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See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/384889562 Blockchain Technology as a Tool to Make Supply Chains More Resilient and Sustainable Article in Operations and Supply Chain Management An International Journal · October 2024 DOI: 10.31387/oscm0580434 CITATIONS 0 READS 93 3 authors: Mojtaba Enayati Amrita Vishwa Vidyapeetham 6 PUBLICATIONS 23 CITATIONS SEE PROFILE Prasad Gudimetla Central Queensland University 51 PUBLICATIONS 604 CITATIONS SEE PROFILE Sudha Arlikatti Amrita Vishwa Vidyapeetham Amritapuri Campus 56 PUBLICATIONS 1,321 CITATIONS SEE PROFILE All content following this page was uploaded by Mojtaba Enayati on 15 October 2024. The user has requested enhancement of the downloaded file..

OPERATIONS AND SUPPLY CHAIN MANAGEMENT Vol. 17, No. 3, 2024, pp. 165 - 178 ISSN 1979-3561 | EISSN 2579-9363 Blockchain Technology as a Tool to Make Supply Chains More Resilient and Sustainable Mojtaba Enayati Amrita School for Sustainable Futures, Amrita Vishwa Vidyapeetham, India Email: amiddids20031@am.students.amrita.edu Prasad Gudimetla School of Engineering and Technology, Central Queensland University, Australia Email: p.gudimetla@cqu.edu.au Sudha Arlikatti Amrita School for Sustainable Futures, Amrita Vishwa Vidyapeetham, India Email: sudhaarlikatti@am.amrita.edu ABSTRACT Supply Chain Management (SCM) is a critical part of all businesses that dictates their success and customer satisfaction. The COVID-19 pandemic and other disruptions exposed critical shortcomings in SCM, such as material and labor scarcity, high freight prices, and demand forecasting complexities. These developments have called for an urgent need to explore ways to make supply chains more resilient. Digital technologies like blockchain, QR codes, and RFID tags are recognized for enhancing transparency and traceability. The paper focuses on enhancing the resilience of supply chains, emphasizing transparency and reliability. It presents a case study of a regional Australian food processing company and evaluates a blockchain-based SCM model to address its upstream supply chain and logistics issues. A smart contract of the proposed model is validated via simulation on Remix IDE. The model promotes total quality by facilitating real-time tracking for rapid fault identification, enabling timely, cost- efficient procurement of raw materials and inventory, and reducing waste. The framework enshrines the principles of the green supply chain, crucial for the SDGs of the UN’s 2030 Agenda. Keywords: blockchain, supply chains, resilience, sustainability, traceability 1. INTRODUCTION In today’s competitive business world, supply chain management (SCM) isn’t just a backstage player anymore - it’s one of the main factors fueling success and customer satisfaction. The philosophy of delivering high-quality goods and services using the best resources at an economically viable cost has been the hallmark of business good practices for ages. The procurement of these resources has been guided by supply chains, which were originally defined as a series of synchronized and related entities, processes, resources, information, and technology from the delivery of the source materials to the delivery of the finished products to customers (Closs and McGarrell, 2004). Early supply chains were largely confined to a local territory or zone or a country at least from resource procurement to product manufacture, and then subsequently to be exposed to select markets around the world. Such supply chains possessed some level of inherent reliability and trust, regulated by well-defined policies and guidelines, but the profits were low (Tokar and Swink, 2019). New business models began to emerge in the mid- 1980s to maximize profits through a reduction of costs related to material, cheap labor, logistics, etc. These models ushered in an era where manufacturing was moved offshore to countries with ready access to resources, labor, and larger consumer markets (or in closer proximity), ultimately termed the 4th era of globalization. This simultaneously saw the transformation of the multinational corporation (MNC) to a global corporation, to sell the same goods in the same way everywhere (Levitt, 1983). While globalization has seen a progressive increase in the flow of products and services across international borders, economic globalization has seen a rapid increase in the interdependence of world economics, resulting in the need for continuous expansion and integration of markets, setting off an irreversible expectation of constant expansion. In this respect, the food processing industries are subject to several other unique challenges in establishing and maintaining reliable and robust supply chains, which are usually long and complex, and sometimes fragile as a breakdown can have detrimental consequences for environmental, social, and governance (ESG) goals. Agriculture produces needs careful and deft handling, from harvesting to packaging and transporting for downstream processing as some produce could be perishable (Salah et al., 2019). Perishability does not just result in wastage but can have serious consequences for the entire upstream (farmers) and downstream (customers) supply chain. It is imperative that businesses identify and anticipate such disruptions in a timely fashion so that waste and inventory costs are minimized simultaneously (Alkaabi et al., 2020)..

