HOW CAN BLOCK CHAIN TECHNOLOGY IMPROVE LOGISTIC PROCESSES

HOW CAN BLOCK CHAIN TECHNOLOGY IMPROVE LOGISTIC PROCESSES

Academic Background of the Research

What could happen if all the intermediaries were to be removed from the world of logistics? What if all the transactions in this sector were to be substantiated, recorded and coordinated in an autonomous way without involving third parties? If only this was possible, then it could do away with the entire chain of complexities which has been witnessed from the global supply chains in the past. This is the new promise being extended to logistics industry by the blockchain technology. At the moment, this technology has not hit its climax because of the many challenges it has to overcome to be successfully deployed in large scale in this industry. However, the early adoption of this technology across different industries, from manufacturing to retail and finance to energy has ranked blockchain as a favorable technology for any business to achieve its full potential in future. According to Britchenko, Cherniavska & Cherniavskyi, in their research on how blockchain technology will impact logistic industry, they outlined that this technology will facilitate greater efficiency in the industry

According to their study, blockchain technology will necessitate faster filling and delivery of orders. It will enable recording and transfer of the raw materials as well as goods being moved through supply chains and track the purchase orders, the shipment notifications, as well as the receipts. The technology has the capability of assigning serial numbers or bar codes to goods to make them easily traceable. According to their study, losing orders costs money to a business, whether the goods require replacement or the consumers’ requires some refunds. Blockchain technology facilitates a trail to reduce the delays and normal human errors.

A similar study by Sadouskaya, blockchain technology has a potential of transforming the supply chains and disrupting the manner in which production, marketing, purchasing, and consumption of goods takes place. According to Sadouskaya, although its adoption in the logistics industry has not fully been implemented, blockchain technology has proved to be a transformative technology and its transparency level will make organizations data secure and more reliable.

In addition, Hofmann, Strewe & Bosia in their scrutiny of blockchain technology argued on the transparency point of view. According to their research, the main challenge which has been facing the global supply chain is keeping track of all their operations, both figuratively and literally. Blockchain technology will necessitate connection between different parties which are involved in the supply chain. This makes this technology transparent because the entire product transactions are easily documented. Blockchain technology enables every party in the shipping process to experience reflectivity and connectivity. Also, this technology enables the customers to have contact with their products before receiving them.

Vovchenko and his colleagues identified logistics among the immune industries to cyberattacks, which have rendered many shipping lines unable to efficiently work with clients. There have also been other similar issues like counterfeiting and poor working conditions among supply chain management. This makes accountability in the sector very difficult due to the number of links involved along the way. According to their study, blockchain technology has emerged as the solution to such inconveniences as it stores a copy of the shipping data on a decentralized platform. As a result, even under the circumstances where a network is maliciously hacked, the information still remains safe. Also, it   allows a company to easily identify any security breaches on the supply chain.

The Research Question being investigated

Blockchain based technology on its emergence was praised of providing both trusted and secure distributed ledgers across the Internet platform, this could enable sophisticated applications which are related to asset transactions to function efficiently. However, what has remained unanswered is how blockchain technology has improved logistic processes?

Research Objectives

1. To gain understanding of how adoption of blockchain technology would increase transparency within the logistic industry
2. To gain understanding of how adoption of blockchain technology would increase efficiency within the logistic industry
3. To gain understanding of how adoption of blockchain technology would enhance security within the logistic industry

Analysis of one source to address my research question

According to a research by Korpela, Hallikas & Dahlberg, whose main aim of their study was to reveal the benefits of blockchain technology in the logistics industry, they pointed out three problems which have been facing the industry as lack of transparency, inefficiency and insecurity across its operations. According to their research, they identified logistic industry among the immune industries to cyberattacks, which have rendered many shipping lines unable to efficiently work with clients. There have also been other similar issues like counterfeiting and poor working conditions among supply chain management. This makes accountability in the sector very difficult due to the number of links involved along the way. According to their study, blockchain technology has emerged as the solution to such inconveniences as it stores a copy of the shipping data on a decentralized platform. As a result, even under the circumstances where a network is maliciously hacked, the information still remains safe. Also, it   allows a company to easily identify any security breaches on the supply chain.

