Eindhoven, February 2019

Blockchain in the supply chain domain:

a technology adoption model
By M.C. Cioffi

Student number: 1177788

Master of Operations Management & Logistics

Supervisors:
B. Ozkan – TU/e, IE&IS
P.W.P.J. Grefen – TU/e, IE&IS
T. Kik – Accenture
Executive summary
This executive summary describes the main steps performed in this research. First, an introduction of
the subject is outlined. Then, problem and research methodology are reported. Lastly, the main results
and conclusions are discussed.

Introduction

Blockchain is a revolutionary technology that promises to change the way transactions are executed.
The Blockchain revolution started in the financial sector, with the birth of a cryptocurrency called
Bitcoin. Nowadays, its use is spread across numerous domains, managing different types of data
transactions. One of this thriving domain is supply chain. Supply chain is currently facing several
problems due to the increasing complexity of its structure. Most of the production activities are not
executed in house anymore, but they are outsourced to external companies spread worldwide. In this
articulated network, each participant owns only a partial and incomplete copy of the information
about products and related processes. This generates an opaque and asymmetric structure that
increases the complexity of the companies’ operations. Blockchain is a promising technology, whose
characteristics can be exploited in the supply chain domain to overcome its main challenges. In
particular, thanks to its transparency, reliability and decentralization it can bring several advantages in
terms of process efficiency, network trustworthiness and supply chain synchronization. For these
reasons, Blockchain applications in this domain are increasingly explored from both researchers and
practitioners.

Problem and methodology

Although the large interest in this technology, the adoption rate from the company side is still low.
Moreover, the knowledge about Blockchain in this domain is fragmented and the overall possibilities
unclear. Therefore, this research aims to, firstly, understand the main applications of Blockchain in this
domain, in terms of use cases and related characteristics. Secondly, it investigates which characteristics
are determinants of its adoption from a company perspective. In particular, the following two research
questions guide this research:

1. What are the most important use cases of Blockchain in the supply chain domain and the
related characteristics?
2. What are the determinants of the adoption of Blockchain in the supply chain domain from a
company perspective?

The ultimate goal of this research is the development of an artifact and, in particular, of a technology
adoption model, in order to understand the factors that move a company to adopt Blockchain. For this
reason, the design science research methodology (DSRM) by Peffers et al. (2007) was followed. The
DSRM is used to produce successful artifacts, which could be either a construct, a model or a method
(Peffers et al., 2007). The DSRM is articulated in six steps: problem identification and motivation,
definition of the objectives for a solution, design and development, demonstration, evaluation, and
communication (Peffers et al., 2007). In this case, the problem identified was the lack of understanding
about the main use cases and related characteristics of Blockchain in the supply chain domain, and
their causal relationships with the intention to adopt the technology. Therefore, a quasi-systematic
literature review (quasi-SLR) was performed to collect the main Blockchain use cases in the supply
chain domain. Then, the related characteristics were extracted. Since the output of the quasi-SLR
presented a lack of understanding in terms of possible Blockchain threats and challenges, an additional

III
screening was performed to integrate this shortage. From the final pool, the main characteristics were
selected and grouped into generic constructs. These constructs were used to build the technology
adoption model. In particular, the constructs were mapped to the components of the Technology
Organization Environment (TOE) framework by Tornatzky and Fleischer (1990). Lastly, the model
hypotheses were defined and a web-survey was created in order to collect the data needed for the
analysis. The model was implemented in SmartPLS 3.0 (Ringle et al., 2015) and PLS-SEM and
bootstrapping were used to test the hypotheses (Hair et al., 2014).

Results

The output of the first part of the research showed the production of a comprehensive model of the
Blockchain use cases described in literature and the related characteristics. In particular, this model
showed how the inherent characteristics of Blockchain, applied to the supply chain use cases, can bring
several advantages in the supply chain domain (Figure 1).

Figure 1. Blockchain use cases and related characteristics (RQ1)

Then, selecting and grouping the main characteristics, the following six constructs of the adoption
model were outlined: technology risks (TER), business performance (BUP), technology and regulations
immaturity (TRI), business integration (BUI), cross-organizational data performance (CDP), and
competitive pressure (COP). The test of the hypotheses of the technology adoption model showed two
significant negative relationships between TER and IAB, and between TRI and IAB. Moreover, two

IV
 positive significant relationships were
highlighted between COP and IAB, and
between CDP and BUI (Figure 2).

Conclusions

This research contributes to the extension

of the body of academic literature in
different ways. First, it provides a complete
model that presents the most meaningful
Blockchain characteristics in the supply
chain domain, related to the single use
cases. In this way, researchers can now
dispose of a model that summarizes the
main Blockchain applications discussed in
literature. Second, this research represents
a first attempt to study the Blockchain
adoption in the supply chain domain with
the application of the TOE framework. The
technology adoption model developed in
this research investigates for the first time
the causal relationships between
Blockchain characteristics and the
companies’ intention to adopt the
technology. Since the adoption of the
technology is determinant for its diffusion,
clarifying the main obstacles is important
to improve the development of the
technology.
Figure 2. PLS-SEM results of the technology adoption model (RQ2)
This study also identifies limitations and
suggestions for future research. In particular, the newness of the topic and the data availability were
discussed as main limitations. Moreover, recommendations like the analysis of possible moderating
effects were provided for future analyses.

Lastly, the practical implications of this research were discussed. The insights provided from the
developed adoption model were identified as main contribution to Blockchain practitioners.
Understanding the factors that obstacle the diffusion of the technology can help them to develop
targeted measures for companies that are hesitant about Blockchain adoption. In particular, the
relevant influence of the Blockchain challenges on the adoption decision suggests to practitioners to
focus their attention on that, trying to solve the main issues and clarifying the misunderstandings
about the technology. Moreover, the results about competitive pressure indicate the utility of
underlining the competitive situation in order to foster the adoption among companies.

V
Table 30. In use characteristics per use case: advantages in black; challenges in red; selected survey items in bold

UC1 UC2 UC3 UC4 UC5 UC6 UC7 UC8 UC9 UC10 UC11 UC12 UC13 UC14 UC15 UC16 UC17 SLRs SURVEY ITEM
Improvement of logistics performance X X X X X X X X YES
Time reduction X X X X X X X X YES
Costs reduction X X X X X X YES
Product safety X X X X X X YES
Real-time data (fast data exchange) X X X X X X YES
Data security X X X X YES
Intermediaries minimization X X X X YES
Customer confidence & satisfaction X X X YES
Customer engagement X X X YES
Data accuracy X X X YES
Digital trust X X X YES
Easy data exchange X X X YES
Improvement of quality management X X X YES
Privacy X X X YES
Process synchronization X X X X YES
Resources optimization X X X YES
Flexibility X X NO
Improvement of customer data analysis X X NO
Loss of sales reduction X X NO
Market adaptation X X NO
Process automation X X NO
Traceability X X NO
Complete data collection X NO
Data control X NO
Improvement of customer experience X NO
Loss reduction X NO
Money transfer efficiency X NO
Process efficiency X NO
Process transparency X NO
Product & service quality X NO
Profits increase X NO
Transaction automation X NO
Waste reduction X NO
Data security X YES
High costs X NO
Immaturity X NO
Difficult integration (IT inadequacy) X X YES
Lack of interoperability X X YES
Lack of standards X NO
Performance capability X NO
Privacy X YES
Regulatory issues X YES
Scalability X X YES

60
APPENDIX D - Survey

61
62
63
64
65
66
67
68