Enayati et al.: Supply Chain Material Management Framework in Assemble to Orders 166 Operations and Supply Chain Management 17(3) pp. 165 - 178 © 2024 From a best practice perspective (Chen and Chen, 2023), a supply chain typically includes real-time inventory and production planning, current technological support, reliable and trustworthy suppliers, robust vendor, and customer relations. Further, there is a paramount need for an efficient product distribution network to entail the least cost of production, faster product delivery, minimal inventory costs and management, increased sales, competitive advantage, and customer satisfaction. Supply chains have advanced and become more complex with changes in business models over the decades. The advancement of not just manufacturing technology but also information technology and its management, generation, storage, and seamless transmission and access across the world has had a great impact on economic globalization. Despite its benefits of transforming our lives, it has its challenges and perils, often becoming susceptible to the butterfly effect. These have been aptly demonstrated by the COVID-19 pandemic (Shetu and Karim, 2023), wars, and in some cases, the role of climate change which have widely disrupted supply chains across the world, inevitably leading to macroeconomic imbalances across the globe (Kova´cs and Falagara Sigala, 2021). Such disruptions and their socio-economic impacts have brought into focus the apparent lack of robust and reliable supply chains in nearly all types of industries. While traditional supply chains focus on production and delivery, the advancements toward Industry 4.0 and the digital world empowered by modern systems prioritize sustainability, data security, and privacy alongside economic efficiency leading to an emerging paradigm shift (Abdul Rahman et al., 2023). This requires a holistic technological approach encompassing environmental and social considerations throughout the entire life cycle. However, complex supply chains face security vulnerabilities that threaten their integrity. The artful assembly of existing technologies, such as cryptographic hashing functions, decentralized networks, and consensus mechanisms, constituted the foundation of blockchain technology in 2008 and led us into a whole new digital era (Nakamoto and Bitcoin, 2008). Although the technology was initially used in fiscal applications, it quickly proved to be highly promising. Consequently, during its evolution over three generations, researchers began exploring its potential application across various domains, including financial services (OBAID et al., 2021), logistics (Goyal et al., 2022), identity management (Das et al., 2023), Internet-of-Things (IoT) (Issa et al., 2023), insurance services (Trivedi, 2023), food industry (Singh and Sharma, 2023), rural development (Enayati et al., 2024), health and well-being (Mardiansyah et al., 2022), and telecommunication (Enayati et al., 2022) among others. these unique attributes and merits of blockchain make it valuable for a diverse range of applications. Blockchain technology serves as a robust security measure for supply chain management, offering a decentralized and tamper-resistant platform for storing and exchanging crucial information across various supply chain layers. It enables the recording of diverse product information, spanning from raw materials and their origin to production, logistics, distribution, and sales. The immutability of blockchain ensures that once information is recorded, it cannot be altered without consensus, enhancing the reliability of the entire supply chain data ecosystem. This study aims to address the challenges faced by an Australian food processing company in its supply chain management system. Consequently, it proposes a conceptual blockchain-based framework for real-time product tracking in supply chains, which can be generalized to other use cases for addressing the urgent need for increased resilience exposed by challenges such as the COVID-19 pandemic and the war in Ukraine (Israfilov et al., 2023; Sodhi and Tang, 2021). This framework incorporates the principles of the green supply chain such as resource efficiency, environmental responsibility, transparency, collaboration, and innovation, serving as a blockchain-based innovative solution and communication hub between various stakeholders, both within and external to a supply chain. Its emphasis on transparency, reliability, and coordination among stakeholders, aligns with the UN’s 2030 Agenda sustainable development goals (Nations, 2015). Utilizing a qualitative research methodology the study answers the following questions:  RQ1: How can the vulnerabilities of the complex supply chains in the food processing industries in Australia be overcome using blockchain technology?  