Blockchain Technology in Supply Chain Management: A Conceptual Framework

1.0 CONCEPTUAL FRAMEWORK
1.1 Background to the study
Bitcoin, a digital currency that was first introduced in 2008, has gained significant popularity in
recent years, leading to a gradual increase in interest in its underlying technology. Blockchain
technology is widely regarded as a pivotal element of the Industry 4.0 paradigm shift and has
become an integral aspect of contemporary society. Blockchain technology has successfully
garnered the attention of diverse industries owing to its innovative features. The decentralised
and dispersed nature of this technology renders it traceable by all parties involved. The
enhanced perceptibility of data has augmented its appeal, while the system's architecture that
thwarts any form of tampering has significantly bolstered its security. In a general sense,
Blockchain technology obviates the need for a central authority or network, thereby enabling
autonomous monitoring of Internet data by individual users (Kaya and Turgut, 2019).
While the initial implementation of this technology was observed in the financial industry, its
potential has extended to various sectors that can be seamlessly integrated with modern
technology. The adoption of blockchain technology has proliferated in Turkey, with numerous
instances of its implementation evident across various industries. Following the advent of
Industry 4.0, there have been swift changes in the production and distribution of goods to the
ultimate recipient. The rapid technological advancements have a significant impact on various
sectors, including businesses, as highlighted by Kaya and Turgut (2019).
In light of the contemporary business landscape wherein competition is predicated on supply
chain involvement, enterprises are keen on leveraging the advantages of Blockchain
technology. These advantages afford businesses the prospect of enhancing efficiency in the
management of their supply chain. The emergence of blockchain technology as a means of
crypto coins has garnered significant interest across various sectors that can be integrated with
the Internet, owing to its demonstrated reliability and transparency within the financial industry.
1.2 Problem statement
The utilisation of blockchain technology in the domain of supply chain management is a nascent
advancement, and there are certain domains of investigation that remain unexplored. Yli-Huumo
and colleagues (2016) undertook a systematic review to identify potential benefits and
challenges that have not been previously investigated. Yli-Huumo et al. (2016) found that the
predominant focus of the reviewed literature pertains to the Bitcoin system, with a minority of
less than 20% of the papers concentrating on industrial applications, such as smart contracts
(Christidis & Devetsikiotis, 2016). These smart contracts enable the automated verification of

transactions in supply chain management. Yli-Huumo et al. (2016) contend that further
examination is imperative with respect to the purported use cases of blockchain technology,
particularly in areas that extend beyond the scope of digital currency.
The disclosure of social and environmental impact of products is mandated by consumers and
governments, as noted by Kamble et al. (2020) and Hastig & Sodhi (2020), thereby
necessitating manufacturers and retailers to comply with such requirements. The
aforementioned literature suggests that there is a growing expectation for companies to
establish a system for tracking consumer products from their final destination back to their point
of origin. (Venkatesh et al., 2020; Hastig & Sodhi, 2020). Blockchain, being a nascent
technological advancement, establishes the fundamental basis for the forthcoming market
milieu. It is crucial for corporations to be cognizant of these disruptive technologies, as
emphasised by Wong et al. (2020) and Erol et al. (2016).
1.3 Aims and Objectives
The aim of this investigation is to analyse the application of Blockchain technology within the
domain of supply chain management, with particular emphasis on the instance of Maersk
shipping.
The specific objectives of the research is divided into three (3) stages:
1. To provide a practical/theoretical foundation to the role of Blockchain technology in the
shipping sector.
2. To explore the issues related to Blockchain technology in Maersk shipping.
3. To utilise the information to make educated predictions about the future.
1.4 Research Questions
1. What is the impact of integrating blockchain technology into supply chain management
on enhancing transparency and fostering trust among stakeholders within the framework
of Maersk Shipping?
2. What are the discernible advantages and operational streamlining achieved by Maersk
Shipping in their supply chain activities as a result of implementing blockchain
technology?
3. What are the obstacles and constraints encountered by Maersk Shipping in the course of
integrating blockchain technology into their supply chain management procedures?
1.5 Importance of the study

