Can We Connect? Benefits and Barriers to Adoption of Transformative Technology in Global Supply Chains

Abstract

The advance of technology is based on making it fit in so that you don't really even notice it, so it's part of everyday life. – Bill Gates, co-founder of Microsoft The logistics and supply chain management (LSCM) landscape continues to advance at a dizzying pace, and the COVID-19 pandemic has only accelerated it. Those of us in academia who have had the good fortune to observe and study LSCM phenomena can look back at our own research and see the sweeping changes that have occurred just over the last decade. Today, many industries are dealing with sprawling and complex global supply chains. At the same time, customers’ demands for speed, convenience, and transparency are unrelenting. Even in the face of the unprecedented “black swan” event that still challenges us today, companies continue to deliver essential products and services because of responsive supply chains that adjust to an uncertain global marketplace. A cornerstone of these advanced LSCM capabilities is the technology that underpins them. Technology not only gives companies the ability to drive efficiency, reduce costs, and share, store, and capture massive amounts of data in real time, but it also creates connectivity among all players in the supply chain, including the end customer. As the quote by Bill Gates infers, the reality of our everyday life as consumers—online shopping, doorstep delivery, tracking packages in transit, and tracing goods to their origin—is largely enabled by LSCM processes overlaid with technology. Logistics and supply chain management research on business phenomena reflects this as well. Most recently, the Journal of Business Logistics (JBL) has published papers about electronic marketplace adoption by transportation providers (Collignon and Sternberg, 2020), visibility through RFID (Rao et al. 2019), and the impact of technology on both sustainability (Sanders et al., 2019) and the future of LSCM talent (Wehrle et al. 2020). An interesting question to ponder is, what will the reality of everyday life look like a decade from now because of nascent (or yet to be realized) technology that further advances LSCM capabilities? Journal of Business Logistics’ first issue of 2021 focuses on new technology that shows promise for increased connectivity across the supply chain—connectivity that these two EICs would not have thought possible at the beginning of our academic careers. This first issue under our watch also illustrates our intent to both expand the academic scope and increase the number of publications in the journal, while maintaining the bar for research rigor and strong implications for practice. Further, it reveals our interest in bringing the role of technology in LSCM to the center of our research discussions. This issue, launched and processed under the leadership of the previous EIC team, combines two of our most well-received Special Topic Forums: “Blockchain: Applications and Strategies for Supply Chain Research and Practice” by Co-Editors Shashank Rao, Yorke Rhodes, Justin Patton, and Senthilkumar CP, and “The Physical Internet and the Internet of Things as a Paradigm Shift: Drivers and Enablers of a New Way of Doing Logistics” by Co-Editors Eric Ballot, Benoit Monteuil, and Zach Zacharia. The two contexts fit together into what we are calling the “Technology & Connectivity” issue. We hope those of you researching the role of technology in LSCM will consider this issue a seminal source for grounding your current and future research. We also want to invite researchers to expand on these studies and argue the merits and limitations in future studies. These ten manuscripts bring a large number of LSCM technological issues into the sunlight that we hope will expand understanding and debate. At the highest level, the studies note the benefits and consequences of the rise of digital connectivity across the logistics network and the larger supply chain. These works break ground on how new disruptive technologies can be implemented within LSCM to maximize related benefits and minimize the potential pitfalls of their implementation and use. Ultimately, the research herein reinforces the growing strategic and operational focus on improving sustainability and transparency for interconnected businesses and their consumers. Below we offer an overview of the articles in the Blockchain STF. Following these five articles in this first issue, a second invited editorial by Ballot et al. (2021) provides a comprehensive overview of the physical Internet and the status of academic research on this LSCM phenomenon. The first five articles in Volume 42, Issue 1 expand our understanding of blockchain. As Auburn University faculty, we stay abreast of the opportunities, complexities, and developments in blockchain’s adjustment to LSCM through our interactions with the RFID laboratory. Over the last six months, we have seen the blockchain hype cycle cool quite a bit. This is typical for a supply chain-spanning technology. We commonly see a pattern that jumps from birth to hyper-growth and then settles into an implementation stage. Currently, the major businesses we speak with are finding difficulty in getting all the needed partners to have faith in the technology. A new form of trust is developing, as the blockchain players must trust the technology, all the partners, the hosting service, and their own employees. There may also be an issue with powerful companies in the supply chain trying to centralize this technological tool. Blockchain loses its value when it is not decentralized. Of course, these are only a few of the issues managers are discovering. In the introductory paper, “On the Quest for Supply Chain Transparency through Blockchain: Lessons Learned from Two Serialized Data Projects” (Rao et al. 2021), Dr. Rao and his colleagues present a detailed discussion of two specific projects in which work is being done to implement blockchain technology. There are very few examples of blockchain implementation with this level of detail. In