RQ2: What blockchain-based solution can tackle the identified challenges in the food supply chain management system under study? The structure of the paper is organized as follows: In Section 2, the paper delineates the fundamental aspects of an ideal sustainable supply chain management system and elucidates how blockchain technology can serve as a robust security measure. This section also proposes a blockchain- based supply chain management system. Section 3 provides an overview of the case study and outlines the methods employed to address the research questions. The proposed solution to the identified challenges faced by the company in the study is presented in Section 4. Section 5 provides the simulation of a smart contract from the proposed model. Finally, Section 6 concludes the paper by summarizing its key points and discussing possible future directions for this study. 2. LITERATURE REVIEW 2.1. The Basic Facets of a Supply Chain It is important to understand the fundamental nature of supply chains before trying to optimize or transform any system. Figure 1 shows a typical supply chain which can be construed as an orderly system of manufacturing and selling tangible and intangible products and services to consumers. It consists of suppliers, producers, distributors, vendors, and retailers involved in developing, marketing, financing, and delivery of final products, facilitating the transfer of data/information and cash flow as well, at strategic points. It is seen that the complexity of a supply chain is a function of the number and levels of interdependencies at every stage of the supply chain. Interdependencies, principally, dictate the reliability of each stage and, in the process, its overall integrity and robustness, which in turn, are a function of the product/service integrity and quality. Since modern supply chains are highly information-intensive and computerized, they are highly susceptible to a range of.

Enayati et al.: Supply Chain Material Management Framework in Assemble to Orders Operations and Supply Chain Management 17(3) pp. 165 - 178 © 2024 167 security concerns, since information sharing is a critical aspect of the whole business process. Integrating sustainable practices has gained paramount importance amid the optimization of supply chains. Sustainable supply chain systems aspire not only to enhance operational effectiveness but also to mitigate their adverse impacts on the environment while upholding ethical standards (Afghah et al., 2023). The demand for robust, eco-friendly, and socially responsible systems is becoming more evident as supply networks evolve, and achieving a harmonious balance among economic objectives, and ecological and social considerations is increasingly imperative. Figure 1 The basic facets of a typical supply chain Supply chains originally focused on efficient production and delivery only. However, there has been a paradigm shift in how SCs are now designed with the growing importance of environmental issues and sustainability challenges (Seitz and Wells, 2006). Sustainable supply chain management (SSCM) represents a holistic approach, integrating environmentally and financially viable practices throughout the supply chain life cycle, ranging from product design and development to material selection (Ferreira Jr et al., 2022). This transformation is propelled by the changing landscape of customer requirements, pushing manufacturers toward immediate benefits without compromising environmental and societal well-being (Liu et al., 2023). The essence of SSCM lies in considering the triple bottom line of the sustainable development concept, i.e., economic, environmental, and social objectives while meeting stakeholder and customer requirements (Seuring and Müller, 2008). It demands explicit consideration of the social and environmental impact, encompassing the management of raw materials, services, and the entire product life cycle (Johnson et al., 2021; Zhu et al., 2005). SSCM incorporates practices such as environmentally friendly packaging, end-of-life (EOL) product return, recycling, and waste disposal, emphasizing the importance of eco-friendly handling throughout the supply chain (Zhu et al., 2005). Carter and Rogers (Carter and Rogers, 2008) define SSCM as the strategic integration of an organization’s social, environmental, and economic goals, aiming to improve long-term economic performance across its supply chains. It thus involves designing, organizing, coordinating, and controlling supply chains for long-term economic viability without harm to social or environmental systems (Pagell and Shevchenko, 2014). However, the reliable operation of large and complex supply chains comprised of numerous interconnected entities will inevitably face some security, privacy, trust, and other concerns that may put the whole supply chain at risk and make it highly vulnerable (Fatima et al., 2024). The next section discusses the potential of blockchain technology to address the above-mentioned concerns. 