MGMT 484 SCSU Blockchain a New Solution for Supply Integrity Paper *Case can be found in your Harvard Business Publishing course pack attached as pdf file

MGMT 484 SCSU Blockchain a New Solution for Supply Integrity Paper *Case can be found in your Harvard Business Publishing course pack attached as pdf file and other requiremements are attached also attached

*should submit the case write-up Max 10 pages Proper grammar and a professional looking document is expected also include names on title page and a table of context

*Include data tables and figures that you use or create. If you include tables and figures, make sure to number them and reference them in the text. Note on citation: be sure to cite any outside sources, although citation format type (i.e. Chicago, APA, etc.) is your choice.

Relevant Readings:

Jon-Amerin, V. 2016. “Why Blockchain is a Game Changer for Supply Chain Management.” LoadDelivered Logistics, blog, available at: https://www.loaddelivered.com/blog/why-blockchain-is-a-game-changer-for-supply-chain-management.

O’Byrne, R. 2019. “Blockchain Technology is Set to Transform the Supply Chain.” Logistics Bureau, blog, available at: https://www.logisticsbureau.com/how-blockchain-can-transform-the-supply-chain/.

Some questions to think about to help you shape reports:

What are present issues managing supply chains?

What is blockchain technology?

How might blockchain address some current SC issues?

What are challenges to adopting blockchain?

