**4. Chain integration**

*Computer Security Threats*

obligations, rights, and concepts between stakeholders is created. This information is recorded as executable computer code to reduce ambiguity. Smart contracts are stored and shared in a distributed ledger that all participants have access to. These contracts automatically self-execute when all of the pre-set conditions are satisfied within a blockchain network. Thus, stakeholders who agreed upon a smart contract have more trust for each other and have a reduced risk of error and fraud [37]. The

• **Cost-saving**: by eliminating intermediaries and reducing process time;

• **Accurate**: all agreements, conditions, etc. are recorded in terms of computer codes that provide a more accurate and efficient means of information storage;

• **Speedy**: Whenever the pre-defined conditions are met, the smart contract is

• **Transparent**: Smart contracts are available and fully visible to all participants

• **Secure**: Smart contracts are stored using encryption and are distributed on all

There are many blockchain platforms with different consensus algorithms, development tools, and programming languages [38]. We introduce a few impor-

**Bitcoin**: The initial and most famous blockchain network to offer cryptocurrency transactions. It was launched in 2009 and has rapidly grown to be a significant currency system both online and offline. Since the mid-2010s, increasingly more businesses have begun accepting Bitcoin as payment. At the time of this writing (March 2019), the market capitalization of Bitcoin was about \$68 billion

**Ethereum**: An open-source blockchain platform that was introduced by Buterin [41] and first launched in 2015. It is the first, and possibly the most advanced, blockchain network to introduce smart contracts for decentralized applications (Dapps). The primary Ethereum network serves as a public blockchain network; however, it is also possible to create a private blockchain network based on Ethereum. Quorum [42] is one such example and deploys the Ethereum network to create an enterpriseready distributed ledger and smart contract platform, both of which contribute to faster processing. In Ethereum's main network where a majority of transactions take place, it takes about 10–15 seconds to create a new block [43]. However, the number

following details additional advantages of smart contracts:

executed autonomously and in real-time;

nodes of the blockchain network simultaneously.

[39]—it takes around 10 minutes to create a new block [40].

of transactions processed per minute is still as limited as Bitcoin.

**Hyperledger fabric**: An open-source, private blockchain network that is designed for enterprise applications. Hyperledger Fabric was established under the Linux Foundation and is maintained by a variety of organizations [44]. It employs a configurable architecture that provides various features, such as distributed ledger frameworks, smart contract engines, pluggable consensus protocols, user interfaces, and more. These versatile characteristics allow for a broad range of business applications, including finance, insurance, supply chain, healthcare, and human

**Skuchain**: A blockchain network that is designed for enterprise supply chains in global trade [45]. It creates a zero-knowledge collaborative platform for global

**3.3 Existing blockchain platforms and applications**

tant blockchain platforms and applications herein.

involved in the network; and

**64**

resources.

In recent years, Blockchain technology has been recognized as a critical technology with inherent capabilities to dramatically improve supply chain efficiency [49–51]. A study from Eye for transport stated that more than 16% of the 300 companies surveyed agree that data interchange, tracking, and visibility are the foremost reasons to deploy blockchain technology in the supply chain [52]. However, we discuss the benefits, challenges, and risks of integrating blockchain technology in the supply chain and introduce several pilot initiatives below.

#### **4.1 Benefits to supply chain**

The adaptation of blockchain technology can significantly alleviate or even eliminate the aforementioned problems in today's supply chain. Blockchain technology empowers the supply chain with improved efficacy, efficiency, and transparency and reduced transactional time and cost. There are many ways blockchain technology benefits the supply chain:

**Advanced traceability**: With the adoption of blockchain technology, traceability within the supply chain is greatly improved; it produces a fully auditable trail of all items flowing through the network. Combined with IoT-based devices, such as RFID technology, a blockchain-enabled supply chain can automatically collect the item-level data of massive quantities of products in real-time. Additionally, this information is associated with timestamps and collection locations to form an audit trail that is complete, accurate, and easy-to-access, from the product's origin to the customer. Furthermore, thanks to the immutability of blockchain data and the digital signatures required to confirm information ownership, data stored in this chain offers a secure and full history of any item in the entire supply chain. In the event of a compromised product, improved traceability enables the source of the issue to be identified more quickly, which reduces the cost of recalling products and improves disruption resolution between stakeholders. Advanced traceability gives stakeholders and customers more confidence in a product's authenticity and quality.

**Improved transparency**: Blockchain technology provides reliable identity management in the supply chain [53] by enabling all parties to know who is performing what actions, at what time, and where. This information is stored and shared in distributed ledgers that can be conveniently accessed by involved and authenticated stakeholders. Through the integration of physical and digital flows across the supply chain, the connectivity of multiple trading partners will improve [54, 55]. Therefore, a blockchain-enabled supply chain with its transparent and complete inventory of product flow helps businesses make better forecasts and

decisions. Additionally, improved transparency serves as a powerful tool for fighting fraud and counterfeiting.