2.2. Blockchain Technology as a Reliable Information Hub Blockchain employs decentralized servers (i.e., nodes) instead of a central server, enhancing resistance to cyberattacks and minimizing single points of failure. It leverages layers of cryptography and links data blocks, contributing to enhanced data security and integrity. Furthermore, the information stored in data blocks is immutable, meaning it cannot be altered without notifying all other participants. Additionally, blockchain provides clarity and transparency to all stakeholders, enabling each participant to examine the data’s origin and access the system’s latest status without requiring the knowledge of other stakeholders. Blockchain’s trust building capabilities eliminate the need for entities to establish trust before engaging in cooperation, a process that traditionally required a considerable amount of time before the technology’s advent. The data records including raw materials’ origin, production information, policy adherence, logistics, distribution, and sales consist of comprehensive data, including contributor identities and timestamps, fostering accountability and transparency. Importantly, this shared ledger system extends beyond internal stakeholders; external entities like governmental bodies, Non- governmental Organizations (NGOs), insurance companies,.

Enayati et al.: Supply Chain Material Management Framework in Assemble to Orders 168 Operations and Supply Chain Management 17(3) pp. 165 - 178 © 2024 and certifiers can contribute to and strategically access relevant data. The integration of blockchain technology into supply chain systems aligns with the principles of Industry 5.0, utilizing advanced technologies for sustainable supply chain management. This integration enhances the reliability, efficiency, and security of information exchange among stakeholders in sustainable supply chains (Musamih et al., 2021; Wang et al., 2023). Particularly relevant to industries aiming to showcase the superior quality of their methods and products to customers (Smith, 2008), blockchain, through smart contracts, facilitates automation in asserting, certifying, and executing market operations, contributing to increased efficiency and security within the supply chain (Hsiao and Sung, 2022). The pivotal elements of transparency, efficiency, and security are crucial in understanding why blockchain is instrumental in enhancing supply chain management (Thompson and Rust, 2023). This research underscores the importance of traceability, and transparency, highlighting blockchain’s role in improving overall supply chain performance (Paliwal et al., 2020). By providing consumers with comprehensive access to information about products or services, from ethical considerations to production and logistics details, blockchain contributes to a more informed and accountable supply chain ecosystem (Perboli et al., 2018). 3. METHODS AND MATERIALS 3.1. Supply Chain Issues at an Australin Food Processing Company This research began as a funded study to address a pressing issue in the supply chain management field. It adopts an applied research approach, aiming to find practical solutions to enhance the supply chain management system at an Australian food processing company. The company was founded in regional Australia in 1958 and rose to become a major supplier of processed foods all over Australia using its patented Instant Quick Freeze (IQF) technology. The company’s basic business process involves the procurement of fresh produce such as zucchini, sweet potatoes, capsicum, and tomatoes from farmers, and holding them in their inventory for processing. Once they are converted into desired finished products, they are packed and shipped to various sellers. The business process can thus be succinctly divided into three distinct supply chains, viz., upstream supply chain (procurement), internal, and downstream (delivery to consumers). In the initial interviews, the company’s supply chain manager underscored several concerns with their upstream supply chain, which constituted about 20 different farmers who were local and from other parts of the state supplying varying quantities of produce at different times of the