Marijan Stipic Final Copy No Sig

The Use of Blockchain Technology in the
Supply Chain: A Case Study from Austria
Master Thesis submitted in fulfillment of the Degree
Master of Business Administration
In MBA with Major in Entrepreneurship, Innovation & Leadership
Submitted to Dr. Horst Treiblmaier
Marijan STIPIC, MA
1702512
Vienna, 01. June 2020

THE USE OF BLOCKCHAIN TECHNOLOGY IN THE SUPPLY CHAIN: A CASE STUDY FROM AUSTRIA
AFFIDAVIT
I hereby affirm that this Master's Thesis represents my own written work and that I have
used no sources and aids other than those indicated. All passages quoted from publi-
cations or paraphrased from these sources are properly cited and attributed.
The thesis was not submitted in the same or in a substantially similar version, not even
partially, to another examination board and was not published elsewhere.
01.06.2020
Date Signature
I
II
ABSTRACT
As blockchain is praised being one of the upcoming game-changing technologies of our
time, which leaves marks on various industries, actors of the supply chain are more and
more occupied with its unique features, such as transparency, data immutability and data
security. Likewise, various stakeholders along the supply chain were affected in different
ways by the paradigm changes blockchain can bring to lower existing limitations and
simultaneously strengthen trustworthiness within the supply chain. However, in order to
be a reliable means of choice for supply chain business models, blockchain needs to
improve on its maturity of technological development. This especially applies to limita-
tions on its scalability and network capacity. This thesis follows the multiple case study
approach based on the framework of Yin (2014). Two case studies deal with projects
from Austria, but from different perspectives on blockchain utilization in the supply chain.
While the case study of 'Blockchaininitiative Logistik' is about the digitalization of freight
documents, the Rotharium case study focuses on a decentralized track and trace solu-
tion. Nonetheless, both cases mostly agree with the stated case propositions, which de-
rived from literature-based theory. This thesis serves as a guide for practitioners inter-
ested in applying blockchain solution in their logistics environment and equips the reader
with theoretical and practical recommendations.
III
IV
TABLE OF CONTENTS
Affidavit .........................................................................................................................................................I
Abstract.......................................................................................................................................................III
List of Tables........................................................................................................................................... VIII
List of Figures ............................................................................................................................................IX
List of Abbreviations ..................................................................................................................................X
1 Introduction ......................................................................................................................................1
1.1 Illustration of the issues....................................................................................................1
1.2 Previous research and general context .........................................................................3
1.3 Aims and objectives ..........................................................................................................3
1.4 Research questions and propositions ............................................................................4
1.5 Methodology ......................................................................................................................5
1.6 Thesis structure .................................................................................................................6
2 Literature review..............................................................................................................................8
2.1 Introduction to Blockchain Technology ..........................................................................8
2.1.1 Definition and Terminology .........................................................................................................8
2.1.2 Technical background and development ................................................................................11
2.2 Disruption in supply chain ............................................................................................. 14
2.2.1 Changes and paradigm shift in the supply chain ..................................................................14
2.2.1.1 Technical development and digitalization ................................................................... 14
2.2.1.2 Insufficiencies within supply chains ............................................................................. 15
2.2.1.3 Expectations of supply chain stakeholders ................................................................. 16
2.2.2 Potentials of blockchain in context with supply chain ...........................................................17
2.2.3 Role of governments and politics.............................................................................................29
3 Methodology ..................................................................................................................................34
3.1 Introduction ..................................................................................................................... 34
3.2 Choice of method ........................................................................................................... 34
3.3 Case study ...................................................................................................................... 36
3.4 Study research design................................................................................................... 37
3.4.1 Study Questions .........................................................................................................................37
3.4.2 Study Propositions .....................................................................................................................37
3.4.3 Unit of Analysis ...........................................................................................................................41
3.4.4 Case Study Protocol ..................................................................................................................42
3.4.5 Data Collection and Interpretation ...........................................................................................43
4 Case Study: Blockchaininitiative Logistik ..................................................................................45
V
4.1 Interview Matthias Leibetseder (WALTER Group) .................................................... 45

4.2 Interview Michael Schramm (EY)................................................................................. 48
4.3 Interview Gerald Gregori (BVL) .................................................................................... 52
4.4 Interview Andrea Plöchl-Krejci (EY) ............................................................................ 53
4.5 Documentation ................................................................................................................ 55
4.5.1 Internal Memo ............................................................................................................................ 55
4.5.2 PowerPoint Presentation .......................................................................................................... 56
4.5.3 Letter of intent ............................................................................................................................ 57
5 Case Study: Rotharium ............................................................................................................... 58

5.1 Interview Tomislav Matic (Crypto Future) ................................................................... 58
5.2 Interview Zsolt Scheffer (Crypto Future) ..................................................................... 61
5.3 Interview Martin Juric (AURA Delikatessen) .............................................................. 63
5.4 Documentation ................................................................................................................ 64
5.4.1 Whitepaper ................................................................................................................................. 64
5.4.2 Product Video and visual presentations................................................................................. 65
5.4.3 Meeting Minutes ........................................................................................................................ 66
5.4.4 Product Testing.......................................................................................................................... 66
6 Case Results and Discussion..................................................................................................... 67

6.1 Case Study Report Blockchain Initiative ..................................................................... 67
6.1.1 Study Questions Analysis ........................................................................................................ 67
6.1.2 Study Propositions Analysis .................................................................................................... 70
6.1.3 Conclusion .................................................................................................................................. 71
6.2 Case Study Report Rotharium ..................................................................................... 72
6.2.1 Study Questions Analysis ........................................................................................................ 72
6.2.2 Study Propositions Analysis .................................................................................................... 76
6.2.3 Conclusion .................................................................................................................................. 76
6.3 Comparison of Cases .................................................................................................... 77
6.3.1 Similarities .................................................................................................................................. 77
6.3.2 Differences ................................................................................................................................. 78
7 Conclusion..................................................................................................................................... 79
7.1 Summary.......................................................................................................................... 79
7.2 Theoretical contribution ................................................................................................. 79
7.3 Implications for relevant stakeholders ......................................................................... 81
7.4 Limitations........................................................................................................................ 82
7.5 Future research .............................................................................................................. 82
8 Bibliography .................................................................................................................................. 83
Appendices ............................................................................................................................................... 93
Appendix 1: Interview guiding principle (German)............................................................... 93
Appendix 2: Interview guiding principle (English) ................................................................ 94
VI
Appendix 3: Case Data collection schedule ‘Blockchaininitiative Logistik.’..................... 95

