Can Projects on Blockchain Reduce Risks in Supply Chain Management?: An Oil Company Case Study

Abstract

Increase in competition and the strategic move of enhanced outsourcing has made supply chain more complex. Various applications and software solutions are available to better manage this complexity. It has been observed that often such initiatives may not provide the excepted benefits. It has also been reported that an unclear understanding of business needs (including perceived risks) is the main reason of supply chain failure. The present study attempts to capture enterprise level supply chain risk in an oil company (case company) in India and explore if perception of a decision maker favours use of blockchain technology project to reduce the supply chain risk. The study adopts the following methodology: in-depth semi-structured interviews and structured survey was carried out with the top management of the case company to identify various enterprise level risks for supply chain management (SCM) projects which were subsequently clustered under Operations, Finance, Human Resources, and Strategic Business Risk categories. Inputs on the probability of occurrence and impacts of the identified risks on the enterprise-wide supply chain was mapped on the risk severity matrix (heat map) to prioritize the risks. Subsequently, the second round of questionnaire was developed and a similar survey carried out again with the same sample show the change in risk perception due to potential application of blockchain technology. Interesting insights could be gained from the practitioner’s perspective on the value contribution of using blockchain for improving management of SCM risks. It could be observed that a number of the high priority risk (in the initial scenario) could now be eliminated or managed due to specific characteristics of blockchain.. One of the major limitations of the present study is the lack of generalizability of the insights as it is based exclusively on the perspective of the case company towards the blockchain.