Risk management of supply chains in the digital transformation era: contribution and challenges of blockchain technology
| DOI | https://doi.org/10.1108/IMDS-04-2021-0235 |
| Published date | 15 February 2022 |
| Date | 15 February 2022 |
| Pages | 253-277 |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
| Author | Komal Rauniyar,Xiaobo Wu,Shivam Gupta,Sachin Modgil,Ana Beatriz Lopes de Sousa Jabbour |
Risk management of supply chains
in the digital transformation era:
contribution and challenges of
blockchain technology
Komal Rauniyar and Xiaobo Wu
School of Management, Zhejiang University, Zijingang Campus, Hangzhou, China
Shivam Gupta
Department of Information Systems,
Supply Chain Management and Decision Support, NEOMA Business School,
Reims, France
Sachin Modgil
Department of Operations Management,
International Management Institute Kolkata, Kolkata, India, and
Ana Beatriz Lopes de Sousa Jabbour
Metis Lab, EM Normandie Business School, Paris, France
Abstract
Purpose –The high degree of likely disruptionchallenges organizations at all levels to develop and implement
innovative strategies. Ensuring supply chain continuity even during emergency and complex situations is
critical for organizations. Therefore, this study explores some strategies adopted by firms based on innovation
and blockchain-enabled digital transformation to reduce risk in their supply chain.
Design/methodology/approach –This study follows the qualitative form of enquiry. The authors
interviewed 26 professionals from the supply chain domain. After three-layered coding and mapping multiple
layers to the data of interviews, the authors identified emerging themes and sub-themes through a thematic
analysis.
Findings –The authors identified type of risks that can affect global supply chains along with both the role of
blockchain and innovation culture in minimizing the degree of such risks and the challenges in adopting
blockchain technologies. This led us to develop a framework to address supply chain risk through digital
transformation through innovation and blockchain.
Practical implications –This research offers exciting implications for practice by drawing on the insights
gathered to facilitate supply chain risk management through innovation and blockchain applications for
organizations that are strongly impacted by digital transformation practices around the world. The study also
offers the utilization of a framework followed by propositions to reduce supply chain risks in the digital
transformation era.
Originality/value –This study focuses on presenting a mechanism of supply chain risk management
throughthe application of innovation and blockchain technology for the digital transformation of a value chain.
Blockchain can offer an innovative platform to ready the supply chain for future dynamic situations.
Keywords Supply chain risk management, Supply chain risk, Blockchain, Innovation culture, Innovation
capabilities, Industry 4.0, Digital transformation
Paper type Research paper
1. Introduction
Due to globalization and technological advancement, there has been a substantial increase in
the wave of global e-commerce. Consequently, traditional supply chains are incapable of
Risk
management of
supply chains
253
This work is supported by the National Natural Science Foundation of China (71832013; 72172140;
71821002).
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0263-5577.htm
Received 18 April 2021
Revised 27 July 2021
1 December 2021
22 January 2022
Accepted 30 January 2022
Industrial Management & Data
Systems
Vol. 123 No. 1, 2023
pp. 253-277
© Emerald Publishing Limited
0263-5577
DOI 10.1108/IMDS-04-2021-0235
developing the foundation for digital transformation. Recent studies have highlighted that
supply chain managers are struggling to come up with the digital tools required for
supply chain digital transformation (Lim et al., 2021;Gupta et al., 2020b;Hanelt et al., 2020).
The digital transformation is eliminating traditional barriers in the supply chain that can
stymie innovation, thereby heralding a new era in supply chain management (Herold
et al., 2021).
Researchers define digital transformation as the integration of multiple disruptive
digital technologies such as blockchain, artificial intelligence (AI), Internet of things (IoT),
cloud computing , big data and analytics, 3D printin g and augmented reality to transf orm
existing services, organizational patterns and business models (Dennehy et al., 2021;
Verhoef et al., 2021;Wei and Sun, 2021). Digital technologies potentially enhance
opportunities and risk analysis and expand an organization’s ability to quickly diagnose
and address any disruptions (Wang et al., 2020). Supply chains that have integrated the
digital transformation promise to reduce inefficiencies, thereby mitigating risks,
optimizing costs and driving the growth of the organization. However, global supply
chains have made supply chain risk management (SCRM) extremely complex due to the
increasing trend of globalization and digitization, more diverse product portfolios, lean
management, global outsourcing, numerous geographic locations to be served and many
other aspects (Hennelly et al., 2020;Wamba and Queiroz, 2020a,b).Therefore, global supply
chains require digital transformation to modernize and automate their manufacturing
operations for effective SCRM.
Ever since the concept of supply chain management emerged in the early 1980s, risk has
been the only inevitable and constant factor in the supply chain management. Literature
indicates that supply chain risk is a potential threat to supply chain operations, making it a
strategic challenge for firms (Ali et al., 2021;Baryannis et al., 2019). As a result, SCRM
literature has considerably matured over the last couple of decades (Ali et al., 2021).
A popular case study demonstrating the significance of SCRM concerned the well-known
companies like Nokia and Ericsson and the accidental fire in the Philips Electronics
manufacturing line in 2000. As Philips is the major supplier of chips to both the companies,
the sudden fire at Philips was a major setback for all three companies. Nokia and Ericsson
failed to manage their supply chain with any original capacity after this event, and the
shortage of chips caused them to suffer a huge loss in the global market due to the lack of
chips supplied by Philips. This unexpected fire at Philips gradually removed Ericsson from
the market, whereas after much struggle, Nokia became a dominant player in the market
because of its effective, strategic SCRM policy (Gu et al., 2021). This real-life example of
supply chain disruption is comprehensive evidence demonstr ating the importance and
pressing need for effective SCRM in the global supply chain (Johnson et al., 2021).
Nevertheless, SCRM emerged as even more important after the global outbreak of the
coronavirus (COVID-19) pandemic, which drastically affected the global supply chain for
most of the companie s.
In recent studies on the global supply chain, manufacturing firms have reported many
adverse supply chain disruptions due to the COVID-19 outbreak, which has unfolded as a
“black swan”according to the experts (Butt, 2021;Ketchen Jr and Craighead, 2020;
Betcheva et al., 2020). The supply chain disruptions caused by this pandemic have
shuttered region, national as well as global economies. In this context, governments,
practitioners and scholars asserted that supply chains are vulnerable to several
endogenous and exogenous risk factors (El Baz and Ruel, 2021;Nikolopoulos et al.,
2021). Organizations have control over endogenous risk factors such as operational risk,
financial risk, information risk as compared to exogenous risk factors such as natural
disaster risks, political risks, etc. However, in this study, SCRM has been specifically
considered as endogenous. Thus, with the periphery of considering risk management as a
IMDS
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