Appendix 4: Case Data collection schedule ‘Rotharium’.................................................... 96
VII
LIST OF TABLES
Table 1: Potentials of BC in SC .............................................................................................. 19
Table 2: Regulatory Overlap BC vs. SC ............................................................................... 30
Table 3: Case Study Protocol ............................................................................................... ..43
VIII
LIST OF FIGURES
Figure 1 - Illustration of Inferences ................................................................................6
Figure 2 - Comparison of networks..............................................................................11
Figure 3 – Development since 2009 ............................................................................12
Figure 4 – Barriers to Blockchain Adoption ..................................................................28
IX
LIST OF ABBREVIATIONS
BIL Blockchain Initiative Logistik
BVL Bundesvereinigung Logistik Österreich
BPR Business process re-engineering
CMR Convention relative au Contract
COVID19 Coronavirus Disease 19
DSC Digital Supply Chain
DLT Distributed Ledger Technology
EDI Electronic Data Interchange
ERP Enterprise-Resource-Planning
GDPR General Data Protection Regulation
P2P Peer-to-peer
PoS Proof-of-Stake
POW Proof-of-Work
OECD Organization for economic cooperation and development
QR-Code Quick-Response Code
RBC Responsible business conduct
RFID Radio-frequency identification
SC Supply Chain
SCM Supply Chain Management
SCOR Supply Chain Operations Reference Model
SHA Security Hash Algorithm
USP Unique selling proposition
VMI Vendor Inventory Management
X
1 INTRODUCTION
“We have elected to put our money and faith in a mathematical framework that is free
of politics and human error.”
(Tyler Winklevoss)
From today’s perspective, we cannot explicitly say if the quote above applies to be true.
What we can say is that scholars, media and pioneers in particular attribute blockchain
technology as a technology with a high level of potential. Still, besides the many possible
ways and ideas of solving business-related issues, it is questionable how keen enter-
prises are to use this kind of technology and how a possible approach fits into regal
regulatory of different governments around the world. While critics argue the technology
for being in children’s shoes with only having fraud-related currencies as a practical use
case, this paper will reflect possible benefits in the area of the supply chain. The aca-
demic contribution shows in the first step by an analysis of state-of-the-art literature in
the respective field of blockchain and the second step by qualitative research in the form
of a case study reflecting a possible implementation of technology on a real-life case.
Below, the chapter continues with a further introduction to the master thesis. Through
the next parts of the chapter, the topic gets illustrated and a context between research
and central parts of the topic is built, identifies aims and objectives of the paper, induces
to think about the research questions and raises understanding for the methodology an-
swering them. Finally, a structured review of the thesis gives a guide to scholars and
other readers.
1.1 Illustration of the issues
Kenton (2019) states that over the past tenths of centuries, the term supply chain (SC),
which defines as a network between a company and its suppliers to produce and distrib-
ute a specific product to the final buyer, went through incremental changes. It is an
emerging term, which emphasizes interactions among different corporations depart-
ments, like logistics, marketing and production. While in the beginning, transportation
technology was necessary, production, consumption of most items were local, and the
cost of moving goods easy to determine we nowadays speak about a highly complex
process, which is evolving year by year, bringing up challenging opportunities to its
stakeholders. According to Sanyal (2012), we today see worldwide shipping, including
several means of transport and possibilities to communicate within seconds by mobile
or the internet at little cost. Of course, in this context, Tang et al. 2011 point out that new
challenging issues come up and significant concerns have emerged in supply chains.
Overall having shorter product cycles and increasing demand among all companies react
1
with outsourcing strategies, which require an extended supply chain network with in-
creased nodes in the system.
Moreover, Lyall et al., (2018) emphasize that today's supply chain management systems
mostly use so-called legacy systems, which means outdated in a sense that they define
a basis but could not hold with the future standards following it. The lack of end-to-end
transparency paired with the situation that people in the supply chain do mostly repetitive
and transactional tasks is an issue because it leads to overstaffing and a miss of effi-
ciency and an undrawn of existing opportunities.
Ballou et al., (2000) identify more challenges in the interaction between several parts
within a supply chain management system (SCM). First, the metrics like costs and other
relevant numerical data within the inter-organizational accounting systems; focus on the
individual firm, instead of looking broader to multi-enterprise channel cooperation. Then
a shortage of information sharing among firms in the supply channel nurtures mistrust,
which leads to a potential breakdown of coalitions and partnerships. Eventually, benefits
do not distribute equitably between the members of the supply chain. However, there is
a try to put in place some informal mechanisms. The result can be opportunist thinking
among stakeholders while seeking equality in terms of economic management.
Furthermore, Asaad (2018) mentions that there is an example of traceability in the food
or agricultural supply chain there is an apparent lack to track the food product through
the different stages of the supply chain and is nowadays an evident demand among
customers. Clients want to know when it comes to the question of where their consumed
products or ingredients have been throughout the production and logistics process. The
miss of authentic and truthful information about each supply chain step can weaken con-
sumers' trust, brand integrity and decrease customer loyalty. With the customers’ rising
sophistication, there is on top of that, also a particular risk of legal issues, which can lead
to considerable problems in product launches. Ultimately, Fernie et al. (2019) mark crit-
ical challenges for retailers coping with e-commerce businesses, which bring up very
different processing of supply chain to the surface. In order to secure full convenient
customer care, retailers started caring about home delivery with an emphasis on accu-
rate and real-time stock management hand in hand with a shortened delivery period,
especially in urban areas.
We see above a handful of issues, which come along within the area of the supply chain
today. The demand amongst participating stakeholders is diverse and the supply chain
needs to react appropriately to satisfy the different needs. From my perspective, it is
worth investigating what can is doable to bring supply chain one or even more steps
further towards a ready and steady department, which can cope with future challenges
and use opportunities, especially in the digital world. On top of that, pairing the chal-
lenges in the supply chain with the potentials and opportunities of blockchain technology
2
could result in a value-added output for both supply chain stakeholders, the same as the
blockchain ecosystem itself.
1.2 Previous research and general context
In general, there is plenty of research in the field of the supply chain. As businesses,
since industrialization have to cope with changes and challenges within the supply chain
of goods, scholars same as practitioners answer questions on the progress and possible
optimization within the area of SC. Since the turn of the millennium, we can see almost
a million scientific articles in the search database of google scholar 1 dealing with the
supply chain. Lots of them are considering several concepts on how to bring up the sup-
ply chain to a higher level not only in terms of efficiency and effectiveness but also in
light of the rising importance of digitalization in nowadays society. On the other hand,
research in the area of blockchain is a relatively new one. Introduced with the bitcoin
whitepaper more than a decade ago by Nakamoto (2008), blockchain technology slowly
went from a geeky niche product into an at least knowledgeable keyword amongst inter-
net users around the world, amounting in roughly over 40% of consumers in financial
service having heard about it (Zhao, 2017). The novelty of the topic causes that research
on blockchain covers mainly possible use cases in a full spectrum of industries together
with state-of-the-art literature with a descriptive character on the technological aspects
of it. Amongst many scholars such as Tapscott & Tapscott (2017) or Tötzer (2019), block-
chain is characterized as a possible game-changer in several industrial areas, especially
where digitalization plays a vital role in future developments. As soon as supply chain
and blockchain were into a mutual context, it is essential to emphasize that there is a
need for clarification and analysis if a possible digitalization in the area of supply chain
brings benefits to the overall supply chain processes. If so, the circle closes with a defi-
nite need for some critical examination whether blockchain can play an essential role in
SC, or its usage is more poorly suited and not a real solution, which can help out of
existing issues.
1.3 Aims and objectives
There are several aims this thesis wants to cover, in order to make the complex topic of
blockchain usage and implementation comprehensible for everyone who is reading it.
First, there is not explicitly a goal but an intent to encourage the reader to understand
blockchain, at least in outline, including a basic understanding, because in my eyes, it
will be mandatory to have this knowledge similar to the extend people understand for
1
Google Scholar database keyword search: ‘supply chain’ - retrieved on June 6th, 2019
3
example the internet at this stage. Based on that, there is hope to achieve a level where
the reader can connect the dots from blockchain to the area of supply chain persists.
From here, vigilant readers should be able to understand the possible deployment of
blockchain technology to any other real-life application, which could make their life more
comfortable at some point. They should also be able to select cases where blockchain
may be helpful and deny ones where it is not the best applicable way to use. The aim is
to have a clear distinction between the blockchain potential within the supply chain com-
pared to other economics areas. Another aim of this thesis is to investigate the relation-
ship between blockchain and governmental behavior, rules and legislation – which is
crucial when it comes to the mass adoption of new technology. Overall, the paper should
raise the level of understanding, go beyond the state-of-the-art of scientific research, and
mark a starting point for further investigation, same as a red line for possible future im-
plementations.
This thesis focuses on providing an in-depth analysis of the role blockchain play in a
possible digitalized supply chain of the future. It will discuss the most pressing questions,
same as common challenges in a possible implementation of blockchain technology in
the SC. A research objective would be to get a clear picture of the status-quo of Block-
chain usage within the supply chain part of the financial world and to find out which rea-
sons prevent companies from using it at this particular stage of time. Another research
objective is to find out if blockchain solves the problem of companies, or can these be
solved without it too. After a thorough literature review, which will cover several aspects
of blockchain getting used in real applications through the value chain, there will be a
case study of an Austrian company on blockchain implementation in the supply chain.
Therefor a whole implementation process and conceptual framework will be simulated
and put into context with the papers' research questions. There will be a valuation of
opinions and points of view that people who are involved possess and a review of best
practices in order to assure smooth, progressive work. On the other hand, the problems
and obstacles will be adequately addressed with a valid link to decision-making pro-
cesses inside the project. The gathered data and information gets extracted in order to
establish a scientific relationship between theory and practice.
1.4 Research questions and propositions
In this thesis, an investigation on theory is happening. This theory gets tested, verified
and explained. In order to develop - as a result of this thesis - an effective action and
implementation framework which can be of use in real-life supply chain applications par-
ticularly the research questions and statements of this paper can formulate as follows:
4
Research Questions:
1. Which business issues can blockchain solve within the supply chain of companies?
2. Which limitations does blockchain technology have in the supply chain?
3. In which ways are legal regulations considered within possible blockchain implemen-
tation?
I have chosen these research questions, as essential elements of scientific research by

following characteristics assessed in the context of the used research design. According
to Hulley et al. (2007), research questions should follow the mnemonic of FINER criteria,
which include that they are feasible, interesting, novel, ethical and relevant.
Propositions:
o The use of blockchain can identify and trace a flow of goods with a high level of detail.
o Blockchain ensures a fair distribution of available information amongst participants
of the supply chain
o Blockchain technology is a perfect fit to meet the needs of stakeholders in the supply
chain.
o Governments declare detailed legislative requirements during an implementation of
blockchain technology.
The relevance of these statements to the study works as validation of theory. The con-
clusions are generally untested and the logic works in a way that there is an attempt to
generalize from the specific to general terms, which further is useful in other similar cases
and occasions. The data is collected to explore this new technology, identify themes and
patterns and create a conceptual framework
1.5 Methodology
Subsequently, there will be an explanation of what used methods in researching and

developing the thesis. What follows is mainly a brief overview, as an explanation of de-
tails can stands in the methodology section of the thesis.
As a foundation and therefore starting point marks the use of secondary data for a liter-
ature review, which gives a picture of existing state-of-the-art. This structured literature
review follows the guidelines of Siddaway (2018), which means that this paper will es-
tablish to what extent existing research has progressed towards clarifying the research
questions. Moreover, the aim is to identify relations, gaps, inconsistencies in the litera-
ture or contradictions and explain the reasons for these. Out of that, general statements
and a possible conceptualization is formulated, which provides implications for practice
and policy.
5
Crucial here is how the identification of significant relationships or patterns is happening

and if there is any conflicting evidence. Although in the world of digital, technologies
change and progress happens very fast, the data collected does not characterize as
being out of date, since the term blockchain is just slightly over ten years old.
The theoretical assumptions from the structured literature review will flow as challenging
propositions into the case study resulting in a benefit for it. Figure 1 shows the compo-
nents of a case study. I will operate mainly on level two, by comparing theory and rival
theory propositions backed up with implications during the case study investigation. The
case study findings will project the circumstances under which blockchain and supply
chain meet each other and at that point, aim toward analytic generalization.
FIGURE 1 - ILLUSTRATION OF INFERENCES

