1 Introduction
2 Literature review
2.1 How does blockchain work?
2.2 Supply chain finance: decentralised versus centralised systems
2.3 Theoretical foundation
3 Methodology
Title | Methodology | Application | Reference |
---|---|---|---|
Global supplier selection: a fuzzy-AHP approach | F-AHP | This method uses F-AHP to tackle the decision variables involved in the global supplier selection | [47] |
Benchmarking health-care supply chain by implementing Industry 4.0: a fuzzy-AHP-DEMATEL approach | F-AHP and F-DEMATEL | The study prioritises and highlights the inter-relationships between the factors affecting the healthcare supply chains | [49] |
A fuzzy analytic hierarchy process-based analysis for prioritization of barriers to offshore wind energy | F-AHP and sensitivity analysis | The study identifies and prioritise the barriers to the growth of offshore wind energy in India using F-AHP The study also uses sensitivity analysis to verify the robustness of the developed model | [50] |
Blockchain implementation for circular supply chain management: Evaluating critical success factors | AHP and DEMATEL | The study identifies the critical success factors of blockchain implementation in circular supply chain management The study employs AHP and DEMATEL to discover the priorities and relationships among the success factors | [51] |
Identification and analysis of circular supply chain management practices for sustainability: a fuzzy-DEMATEL approach | F-DEMATEL | The study identifies the circular practices in circular supply chain management in Indian auto sector F-DEMATEL is used to find the cause and effect relationship between the circular practices | [52] |
4 Data analysis
Barrier | Sub-barrier | Description | Reference |
---|---|---|---|
Technology barriers (TB) | Lack of technological infrastructure in SMEs (TB1) | The general technology infrastructure in India is still at the development stage. Therefore framework to support blockchain in SMEs in India is limited and cost-prohibitive. A good internet connection which is crucial for the successful implementation of blockchain technology is not assured due to poorly developed data infrastructure in many parts of the country | |
Lack of scalability and speed of blockchain system (TB2) | The blockchain technology exhibits significantly lower transaction performance than current systems due to its inadequate scalability. The scalability limits of blockchain are related to the size of the data on the blockchain, the transaction processing rate, and the latency of data transmission which leads to slow transaction speed. E.g. existing blockchain can process 7 transactions per second (tps) in comparison to 500 and 2000 tps processed by Visa and Paypal respectively | ||
Lack of Interoperability (between different blockchains, existing technology and legacy systems) (TB3) | Interoperability is the ability to operate and transact on different systems. For successful mass adoption of blockchain, the integration of blockchain platforms with predominant legacy systems and regular IT applications is essential. Moreover, different blockchain systems should be compatible enough to perform transactions among each other. But blockchain ecosystem is siloed and cannot communicate properly with other systems | ||
Lack of automation of invoicing and payment processes in SMEs (TB4) | The lack of automated payment processes in SMEs makes it difficult to implement the blockchain-based SCF platform. There are many SMEs in India that uses paper-based invoices, which is a disadvantage while implementing blockchain technology | [55] | |
Lack of standardisation (TB5) | Lack of standardisation is one of the most significant shortcomings of blockchain technology. Standards constitute agreed and documented way of conducting business. Standards are required in establishing market confidence to support the rollout of blockchain technology. Standardization can further advance the development of blockchain by providing internationally agreed ways of working, stimulating greater interoperability, speedier acceptance and enhanced innovation | ||