In regard to transparency within the industry operations, they identified the main challenge which has been facing the global supply chain as keeping track records of all their operations, both figuratively and literally. Blockchain technology will necessitate connection between different parties which are involved in the supply chain. This makes this technology transparent because the entire product transactions are easily documented. Blockchain technology enables every party in the shipping process to experience reflectivity and connectivity. Also, this technology enables the customers to have contact with their products before receiving them.

They also outlined that blockchain technology will facilitate greater efficiency in the industry. According to their study, blockchain technology will necessitate faster filling and delivery of orders. It will enable recording and transfer of the raw materials as well as goods being moved through supply chains and track the purchase orders, the shipment notifications, as well as the receipts. The technology has the capability of assigning serial numbers or bar codes to goods to make them easily traceable. According to their study, losing orders costs money to a business, whether the goods require replacement or the consumers’ requires some refunds. Blockchain technology facilitates a trail to reduce the delays and normal human errors.

This research by Korpela, Hallikas & Dahlberg will be of great importance as it builds on the basics of my research question. It has tackled some of the benefits resulting from the adoption of blockchain technology like security, transparency and efficiency. These are my basic concerns in my research in addressing how blockchain technology has improved logistic processes.

Employer assistance during the research

As a part time student, having a close contact to an employer in the company carrying out my research will be a great opportunity to facilitate my research. This is in consideration to the fact that under current policies, organization data and information has access externally has been restricted to minimize cybercrimes. It will be difficult to be entrusted with the organization information without any close supervision. Apart from supervision, I will have a chance of interrogating the employer in the process of his or her supervision. Through him I will be able to understand the organizational perspectives, interview him when necessary, get interpretation and functionalities of different organizational structures like its database as well as referrals to different other companies where my research can have advanced outcomes in sectors lagging behind at such an organization.

Any organization is founded on three perspectives, the modern perspective, interpretive perspective and post-modern perspective. Each of these three perspectives has a different approach in regard to management of the organization and understanding. Having an insight on these three perspectives is additional information to successfully come up with dependable results. Pioneers are objectivists who center on reality of learning which is manufacture in view of the conceptualization and the hypothesis. An Example would be that an organization procures benefits in light of the CEO’s capacity to settle on right choices while contributing the cash of an association. The aftereffects of the activities can be estimated in benefit and misfortune and can be specifically estimated. The information which innovators perceive are from the five detects, through what the business has seen, heard, touched, smell and tasted. Present day Perspective forms an arrangement of principles that can be utilized as a part of association with the goal that all workers will have the capacity to take after, perform and work, guaranteeing the whole procedure in the association runs easily. Innovators don’t consider the representative point of view of looking outside of the five faculties and taking a gander at feeling and instinct.

In some instances, to be able to acquire more about the organization, the employer will act as my Interviewee. This is considering the fact that there is much more taking place inside the organization which cannot be expressed fully through the organization perspective only. It will be therefore a great opportunity to have the employer on my side to be asking and inquiring what I aspire to know about the organization. Having an organized choice of questions which I would like to get responses, we will be having interviews at different stages over the time I will be moving around different organization structures. For instance, when I get at the organization’s IT sector, I will contact an interview at that particular point in order to know different technologies which are being utilized by such an organization and how effective they have proved to being the organization. Blockchain technology will be the center of my interview considering the fact that it’s the main technology triggering my research study.

Some sectors in any organization today are very sensitive for an intruder or a non-staff to be allowed to have access; this is because of the increasing threats associated with cybercrime. My research will require some information which cannot be obtained from consultation with the organization management but by also having an interaction with such sectors. One of the main sectors in this scenario is the database of the organization. Organization database is among the few elements which are making Blockchain technology a success since all business subdivisions must be controlled centrally under one database for coordination to be effective. For me to be granted access to organization databases, I must have one of the organization staff monitoring whatever that I will be doing. For that reason, having one of the organization’s employers on my side, I can be allowed to have access to the databases and interact with it to gain the knowledge which I would wish to gain in relation to how blockchain technology is effecting the coordination of organization structures.

Lastly, some of the information I would wish to obtain from my organization in regard to the impacts of blockchain technology may be lacking in my chosen organization. The possibility that I may opt for another organization and still find its lacking is also high. However, with one of the employees of my chosen organization on my side makes it easy since he/she is an expert in the industry and may have helpful information to which organization I can get the information which I require in my research. He or she can therefore easily connect me to such organizations and obtain such information straight away instead of gambling around organizations which may lead to a lot of time consumption doing guess work.