(YIN, 2014, P. 39)
As the last step, the data analysis happens descriptively. There are logical descriptions
of the outcomes and background information is revealed appropriately. The establish-
ment of a problem-solution relation happens to stimulate discussions and recommen-
dations on the research topic.
1.6 Thesis structure
After the introduction chapter, the literature review will consist of the following parts. The
first sections will contain a brief definition and technical background of blockchain tech-
nology. Here readers get familiar with the underlying technological and cryptographical
knowledge in order to be able to follow further paper content. The next part tackles the
possible disruptive character of blockchain in the area of the supply chain. Here potential
will be revealed to the reader by presenting ideas with clear distinction to what is possible
to achieve with current technological progress and what may be achieved in the future
when more and more people require the technology to mature. Based on that, the next
6
chapter points out problems and issues within the supply chain, which blockchain may
solve when applied adequately. Finally, the role of politics and governments will get re-
vealed when it comes to blockchain implementation and the question of what is permit-
ted, what disallowed and are next steps to help the technology to break through main-
stream usage. Based on this literature review, a first framework can be developed and
put into comparison to real-life activities.
What follows is a detailed examination of the used methodology and the case study of
blockchain implementation. I will accompany two firms, which are launching blockchain
technology in their supply chain process. Moreover, the aim to spot as many contingen-
cies as possible is essential, the same as the goal to describe the path of implementation
in the best possible way. Possible best practices for further development are possible to
extract and execute in future projects, the same as the avoidance of mistakes leading to
issues in the project.
The last thesis section summarizes the findings from the literature and empirical study.
It affirms or refuses the given statements and answers the relevant research questions.
The proposition of recommendations adds to a well-established basis for discussion. The
drawing of further conclusions from previous content analysis helps to provide perspec-
tives for future research.
7
2 LITERATURE REVIEW
2.1 Introduction to Blockchain Technology
2.1.1 Definition and Terminology
As a topic of increasing relevance in the range of promising technologies, blockchain

technology requires proper definition to ensure understanding amongst readers. While it
is a trending topic, nowadays, there is no accepted standard definition, which includes
all relevant factors of it. In a try to cover all notable aspects, Swan (2015) calls it the
blueprint for a new economy, which is qualified by the existence of a transparent, open
and decentralized database. Further definition from Bradley (2016) describes it as open-
source technology, which works as an alternative to current centralized systems, be-
cause the intermediary, like a third party partner, is skipped in favor of a collective verifi-
cation within the settled ecosystem. Another characterization by Drescher (2017) ex-
plains it as a peer-to-peer (P2P) system of journals, which uses an algorithm, based
software components intending to exchange information in organized linked data blocks
with the help of cryptographic security technologies. Other scholars like Klötzner & Iten
(2019) see blockchain as an unalterable list of transactions in a distributed network
where entries of participants are validated with a digital signature and put together se-
quentially following a consensus mechanism. Twesige (2015) compares it with the inter-
net by calling blockchain a protocol that governs the rules and regulations for value ex-
change within a particular network, while the internet serves as a means for communi-
cation exchange. The value here is explained broadly as the measure of the benefit to
an economic agent. A drill-down into three fundamental components marks Kuner et al.,
(2018), who formulates blockchain as a system for recording a series of data items that
uses encryption to make it as difficult as possible to tamper entries and has a democrat-
ically agreed process for storing journal copies.
An opposite approach of defining blockchain comes from Pilkington (2017), who men-
tions Vitalik Buterin, the creator of the blockchain computing platform Ethereum. He
states that a blockchain definition does not link to any technical features and attributes
like above mentioned. He sees algorithms, consensus and cryptography rather as appli-
cations and properties than definitions. Blockchain here describes the visible conse-
quences of the actions taken by users of a network. Therefore, as a transitional and
evolutionary technology structured around a network.
Zheng et al. (2018) mention a significant distinction in defining blockchain is the sub-
sumption in a public and private blockchain. Depending on the classification in either one
of these two, possible usage fields can be determined. It depends on what kind of use
case can be applied to which blockchain. The public blockchain is defined by the open-
access of validation nodes for the consensus-building process, with all transactions be-
ing visible to the public. The large number of participants acting as a consortium in a
8
public network makes sure falsification is nearly impossible but at the cost of higher la-
tency and efficiency issues.
On top of that, public blockchains identify as strongly decentralized networks. On the

other hand, Lin & Liao, (2017) point out that private blockchains have strict authority
management on data access, paired with a restriction in the decision who can participate
in the network. This kind of authority management leads to the fact that these block-
chains are in full control of an organization that could determine the mechanism of con-
sensus, access permission or the possibility to alter or reverse ledger entries. Literature
also provides mixed variants, like a consortium blockchain, which has attributes of both
public and private databases. An overview of participating stakeholders in the blockchain
economy comes from Lewrick & Di Giorgio (2018), who group according to several as-
pects dependent on the interest and aims of the parties involved. The starting point gets
often formed by entrepreneurs or decision-makers in companies who have disruptive
ideas, technological interest, the right feeling for potential or that a strategy of digitaliza-
tion and optimization is mandatory for future success and competitiveness. The execu-
tion and final realization remain reserved for the labor, which is working operationally,
namely IT developers or blockchain advisors. They sharpen, test and audit within the
whole implementation process as specialists in their respective fields to satisfy not only
leaders but also regulators, who build the next group of stakeholders. These regulators
work on a structural framework, which represents current legislation in order to support
upcoming decentralized systems. Finally, we see investors who aim to spot the inner
value of a project and support it with a respective investment with the expectation of
value gains.
Because of a ubiquitous tech hype all over the world, many scholars disproportionately
use the term blockchain. However, there is a lot of wording and terminology, which goes
hand in hand with it. Based on Dascano (2018), similar to an accounting journal, the term
blockchain describes a spreadsheet. This spreadsheet contains all executed transac-
tions between the users in a network. The process utilizes blocks and each of these
blocks contains information on all happened transactions and connects to the previous
block. The process of stringing together these blocks in a chain led to the term of block-
chain.
Moreover, Back et al. (2014) mark that there is also a possibility to use so-called
sidechains, which exist parallel to the main chain creating possibilities to lower latency
of information exchange because of the number of confirmations to achieve consensus
lowers while the trust principle is held constant. On top of that, with pegged sidechains,
an asset transfer between multiple blockchains seems to get possible soon. Further-
more, Laurence (2017) mentions that size, period and triggering event for new blocks is
different for every blockchain as not all blockchains see velocity, transparency, move-
ment record or security as the same primary objectives. Dependent on the aim to create
9
value, particular attention shifts on either one of the targets. The act of chaining the dif-
ferent blocks together happens mathematically in a trust-building process.
The result of the above-mentioned trust-building process is called consensus. Scholars

like Nguyen & Kyungbaek (2018) explain the term as an agreement, which governs
whom of the network participants, is permitted to append the proposed blocks to the
chain. In order to prevent the ledger holding procedure, the consensus algorithm requires
nodes to show they are more eligible to do the work by giving certain rewards after ap-
pending a block to the chain in a proof-based consensus. A corresponding explanation
comes from Frankenfield (2019), who states it as a fault-tolerant mechanism that is used
in computer systems to achieve the necessary agreement on a value or state of the
network. Hence, Baliga (2017) refers to several challenges when achieving consensus
in a distributed system because it is of primary importance that consensus algorithms
are resilient to failures of nodes, message delays or network portioning pointing security
on top of the most crucial aspects when choosing a blockchain platform. With the state-
ment of Bashir (2018), who exemplifies consensus as the backbone of a blockchain,
which provides decentralization of control, we come to the next notion within blockchain
technology.
In essence, Anderson (2019) states that blockchain facilitated social decentralization can
potentially redistribute and democratize patterns of human participation and cooperation.
Hence, blockchain is into a position of being censorship-resistant and fundamentally
more elastic than other decision-making mechanisms for large amounts of people. A
further literature review showed based on Morabito (2017) that the decentralized nature
of blockchain reduces the need for centralized authorities remarkably and makes it more
difficult for all participants to get attacked and data harmed simultaneously. Decentral-
ized computing allocates resources, hardware, software and computing power to individ-
ual workstations, while the majority of functions splits between individual nodes with no
need for everyone to access a single node to get a simple task done. In this regard,
Tapscott & Tapscott (2016) point out that power distributes towards the system with no
party being able to interfere all alone in the system. Even if there is an attempt to do so,
the system is transparent enough to make sure everyone witnesses it. The functionality
of a decentralized network works as the collaboration of many in their optimal form to
enable collective force through distributed computing power.
When talking about blockchain as a technology, Ray (2018) sees the so-called distrib-
uted ledger technology (DLT) as the basis of it. DLT provides a database that divided
into nodes or computing devices and each node replicates and saves an identical copy
of the ledger, same as each node updated itself independently. There is a voting system
on these updates to ensure that the majority agrees with the conclusion reached and the
latest agreed version of the ledger is saved on each node separately. We see decentral-
ization and consensus as core elements of DLT working together towards a possible
new paradigm for how information is accumulated and communicated.
10
A very comprehensible illustration comes from Kuo et al. (2017), who provide a compar-
ison of network topologies. Whereas today is well-known systems possess a single-
point-of-failure, the next step marks the usage of DLT and eradication of this vulnerability.
Blockchain eventually brings further development by verifying transactions mathemati-
cally and prohibiting double transmission of information, which are clear keys of trust in
this context.
FIGURE 2 - COMPARISON OF NETWORKS