fact, it is quite difficult to find peer-reviewed case studies in which blockchain has been implemented across the supply chain. In this work, the visibility provided by the technology is supported as a solution to issues including risk reduction, inventory planning, and cost reduction. The authors employ two serialized data projects to cut through the hype and explain the benefits and drawbacks of blockchain. Their multi-level context makes this a one-of-a-kind examination of supply chains and blockchain. The second manuscript adds 3D printing to the discussion in “Blockchain in Additive Manufacturing and its Impact on Supply Chains” (Kurpjuweit et al. 2021). Dr. Kurpjuweit and his colleagues explore how integration of additive manufacturing and blockchain will affect LSCM networks. Additive manufacturing has also been a technology high on the hype cycle and is rapidly becoming an integral part of many industrial production systems. Experts anticipate the widespread adoption will further provoke the emergence of decentralized manufacturing facilities, leading to shorter lead times, more agile supply chains, lower logistics costs, and higher levels of mass customization. It is important to note that adaptive manufacturing includes managing deep and complex digital information. The expectation is that blockchain can provide security against data theft, intellectual property infringements, and black-market product counterfeiting. In this qualitative study, blockchain ensures the authenticity of critical digital information. The research findings suggest that in combining the two, there will be opportunities related to intellectual property management, monitoring printed parts throughout life cycles, process improvements, and data security. Next, Dr. Sternberg and his colleagues present “The Struggle is Real: Insights from a Supply Chain Blockchain Case” (Sternberg et al. 2021). They discuss how blockchain is designed for increasing logistics and supply chain transparency. This will obviously disclose supply chain information to consumers, business partners, and firm personnel. Despite the hype surrounding blockchain technology, adoption of this new technology is slow. This is because a company cannot adopt blockchain in isolation and still expect to realize the benefits of visibility. These firms and their suppliers must adopt the technology in unison. Proposing a theory-based model for the system-wide adoption of blockchain, the authors conduct a case study revealing that the integration decision of one supply chain actor to use blockchain recursively affects that of other supply chain actors. The last year has added great emphasis on the changing approach trade by customers. E-commerce has taken on a life of its own, as even grandparents are buying their fresh produce online. Moving to an online setting increases the importance of issues such as privacy, security, and inclusion. In “Blockchain Applications in Supply Chain Transactions” (Durach et al. 2021), Durach et al. suggest that the lack of trust created by the migration to e-commerce may only be remedied by the mass adoption of blockchain technology. Such a change will require a peer-to-peer network that decentralizes structures and uses encryption algorithms to protect sensitive customer and company data. Importantly, these authors ask where specifically blockchain should be deployed. They ask, what makes sense in terms of performance gains? The results of the study indicate that verified customer reviews and product quality certifications are the most relevant blockchain uses in LSCM. Logistics and delivery systems are detailed as two newly identified blockchain applications areas, ranking among the top four most relevant areas for future research. This study should help future researchers focus on value beyond adoption. The final blockchain article in this issue is titled “Understanding Managers’ Reactions to Blockchain Technologies in the Supply Chain: The Reliable and Unbiased Software Agent” (Falcone et al. 2021). Dr. Falcone and her colleagues examine the adoption of blockchain across LSCM information systems. Successful adoption is supported as the result of effective internal and external implementation in order to realize the full potential of the new technology. The authors use an experiment-based method to examine how external authenticated transactions across a network influence a more complex implementation process than internal organization-specific technologies. The benefits of blockchain may only be fully realized through significant levels of collaboration across all partners. This collaboration pays off when the supply chain can eliminate traditional intermediaries while acting as an unbiased software and audit agent within the network. These researchers work to understand the managers’ perspectives regarding the technology and their willingness to adopt it. They find that trustworthiness and perceived distributive justice influence the inclination to embrace blockchain. Likewise, they find that risk and interactional justice are not drivers of managers’ willingness to use the new technology, contrary to claims asserting that effect. In sum, we hope that this first issue under our leadership signals to the LSCM field that articles published in JBL should be on the cutting edge of research and practice. The journal at its core is rooted in traditional logistics phenomena that will remain the backbone of a company’s ability to meet customer requirements by delivering the right product in the right form at the right time at the right place in the right order condition at the right price (Novack et al. 1996). In today’s global landscape, getting those “7 R’s” to align can require a complex network that spans time zones, regulatory constraints, and logistics systems. It is therefore important for us to focus our attention on LSCM phenomena that promote holistic understanding and offer broad implications for the discipline. This issue provides a first glimpse into the direction that we hope to take the journal over the next five years of our editorship. Happy reading!