month. The manager explained that she used internal software systems to identify fresh produce demand based on existing inventory. She then called each farmer and placed an order one month before it was required. The company also held a 3-month floating inventory using its IQF technology. However, following the order placement, the supply chain manager made time-consuming individual follow-up calls to suppliers on a weekly basis just to get updates on the order status. As she frustratingly pointed out, it wasn’t until almost the dispatch day that the manager or the company received any clear information about what would actually be delivered. This lack of clarity created too many uncertainties. Another issue with the dispatch was the varying quantities of produce received in at least 30% of the orders. Farmers tended to send more produce than requested. For example, if the company ordered 6,000 kilograms of zucchini, they would end up receiving an additional 500 kilograms or even 1,000 kilograms, which harmed the company’s internal processing plans. This mismatch in supply and demand had adverse consequences. The excess stock became waste, requiring additional time and effort for disposal and cleanup. This experience highlighted the following important issues around the company’s upstream supply chain:  Lack of transparency and traceability while sourcing produce: The unreliable delivery system and intermittent traceability of deliveries contribute to a lack of transparency in the origin and movement of produce within the supply chain.  Poor storage practices: The use of the Instant Quick Freeze method leads to challenges, especially with soft produce, causing them to become watery due to prolonged freezing, resulting in significant wastage.  Too much inventory: Maintaining a 3-month inventory of produce, thawed as required, leads to challenges, such as increased wastage due to prolonged inventory holding and the need for extensive storage facilities.  Poor communication between vendors, subcontractors, and the company: Subcontracting operations introduce an additional layer of communication, contributing to challenges in coordinating and ensuring timely services, resulting in increased paperwork.  Additional costs associated with subcontracting: Relying on subcontractors due to low supply chain reliability incurs additional costs and complexities, affecting the overall efficiency and cost-effectiveness of the supply chain.  Largely manual handling of all paperwork: The majority of paperwork being manual and carried by truck drivers introduces inefficiencies, potential errors, and increased labor requirements in handling documentation throughout the supply chain. 3.2. Data Collection and Analysis To gather information on the challenges faced by the company, the research team conducted semi-structured qualitative interviews with key personnel from the Supply Chain Management (SCM) section at the studied company. The initial two interviews were online sessions between the company’s supply chain manager and the research team. To delve deeper into problem identification, the research team conducted four additional on-site visits to the company. Each visit lasted approximately half a day and included observing procedures at the factory. During this period, the team also conducted three more online interviews with the company’s SCM personnel, bringing the total number of online interviews to five. Furthermore, discussions with relevant upstream stakeholders, including interactions with various personnel.

Enayati et al.: Supply Chain Material Management Framework in Assemble to Orders Operations and Supply Chain Management 17(3) pp. 165 - 178 © 2024 169 and raw material suppliers, provided valuable insights into the supply chain’s complexities. Additionally, the research team maintained ongoing communication with key personnel from the food processing company’s SCM section via email. This communication ensured they captured any required information beyond what was already provided during interviews and visits. Reports were generated for each interview to keep the research team members updated and to be used during the data processing phase before designing solutions for the identified challenges. In the next phase, the qualitative information collected was manually analyzed (McAleavy, 2020) to identify the causes of the issues reported by the company under study. Table 1 lists the semi-structured qualitative questions used in the initial phase of the study. Relevant documents, such as reports on delivered raw materials from various logistics and suppliers, were also analyzed to ensure that the designed solution aligns as closely as possible with conventional procedures. Table 1 Semi-structured Interview Questions and Corresponding Themes *DIFOT: Delivery in Full on Time No. Question Theme 1 What challenges hinder the company from delivering products ’in full’ and ’on time’? * DIFOT 2 What is the frequency at which the challenges occur? DIFOT 3 How much are the challenges related to on-site and external delays? DIFOT 4 Do these occur in a combined form or individually or both (cannot deliver full and on time, can deliver full but not on time, cannot deliver full but on time, etc.)