(KUO, 2017, P. 1212)
The term double-spending, which illustrates in Figure 2, is numbered among the core
content of a blockchain. Foroglou & Tsilidou (2015) argue that the network protocol im-
plemented in blockchain technology disables the multiple transmission of the same
data, because the network determines whether a transaction is legitimate, notices ir-
regularities and collectively update the blockchain if the transaction is there only once
and valid.
Overall, scholars related to blockchain, make use of keywords like transparency, irre-
versibility, traceability, security or trust. These attributes play a vital role when it comes
to the questions of what kind of innovation to existing processes blockchain really can
bring. This paper will catch up on these, the same as other important ones in context
with the supply chain in the chapters, which follow.
2.1.2 Technical background and development
Casey & Vigna (2018) state that in the middle of the last financial crisis, caused by ma-
nipulation of financial entries and accounting books, at a point where the level of trust
was alarming low, people started to put faith in a system, which offered transparency,
speed, and security during information and data exchange. However, according to Bur-
nett & Paine (2011), several puzzles, which draw up the picture of blockchain, where
mentioned and made public sometime earlier. With the appearance of the cryptosystem
11
RSA in 1977, the usage of secure data transmission was facilitated by allocating random
numerical and letter strings, which served as keys randomly created by an algorithm.
Alam (2019) points out that in the early nineties of the last century, the scientists Haber
and Stornetta brought up his first idea on the creation of a privacy driven document,
which is timestamped and digital without the possibility of backdating. Unfortunately, the
usage of the patent lapsed unused in 2004. Lastly, Nian & Chuen (2015) mark that the
next step marks the introduction of a concept of so-called reusable proofs of work. This
mechanism shows a scheme that permits the reuse and exchange of tokens, which rep-
resent some asset value.
Figure 3 shows the development of blockchain technology according to its fields of use.
The newest progress aims to the area of applications, particularly tailored network solu-
tions that are permissionless and explored amongst a brought number of industries. It
means that markets get the chance to open up for the development and execution of a
possible mainstream usage in the future, especially on mobile and portable devices.
FIGURE 3 – DEVELOPMENT SINCE 2009

(SHAIKH, 2019, P. 3)
There are several methods to achieve consensus in a decentralized network. The most
widespread is the proof-of-work (PoW) method. Here the technical basis is built on cryp-
tography. Schneier (1996) describes cryptography as a science, which deals with secur-
ing messages, where input data encrypts to a so-called ciphertext, which represents en-
coded secret content. Decryption is necessary if the original information should be visible
again. The whole ciphering process integrates into two mathematical functions, which
represent a computing rule called a cryptographic algorithm. In order to make data trans-
mission possible, Zheng et al. (2018) state that digital signatures are inevitable, meaning
that each participant of the transaction owns a pair of keys, namely private key and public
key. The public key defines as an address, which is visible to the network, whereas the
private key represents the personal, unlock the possibility of the transaction receiver.
While the receivers' public key is used first by the sender in the so-called signing phase
to encrypt the value, we then see in the verification phase the receivers' private key used
12
by him to verify the transaction by comparing received and encrypted data. Mohanty
(2018) argues in context with PoW that so-called miners, who provide computing power
and solve mathematical problems, validate transactions inside the block. As soon as the
miner finds the correct numeric solution, the network gets informed and distributed re-
wards to participating miners according to the blockchain protocol. Every block must in-
clude proof of work in order to get valid recognition.
The changes in the data structure in the process of decryption and encryption explain
Paar & Pelzl (2010) by exhibiting the methodology of hash functions. The messages of
the transaction are hashed, meaning transformed into a bit string. It makes the hash a
representative of the transaction data and a unique fingerprint of the transaction content.
The whole process of signing and verification only consists of hash values, which on the
input length can be random while the output length is independent and with a fixed length
of digits. This ensures fast processing of more significant data volumes avoiding latency
times. The explanation that hashes are an integral part of blockchain architecture shows
Nguyen & Kyungbaek (2018) by describing characteristics of a block in the chain. All
information inside a block gets inputted to a hash function to get a value, which then
assigns to a field called previous hash in the new block. This measure ensures that
blocks are linked unmistakable with each other, including a timestamp showing the time
when the block was found and completed. In this regard, it is valuable to say that not
every blockchain is equally fast. A fitting explanation provides Antonopoulos (2016), who
points out that the measure of how severe it is to find a hash is called difficulty. The
network-wide setting that controls how much computer power is required to produce a
PoW is necessary to avoid any extreme volatility and instability in the network. The set-
ting is stored in the block as a difficulty bit metric, which is a dynamic parameter, and
adjustable in a way that the block generating scheme remains constant on a long-term.
Rosenberger (2018) calls the mining process a trial-and-error procedure and acknowl-
edges various types of secure hash algorithms (SHA) in a bundle of so-called Merkle-
trees, which put together hashes pairwise until the block size reaches. Whereas a re-
ward-based system of PoW consensus seems beneficial for all involved stakeholders, it
is questionable how energy sustainable it is to base decentralized on a high level of
electric power consumption.
Moreover, another scope of cryptography, which possibly is of value for blockchain ap-
plications, is the utilization of zero-knowledge proofs described by Schneier (1996). Es-
pecially when the company for its departments wants to use private blockchains, e.g.,
for the usage in the supply chain, the topic of privacy comes into view. As a one-way
function, this method ensures that one party can prove to another one that they know
value without delivering any information apart from the fact of knowing it. Hence, scholars
like Beutelspacher (2015) emphasize the factor of anonymity as a core achievement of
cryptography-based technologies, because there is an avoidance of problems with the
13
general data protection regulation (GDPR) or other global privacy laws through the de-
ployment of cryptographical solutions by rendering anonymous the broadcasting process
or using pseudonyms.
Besides the content of cryptography, Ploom (2016) describes the possibility to implement
and save scripts into the blockchain. An example is given by the so-called smart con-
tracts, which are self-executable protocols, meaning digital, and credible in a way that
legal obligation gets valid for participants of an asset transaction.
2.2 Disruption in supply chain
2.2.1 Changes and paradigm shift in the supply chain
Concerning manufacturing and supply chain processes since the industrialization, there
were many steps forward in terms of process optimization and information exchange.
Nowadays, new technology introduces to change the production process of a good sig-
nificantly. These upheavals require not only technological expertise but also strong lead-
ership a precise strategic planning and influential groups amongst the participating stake-
holders. Hence, Gray (2017) outlines significant shifts in paradigms caused by block-
chain, namely the advancing of digital transformation. That means global stakeholders
are connected and benefit from emerging trends as the design of value networks, multi-
ple data forms, for example, open-source data, intelligent response and autonomous and
localized processes.
2.2.1.1 Technical development and digitalization
Several European Associations, according to Van Wassenhove et al. (2007), speak

about supply chain collaboration in the sense that supply chains are in a connected sta-
tus and communicate with each other regularly. Plants and clusters, which are produc-
ing, can benefit from interconnection with the existence of aggregate information availa-
ble. Hence, Korpela et al. (2017) envision several benefits of the so-called digital supply
chain (DSC). It includes cost-effectiveness of services and value-creating activities that
are advantageous to many actors in the supply chain ecosystem. It is characterized by
the strategic and operative exchange of information between suppliers to enhance com-
munication and in general, inter-organizational coordination is achieved through elec-
tronic links between information systems.
Moreover, Mirando et al. (2019) add that technological advances have to get impacted
how humans participate in a supply production process. Therefore three types of inter-
actions could be implemented in new products, namely human-human collaboration,
which has less technology content and human-machine and machine-machine collabo-
ration. The wider variety of technologies and devices included in the process would result
in a more autonomous system backed by ledger solutions like blockchain. Further,
Treiblmaier (2018) exhibits that with the advent of new technologies, the way supply
14
chain structures are managed, obviously changes. From a resource-based view (RBV),
which describes the way to competitive advantage by the optimal use of resources and
capabilities, a possible blockchain transformation would result in a shift of existing bound-
aries on either the increase or decrease of the respective source. It implies that block-
chain induced transformations afford opportunities which go beyond existing ones. An
interesting aspect of how a possible supply chain of the future could look like give
Gromovs & Kammi, 2017 who include in a smart map structure three behavioral steps
forward in the supply chain processes. Based on the research of the IBM company, these
supply chains are intelligent, which means include analytics, simulation models, carbon
footprints, predictive and business intelligence analysis, amongst others. Furthermore,
the connection with real-time visibility, on-demand network, interactive KPI’s and collab-
oration platforms is factual. Eventually, machine-generated information will replace peo-
ple’s creations in the form of radio-frequency identification (RFID) tags, sensors, actua-
tors, self-counting inventory and container content self-detection.
Overall, Tholen et al. (2019) write about a highly developing digitalization of assets in the
financial world. Non-digital assets are commodities and raw material gets so-called dig-
ital twins in the process of tokenization. Still, the created token is only as reliable as the
party that first created it, so fraudulent action still is possible without proper governmental
rules and regulations.
2.2.1.2 Insufficiencies within supply chains
Scholars like Zhao et al. (2019) argue on the topic of food supply four distinctive themes,
which show insufficiencies in the supply chain. These are traceability, manufacturing,
sustainable resource management and information security. The lack of clarity within the
above stated deficitial topics results in less agile value chains. According to Barner
(2019), visibility is needed from end to end, especially in the food supply chain, both to
make sure companies can label their products with confidence and to prevent some pos-
sible spread of illnesses because of contaminations. Several challenges in a supply
chain due diligence are explained by Tholen et al. (2019), who emphasize the fact that
modern supply chains are fragmented, complex and rely on a large number of suppliers
and intermediaries from all around the world. Hence, this leads to deficits in the infor-
mation on the flow of goods, which prevents companies from carrying out due diligence
by identifying risks, prioritizing activities or track goods and report figures more efficiently.
Although there are standardized systems as nomenclatures and norms, which share in-
formation in a similar digital language, there is still much room for improvement and fa-
cilitation.
Furthermore, because of the fragmentation of supply chains in highly complex vehicles