Lack of infrastructure providers (TB6) | Blockchain is an emerging technology. Therefore there is a shortage of firms building blockchain infrastructure in India which further impedes the adoption of blockchain in SMEs in India | Added by expert | |
Organisational barriers (OB) | Resistance to convert to new systems (OB1) | Change is a painful process and is always accompanied by resistance. For the deployment of blockchain technology, some changes are required in traditional business processes. The involved stakeholders may be reluctant to participate in this process. Moreover, the hesitation to reveal information from some partners may limit the full benefits of adopting blockchain technology and hinder the successful implementation of this technology | |
Lack of workforce specialised in Blockchain technology (OB2) | Any emerging technology, in its early years of adoption, requires technically expert workforce to ensure its implementation. The requisite numbers of such specialised workers are in short supply at present in India. Limited technical competence and knowledge of using blockchain technology act as a barrier of adopting this new technology into the supply chain finance | ||
Problems in collaboration, communication and coordination in the supply chain (OB3) | Supply chain partners with different operational objectives and priorities may lack collaboration which can disturb the supply chain operations and implementation of blockchain technology in the firm. If the supply chain partners are geographically dispersed, the communication challenges can get worse | ||
Lack of information disclosure policy between supply chain partners (OB4) | Supply chain partners are reluctant to share the sensitive financial data on blockchain due to its open and distributed architecture. Additionally, lack of privacy policies related to data usage in supply chains makes it challenging for the supply chain partners to share data with each other. There should be standard rules and policies for information sharing among supply chain partners so that they can collaborate and implement this new technology effectively | ||
Lack of collaboration for creating consortium blockchain (OB5) | The consortia creation among the multiple stakeholders in supply chain helps to create, deploy and scale industry-wide solutions. Lack of trust and coordination among the supply chain partners impedes the process of consortia creation. The consortium model allows the supply chain partners to balance the benefits and costs and take advantage of blockchain technology collaboratively. Consortia creation fuels the financial requirement for unlocking the true potential of technology | ||
External barriers (EB) | Market competition and uncertainty about using blockchain technology (EB1) | Applying blockchain technology may affect the market competitiveness of the firm as it is a complex and time-consuming task. Blockchain users are always worried whether their supply chain partners and payment merchants will adopt the new technology in future. Otherwise, the whole exercise of implementing blockchain can turn futile | |
Legal and regulatory challenges (EB2) | Blockchain users and network operators may experience legal and regulatory uncertainty because there is no settled law of blockchain, so the organisations are translating the existing legal concepts in light of blockchain technology. Legal and regulatory risks include know-your-customer (KYC), anti-money laundering (AML), intellectual property (IP) protection and data privacy and security regulations | ||