Potential Limitations of the data from this source

Obtaining data from an organization is tedious and also a broad affair which might be highly demanding than expected. A single step blander may have very huge impacts on the final data obtained which in turn implies that the research becomes unreliable. My research which basically entails an interaction with a single employer to obtain data for a whole organization is likely to face some limitations which could otherwise be avoided  were it not for the limited scope besides several other reasons.

One of the main limitations in my source of data is its limited scope. As had mentioned earlier, I will be relying only on one employer to get all the information concerning the whole organization. Logically, that’s a very small portion in consideration to how extensive the current organizations are. The data obtained from the employee stands an equal chance of being true as it has on being false. The first information I will be expecting from this employer is the organization perspective, and what he provides is his personal opinions which may be different from what another employee would provide. It would be somehow good if I could obtain information from different employees and take an average stand out of the obtained information which could result in some reliable outcome.

My dependence on a mere employee in this research can also be a limitation. Considering that employees have limited to organization resources as compared to top management, I might end up being exposed to biased documents of the organization without the consent of the employer. This is because organizational data is constantly updated and it takes time before it can reach all the stakeholders of the organization.

Depending on the ethical policies of the organization I chose for my research, I may end up not getting some important details crucial for my research. For instance, the organization ethical policies might not allow me to have access to its database. Without the access, my research may lack some basics which are very crucial in understanding the impacts of Blockchain technology like how different sectors of the organization have been centrally coordinated courtesy of blockchain technology.

Lastly, reliability will be another major limitation of my research due to the scope I chose right from the word go. Opinions of just one person out of millions of stakeholders in the organization stand a very high chance of being biased. High chances of biasness limit the data reliability on the other hand and that is a case likely to be observed in my research.

Critical discussion on collection and analysis of quantitative data in my research

As a reminder, my research question was; how blockchain technology can improve logistic processes? Improvement in an organization can be observed in two aspects, quantitatively and qualitatively. Blockchain based technology on its emergence was praised of providing both trusted and secure distributed ledgers across the Internet platform, enabling sophisticated applications which are related to asset transactions to function efficiently. To gain an insight on this aspect quantitatively, I will get data from the organization books of records in from the time it had not adopted Blockchain technology and compare it to the current trend after adoption of this magnificent technology.

From the records before the organization adopted Blockchain technology, I will be in a position to obtain the value of what the organization lost in terms of dollars out of insecure transactions which necessitated hacking in the organization. I will obtain such a data for several years, say like 10 years and above if possible to avoid unreliable conclusions. From the data I obtain for like 10 years or so, I will calculate the average in order to settle at a more reliable figure. Concurrently, I will also embark on the records on losses incurred after Blockchain technology has been adopted. Just like the figures obtained from the era before Blockchain technology, the figures after the adoption of this technology will also be summed in terms of dollars and averaged with the number of years from its adoption. I will then analyze the two figures obtained (before and after adoption of Blockchain technology) to settle at my conclusion whether Blockchain has improved the logistic processes. I will consider the decline in the amount which was lost before adoption of blockchain technology as compared to the era after adoption to be an improvement in logistic processes while the opposite to be a  degradation in the logistic processes.

On the same note, Blockchain technology has been praised of providing trusted transactions over the internet, a factor which can also be quantified in regard to what the records indicate before and after the adoption of Blockchain technology. For transaction to be termed as trusted, the level of integrity over the course of transactions should have a rating of 100%. To mean that if the records of transaction indicate a transaction of one million to have taken place, the organization should have received one million from the partner, not less or more. Otherwise, the transaction can be deemed as untrusted. To achieve my objective in regard to proving the trustworthiness of Blockchain technology in logistic processes, I will take the records of transactions which indicate some money losses over the period they took place before the organization adopted Blockchain technology and compare the figures with those obtained after the technology was adopted. To make these figures more reliable, I will collect such figures from several years and average them to increase the reliability of my final results. In order to affirm that Blockchain technology has led to trusted transactions, I will compare the loss in figures as per the records before adoption of Blockchain and after being adopted in the organization. A decline in the value will be an implication that Blockchain technology has brought about a trusted transactions online.

Critical discussion on collection and analysis of qualitative data in my research

In order to affirm that blockchain technology has of provided both trusted and secure distributed ledgers across the Internet platform in my organization of choice, I will carry out security and integrity testing of the system in four phases. Dynamic, static, penetration and Runtime self-protection security tests

In the first phase, Dynamic application security test, I will contact security tests in all the automated applications running under this technology in order to determine how firm they are in regard to withstanding internal threats. To be fully convinced that this technology is up keeping security standards, the low risk applications must show compliance with the regulatory security test assessments while the medium and critical applications must totally be turgid.