? DIFOT 5 Does existing inventory control influence the occurring challenges? DIFOT 6 Which part of the supply chain is the most required part for traceability? Traceability 7 What are the feasible options to include electronic tracking approaches? Traceability 8 Who constitutes the other stakeholders both upstream and downstream in your supply chain? Traceability 9 What are the sources or reasons leading to waste? Waste reduction 10 What do you do with the wasted materials? Waste reduction 11 In which sections and procedures do you require automation? Automation 12 How open is the company to the next- generation (AI-based) document automation platforms? Automation 13 What specific information do you communicate with each stakeholder? Automation 4. RESULTS Four distinct themes have emerged during the study (see Table 1), viz., Delivery in Full on Time (DIFOT) as a key performance indicator (KPI) to measure the efficiency and effectiveness of the delivery process, traceability focusing on tracking and documenting the movement of goods and materials throughout the entire supply chain, waste reduction for minimizing waste generated throughout the supply chain by optimizing processes and resources, and automation referring to using technology to automate tasks within the supply chain, improving efficiency and reducing human error. The company’s philosophy and mission of DIFOT are largely dependent on its relationship with both upstream suppliers and downstream consumers. The present study, however, discusses issues pertaining to the upstream supply chain as the company uses a manual and conventional interaction with farmers as already stated. This places a lot of stress on the internal processes of the company and requires urgent attention. The following are some quotes from the interview with the SCM manager at the company that contributed to the findings of this study:  Traceability: ”Being in this industry traceability is a major part of our quality requirement. So, we need to follow it from the raw materials coming into our factory, how we temperature record everything, and we put that into a finished product.” ”We find that some of the biggest problems in our supply chain management system are transport, extensive paperwork, and lack of traceability.” ”I spoke with so many big transport companies, but there is no electronic tracking system, they only have an electronic portal where you can book your jobs in, but that is it! There is no traceability of where did your cargo go, after departure and we have been told the reason is the cargo goes through several carriers to reach the destination.”  Automation: ”I would like to see this technology be part of our ERP system, where we can have the industry transport people can communicate with us and also, we can import and export manifests.” ”We are trying to reduce our paper footprint but still get the traceability, so, I am interested to see how your program would turn this around because the industry needs it.”  Waste reduction, DIFOT, and traceability: ”Yesterday I had a scenario where raw material came in and it was all good on paper but when we checked the raw materials all was rotting, we did get back to our suppliers and said that we cannot use that in production, they replied that the raw materials should have been damaged due to raised temperature during the transport.” ”The logistic companies do not use electronic devices to record the temperature and only record on pieces of paper, there is no proper tracking of the status of the raw material in transit.” ”At the end of the day the proof of delivery is the key thing that we can show to the customers and make sure they received it in good condition and then get paid.” ”I definitely think we will get some value from participating in this blockchain because I used to work with a different industry, a gas industry, so we were using different things for tracking and tracing and transport. It is very interesting with the food industry where you need to have all of your papers ready and signed because if the product makes somebody sick the company can have serious problems, so I really.