How can blockchain be used for competitive advantage in supply chain management? Blockchain Formal Case Write-Up
MGMT 484 – Supply Chain Management
This course includes two formal case reports related to course topics. To keep the
workload manageable, these are intended to be completed within your established
teams (Quick Topic Presentation Team). Work can be distributed however the team
sees fit. Members may “opt out” of the team environment and complete cases
individually. If you choose to do this, please send an email directly to me and copy your
teammates. Members can also be “fired” from the team. This is not usually an issue, but
should it arise send an email directly to me with all teammates copied.
*Case can be found in your Harvard Business Publishing course pack.
Case report write-ups
Position yourself/team as though you are a consulting firm examining the
presented situation. Prepare a case write-up to include, in general, the following
sections:
Introduction – Describe the main problems/issues in the case. Explain what you will do
to address these problems. Briefly describe why are you are taking these actions and
what the expected outcome will be.
Background – Go into a little more detail on issues, you may (should) bring in other
sources here.
Methods – Explain your methods (how is your group approaching the problem,
what solution methods are you using) and any data/sources used for analysis. For
example, a SWOT analysis might be useful for this from an industry perspective, or
several industries. Any other relevant method is acceptable.
Analysis and Results – Explain your analysis (describe what you did and what your
results are).
Recommendations and Conclusions – Discuss implications of your analysis and what
you recommend as an action plan moving forward. Reflect on your key
takeaways/learnings.
Some questions to think about to help you shape your reports:
•
•
•
•
•
What are present issues managing supply chains?
What is blockchain technology?
How might blockchain address some current SC issues?
What are challenges to adopting blockchain?
How can blockchain be used for competitive advantage in supply chain
management?
Relevant Readings:
Jon-Amerin, V. 2016. “Why Blockchain is a Game Changer for Supply Chain
Management.” LoadDelivered Logistics, blog, available at:
https://www.loaddelivered.com/blog/why-blockchain-is-a-game-changer-for-supplychain-management.
O’Byrne, R. 2019. “Blockchain Technology is Set to Transform the Supply Chain.”
Logistics Bureau, blog, available at: https://www.logisticsbureau.com/how-blockchaincan-transform-the-supply-chain/.
*One team member should submit the case write-up and any supporting files to D2L
before class on the due date. Max 10 pages, include all member names on title page
and a table of context. Proper grammar and a professional looking document is
expected.
*Include data tables and figures that you use or create. If you include tables and figures,
make sure to number them and reference them in the text. Note on citation: be sure to
cite any outside sources, although citation format type (i.e. Chicago, APA, etc.) is your
choice.
Due: Before Class March 25th, submit to D2L assignment box.
For the exclusive use of S. Rai, 2020.
W16871
BLOCKCHAIN: A NEW SOLUTION FOR SUPPLY INTEGRITY 1
Min Pan wrote this case under the supervision of Professors Xin (Shane) Wang and Xin Xu solely to provide material for class
discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may
have disguised certain names and other identifying information to protect confidentiality.
This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.
Copyright © 2016, Richard Ivey School of Business Foundation
Version: 2016-12-21
In 2014, blockchain, the technological innovation behind the cryptocurrency bitcoin, was beginning to
gain traction as companies began integrating blockchain-based technology into their existing business
models. Blockchain had the potential to transform the US$40 trillion 2 global supply chain industry, which
faced challenges from an increasing number of participants, toughening international regulations, and
expanding geographical coverage.
Supply chain integrity troubled people, companies, and regulators worldwide. With the increasing level of
complexity of supply chains due to global trade liberalization, the challenges faced by the industry far
surpassed physical protection from theft. Information security was expected to be the next high concern
area as cyberattacks to supply chain databases were increasing in sophistication and the potential value
loss was amounting in the hundreds of millions. In one of the largest known security breaches, 3 Target’s
network was accessed through a small, third-party supplier vendor, which resulted in 110 million records
lost and hundreds of millions in damages. The inability to protect information transfer in a supply chain
was not only a security risk, but could potentially tarnish confidence and trust from producers, suppliers,