with many participating actors, an understanding and categorization of severity and like-
lihood of risks is tough to achieve. This inaccuracy of risk information puts pressure on
the company’s value chains, because of information on risks in order to be leveraged
right needs be at some point reliable and credible, but also comparable and accessible
15
by stakeholders. Examples here are bribery risks, tax evasions, labor conditions, human
rights abuses and many more. Moreover, many supply chain actors tend to be transpar-
ent because gathering information on suppliers and sub-suppliers at crucial points in the
chain because local governments in some countries simply do not require proper gov-
ernance in relationship information amongst the supply chain. Abeyratne & Monfared
(2016) mark that it is challenging to have an overall picture of all transactions within the
chains, especially in an extensive supply chain system. The information, for example,
contracts, financial transactions, goods transactions or resources and the respective sys-
tem entries in today’s supply chain systems, are typically stored in multiple locations and
are accessible only to certain system entities.
Additionally, Casado-Vara et al. (2018) attest to the supply chain sector the problem that
its scale may lead to delays and defaults in the delivery of goods as well as other issues
within the supplying process. In an attempt to solve the problem, process automatization
was the result, hand in hand with a significant increase in the number of distributors in
the supply chain. However, that means that the risk of attacks on the databases is high
and the intentions of hackers may be to modify, delete or steal valuable data. It is result-
ing in better visibility of performance management, optimized inventory controls, event-
driven alerts and automated data feeds from logistic partners.
2.2.1.3 Expectations of supply chain stakeholders
Different stakeholders in the overall supply chain world have, of course, different, some-
times diverging interests and needs. From a customer’s perspective, for example, there
are plenty of reasons why the supply chain of the product is essential. Montecchi et al.
(2019) see a high level of perceived risk by customers if their information hides in a
product's supply chain. This so-called perceived risk can influence customers to pur-
chase decisions and attitudes because the information asymmetry can lead to undesired
consequences or outcomes for the customer. Halder & Pati (2011) point out the example
of the Indian population that due to demographic growth, the demand and consumption
patterns change tremendously and therefore, these people simply seek enough supply
of the products they need. According to Mattila, 2016 firms themselves expect to keep
track of the legitimacy within their supplier networks, which can be very sophisticated
nowadays, but currently are not able to do it properly. Besides that, customers are cur-
rently very limited in their ability to evaluate the origins of the materials used or the ethical
aspects of how the manufacturing of products happens. More than that, customers seek
for more democratization of the supply chain. Now, where a reconfiguration of the bal-
ance of power in supply chain networks can be the result of customers aspirations to
arrange each step in the supply chain to their liking, by using specified raw materials and
suppliers for a product which gets produced precisely as the customer wants it, can mean
a massive paradigm shift. Similar other customer motives are described by Westerkamp
et al. (2019), who emphasize the increasingly important factor of goods compliance with
specific ecological and ethical standards. Customers expect to know where the goods
16
are from and how they came into their property. Similar comes from Abeyratne & Mon-
fared (2016), who added that currently, there is a development of overall demand for
improved access to information in order to regain consumer trust in products. The ex-
pectation is a higher level of awareness of the various potential events happening in the
supply chain. Consumers are more than ever encouraged not to accept any information
without being able to verify and thoroughly understand the meaning behind it. Recent
examples of abuse of trust in reputable companies are the emissions scandals of
Volkswagen in 2011 and Nissan in 2016.
More standpoints from the position of strategic and operational decision-makers within
supply chain-operating companies bring Chang et al. (2019), who refers to the term of
business tracking process (BPR) as a re-engineering procedure within the SC. It is de-
scribed as a pathway to rethink and radically redesign business processes to achieve
improvements in contemporary critical measures of performance, such as service, qual-
ity, cost and speed. A valid point here is the fact that implementing new technology re-
quires changes and different approaches compared to the way organizations execute
routine operations. Moreover, Tholen et al. (2019) argue about the importance of satis-
fying voluntary principles for example, the sectoral supply chain due to diligence guid-
ance within the OECD guidelines. These include an embedment of responsible business
conduct (RBC) into supply chain policies and management systems, followed by a cor-
rect execution of communication, identification, assessment and tracking of adverse im-
pacts. In implementing this framework, enterprises may face obstacles that directly affect
their ability to conduct a meaningful supply chain due diligence. In general, a snowballing
trend towards transparency and more reliable expectations of consumers, regulators and
investors in terms of responsible business conduct is global in scope and cuts across
different economic sectors.
2.2.2 Potentials of blockchain in context with supply chain
Amongst the various number of potential, blockchain technology can bring, Table 1
shows some of them with relevance to a possible enhancement of supply chain pro-
cesses. Likewise, there is a list of limitations in order to classify if the technology with its
characteristics is the right choice to meet the requirements of being beneficial to supply
chain processes.
Feature Benefit Limitation
General • The early development stage of technology of- • Still, no accepted and un-
fers room for improvement towards holistic derstood the single underly-
SCM add-on ing standard
• Opportunity to reduce control structures of • High level of computeriza-
centralized databases tion prevents usage in de-
veloping countries
17
• Process enhancement through decentraliza- • Scalability prevents from

tion by information sharing with a change of handling of vast amounts of
competencies data, e.g., big data in real-
• Automated data transfer under one umbrella time
• Regulatory uncertainty
• Incompatibility of data for-
mats
Trust Level • Decision-based on a democratic majority • The public still not con-
• Smart contracts as a self-execution procedure vinced on the safeness of
• Technical feasibility aspects easy to imple- storage and transmission,
ment e.g., new technology ac-
• Technical configuration assures objectivity ceptance low
and is adaptable with technology matureness • Composition of trustworthy
• Trust evaluation model possible because of consortia challenging
sufficient blockchain features • History of fraud & hacking
• ‘Trust factories’ as the end product of decen- incidents reduces confi-
tralization dence
• Self-generating audit trails • The right choice of partici-
• All SC participants are known, tracked and pants based on principal-
certified properly agent theory
• The authenticity of observa-
tion questionable
• Interorganizational trust
from still uncoupled from
blockchain
• Self-generating audit trails
lack recognition of regula-
tors
Transparency • Visible tracking activities • Risk of exposing confiden-

• End-to-end visibility according to permission tial information
levels • Decrease of the level of
• Reduction of waste for perishable food transparency sometimes
• Mitigation of friction and self-execution on in- needed but contradicts BC
formation, goods and capital flows core competences
• Customers gain loyalty and knowledge with • Blockchain transparency
product transparency contradicts with privacy re-
• Regulators’ opportunity to monitor properly sulting in neutralization of
• Purposeful targeting of customer consumption BC benefits
enabled • Either more restricted or
• Reduction of the bullwhip effect more open blockchain to
• Zero-knowledge proofs for data sensitivity im- choose
provement • Missing of proper data
checks before pulling them
into the ledger causes infor-
mation asymmetries
Data security • Digital certificates instead of paper ones miti- • Superordinate authority giv-
gate the risk of physical loss ing permissions limits de-
centralized character
18
• Uniquely identification of data enhances its • Security gap due to latency

security level of transactions and scalabil-
• Data correctness improves the comprehen- ity
siveness of SC • On-chain storage blow up
• Data integrity at low cost through a guarantee BC capacities
of participants identities • Off-chain storage lowers
• Permissioned system traceability
• Storage of hash data only enhances anony-
mization
Traceability • Optimization of time schedules • Compatibility problems