Enayati et al.: Supply Chain Material Management Framework in Assemble to Orders 170 Operations and Supply Chain Management 17(3) pp. 165 - 178 © 2024 think that blockchain might be able to help us in this matter and to help us to do the things more efficiently.” 4.1. Upstream Supply Chain Model Using Blockchain Technology Challenges that came to light were, uncertainties in decision-making due to the lack of reliable information, excessive manual procedures for recording the information leading to more human errors and unnecessary time consumption, lack of automated communication and follow-up processes, unknown status of the material in transit, and lack of a unified information format provided by the other stakeholders. To mitigate these challenges a logical design of the supply chain management system, leveraging blockchain technology and its smart contracts for optimizing planning, transparency, reliability, traceability, sustainability, and bottleneck prevention was created. The proposed framework is designed in alignment with the issues of the company to tackle the roots of its challenges as shown in Figure 2. Figure 2 Logical design of the proposed blockchain-based supply chain management system. It is comprised of two major sections that pertain to different concepts, working together to establish a holistic and efficient supply chain management system: the automated supply chain management system and a consortium of various organizations. Firstly, the automated supply chain management, aligned with the green supply chain concept in opposition to the linear supply chain, operates based on the principle that every part of the product ecosystem should act responsibly to achieve green supply chain goals, such as preventing unnecessary harm to the environment for a more sustainable approach. Responsible changes to adapt from a linear supply chain can start with avoiding over-exploitation and unnecessarily prolonged storage of raw materials and implementing changes in manufacturing planning and processes, such as more efficient designs to achieve zero waste and reduce material use, to name a few. Secondly, the consortium comprises organizations that play various roles in the processes of procuring raw materials, manufacturing, and delivering a product to end- users while ensuring the accurate recording of information during these procedures. The holistic approach of securely and efficiently sharing information using blockchain technology aims to reduce bureaucracy, facilitate informed decision-making, increase trust in recorded information, automate procedures for faster processes, identify and prevent potential bottlenecks, foster trust between customers and manufacturers, and provide reliable information to end-users, business partners, and stakeholders. Blockchain technology acts as an information hub, connecting all components with automation capabilities through smart contracts to enhance the performance and reliability of the system. Furthermore, it shows a reorganized supply chain and operations for the company incorporating blockchain technology. It is comprised of two main components, viz., the Supply Chain and the Information Channel. As with any manufacturing organization, the Supply Chain Manager is the major interface between the upper management and the manufacturing department, internally, while also the principal communicator with suppliers and customers. The person is also responsible for undertaking demand forecasting, procurement planning, logistics and transport, financial planning, and customer service and liaison. As can be seen in the figure, the Supply Chain Manager is the trigger for all orders and interfaces directly with the suppliers (farmers). This is discussed in detail in section 4.2 and Figure 5. Once orders are placed, the details would be automatically captured and stored in a new information model database, as shown in Figure 5. This database can be used to keep a tally of all inventories at any given time, thereby saving valuable time for the supply chain manager. The suppliers would have access to a separate node of this database (external and secure) where they enter the details of the consignments at dispatch. This is critical to the internal production planning for the company as details such as harvest and packaging dates (which are currently not available from some suppliers) are vital to the stock rotation and management. RFID and temperature sensors would be embedded in pallets, providing real-time data for traceability and transparency..

Enayati et al.: Supply Chain Material Management Framework in Assemble to Orders Operations and Supply Chain Management 17(3) pp. 165 - 178 © 2024 171 Figure 3 illustrates the comparison between the company’s conventional supply chain (A) and the upgraded version of the supply chain with the proposed framework (B). In the figure, the supplier is denoted as number 1, the logistics company and shipping trucks as number 2, the company’s supply chain management office as number 3, the factory as number 4, the warehouses for storing manufactured products as number 5, and the customers as number 6. In the conventional system, all processes are manual, relying on extensive paperwork. Suppliers submit information in manual forms and various formats, and logistics lack real-time tracking during transit, relying on manual manifests. The upgraded system benefits from a unified data structure between the suppliers and the company, traceable logistic systems with real-time shipment status in transit, and automation of both intercompany and intracompany processes. These can be delivered via mobile or web applications with synced databases, GPS tracking systems, and IoT devices installed on the trucks communicating the real-time status of the products (Adeusi et al., 2024; Ben-Daya et al., 2019; Helo and Shamsuzzoha, 2020; Molano et al., 2017; Suban et al., 2021). Figure 3 Supply chain model of the company under study, before and after adopting the framework. Designed with the icograms online service. 4.2. Creation of Blocks on the Ledger While recording information on the blocks of the ledger, two types of information take separate paths to be encapsulated in a block. For instance, information meant to support end-users’ rights, including details about the origin of the products, their raw materials, the manufacturing processes, and the policies followed by manufacturers during various procedures, should be recorded in a way that is accessible to end users. On the other hand, there is information that may not necessarily concern end-users, such as details of orders for raw materials, including the volume of ordered material and the date of clearing financial balances between business entities. Figure 4 outlines the high-level flowchart that nodes should follow when creating an appropriate block. It emphasizes that identifying the recipient of recorded information on the blockchain is pivotal for deciding how the information should be recorded and disseminated on the network. Therefore, the information should follow specific protocols before being encapsulated in the blocks. Publicly available information does not need to be encrypted to be accessed by a specific recipient. In this process, smart contracts autonomously execute required actions and share information with relevant entities and organizations. Certain sensitive information, including financial details, order and demand information, and the terms of contracts between entities, must be securely maintained and disclosed only to the intended recipients. The need for a supply chain management system with capabilities such as reliably and securely recording public and private information calls for a.