The present study is of great importance as it examines the effects of integrating blockchain
technology on augmenting transparency and trust within the supply chain. According to Akter et
al. (2021), the transparent recording of all transactions and information is ensured by the
decentralised and immutable characteristics of blockchain technology, which renders them
unalterable. The creation of a reliable and verifiable source of information, along with the ability
to quickly verify supply chain operations, fosters trust and dependence among all parties
involved.
The study's findings have the potential to offer significant insights and recommendations for
other organisations considering the integration of blockchain technology into their supply chain
management systems. As such, the study can serve as a point of reference for best practices
and guidelines. By conducting a thorough examination of the Maersk Shipping case study,
significant observations can be made with respect to efficacious tactics, acquired knowledge,
and suggestions for execution. These findings can be instrumental in assisting other entities in
successfully navigating the complex procedure of incorporating blockchain technology into their
supply chain management.
2.0 THEORETICAL FRAMEWORK
2.1 Blockchain technology
The genesis of blockchain technology can be traced back to its initial development in the
context of bitcoin, with the primary objective of enabling secure data collection and exchange of
cryptocurrency. Despite the contentious nature of bitcoin, the blockchain technology that
underpins it has demonstrated seamless functionality across a range of financial and
non-financial use cases (Crosby et al., 2016). According to Kshetri (2018) and Kouhizadeh et al.
(2021), blockchain technology is regarded as a disruptive innovation that is poised to play a
pivotal role in shaping the future of supply chain operations.
Blockchain technology serves as a decentralised and immutable database that offers a secure
platform for conducting transactions among multiple parties (Schmidt & Wagner, 2019). The
process of linking transactions in a sequential and unalterable manner into blocks of data allows
for the secure and transparent sharing of information among stakeholders, as noted by Swan
(2015) and YliHuumo et al. (2016). Fresh blocks are connected to a pre-existing block, verified,
and archived in the disc storage of numerous users located in diverse nodes. This process is
depicted in Figure 1, which provides a comprehensive overview of the step-by-step blockchain
transaction. Upon verification of all transactions, a consensus is established among all nodes,

thereby solidifying the reputation of blockchain as a decentralised technology that is secure,
transparent, and scalable (Yli-Huumo et al., 2016).
Fig. 1: Blockchain explained
Source: PWC, 2021.
2.2 Blockchain technology and supply chains
The blockchain technology is a modern application model that integrates various technologies
including databases, cryptography, and network technology. It has become a significant driver of
change in several domains. Recent industry survey reports indicate that logistics managers
demonstrate a strong inclination towards the incorporation of blockchain technology, specifically
in the domain of supply chain management. The aforementioned assertion is supported by the
scholarly contributions of Kim and Shin (2019), Kumar, Liu, and Shan (2020), and Van Hoek
(2019). Recent research conducted by Martinez et al. (2019) and Schmidt and Wagner (2019)
has demonstrated that the unique data structure system of blockchain technology has the
potential to reduce transaction and inventory costs, eliminate supply chain bottlenecks, establish
a flexible supply chain capable of adapting to changes in the global economic environment, and
enable secure and reliable product traceability (Yoo and Won, 2018). Additionally, blockchain
technology has the potential to leverage c Several academic studies have extensively
documented the significant advantages of employing blockchain technology in the fields of
logistics and supply chain management (Cole, Stevenson, and Aitken 2019; Hughes et al. 2019;
Longo et al. 2019). The advantages of improving the supply chain include strengthening
cybersecurity protocols (Wong et al., 2020a), increasing transparency and traceability (Hastig
and Sodhi, 2020; Rodríguez-Espíndola et al., 2020; Wu, Fan, and Cao, 2021), and