One of the key drivers of modern supply chain traceability solutions lies in the underlying information systems.
However, it is unclear how centralized cloud-based systems and decentralized blockchain systems—both modern solutions that are believed to drive a wave of improved traceability adoption—compare to traditional ERP-powered traceability and each other.
We build a game-theoretic framework to show that differences between information systems profoundly impact both the adoption and effectiveness of traceability solutions.
In particular, modern traceability systems allow for a different mode of connection (1:n instead of 1:1), and tend to be cheaper and quicker to adopt.
They differ, moreover, in their approach to data interchange and ownership.
We show that all these differences can have non-intuitive impacts on whether traceability is broadly adopted because they also affect long-term supplier relationships and commitments.
For example, the degree of competition in a supply chain network largely determines the advantage of modern over traditional traceability systems.
This is because modern systems' efficiency advantages coincide with issues in sustaining long-term supplier relationships.
We also show that retention of data ownership, one of the key arguments for blockchain technology, may further compromise supply chain members' ability to commit to data sharing.
This points to a potential pitfall in the usage of blockchain technology for traceability.
Joint work with Andre Calmon (Georgia Tech) & Sameer Hasija (INSEAD).
I discussed some of my research results in a tech talk hosted by digital@INSEAD
Together with my Ph.D. advisor Sameer Hasija, my colleague Dmitry Sumkin, and Aly Madhavji from the Blockchain Founders Fund, we analyzed different perspectives and distinguish the hype from reality.