• Real-time information for customers on origin through inconsistencies in
and product life cycle captured datasets
• Identification of grey market activities • Latency in the confirmation
• Comprehensible data flows generate custom- and verification process
ers’ willingness to pay premiums • Deployment and mainte-
• Higher responsiveness to global trends and nance costs still questiona-
movements enabled ble compared to legacy sys-
tems
Irreversibility • All participants with the same information • Illegitimate data entries not
• Reduction of communication and data trans- changeable anymore
fer errors • Participants not used to a
• History of network activities improves trust is- high level of consensus
sues within manufacturers • Human involvement allows
• Immutability of data boosts the legitimacy of erroneous data input
complex supplier networks and favors prod-
ucts on blockchain-based solutions
TABLE 1: POTENTIALS OF BC IN SC
Source: Adapted from Kamble et al., 2018; Abeyratne & Monfared, 2016; Laaper et al., 2017;
Ganeriwalla et al., 2018; Treiblmaier, 2018; Malik et al., 2019; Kshetri, 2018; Behnke & Janssen,
2020; Francisco & Swanson, 2018; Blechschmidt & Stöcker, 2016; Sanjeev, 2019; Chang et al.,
2019; Hackius & Petersen, 2017; Tribis et al., 2018; Steiner & Baker, 2015; Saberi et al., 2019;
Lyons & Courcelas, 2019; Blossey et al. 2019; Kang et al., 2019; Kritikos, 2018; Tholen et al,
2019; Fisher et al., 2018; Sarkis et al., 2011; Tijan et al. 2019; Hepp et al., 2018; Mirchandani,
2019; Aung & Chang, 2014; Casino et al., 2019; Westerkamp et al., 2019; Sodhi, 2019; Apte &
Petrovsky; 2016; Mattila, 2016; Korpela et al., 2017; Perboli et al., 2018;
Kamble et al. (2018) describe the possibility of gaining trust in a supply chain environ-
ment with a reduction of possible payment gaps between the actual delivery of a product
and the final payment settlement. The risk reduction of losing funds results in a high level
of trust achievable through self-execution of agreed contract components based on
smart contracts acting as a rulebook towards the financial sustainability of the supply
chain. According to Abeyratne & Monfared (2016), a sufficient level of trust nowadays is
only achievable with trust reliance on the foundation of a democratic majority, instead of
relying on individual organizations or people. The flow of trusted information between
19
parties requires accurate data collection and secure data storage, which are key ele-
ments of blockchain technology. Having examples of various fraud, corruption or hacking
incidents happening in the past decades, which reduced the trust level amongst stake-
holders, shows that trust level enhancement leads to a potential reducing risk of losing
consumption of goods and services, which represents the backbone of supply and de-
mand in economics. Moreover, Laaper et al. (2017) reveal concerns about proper cyber-
security paired with blockchain technology. For them, it is highly questionable if the public
will entrust sensitive data to a blockchain solution without labeling it as a hundred percent
safe way of data storage and transmission. A potential mitigation effect here can be the
right choice of the blockchain implementation partner with the satisfaction of privacy and
security needs, tested carefully beforehand.
Further, Ganeriwalla et al. (2018) show that trust is an integral part of any functioning
supply chain and that it usually develops over time as companies and suppliers work
successfully together, sharing various types of information. In today’s complex manufac-
turing ecosystems, participants often do not know each other and thus, they lack visibility
and trust, therefore, must be built elsewhere. A solution provides the self-execution pro-
cedure of smart contracts, which is simultaneously a bypass of conventional ways of
establishing trust by using blockchain for a wide range of supply chain transactions, such
as materials and food delivery information, payments, insurance payouts or copyright
transfers. Still, the overcome of the trust barrier is linked to the formation of a trustworthy
consortium to run the blockchain. It can be challenging to choose and coordinate, be-
cause the principles of a democratic majority, whose decisions are binding for partici-
pants, should be appropriately met.
Treiblmaier (2018) brings up the so-called agency theory in connection with trust creation
using blockchain in the area of the supply chain. The information consistency and its
complete distribution achieved with the use of blockchain enlarges trust levels between
principal and agent, but still, the major challenge lies not on the technical configuration
of BC, but instead in the right choice of the principal to select an agent. The formal guar-
antee to both parties, that agency issues are addressed considerably is provided by the
blockchain in a comprehensible way, given its specifications. On the contrary, Malik et
al. (2019) argue that although data related to supply chain events are not changeable
once recorded on the ledger, blockchain technology cannot ascertain the authenticity of
observations provided by supply chain entities. The limitation gets very clear if partici-
pants generate false data. Therefore, a possible proposal for a solution is the integration
of accountability and reward mechanisms to penalize dishonest on the one hand and
incentivize trustworthiness, on the other hand, correctly. However, the prerequisite of a
trust management system added into today’s existing blockchain systems speaks
against the blockchain as a fully integrated base technology of a supply chain manage-
ment system of the future. Kshetri (2018) affirms the statements of Malik. He speaks
about the importance of data quality in order to achieve a system, which is characterized
by trustworthiness. From a technical standpoint, blockchain can assure objectivity and a
20
low level of bias of data. Still, trust builds outside the technological boundaries of block-
chain. An example from the food supply chain brings Behnke & Janssen (2020), who
criticize that actors in the SC still use individual quality standards instead of exchanging
information with each other on a detailed level. This encountered lack of trust cannot be
solved with blockchain, although the technology is heralded of being the choice number
one when it comes to the need of trust creation, in this example, the initiatives blockchain
bring forward are mainly technology-driven, focusing on technical feasibility aspects.
Francisco & Swanson (2018) distinguish between two types of trust, namely the trust of
technology and inter-organizational trust. This construct to frame trust concerning tech-
nological innovation shows that blockchain has the potential to be trustworthy in terms
of technological aspects, although the credibility of new technology rises with its main-
stream adoption and here it is still some way to achieve that. Inter-organizational trust
refers to the trust between institutions and is the same as critical for technology ac-
ceptance and information sharing as the technology basis beyond. This type of trust is
more difficult to achieve with technological solutions, as the so-called behavioral inten-
tion cannot be verified that easy. Opposing standpoints come from Jiang & Yongjun
(2017), who put in place a model to evaluate trust among supply chain enterprises. Here,
trust in the supply chain is not determined by any specific definition, but as a conglom-
erate of sufficient features, such as transparency, irreversibility or undeniableness.
Therefore, a blockchain in connection with the supply chain is always trustworthy, given
its technical cornerstones.
Blechschmidt & Stöcker (2016) bring up the creation of so-called ‘trust factories,’ which
are end products of blockchain-based technology progress. These factories or decen-
tralized institutions and organizations provide trust at a far lower cost than traditional
providers do. That means that even intellectual property and knowledge overall were
excessively expensive until the occurrence of DLT because third parties were collecting
high margins on it. Even though blockchain also poses challenges, because organiza-
tions move their trust from the known to for many unknown mathematical algorithms,
which only a few people understand. A negative aspect blockchain faces nowadays can
be eradicated, the more people are keen to gain at least a basic understanding of the
subject matter. Similar views come from Behnke & Janssen (2020), who point out that
acceptance of new technology, especially in the early stages of adoption, is a huge ob-
stacle to overcome. Particularly blockchain, with its present day’s characteristics, has
limitations in the ability to gain and maintain trust for the majority of supply chain stake-
holders.
Saberi et al. (2019) report intra-organizational barriers and propose the usage of so-
called Technology Acceptance Models in order to reduce resistance and hesitation from
individuals and organizations during the adaption to the blockchain as a new technology
in the SC. This framework model evaluates the blockchain in a sense that statements
formulate why people use particular technology and why not. Another trust-related use
21
case comes from Sanjeev (2019), who points out that as a trust-building activity, self-
generating audit trails can be established and put in place amongst supply chain partic-
ipants. That means a highly detailed level of granularity formed by the nature of the
blockchain gives insights on every transaction that happened in the ledger. Of course,
this is a solid foundation for auditors to rely on, but still lacks recognition of governments
and financial institutions, who first need to put a framework in place, which remains au-
thorized and valid for further usage. Furthermore, Steiner & Baker (2015) emphasize the
clear benefits of having all participants of a supply chain blockchain certified by authori-
ties or independent audit firms to maintain the system trust.
As one of the key benefits of using blockchains in a supply chain environment, Chang et
al. (2019) refer to several consulting reports and studies focusing on the advantages of
enhancing the transparency and visibility of tracking activities in business operations. A
conceptual framework of a blockchain-based information tracking process includes a
transparent view of information within the shared ledger, then a self-execution of infor-
mation flows through smart contracts amongst suppliers, buyers and logistics within the
supply chain. Integrated blockchain solutions have the potential to mitigate friction in
business in not only the flow of goods but also on the flow of capital and flow of infor-
mation. The more transparent and cross-fitting information in a supply chain is, the more
cost savings and economic incentives through the optimization of time schedules partic-
ipants can collect. Hackius & Petersen (2017) add that sustainability improvements
through blockchains' ability to facilitate origin tracking are another benefit because the
waste of perishable goods, for example, food, can be reduced heavily if the newly avail-
able data on shelf life is used argument for the optimization within the SC.
Further, Tribis et al. (2018) envision that a blockchain approach in the SC increases the
transparency of physical distribution processes and therefore eliminates the ability to
cheat, providing each participant amongst the stakeholders' end-to-end visibility based
on the several permission levels on the chain. For governments, for example, block-
chains bring the potential to track, monitor and audit the supply chain and to serve man-
ufacturers to record transactions with a high level of authenticity. For customers, there is
the possibility to enhance their product knowledge and loyalty through transparent, freely
viewable information on the products and their goods flow. Additionally, Steiner & Baker
(2015) argue that with blockchain and its ability to enlarge the level of transparency, the
supply chain can widen its field of vision by stopping the limits stakeholders have. Where
usually stakeholders work in supply chains, which are held secret, now there is the
chance to prevent environmental, social, health and safety issues. Nowadays, where
differentiation and conscientious consumption are required to be mandatory for success,
a sustainable and transparent supply chain benefits strongly from the definite impact
blockchain brings. Lyons & Courcelas (2019) agree on data transparency being a great
effort of blockchain usage in the supply chain, because of easements in terms of man-
aging and securing supply chains, but bear the risk of exposing confidential information
22
to competitors and unwanted counterparts. Hence, transparency through blockchain cre-