and customers. Managing databases, communication, and information sharing were concerns that needed
to be addressed as enterprises adopted record and transaction digitization. Supply chain integrity affected
not only physical goods, but also information, and was becoming a prominent issue that companies faced
in the ever-growing complexity of the global supply chain industry.
While blockchain technology was still in its infancy, it was clear that it could have endless applications in
the global marketplace: it could shorten the transaction process between intermediaries and allow trades
to take place with security, validity, and integrity, and it could expand the definition of supply chain to
include new applications in emerging industries.
Ultimately, the emergence of blockchain would challenge market positioning in established businesses.
Some advantages would become obsolete with the introduction of blockchain into the supply-chain
network. How would vertically integrated companies compete with multiple participants that specialized
1
This case has been written on the basis of published sources only.
All currency amounts are in U.S. dollars unless otherwise specified.
3
Bill Zalud, “The Daily Challenges of Supply Chain Security,” Security Magazine, April 1, 2016, accessed October 3, 2016,
www.securitymagazine.com/articles/87010-the-daily-challenges-of-supply-chain-security.
2
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For the exclusive use of S. Rai, 2020.
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in a particular task linked by blockchain? Would the key to future businesses be providing value-added
services rather than seeking information asymmetry in the market? What kind of firms could leverage this
technology to better position their brands and value creation?
ISSUES WITH MANAGING A SUPPLY CHAIN
The term “supply chain” described the process of extracting raw resources and delivering finished goods
to customers. It was a dynamic system involving a complex network of companies, organizations,
activities, technologies, information, and resources.
The continuing shift towards global trade liberalization was increasing the demand for resiliency within
companies’ supply chains. Multinationals were vertically integrating as cost reduction and information
management within the supply chain became a source of competitive advantage
As an industry, the global supply chain was worth over $40 trillion every year. 4 The complex
international regulations that governed each step in the supply chain was costing companies millions in
tied-up inventory and in overhead costs associated with seeking approvals and audits. The growth in
participants and the increasing geographic coverage of the supply chain required companies to develop
sophisticated supply-chain management systems. For example, the design for an iPhone originated in
California; its sourcing came from suppliers in Europe, Asia, and the United States; and then the
manufacturing and assembling took place in China before the product was finally delivered to customers
worldwide through a network of warehouse and distribution centres. 5 In some cases, the chain was
physically integrated; however, information wasn’t always available due to the lag between
intermediaries. The existing supply chain faced three main issues: integrity of goods, trust, and tracking.
The emergence of blockchain-based solutions had the potential to address these issues.
Integrity of Goods
To preserve brand equity, high-end luxury companies had to ensure operational as well as reputational
integrity 6 (see Exhibit 1). Their customers were often affluent individuals who looked for more than the
functionality of the product; they usually made their purchasing decisions based on the value proposition.
They decided to purchase products based on the status they represented. Therefore, many high-end
companies physically integrated their entire supply chain—from raw materials to storefront—as a strategy
to ensure that value was not destroyed during production or delivery of the product.
However, there were obstacles to establishing supply-chain integrity. For example, the value of diamonds
was challenged by the presence of “blood diamonds”—diamonds mined in war zones and used to fund
unethical military operations.” 7 Consumers who purchased these diamonds were indirectly funding
military conflicts. Despite the establishment of the Kimberley Process to control and govern diamond
sources, the definition of conflict diamonds was still too narrow to exclude sources where the diamonds
4
Luke Parker, “Blockchain Tech Companies Focus on the $40 trillion Supply Chain Market,” Brave New Coin, February 2,
2016, accessed April 28, 2016, http://bravenewcoin.com/news/blockchain-tech-companies-focus-on-the-40-trillion-supplychain-market/.
5
Ian Barker, “The Global Supply Chain Behind the iPhone 6,” betanews, accessed June 8, 2016,