Lack of qualified blockchain developers (EB3) | There is a dearth of trained blockchain developers across the globe. Although the technical aptitude required for blockchain programmes is very similar to the popular programming languages such as java and python, the number of blockchain developers globally are far less than the java developers | ||
Lack of Ecosystem collaboration with blockchain (EB4) | Collaboration is a critical success factor in a blockcahin project because it always involve cross-enterprise workflows. Since information in a blockchain project will usually be shared across multiple supply-chain participants, it is important to consider how the ecosystem will operate and be governed. Whereas, a lack of ecosystem planning can hamper the blockchain projects in supply chain finance | ||
Knowledge barriers (KB) | Lack of blockchain knowledge (KB1) | Lack of knowledge about handling and managing the blockchain-based SCF projects acts as barrier to its adoption. The existing employees who are trained to work on the centralised systems such as ERP may require training from the area expert to use such platforms | Added by expert |
Lack of understanding of cost, ROI and financial losses (KB2) | SMEs are pondering on the costs, financial losses and return on investment (ROI) in the blockchain-based business models. The incomplete information about the costs and benefits of these projects discourage the SMEs to adopt this technology. Additionally, there may be a financial loss to the blockchain users due to absence of trusted third party or due to incorrect representation of commercial contracts in the smart contract code | [56] | |
Blockchain configuration decision (KB3) | One of the most crucial decision for the organisations launching blockchain projects is whether to use a public or private blockchain. This decision will affect the security, functionality and compatibility with other member’s systems. Additionally, selection of the consensus algorithms (e.g. proof of work and proof of stake) is also a big challenge for the organisations | [26] | |
Security barriers (SB) | Data protection and privacy concerns (SB1) | Blockchain faces some fundamental privacy issues by virtue of its design. Each transaction can be traced in this distributed ledger. The user’s anonymity seems to be compromised as the technology is highly transparent. Therefore none of the supply chain actors will be willing to share commercially sensitive data on blockchain. In some countries data protection and privacy are enforced by legislation e.g. the General data protection regulation in European union. But blockchain may adversely affect the data protection rights | |
Data security concerns (SB2) | Blockchain can be detrimental to a business because of some security issues. The most worrisome threat to security is the possibility of a 51-percent attack, in which one mining entity grabs the control of blockchain and manipulates it. Other areas of concern are DDoS attacks, DNS attack, mempool attack, double spending, consensus delay, etc | ||
Data integrity concerns (SB3) | In supply chains data integrity indicates towards the timeliness, completeness and accuracy of the data over its entire lifetime. Data should be preserved from the point of data creation to the point of usage on the blockchain. Blockchain prevents the modification of data once it is entered on the chain. If inaccurate data is entered on the blockchain then there is no benefit of making it immutable. It will be ‘garbage in, garbage out’ | [55] | |
Financial barriers (FB) | Huge initial capital investment for infrastructure and energy resources (FB1) | Blockchain requires huge capital investment in new hardware and software by the organisations and their network partners in the supply chain. Moreover, once implemented, these systems consumes enormous amount of energy, which adds to the total cost of the organisations. Therefore, high initial investment may impede the SME owners to adopt this technology | [55] |