ates new opportunities and ways of cooperation along with the SC but only can prepare
the path if new mindsets establish amongst stakeholders. Moreover, Abeyratne & Mon-
fared (2016) mark that a controlled level of transparency amongst related parties is only
possible if there is a chronological list of all previous owners of data in a network is avail-
able. Using blockchain each time exchange of product information or data is happening,
the newly created entry with the details of the transacting parties is stored openly to
people with authorized access.
Blossey et al. (2019) identify the transparency feature of the blockchain as the right
measure to eradicate supply chain inefficiencies caused by the so-called bullwhip effect.
This concept refers to increasing swings in stock in response to shifts in customers’ de-
mand. Blockchain enables the sharing of real-time information about the status and lo-
cation of a particular good between multiple SC members. With the addition of IoT and
sensor technology data, which lies and is verified on the blockchain, any measurable
condition or availability figure can be identified without errors. An example poses a prod-
uct temperature measurement used at Modum, a Swiss blockchain startup, which cre-
ates trusted digital ecosystems for sensitive goods in areas of pharmacology and logis-
tics. The combination of transparency and smart contract automation means that supply
chain parties cannot revert the contractual commitments and therefore head towards the
fulfillment of a new paradigm, called smart factory.
Kang et al. (2019), who argue that in the starting phase of blockchain adoption in the SC
organizations, are hesitant to be more transparent under a distributed ledger system,
bring up a negative aspect of high transparency within blockchain. The reason is that,
mainly because the level of transparency cannot downregulate that easy, as BC’s core
competencies require the maintenance of the best possible standards the technology
can offer. Besides, Kritikos (2018) points out that although blockchain adds a degree of
accountability that has not existed to date, at the same time, it contradicts with another
appealing aspect, namely privacy. Therefore, blockchain benefits neutralize and limit
each other in a very different way resulting in a significant reduction of innovation poten-
tial.
Tholen et al. (2019) add here that commercial regulatory or the satisfaction of GDPR
legislations prevents using an open blockchain platform. If there is some restricted ver-
sion of the blockchain, the principle of maximum transparency does not hold anymore.
Possible solutions like the implementation of so-called zero-knowledge proofs, which im-
prove the sensitivity of data in a public ledger, still need to be fully understood and in a
next step formally approved by authorities. Still, organizations have to choose which fun-
damental design of a blockchain-based supply chain tool is their preferred one, based
on the focus, which lies on either transparency or privacy. This fact speaks against block-
chain as an integrated supply chain management solution. The aspect of proper data
23
management reflect Fisher et al. (2018), as they point out that data entering and ade-
quate care of this data are essential for reaching potential full transparency on the one
hand, but on the other hand also reducing costs of subsequent amendments in data
structure and security. Here blockchain needs to find solutions to proper data checks
before transforming them into the ledger. The problem of information asymmetry address
Sarkis et al. (2011), who speak about issues supply chain organizations have expressing
information underlying a product to their respective customer base. The aim is to put
customers in the position of believing in the more excellent value of a particular product
and it is essential to mention that in order to reduce information asymmetries, more sig-
nificant interaction, in the form of decentralized data sharing, can be the right choice.
Here the information sharing process becomes less critical because it tends to be easier
to achieve with internal system coordination than necessarily by closer customer rela-
tionships.
In terms of data security, Hackius & Petersen (2017) argue that especially for supply
chain products of high value, such as diamonds, paper certificates expose to high risk of
data insecurity, through physical loss or manipulation. The possibility to collect and rec-
ord as many data points as possible, stored on the blockchain, can uniquely identify the
product's origin and historical data structure, which makes it much more difficult for tam-
pering information. Similar assertions come from Tijan et al. (2019), who points out that
up to ten percent of every logistics document, for example, a bill of lading, contains in-
correct data, leading to possible litigation or controversies. The mitigation of that kind of
issue and, in the next step, the improvement of underlying business processes puts
blockchain into importance within a comprehensive supply chain management. Accord-
ing to Abeyratne & Monfared (2016), data security goes hand in hand with a proper guar-
antee of a participant’s identity. Blockchain technology could provide the infrastructure
to scale digital identity at little cost and therefore improves digital security and integrity
profoundly. For the supply chain, this means that verified participants on the chain can,
with integrated smart contracts, improve the security of transactions as the buyer who
has signed a relevant contract with the seller can only receive each item. The nature of
blockchain allows here the system to identify fraudulent transactions or misplaced items
in a short timeframe.
Moreover, Kshetri (2018), reports that supply chain companies who implement block-
chain, such as the logistic giant Maersk were less worried about data security issues
because they prefer a permission system over a permissionless solution. Here a closed
group of participants that are known depends on access issuance from some superordi-
nate authority. However, this limits the decentralized character blockchain has in its out-
line and diminishes innovation in the sense that dependence on individual actors rises.
Nevertheless, Tribis et al. (2018) identify a gap of security and data integrity because the
latency of transactions, as the result of poor scalability, opens a window for cyber-at-
tacks. The vulnerability here gets visible if actors decide to build a more centralized sup-
ply chain setup.
24
Furthermore, Hepp et al. (2018) distinguish between on- and off-chain storage affecting,
to some extent, the appraisal if data security within supply chain processes is efficient or
not. Full blockchain integration into SC does not necessarily mean an on-chain storage
approach only. The ability to store various amounts of data on the blockchain itself would
be more secure but not sufficient in terms of scalability. For example, the possibility to
store the hash information only on the chain is intriguing if the information needs to be
verified but not immediately made available in full detail. Additionally, vast amounts of
data would blow up blockchains capacity in an often not necessary way. This tends to
be also the preferred way of approach for supply chain participants because the new
technology could be declared as innovative but not too disruptive and changing for the
actual state of the supply chain processes. Similarly, Mirchandani (2019) argues that
having only hashes stored on a blockchain would likely fit into GDPR and be classified
as anonymized in terms of data security. On the other hand, this would result in very low
traceability of hashed personal data to a data subject, which then weights against other
benefits of BC.
From a perspective of traceability, according to Aung & Chang (2014), characteristics

