Inventory management and information sharing based on blockchain technology

Abstract

This paper presents a structural framework for blockchain-based supply chains (SCs) and demonstrates how blockchain technology can help realize five crucial changes: common platform, end-to-end information sharing and traceability, real-time update, speedy and efficient asset transfer, and contract automation. The most unique change is that a blockchain-based supply chain operates on a decentralized common platform, in contrast to the tiered structure of a traditional supply chain. Using fundamental analytical models, inventory management and information-sharing benefits from the abovementioned critical changes were quantified. Therefore, the three managerial implications for supply chain resilience are as follows. (1) A blockchain-based SC essentially transforms a multi-tier SC into a one-platform SC, effectively shortening the length of SC tiers and therefore eliminating problems and challenges in multi-tier supply chain management (SCM). (2) A blockchain-based SC can be both time- and cost-efficient. (3) A company on the blockchain platform can reduce the cost and risk/variance associated with its SC partners. These results can substantially contribute to the industry, given that blockchain is in the early stage, thus rendering supply chains smarter and more efficient.