In the second phase, static application security test approach, I will be aiming at identification of bugs without necessarily executing the applications managed under this technology physically in the production environment. Through it, I will be in a position to scan the source code systematically and identify whether or not there are security loopholes.

In the third phase, the penetration test, I will be mainly aiming at the critical applications like the finance management system. I will achieve my aim through business logic approach in support of adversary based penetration tests in order to reveal whether or not there is possibility of advanced attack scenarios. My final test, Runtime application self-protection, will encompass a number of technological approaches to instrument critical applications for certain duration of time so that I can monitor whether there can possible attacks in the applications.

Methodology for my research

Research philosophy

My research will utilize the Epistemology philosophy

Epistemology is basically implies the acceptance of knowledge from a particular case study. It is broadly divided into resource researcher and feelings researcher. In my case study, the resource researcher will entail data collection from the employer of the organization who will be accompanying me throughout the course of my research in such an organization. On the other hand, the feeling aspect in my research will be based on the feelings and the attitudes of the employer towards his managers. The approach in my case will therefore be integrated in my research to develop positivist philosophy while the feeling researcher will have its focus on interpretivist philosophy.

Research approach

My research will use deductive approach

In my research, I will be using the deductive research approach, as the only researcher, I will have my hypothesis formulated as follows

1. Blockchain technology has made logistics process transactions secure over the internet platform
2. Blockchain technology has made logistics process transactions secure over the internet platform

My choice research methods are interviews, observations and experiments which I will apply to test my set of hypotheses in order to either declare them right or wrong.

Generally, my research under this approach will adhere to the following five stages:

1. I will deducing my hypothesis, in this case I have two as outlined above: Blockchain technology has made logistics process transactions secure over the internet platform, Blockchain technology has made logistics process transactions secure over the internet platform
2. I will formulate my two hypothesisin an operational manner and propose the relationships between their two specific variables
3. I will test my two hypotheseswith the application methods like regression and correlation analysis, mean, mode and median and others.
4. I will examine the outcome of my tests in order to confirm whether the two hypotheses are valid or not.
5. I will modify any of the two hypotheses in the instance where it’s not confirmed.

Research strategy

Case study strategy

The main aim of my research is to investigate how Blockchain technology has improved logistic processes in the logistic industry. I will therefore locate one organization in this industry and which has adopted the technology to carry out my research. As pointed out in the list of research strategies, my selection fits on the case study category of research strategies. Using a case study as a strategy in research implies that all the other organizations using this technology will be represented by the chosen organization. In short, the findings of my research in this single organization will represent all the organizations which are using this technology

Sample size

As outlined above, my sample size will be one organization which has already adopted the Blockchain technology in its operation. The organization must be selected from the logistic industry since my research question has been specifically narrowed down to the logistic industry and not general. The results of this one research will act as a representative of all the organizations in the industry which have adopted this magnificent. It is clear that my sample size is very small so the likelihood of obtaining biased data is also very high. However, due to limited resources and time I had to opt for such a small sample size.

Validity and reliability

One of the main limitations in my source of data is its limited scope. As had mentioned earlier, I will be relying only on one employer to get all the information concerning the whole organization. Logically, that’s a very small portion in consideration to how extensive the current organizations are. The data obtained from the employee stands an equal chance of being true as it has on being false. The first information I will be expecting from this employer is the organization perspective, and what he provides is his personal opinions which may be different from what another employee would provide. It would be somehow good if I could obtain information from different employees and take an average stand out of the obtained information which could result in some reliable outcome. Reliability will therefore be a major limitation of my research due to the scope I chose right from the word go. Opinions of just one person out of millions of stakeholders in the organization stand a very high chance of being biased. High chances of biasness limit the data reliability on the other hand and that is a case likely to be observed in my research.

Ethical issues

Depending on the ethical policies of the organization I chose for my research, I may end up not getting some important details crucial for my research. For instance, the organization ethical policies might not allow me to have access to its database. Without the access, my research may lack some basics which are very crucial in understanding the impacts of Blockchain technology like how different sectors of the organization have been centrally coordinated courtesy of blockchain technology.

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