Lack of financial resources (FB2) | While adopting and implementing a new technology, cost is the most critical factor for a business. SMEs may find it difficult to get started with this new technology because of its lack of funds. If it takes a long time to recover the cost of implementing blockchain, SMEs may drop the idea of adopting it. For SMEs, affordability can be a major issue | ||
Complex tax implications around digital assets (FB3) | The tax rules on digital assets are very inconsistent on among various jurisdictions. The tax implications around digital assets are very complex. SMEs may need to consult with local tax specialists in the jurisdiction for calculating the tax liability and compliance reporting requirement | [60] | |
Audit concerns (FB4) | Blockchain technology presents a whole new set of challenges for auditors. The auditing process of a technology which is designed for privacy is very complex. The transactions on a blockchain platform are irreversible. Therefore, it is important for the auditors to assess that automated controls are effective in validating the transactions. Additional expertise in auditors will be required to satisfy the expectations of the business owners and stakeholders | Added by expert |
4.1 Prioritising barriers to blockchain adoption in supply chain finance: Fuzzy AHP
Linguistic variables | Triangular fuzzy numbers | Inverse triangular fuzzy numbers |
---|---|---|
Equally important | (1,1,1) | (1,1,1) |
Moderately important | (1,2,3) | (1/3,1/2, 1) |
Strongly important | (2,3,4) | (1/4, 1/3, 1/2) |
Very strongly important | (3,4,5) | (1/5, 1/4, 1/3) |
Extremely important | (4,5,6) | (1/6, 1/5, 1/4) |
Barriers | Significance weights | Ranking |
---|---|---|
Technology barrier (TB) | 0.2261 | 1 |
Organisation barrier (OB) | 0.1826 | 2 |
Security barrier (SB) | 0.1742 | 3 |
Knowledge barrier (KB) | 0.1643 | 4 |
External barriers (EB) | 0.1350 | 5 |
Financial barrier (FB) | 0.1178 | 6 |
Main barriers | Sub-barriers | Relative weights | Relative ranking | Global weights | Global ranking |
---|---|---|---|---|---|
Technology barriers (TB) | TB1 | 0.3405 | 1 | 0.0770 | 3 |
TB2 | 0.1533 | 3 | 0.0347 | 13 | |
TB3 | 0.0864 | 4 | 0.0195 | 20 | |
TB4 | 0.0833 | 5 | 0.0188 | 21 | |
TB5 | 0.0022 | 6 | 0.0005 | 25 | |
TB6 | 0.3293 | 2 | 0.0745 | 4 | |
Organisation barriers (OB) | OB1 | 0.2454 | 1 | 0.0448 | 8 |
OB2 | 0.2259 | 2 | 0.0412 | 10 | |
OB3 | 0.2071 | 3 | 0.0378 | 12 | |
OB4 | 0.181 | 4 | 0.0331 | 15 | |
OB5 | 0.1506 | 5 | 0.0275 | 17 | |
Security barriers (SB) | SB1 | 0.6263 | 1 | 0.1091 | 1 |
SB2 | 0.3104 | 2 | 0.0541 | 6 | |
SB3 | 0.0634 | 3 | 0.0110 | 23 | |
Knowledge barriers (KB) | KB1 | 0.5544 | 1 | 0.0911 | 2 |
KB2 | 0.3097 | 2 | 0.0509 | 7 | |
KB3 | 0.1359 | 3 | 0.0223 | 18 | |
External barriers (EB) | EB1 | 0.2824 | 2 | 0.0381 | 11 |
EB2 | 0.3268 | 1 | 0.0441 | 9 | |
EB3 | 0.2287 | 3 | 0.0309 | 16 | |
EB4 | 0.1622 | 4 | 0.0219 | 19 | |
Financial barriers (FB) | FB1 | 0.5139 | 1 | 0.0605 | 5 |
FB2 | 0.2872 | 2 | 0.0338 | 14 | |
FB3 | 0.1313 | 3 | 0.0155 | 22 | |
FB4 | 0.0676 | 4 | 0.0080 | 24 |
4.2 Sensitivity analysis
Barriers sub-criteria | TB = 0.1 | TB = 0.2 | TB = 0.23 (absolute) | TB = 0.3 | TB = 0.4 | TB = 0.5 | TB = 0.6 | TB = 0.7 | TB = 0.8 | TB = 0.9 | Barriers sub-criteria |
---|---|---|---|---|---|---|---|---|---|---|---|
TB1 | 0.0340 | 0.0681 | 0.0783 | 0.1021 | 0.1362 | 0.1702 | 0.2043 | 0.2383 | 0.2724 | 0.3064 | TB1 |
TB2 | 0.0153 | 0.0307 | 0.0353 | 0.0460 | 0.0613 | 0.0767 | 0.0920 | 0.1073 | 0.1227 | 0.1380 | TB2 |
TB3 | 0.0086 | 0.0173 | 0.0199 | 0.0259 | 0.0346 | 0.0432 | 0.0519 | 0.0605 | 0.0692 | 0.0778 | TB3 |
TB4 | 0.0088 | 0.0177 | 0.0203 | 0.0265 | 0.0353 | 0.0441 | 0.0530 | 0.0618 | 0.0706 | 0.0795 | TB4 |
TB5 | 0.0002 | 0.0004 | 0.0005 | 0.0007 | 0.0009 | 0.0011 | 0.0013 | 0.0016 | 0.0018 | 0.0020 | TB5 |