6
“A strategic view of supply chain integrity,” PricewaterhouseCoopers, accessed June 9, 2016, www.pwc.com/us/en/supplychain-management/publications.html.
7
Aryn Baker, “Blood Diamonds,” Time, accessed June 10, 2016, http://time.com/blood-diamonds/.
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For the exclusive use of S. Rai, 2020.
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were clearly unethical, 8 and diamond companies still had no effective means to control their sources.
Thus, they were unable to differentiate blood diamonds within their supply chains (see Exhibit 2). If a
brand was unable to prove the source of its diamonds, socially responsible customers were less inclined to
purchase their product and might choose to buy from competitors.
Trust
The Internet had increased consumers’ awareness of issues of sustainability, and customers’ stronger
appetites for organic, fairly traded, or environmentally friendly products was causing companies to
change their marketing strategies to cater to these markets. However, because supply chains were often
opaque, it was difficult for consumers to verify the validity of these marketing claims. Even if a company
chose to disclose information, it was often partial or incomplete. The lack of available information
hindered the establishment of trustworthy relationships between companies and consumers.
Supply-Chain Tracking
The time lag and barriers between supply-chain participants created obstacles for tracking specific
transactions and goods, leading to information asymmetry between participants in the supply chain. It was
difficult, if not impossible, to precisely follow the transfer of a specific batch of goods as information for
previous transactions was often erased when goods were transferred. Even if previous records existed, the
information was not always consistent. 9 This made understanding the movement of goods particularly
difficult as each participant only possessed partial information. Even if information was shared, it could
take weeks to synchronize and process.
BLOCKCHAIN
Blockchain, which was seen as the main technological innovation behind bitcoin, was a record-keeping
mechanism that allowed businesses to work together with authenticity and reliability. Bitcoin was a
cryptocurrency developed in 2009 and quickly gaining acceptance; it could be traded for physical
currencies on online currency exchanges. Bitcoin’s value continued to appreciate against the dollar.
Blockchain was a distributed public ledger that maintained a continuously growing list of information
“blocks” (see Exhibit 3), each data block was linked to the previous block by a unique hash value
calculated through a mathematical relationship known as a mathematical “trapdoor” function. The blocks
were connected if the hash value matched the “trapdoor” function. One data block was made of individual
transactions with a time stamp and information linked to the previous block.
The trail of information was stored in Internet nodes, where no party had direct control. The nodes were
anonymous and linked only to a few other nodes. The original data was permanent, leaving a public
information trail or chain of transactions. This chain was visible to all users on the peer-to-peer network,
so users could trace the history of a transaction chain based on one single transaction.
8
Tara John and Heather Jones, “This Graphic Shows How Blood Diamonds Arrive in the U.S.,” Time, August 27, 2015,
accessed June 10, 2016, http://time.com/4013120/blood-diamonds-graphic/.
9
Jon-Amerin Vorabustra, “Why Blockchain Is a Game Changer for Supply Chain Management,” LoadDelivered Logistics,
blog, January 28, 2016, accessed June 8, 2016, www.loaddelivered.com/blog/why-blockchain-is-a-game-changer-forsupply-chain-management/.
This document is authorized for use only by Sonu Rai in MGMT 484_Spr 2020 taught by SARAH SENGUPTA, St. Cloud State University from Jan 2020 to Jul 2020.
For the exclusive use of S. Rai, 2020.
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Even if some users had malicious intentions, a consensus was required before any new information block
could be added to an existing chain. Data was verified through the use of an elliptic curve digital
signature algorithm that used a separate set of public and private key to ensure integrity and exclusivity in
the verification process. Consensus was reached if the majority of the blocks agreed with the set of the
transactions. New data had to be in full agreement with previous transactions; otherwise, the new data
would never become part of a confirmed data set.
SUPPLY CHAIN SECURED BY BLOCKCHAIN TECHNOLOGY
Blockchain could fundamentally change supply-chain management. Many experts argued that blockchain
could become the universal supply-chain operating system due to its wide range of applications.
Blockchain was being used for the following applications:
•
•
•
•
•
It tracked the quantity, specification, and origin of containers, trailers, and pallets as they moved
among participants in the supply chain.
It recorded shipping documents, receipts, and other necessary documents for each transaction.
It provided downstream participants with assembly processes, raw ingredients lists, and precautionary
warnings specified to each customized product.
It simplified the regulatory and auditing process by attaching insurance quotes, customs clearance,
and duty information directly to each shipment.
It monitored, accessed, and shared information to analyze real-time information for insights.
Transparency
The ability to document a product’s journey along the supply chain was seen as the key innovation behind
blockchain. Blockchain technology could record the product’s origin along with every transaction that
occurred to take the product to its final destination. To customers, knowing where the raw ingredients
came from, where the product was made, and who made the product could significantly impact their
purchase decisions. This eliminated the trust issues associated with the existing supply chain because the
data was accessible to all participants in the network. The reliability of the data was governed by all
participants, which significantly decreased the chance of bias and fraud. A transparent network also meant
that regulators could track key accountable parties without needing to access information through
companies.
Scalability
Blockchain was theoretically infinitely scalable due to the database structure. The distributed nature
meant that information was stored on Internet nodes instead of on a central server. This created an
infinitely large database that was virtually accessible by any number of people at any given point in time.
Security
Blockchain would decrease cyber security risks compared to previous company databases. An indelible
ledger with traceability for every transaction, combined with the prohibitively high cost to alter
transaction history would deter participants with malicious intent from attacking the network.
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For the exclusive use of S. Rai, 2020.
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Codified rules would also increase supply chain and network integrity, which could be enhanced if
specific conditions had to be met before transactions were permitted. The automatic ruling within the
network would provide better protection against suspicious, unwanted, or fraudulent goods from entering
the supply-chain network.
Real-Time Transactions
Blockchain would increase efficiencies while eliminating inconsistencies for a company’s supply-chain
network. One view, agreed to by all participants, and shared records would enable information to be
consistent across various points in the supply chain. This would reduce the processing time between
intermediaries from days to minutes because information no longer needed to be transferred from party to
party.
Real-time transactions would decrease processing time and the amount of capital tied up within the
supply chain (see Exhibit 4). In global trades, letters of credit were used to guarantee transactions, which
tied up companies’ capital. Any reduction in processing time, such as customs clearance speed, could
unlock capital tied within the supply chain.
Innovation
The decentralized architecture could unlock limitless opportunities for innovation and new applications.
For example, smart contracts could be integrated into the supply chain, where only participants with
certain conditions could access the information being developed. Through smart contracts, regulators
would be able to monitor the flow of goods through the supply-chain network without all participants
having access to the information.
SHIFTING THE GLOBAL MERCHANT MARKET
As the technology innovation behind the cryptocurrency bitcoin, blockchain technology was still in its
infancy. Nevertheless, blockchain could have endless applications in the global marketplace by enabling all
forms of assets to be traded. For example, an individual could trade away blocks of energy within a
microgrid. 10 This trade could reward individuals who use less energy and increase environmental
sustainability. It could a…
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