Enayati et al.: Supply Chain Material Management Framework in Assemble to Orders 172 Operations and Supply Chain Management 17(3) pp. 165 - 178 © 2024 framework proficient in generating both publicly available blocks and private blocks on the ledger as needed. Figure 4 Block creation flowchart based on the recipient of the information. Utilizing technologies can enhance the performance of the supply chain management system, such as cloud computing to improve data access efficiency (Anbuudayasankar et al., 2020; Nair, 2012; Nair and Anbuudayasankar, 2016a), blockchain technology to enhance transparency and traceability (Darshan et al., 2022; Kumar et al., 2023; Misra et al., 2023), IoT sensors in logistic systems to monitor the condition and status of products, RFID tags to track inventories and raw materials (Cocco et al., 2021; Nair and Anbuudayasankar, 2016b), and QR codes for easy access to information. In addition to these technologies, enhancing the framework’s efficiency and performance requires that information, such as details about raw materials, products, logistics, etc., recorded in a block adheres to specific standards. Adherence to standards facilitates better adoption and scalability of the platform (Adaryani et al., 2024; Guan et al., 2023; Singh et al., 2023). Existing globally recognized identification codes (AISBL, 2008; Zhang et al., 2020) can be employed for this purpose, and some of the standard identification codes globally used in supply chain management are listed in Table 2. Table 2 Globally recognized identification codes. Code Full Form UID Unique Identifier IFT14 Item Logistics Unit UPC Universal Product Code GTIN Global Trade Item Number SSCC Serial Shipping Container Code GSRN Global Service elation Number GUN Global Unique Identifier Number GIAI Global Individual Asset Identifier GRAI Global Returnable Asset Identifier SGTIN Serialized Global Trade Item Number EAN International/European Article Number EPCDS Electronic Product Code Discovery Service EPCSS Electronic Product Code Subscription Service EPCIS Electronic Product Code Information Services While the complexity of creating new blocks related to a specific business activity highly depends on the use case scenario, Figure 5 demonstrates a simple sequence wherein the company attempts to order raw materials from a supplier. For the sake of simplifying the demonstration, the diagram does not indicate the public and private blocks mentioned in Figure 4. Initially, the supply chain manager of the company would select the required raw material identified through the production plans at the company from a list provided in the user interface. Next, by choosing a specific supplier, the order with specific details can be placed on the ledger. The supplier will be automatically notified through the mobile application or developed software about the details of the placed order. Upon agreement for procuring the ordered raw material, a contract will be signed between the two stakeholders, handled by a smart contract. The supplier will be notified to update the ledger with information on the advancement of the material procurement based on the unique order ID at periodic intervals. This would automatically update the company on the other end, allowing for informed decisions and planning. Figure 5 Block creation sequence in a simplified order placement scenario..