**Boosted efficiency**: One of the primary motivations for implementing blockchain technology is to replace the outdated, paper-heavy processes in place today. As one of the benefits of digitalization, the logically centralized data ledger provides up-to-date local copies to all stakeholders within the network. All transactions are committed and immediately validated by all involved parties, and data are automatically synchronized to each party's local copy. Blockchain technology makes it safer and faster to maintain the quality of transactions and associated data [56] by reducing human error and eliminating the need for third-party intermediaries and for local ledger reconciliation. Finally, the autonomous and self-executing blockchain-based smart contract replaces tedious processes and improves flexibility in supply chain management.

**Greater security**: It is nearly impossible to impact blockchain technology through hacking attacks like those that threaten centralized databases of intermediaries (e.g., banks). It is structured so that when there is an attempted hack into a specific block, all preceding blocks in the entire history must also be tampered with. Thus, blockchain provides a more secure way to maintain a log of business activities and transactions [12].

**Enhanced trust**: The transactions of a blockchain-based supply chain are created and recorded based on peer-to-peer interaction that can be trusted by the associated digital signatures. Additionally, a reliable identity management mechanism [53] allows for the collection of time, location, and other data at every action on a product in the supply chain. All data are synchronized to all stakeholders in realtime, which enhances trust among stakeholders within the supply chain network.

**Easy compliance**: A blockchain-enabled supply chain network records all transactions with precise details, such as timestamps, environmental conditions, and location. These accurate, tamper-proof records can serve as the source of a business's data integrity and be easily accessed for regulations and compliance.

#### **4.2 Challenges with blockchain technology**

Although blockchain technology is widely recognized as a promising solution for issues with today's supply chain, the application of it requires significant changes in both technological and cultural contexts. Additionally, more comprehensive evaluations of it are needed to unveil and address its challenges before the full potential of this new technology can be realized [22, 57].

**Throughput and performance**: Due to its decentralized architecture, each transaction is approved by all or a majority of nodes in a blockchain network. This approval process limits the throughput of a blockchain network; for example, Bitcoin, a public blockchain, can only process from 3 to 30 transactions per second. However, a private blockchain-based supply chain network must process far more transactions, possibly thousands per second, for the entire system. Thus, it is imperative to improve the transaction capacity of blockchain technology for full scalability. Fortunately, a private blockchain network's ability to improve the throughput of transactions may mitigate this processing challenge.

**Standardization**: Standardization is a critical concern for the adoption of blockchain technology in the supply chain. In essence, this technology offers a ubiquitous and general-purpose platform for digital data sharing and permanent storage. Interestingly, a major question still remains: what content and format should be adopted for transactional data that facilitates interpretation by all participants? A data standard must be established and agreed upon by the entire supply chain community. However, there is no existing standard that can be adapted for this purpose.

**67**

*Deploying Blockchain Technology in the Supply Chain DOI: http://dx.doi.org/10.5772/intechopen.86530*

supply chains.

private data are stored [13].

and enhance consumer experiences.

**4.3 Pilot initiatives**

In recent years, much effort, such as EPCIS [58] that proposed GS1, has been made to overcome this gap, however, it is still not widely accepted and implemented in

**Data privacy**: The immutability and transparency of blockchain technology raise a concern with data privacy when deployed for supply chains. Once data are stored in blockchains it cannot be changed, and, thus, it is imperative that a reliable mechanism that protects users' privacy is designed. The task of balancing an individual's right to privacy in an open blockchain network is very challenging. Currently, most blockchain networks, such as Bitcoin, provide limited control to users over the data and where they can transfer it to [22]. Most networks offer only pseudonymity to its users for privacy, so, although transactions are public for all nodes, the real identity of their owners is never revealed. This is unacceptable for supply chains, as nobody is willing to leak information to competitors about Confidential detail or the amount of merchandise moving in a network. Furthermore, with the limited number of stakeholders in the supply chain, it would be easy to figure out the owner of the transactional data and anonymity would disappear. To address this, private blockchain technology (such as Hyperledger Fabric) can support the creation of a channel for limited and trusted parties who are involved in specific transactions [44]. In this way, an unauthenticated user is forbidden to join the channel or access its data. It should be noted that a blockchain network can be designed to only serve as metadata of the workflow and the contents and details of all transactions within it are stored in external data repositories. Therefore, this technology provides a log of transactions on which no

Since late 2016, retail giants Walmart and IBM worked together for a pilot project to develop a blockchain-based system for tracking produce in the U.S. and pork in China. The project traced each product and collected its associated data, including origin farm/factory, storage temperature, and serial number. With this technology, tracking reports for each product were produced within minutes and the speed and accuracy of identifying and recalling contaminated food products were significantly improved [59]. On May 31, 2017, Walmart released the results of this pilot project and reported that blockchain technology helped them trace the origin of Chinese pork and U.S. mangoes in 2.2 seconds, which would normally take

Intel conducted a public demo to explore the implementation of blockchain technology for tracking seafood in the supply chain. They aimed to create a network that assists multiple parties with food storage condition (i.e., temperature) control and with tracking food from sea to table. Several public records of this project are available on the Traceability Blockchain website [61]. These records detail how to use blockchain technology to collect seafood product data (i.e., locations, timestamps, owners, temperatures, etc.) from fishermen, transports, and restaurants within the entire supply chain network. This seafood blockchain can foster more trust between customers and sellers, improve and expedite the food safety network,

In 2018, el Maouchi introduced TRADE, a fully transparent and decentralized traceability system for the supply chain that leverages blockchain technology [17]. It is a single system in which multiple participants can transfer and track products flowing through the supply chain. Additionally, it enables customers and other parties in the system to view and verify product data. Experiments show that each actor on the TRADE system can create about 351 and validate 437 transactions per second.

as long as several weeks in a traditional supply chain platform [60].