TB6 | 0.0329 | 0.0659 | 0.0757 | 0.0988 | 0.1317 | 0.1646 | 0.1976 | 0.2305 | 0.2634 | 0.2963 | TB6 |
OB1 | 0.0521 | 0.0463 | 0.0442 | 0.0405 | 0.0347 | 0.0290 | 0.0232 | 0.0174 | 0.0116 | 0.0058 | OB1 |
OB2 | 0.0459 | 0.0408 | 0.0389 | 0.0357 | 0.0306 | 0.0255 | 0.0204 | 0.0153 | 0.0102 | 0.0051 | OB2 |
OB3 | 0.0440 | 0.0391 | 0.0373 | 0.0342 | 0.0293 | 0.0244 | 0.0196 | 0.0147 | 0.0098 | 0.0049 | OB3 |
OB4 | 0.0384 | 0.0342 | 0.0326 | 0.0299 | 0.0256 | 0.0214 | 0.0171 | 0.0128 | 0.0085 | 0.0043 | OB4 |
OB5 | 0.0320 | 0.0284 | 0.0271 | 0.0249 | 0.0213 | 0.0178 | 0.0142 | 0.0107 | 0.0071 | 0.0036 | OB5 |
EB1 | 0.0443 | 0.0394 | 0.0367 | 0.0345 | 0.0295 | 0.0246 | 0.0197 | 0.0148 | 0.0098 | 0.0049 | EB1 |
EB2 | 0.0513 | 0.0456 | 0.0425 | 0.0399 | 0.0342 | 0.0285 | 0.0228 | 0.0171 | 0.0114 | 0.0057 | EB2 |
EB3 | 0.0359 | 0.0319 | 0.0297 | 0.0279 | 0.0239 | 0.0199 | 0.0160 | 0.0120 | 0.0080 | 0.0040 | EB3 |
EB4 | 0.0255 | 0.0226 | 0.0211 | 0.0198 | 0.0170 | 0.0141 | 0.0113 | 0.0085 | 0.0057 | 0.0028 | EB4 |
KB1 | 0.1059 | 0.0941 | 0.0887 | 0.0824 | 0.0706 | 0.0588 | 0.0471 | 0.0353 | 0.0235 | 0.0118 | KB1 |
KB2 | 0.0592 | 0.0526 | 0.0496 | 0.0460 | 0.0394 | 0.0329 | 0.0263 | 0.0197 | 0.0131 | 0.0066 | KB2 |
KB3 | 0.0260 | 0.0231 | 0.0218 | 0.0202 | 0.0173 | 0.0144 | 0.0115 | 0.0087 | 0.0058 | 0.0029 | KB3 |
FB1 | 0.1269 | 0.1128 | 0.0617 | 0.0987 | 0.0846 | 0.0705 | 0.0564 | 0.0423 | 0.0282 | 0.0141 | FB1 |
FB2 | 0.0629 | 0.0559 | 0.0345 | 0.0489 | 0.0419 | 0.0349 | 0.0279 | 0.0210 | 0.0140 | 0.0070 | FB2 |
FB3 | 0.0128 | 0.0114 | 0.0158 | 0.0100 | 0.0086 | 0.0071 | 0.0057 | 0.0043 | 0.0029 | 0.0014 | FB3 |
FB4 | 0.0704 | 0.0626 | 0.0081 | 0.0548 | 0.0469 | 0.0391 | 0.0313 | 0.0235 | 0.0156 | 0.0078 | FB4 |
SB1 | 0.0394 | 0.0350 | 0.1065 | 0.0306 | 0.0262 | 0.0219 | 0.0175 | 0.0131 | 0.0087 | 0.0044 | SB1 |
SB2 | 0.0180 | 0.0160 | 0.0528 | 0.0140 | 0.0120 | 0.0100 | 0.0080 | 0.0060 | 0.0040 | 0.0020 | SB2 |
SB3 | 0.0093 | 0.0082 | 0.0108 | 0.0072 | 0.0062 | 0.0051 | 0.0041 | 0.0031 | 0.0021 | 0.0010 | SB3 |
4.3 Classifying the barriers to blockchain adoption in supply chain finance into cause and effect groups: Fuzzy-DEMATEL
Linguistic variable | Preference score | Corresponding triangular fuzzy numbers |
---|---|---|
No influence (NI) | 0 | (0, 0, 0.25) |
Low influence (LI) | 1 | (0, 0.25, 0.50) |
Medium influence (MI) | 2 | (0.25, 0.50, 0.75) |
High influence (HI) | 3 | (0.50, 0.75, 1.0) |
Very high influence (VHI) | 4 | (0.75, 1.0, 1.0) |
TB | OB | EB | KB | SB | FB | |
---|---|---|---|---|---|---|
TB | 0.04 | 0.5 | 1 | 0.75 | 0.75 | 0.75 |
OB | 0.5 | 0.04 | 0.75 | 0.75 | 1 | 4 |
EB | 0.5 | 0.75 | 0.04 | 0.5 | 0.5 | 1 |
KB | 0.75 | 0.75 | 4 | 0.04 | 0.5 | 0.5 |
SB | 0.75 | 0.75 | 0.75 | 0.75 | 0.04 | 0.75 |
FB | 4 | 4 | 0.75 | 0.5 | 0.75 | 0.04 |
Barrier | R + C | R – C | Barrier’s attribute | Sub-barrier | R + C | R – C | Sub-barrier’s attribute |
---|---|---|---|---|---|---|---|
TB | 2.57 | − 0.74 | Effect | TB1 | 25.81 | 0.14 | Cause |
TB2 | 26.34 | − 0.39 | Effect | ||||
TB3 | 26.05 | − 1.38 | Effect | ||||
TB4 | 23.57 | − 1.14 | Effect | ||||
TB5 | 22.01 | − 0.85 | Effect | ||||
TB6 | 24.47 | 0.39 | Cause | ||||
OB | 3.68 | 0.24 | Cause | OB1 | 23.26 | − 0.29 | Effect |
OB2 | 23.73 | 1.09 | Cause | ||||
OB3 | 26.32 | − 0.98 | Effect | ||||
OB4 | 24.45 | 1.67 | Cause | ||||
OB5 | 26.32 | − 1.10 | Effect | ||||
EB | 2.42 | − 0.68 | Effect | EB1 | 23.09 | − 0.99 | Effect |
EB2 | 22.42 | 1.23 | Cause | ||||
EB3 | 23.06 | 2.50 | Cause | ||||
EB4 | 23.75 | 0.65 | Cause | ||||
KB | 2.20 | 0.57 | Cause | KB1 | 23.89 | 1.89 | Cause |
KB2 | 25.28 | 0.65 | Cause | ||||
KB3 | 24.62 | − 1.28 | Effect | ||||
SB | 1.84 | 0.04 | Cause | SB1 | 23.89 | − 0.29 | Effect |
SB2 | 23.61 | − 1.58 | Effect | ||||
SB3 | 24.51 | 0.49 | Cause | ||||
FB | 4.14 | 0.58 | Cause | FB1 | 23.74 | 0.38 | Cause |
FB2 | 21.75 | 1.68 | Cause | ||||
FB3 | 22.71 | − 0.61 | Effect | ||||
FB4 | 24.12 | − 1.89 | Effect |