca-

tions, and a multitude of invoices and payments;

involve dozens of individuals and entities; and take

months to complete. The complexity, lack of transpar-

ency, and increasingly global nature of supply chains

make the systems ripe for transformation via blockchain

technology.

1|SUPPLY CHAIN

MANAGEMENT

Supply chain management (SCM) involves design, plan-

ning, and execution of all activities that result in delivery

of a product or service to the end customer. In addition,

supply chain managers may be responsible for returns

from customers, reverse logistics, and ultimate dis-

posal/recycling of returned products. The role of SCM

spans the boundaries of multiple business entities

ranging from suppliers of suppliers to customers of

customers. The fundamental idea behind SCM is that

the end customer is the source of revenue/profit for

all the participants who are working together to pro-

vide a product or service for that end customer. There-

fore, it is in the best interest of all the participants of a

supply chain to work as a team, maximizing the total

value created instead of pursuing individual self-

interests.

One may find multiple definitions of SCM in the

academic literature and among professional associa-

tionssuchastheAssociation for Operations Manage-

ment and the Council of Supply Chain Management

Professionals. Across all these definitions, there are

consistent themes that include communication, infor-

mation sharing, coordination, integration, and collabo-

ration among supply chain partners. Companies in a

supply chain act as a singular entity for achieving

shared objectives, but they are free to join or leave sup-

ply chain relationships if those relationships do not

work for them. Thus, supply chains are comprised of

Correction added on March 28, 2020, after first online publication:

Article category updated from Commentary to Blind Peer Review.

Received: 28 June 2019 Revised: 1 October 2019 Accepted: 15 October 2019

DOI: 10.1002/jcaf.22423

54 © 2020 Wiley Periodicals, Inc. J Corp Acct Fin. 2020;31:54–64.wileyonlinelibrary.com/journal/jcaf