The role of Blockchain in improving the logistics flows – An overview

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Information systems in the logistics sector

Information systems (IS) reach into many business sectors and play an important role in the development of business and societal solutions. The management of information is crucial for many companies and is considered as one of the most important factors for success in a competitive market (Loebbecke & Powell, 1998). The logistics sector also profits from the use of IS and research on IS in logistics has been conducted since the 1990s. Initial research focused on exploring the potential of IS in management and the impact on organisational structures (Lewis & Talalayevsky, 1997; Bowersox & Daugherty, 1995).
The research on organisational structures describes that information technology influences the strategy and the competencies concerning the competitive advantages of logistics companies (Bowersox & Daugherty, 1995). Lewis and Talalayevsky (1997) explain that the use of IS in logistics goes beyond providing status information of the flow of goods (Rayport & Sviokla, 1995). The flow of information should therefore be handled separately from the flow of goods (Lewis and Talalayevsky, 1997). In this thesis, logistics is viewed as a part of supply chain management according to the Council of Supply Chain Management Professionals (CSCMP). The CSCMP defines Logistics as: “the part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” (“SCM Definitions and Glossary of Terms”, 2017) Supply chain management involves the flow of three key resources, which are the flows of information, goods and finances (Chen, Drezner, Ryan & Simchi-Levi, 2000; Kulp, Lee & Ofek, 2004; Mentzer, DeWitt, Keebler, Min, Nix, Smith & Zacharia, 2001). The flows of goods and information are especially important for the logistics process (Klein & Rai, 2009). The financial flow could be a worthwhile research topic in combination with the Blockchain technology as well, however this thesis is not concerned with the cryptocurrency aspect of the Blockchain technology. Therefore, the following sections describe these two concepts.

Flow of goods

The very basic activity of the logistics process is the re-allocation of physical goods (Glöckner, Ludwig & Franczyk, 2017). To further specify, logistics provides goods to customers at the right time and in the right quantity (Prajogo & Olhager, 2012). The number of shipping and receiving locations determines the complexity of this process (Simchi-Levi, Kamisnsky, Simchi-Levi, 2008). With increasing complexity, the management of the flow of goods gets more difficult (Prajogo & Olhager, 2012). Information systems help to manage the flow of goods (Lewis and Talalayevsky, 1997) Lewis and Talalayevsky (1997) explain that logistics is driven by an increased product proliferation, increasingly demanding customers, just-in-time manufacturing and a globalized marketplace. This is reflected for example by custom-made products, with next day delivery (Lewis & Talalayevsky, 1997). The successful flow of physical goods depends on the flow of information, which means that shipping information should be transmitted before the goods arrive (Sheombar, 1992; Hou, Chaudhry, Chen & Hu, 2017). This example illustrates the synergy between the information flow and the flow of physical goods.

Flow of information

The management of the flow of information is equally important to the management of the flow of physical goods to add value to the logistics process (Rai, Pavlou, Im & Du, 2012; Korpela et al., 2017; Lewis & Talalayevsky, 1997). The role of information systems in logistics is to convert data into information to support managers in their decision-making process (Introna, 1991; Gomez, Grand, & Gatziu Grivas, 2015).
The competitive advantage that the use of information systems brings is recognised by Closs, Goldsby and Clinton (1997). A disruption in the flow of information leads to a disruption of the process and ultimately to a disruption in the flow of goods (Heilig, Schwarze & Voss, 2017). The logistics process involves multiple parties, and therefore information is exchanged not only within a single organisation but also across multiple organisations. Seidmann and Sundararajan (1997) suggest sharing strategic information with partners to improve forecasts about demand and planned production. However, sharing strategical information is not without risk and the partner might increase prices based on this information. Klein and Rai (2009) found out that buyers and suppliers benefit financially and non-financially from the sharing of strategic information flows. They further state that there is a risk of exploiting involved parties, which leads to losses (Klein & Rai, 2009).

1. Introduction 
1.1 Problem
1.2 Purpose
1.3 Research questions
1.4 Delimitations
1.5 Definitions
2. Theoretical background 
2.1 Information systems in the logistics sector .
2.3 Blockchain and logistics – Key concerns
3. Methods
3.1 Research methodology
3.2 Case study
3.3 Block & Log project
3.4 Data collection
3.5 Data analysis
3.6 Research credibility
4. Results
4.1 Problems of information systems in logistics 30
4.2 Requirements of information systems in logistics
4.3 Concepts of privacy, transparency and trust
4.4 Matureness and understanding of Blockchain technology
4.5 Public and private Blockchain approaches
4.6 Technical implications
4.7 Organisational implication
5. Findings
5.1 The evolution of themes
5.2 Description of themes
5.3 The role of Blockchain in improving the logistics flows – An overview .
6. Discussion 
6.1 Implications for research
6.2 Methods discussion
6.3 Implications for practice
6.4 Concluding remarks
Reference list
Appendices .

The potentials of Blockchain technology in logistics

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