*Computer Security Threats*

fighting fraud and counterfeiting.

in supply chain management.

**4.2 Challenges with blockchain technology**

this new technology can be realized [22, 57].

and transactions [12].

decisions. Additionally, improved transparency serves as a powerful tool for

**Boosted efficiency**: One of the primary motivations for implementing blockchain technology is to replace the outdated, paper-heavy processes in place today. As one of the benefits of digitalization, the logically centralized data ledger provides up-to-date local copies to all stakeholders within the network. All transactions are committed and immediately validated by all involved parties, and data are automatically synchronized to each party's local copy. Blockchain technology makes it safer and faster to maintain the quality of transactions and associated data [56] by reducing human error and eliminating the need for third-party intermediaries and for local ledger reconciliation. Finally, the autonomous and self-executing blockchain-based smart contract replaces tedious processes and improves flexibility

**Greater security**: It is nearly impossible to impact blockchain technology through hacking attacks like those that threaten centralized databases of intermediaries (e.g., banks). It is structured so that when there is an attempted hack into a specific block, all preceding blocks in the entire history must also be tampered with. Thus, blockchain provides a more secure way to maintain a log of business activities

**Enhanced trust**: The transactions of a blockchain-based supply chain are created and recorded based on peer-to-peer interaction that can be trusted by the associated digital signatures. Additionally, a reliable identity management mechanism [53] allows for the collection of time, location, and other data at every action on a product in the supply chain. All data are synchronized to all stakeholders in realtime, which enhances trust among stakeholders within the supply chain network. **Easy compliance**: A blockchain-enabled supply chain network records all transactions with precise details, such as timestamps, environmental conditions, and location. These accurate, tamper-proof records can serve as the source of a business's data integrity and be easily accessed for regulations and compliance.

Although blockchain technology is widely recognized as a promising solution for issues with today's supply chain, the application of it requires significant changes in both technological and cultural contexts. Additionally, more comprehensive evaluations of it are needed to unveil and address its challenges before the full potential of

**Throughput and performance**: Due to its decentralized architecture, each transaction is approved by all or a majority of nodes in a blockchain network. This approval process limits the throughput of a blockchain network; for example, Bitcoin, a public blockchain, can only process from 3 to 30 transactions per second. However, a private blockchain-based supply chain network must process far more transactions, possibly thousands per second, for the entire system. Thus, it is imperative to improve the transaction capacity of blockchain technology for full scalability. Fortunately, a private blockchain network's ability to improve the

**Standardization**: Standardization is a critical concern for the adoption of blockchain technology in the supply chain. In essence, this technology offers a ubiquitous and general-purpose platform for digital data sharing and permanent storage. Interestingly, a major question still remains: what content and format should be adopted for transactional data that facilitates interpretation by all participants? A data standard must be established and agreed upon by the entire supply chain community. However, there is no existing standard that can be adapted for this purpose.

throughput of transactions may mitigate this processing challenge.

**66**

In recent years, much effort, such as EPCIS [58] that proposed GS1, has been made to overcome this gap, however, it is still not widely accepted and implemented in supply chains.

**Data privacy**: The immutability and transparency of blockchain technology raise a concern with data privacy when deployed for supply chains. Once data are stored in blockchains it cannot be changed, and, thus, it is imperative that a reliable mechanism that protects users' privacy is designed. The task of balancing an individual's right to privacy in an open blockchain network is very challenging. Currently, most blockchain networks, such as Bitcoin, provide limited control to users over the data and where they can transfer it to [22]. Most networks offer only pseudonymity to its users for privacy, so, although transactions are public for all nodes, the real identity of their owners is never revealed. This is unacceptable for supply chains, as nobody is willing to leak information to competitors about Confidential detail or the amount of merchandise moving in a network. Furthermore, with the limited number of stakeholders in the supply chain, it would be easy to figure out the owner of the transactional data and anonymity would disappear. To address this, private blockchain technology (such as Hyperledger Fabric) can support the creation of a channel for limited and trusted parties who are involved in specific transactions [44]. In this way, an unauthenticated user is forbidden to join the channel or access its data. It should be noted that a blockchain network can be designed to only serve as metadata of the workflow and the contents and details of all transactions within it are stored in external data repositories. Therefore, this technology provides a log of transactions on which no private data are stored [13].
