Abstract
Blockchain technology has been promised as a solution to social and environmental issues in supply chains. The potential includes reduction of vulnerable party exploitation and avoiding environmentally harmful practices. Yet, it remains unclear how these potential improvements are created and whether blockchain can truly contribute. Therefore, this field study explores and identifies the mechanisms for blockchain technology to facilitate positive social and environmental impacts in supply chains. We applied an explorative qualitative research approach and interviewed blockchain technology implementers and practitioners that allowed a detailed analysis of this problem despite the scarcity of practice data. The results include the development of a middle-range theory that shows barriers and drivers of blockchain-based technologies in supply chains, introduces the concept of blockchain-enabled system, and outlines expected outcomes and impacts. We further identify four impact pathways that describe how blockchain-enabled system create positive impact: (voluntary) market mechanisms, plausibility checks, smart contracts and tokenisation, and peer-to-peer trust. The study contributes by providing insights into “how” blockchain-based technologies in supply chains can lead to social and environmental impacts. The study also furthers the discussion on blockchain technology’s role in supply chain implementation and addresses the yet unresolved problem of measuring the impact of such blockchain-enabled systems.
Highlights
Globalisation has made modern supply chains increasingly complex as technology, culture, and value chain activities become entwined and supply chains reach deep into various regions of the world
Where previous studies mainly focussed on blockchain-based technology impact (Lim et al, 2021), we develop a middle-range theory on how blockchain technology implemented in supply chains creates impact
Blockchain-enabled systems in supply chains can potentially result in a variety of positive social and environmental impacts
Summary
Globalisation has made modern supply chains increasingly complex as technology, culture, and value chain activities become entwined and supply chains reach deep into various regions of the world. Companies often do not know their tier three or four suppliers; with limited visibility beyond the first tier. Producers do not always know who consumes or manages the materials they supply. Information flow and visibility between these and other actors in supply chains is low. Identifying product or material sourcing and process activities that include questionable and illegal practices including human rights abuses, environmental damage, or fraud is extremely difficult (Clarke and Boersma, 2017). Blockchain technology proclamations include the ability to solve the problem of lack of trusted information from supply chains and increase visibility (Feng et al, 2020; Wang et al, 2019). Blockchain technology is implemented together with other components—such as tracking technologies—to address issues of traceability (Köhler and Pizzol, 2020)
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