Blockchain-based Supply Chains - Why are Sustainability Benefits not Realized?

Abstract: The world is constantly evolving, becoming more digital and new technologies are being developed. One such technology is blockchain, which has gained popularity through the cryptocurrency Bitcoin. However, there is much more potential in this technology, for example within supply chains. With its immutable, secure and transparent nature, blockchain has the potential to revolutionize supply chain management. Nevertheless, blockchain-based supply chains have their raison d'être not only for efficiency reasons. Due to the above-mentioned attributes of this technology, it can also make a great contribution in terms of sustainability. The external pressure is growing and forces retailers to become more transparent and act more sustainably along supply chains. This pressure comes both from their own customers, who place an increasing value on sustainable and green products, but also from regulations and laws that oblige companies to operate more sustainably. Even though the advantages of blockchain-based supply chains are evident, the adoption of blockchain is still quite narrow and small-scaled. For this reason, this thesis examines to what extent and why a gap between claimed sustainability potentials and reality exists in supply chains. A thorough literature review has been conducted which resulted in a capability framework, listing nine sustainability capabilities of blockchain and their associated benefits for sustainable supply chains. Further, six semi-structured interviews were held with experts and companies using or providing blockchain platforms. The findings demonstrate that the claimed sustainability potentials of blockchain platforms are not used to their fullest extent. Moreover, the analysis suggests that there are several barriers hindering the adoption of blockchain in supply chain management. The main bottleneck is found to be the resistance among lower-tier suppliers. This resistance is mainly due to the lack of external pressure, which is disproportionally weighted on retailers in the public eye. It is also due to technical difficulties, making it hard for less digitized companies to adopt blockchain. The analysis results in a number of possible solutions to mitigate inter-organizational issues, where the recommendation is to work collaboratively with suppliers and incentivize adoption by demonstrating efficiency gains and sharing benefits. Through providing the findings and analysis, this research contributes to the literature and practical field by shedding light on the difficulties of making full use of blockchain-based supply chains. Furthermore, this thesis guides future research towards the most essential barrier that needs to be overcome.