like unique identification of units, transfer information and an adequate link of unit and
movement are defining and end-to-end traceability system. Although the benefits of
blockchain, such as transparency, immutability and data encryption, can address the
above requirements appropriately, there are also challenging parts, namely a lack of
standardized data and inconsistencies in captured datasets. The result is the creation of
compatibility problems as actors use several different traceability methods. In order to
eradicate these barriers, which limit blockchain usage in the area of traceability, the es-
tablishment of global standards is unavoidable. Abeyratne & Monfared (2016) note that
especially end customers can enlarge their knowledge about origin, manufacturing and
usage through the product life cycle by profiting on the implementation of blockchain
technology in supply chains. This level of transparency, which allows auditing and in-
specting of datasets in real-time, makes network activities and operations highly visible
and thereby reduces the additional need of trust significantly. As an example here, the
implementation of certifications and standards, such as Fairtrade or Forest Stewardship
Council (FSC), on the blockchain brings a maximum of transparency. Here inspections
and verifications of facilities and factories, same as the identity verification, are digitally
managed and stored on a distributed ledger.
Fisher et al. (2018) emphasize the beneficial character of blockchain for regulators to
trace source and treatments of products the same as for suppliers and manufacturers to
identify precisely possible defective, inadequately or even grey market counterfeit com-
ponents along the supply chain. Furthermore, Laaper et al. (2017) envision that through
transparent and accurate end-to-end tracking, not only costs can be reduced signifi-
cantly, but also consumers stated that they would pay a premium for services or products
from companies promoting social responsibility through comprehensible data flows. An
analysis of the complex food supply chain comes from Casino et al. (2019), who identify
25
on the one hand blockchain as a tool to overcome certain obstacles of traditional trace-
ability mechanisms, like lack of information sharing and system integration difficulties.
On the other hand, blockchain faces constraints in the ability to project traceability solu-
tions properly, because of performance issues, either because of vast amounts of pro-
cessed data or latency in the confirmation and verification process. Also, Westerkamp et
al. (2019) point out that the input information available at tracking systems embodies in
batches and dependent on the product as a batch can have hundreds of logs too. This
fine-grained approach can be handled by blockchain from a technical perspective by, for
instance, tokenizing the information with its unique features. Still, the question comes up
at which deployment and maintenance costs and which speed blockchain can perform
in order to represent a better option than existing supply chain legacy systems. Sodhi
(2019) argues that blockchains potential to make supply chains more responsive to
trends and movements and more stable against market disruptions shows the best in a
way that it connects participants and companies can fetch the intelligence quickly and
securely. This competitive advantage of having an information advantage within the area
of tracking and tracing forces whole industries to react in order to set new standards of
innovation within their supply chain processes.
Laaper et al. (2017) discuss the subject of data irreversibility by blockchains’ ability to
provide all parties within a respective supply chain with access to the same information,
resulting in a reduction of communication and data transfer errors. Therefore less time
is spent with the validation of data. Instead of that, more can be spent on delivering better
goods or services while improving quality and cutting costs, respectively. Furthermore,
Abeyratne & Monfared (2016) point out that blockchains immutable record of data with
controlled user access helps a lot in building trusted foundation, whenever information is
typically stored and accessible in different locations, or participants have only partial ac-
cess to the overall data. The irreversibility of data with a history of all network activities
is a catalyst for improvements in transparency and traceability issues within manufactur-
ers.
Moreover, Apte & Petrovsky (2016) question the data consistency in private blockchains.
After all, the need for substantial PoW processing across multiple supply chain infor-
mation channels does not envision in a sense that participants can live with a lower level
of consensus because they are used to it in their previous centralized legacy systems.
This enlarges the probability of external attacks from actors with the majority of the net-
works hashing power, resulting in changes towards Illegimate data entries, which are not
changeable anymore. Additionally, Saberi et al. (2019) argue that blockchains prevention
to falsify and tamper data cannot entirely prevent any possibility of having erroneous
data because humans are still involved in applying and running the technology. If key
owners edit data and update it with additional information before it is displayed on the
chain the first time, participants are not fully covered from damage done by the existence
of invalid information. Mattila (2016), argues that the massive improvements of compa-
nies’ and customers’ access into detailed and irreversible supply chain records, even on
26
the detailed level of individual products and its value chain, boost the legitimacy of the
complex supplier networks. With the belief of having immutable information across the
supply chain, stakeholders empower to favor deliberately products, which information
lies on the blockchain instead of other ones, which do not offer their required level of
trust.
Furthermore, Hackius & Petersen (2017) see blockchain as the ideal base technology
where IoT can operate on to enhance SC processes. As estimations from Gartner
(2015), show a massive increase in connected devices year by year, it gets clear that
today’s internet architecture cannot handle such amounts of data. Although blockchain,
because the removal of points of failure through decentralization, is considered being a
solution to connect and manage IoT on a reliable basis, still its scalability remains ques-
tionable in meeting IoT’s requirements accurately. Westerkamp et al. (2019) add that
information distribution in decentralized networks is limited by its weakest link in terms
of storage, bandwidth and processing capabilities. In the context of blockchain blocksize
and completion time is adjusted to satisfy a node majority participating in the network.
The consensus of this majority does not correspond necessarily with the opinions of
supply chain participants. Saberi et al. (2019) argue that BC still in its early development
stages and considers it as immature and unready technology in terms of scalability when
it comes to handling larger numbers of transactions. Especially the handling of big data
in real-time requires more substantial scalable base technology, same as improvements
in storage management and cloud infrastructure.
Another limitation comes from Tijan et al. (2019), who attest that within blockchain tech-
nology, there is no single underlying standard, which is understood and accepted for a
majority of the users. It leads to the creation of many difficult standalone concepts, where
programming intervention, even in the purest form of change, happens regularly. Addi-
tionally, Kshetri (2018) points out that blockchain does not have the attribute of being a
global technology, reachable for every supply chain actor in the world. It is because BC
requires a high degree of computerization, which results in the issue that not all countries
are ready to participate mainly because of their characteristic of being a developing coun-
try.
Figure 4 shows survey results where the most pressing barriers for blockchain adoption
in the logistics industry are. The limitations clearly show typical aspects of insufficiencies
within new technology adaptions, more than technological deficiencies. Kshetri (2018)
speaks about a complex environment in which global supply chains operate and thus
emphasizes, to some extent, regulatory uncertainty as a significant challenge and limi-
tation to overcome. Various parties have to comply with regulations, various laws and
institutions, which include, for example, commercial codes, laws regarding ownership
and multiple jurisdictions for shipping routes. The issue here is that human beings, who
vindicate against these old established laws, manage customs and institutions and im-
plementing blockchain-based solutions can, therefore, get a very complicated task. On
27
the barrier where different parties have to join forces, Treiblmaier (2018) exhibits a pos-
sible change of competencies for supply chain companies that make use of BC. The
importance of resources for a sustainable advantage across various industries alters
because factors as company size or managerial experience are not that important any
more. This should help companies to open up, but firms still struggle to reduce control
structures and centralized databases in order to share information and work together
towards a higher level of information or process enhancements.
Korpela et al. (2017) show the lack of technological maturity with the example of auto-
mated data transfer between organizations. While in traditional trade finance contexts, it
is possible to show data transfers of payments, the document collection for letters of
credit transactions or trade documents, such as bills of lading, various certificates or
shipping documents, gets significantly more complicated. The formats of seller and buyer
documents are often incompatible, same as the information within these documents,
which required further manual entries and computer-paper solutions. That means in or-
der to achieve improvements, on the one hand, the way the supply chain works with
these documents needs to be adjusted and streamlined, same as technology needs to
find a way to model various requirements on the chain.
As one of the most critical issues, Perboli et al. (2018) identify a lack of acceptance in
the industry, which eventually results in the absence of all relevant actors of the SC. It
goes hand in hand with indolence in the process of technology adoption. For this reason,
for implementation, it is vital to start with an analysis of all needs, objectives and exclu-
sion criteria of the different actors involved. The business model created after this fine-
grained analysis should be capable of emphasizing both customer satisfaction and eco-
nomic returns. The basis, therefore, is a solid understanding of what BC can offer to
enhance SC processes.
FIGURE 4 – BARRIERS TO BLOCKCHAIN ADOPTION

(HAKIUS & PETERSEN, 2019, P. 14)
28
2.2.3 Role of governments and politics
The role of governments and regulations in the implementation phase of new technology
is an interesting one and undoubtedly, there needs to be put attention to that field. Table
2 shows some connections between blockchain implementation and its regulatory junc-
tion.
Feature Overlap Insufficiency
General • Decentralization contradicts with govern- • Regulatory enforcement low

mental checks and balances in many areas of SC
• Proactiveness by governments occasionally • Regulators still ill-equipped
existing (Blockchain Act in Liechtenstein) in blockchain knowledge
• Motivation to act in the interest of society which leads to overregula-
brings innovators and regulators together tion
• External pressure from regulators would en- • No intrinsic motivation for
hance the drive of innovation in SC organiza- regulators, because still, no
tions economic benefit elaborated
• Tokenization of assets and information • Questions on ownership,
opens new perspectives copyrights widely unan-
• Innovative features of blockchain may make swered
old regulatory approaches obsolete
Trust • Levels of Governmental interference vary • Distrust in SC towards regu-

and need efficiency lators prevalent
• The proposition of social value from block- • Best practices for correct
chain usage in the SC by governments cru- regulatory approaches still
cial for collaboration widely missing
• Creation of consortia & regulatory sand-
boxes to bring parties together and test inno-
vation respectively
• Agreed permission infrastructure lowers con-
flicts
Data Security • The validity of data transactions important for • Data usage and access with
regulators during audits and checks blockchain lacks an appro-
• Regulators participate in the ecosystem as priate regulatory framework
participants for auditing purposes • Data governance and
standardization misses as a
precondition towards next
maturity step
Smart contracts • Self-execution of contracts enlarges end-to-

end process enhancement
29
• Predefinition of rules for smart contracts to • Smart contracts still not

be done proactively by regulators binding from legal and over-
regulated from a regulator
perspective
• Utilization within routine sit-
uation easier than others
where regulatory individual-
ity is of demand
Immutability • Reliance on data provides certainty • Data deletion contradicts

• Due diligence and disclosure obligations in with immutability
the logistics require data and digital identity
protection
Privacy • Zero-Knowledge proofs support regulatory • Privacy contradicts with

expectations GDPR as it is in place
• Exception clauses of GDPR for blockchain
applications in discussion
TABLE 2: REGULATORY OVERLAP BC VS. SC
Source: Adapted from Tseng et al., 2018; Ganne, 2018; Herian, 2018; Tijan et al., 2019; Mangla
et al., 2018; Cermeno, 2016; Mirchandani, 2019; Fitzgerald, 2018; Cole et al., 2019; Grech &
Camilleri, 2017; Behnke & Janssen, 2020; Baumann & Supe, 2018; Blemus, 2017; Dobrauz et
al., 2018; Kshetri, 2018; Mattila, 2016; Filippi & Hassan, 2016; Macedo, 2018; Warren et al., 2019;
Neuburger, 2018
Governments have a vast number of responsibilities towards its citizens in order to es-
tablish a stable society. Tseng et al. (2018) point out that distrust is the most important
reason; the public needs the state as a supervisor. In more detail, that means, that de-
pendent on the range of activities in different supply chains, different levels of govern-
mental interference is expected. In health or financial trade supply chains, the surveil-
lance may be higher than in others. Nevertheless, this kind of monitoring requires many
resources and could still be inefficient. For this reason, blockchain technology can be
just one way to provide the capability to raise the efficiency of regulatory enforcement.
Ganne (2018) argues that the deployment of blockchain requires an appropriate regula-
tory framework that recognizes the validity of data transactions, clarifies the law and
regulates the way of data access and usage. The legal status of blockchain transactions
is treated as possibly critical because regulators still need to build frameworks to classify
them properly legally. Furthermore, Herian (2018) discusses to a legal framework which
requires the government to stand back and let actors have the choice as to how to ac-
complish their peer to peer information sharing, but at the same time taking active steps
where needed, to ensure people have all the basic resources to act not only in the own
but in the interest of the society as a whole. However, regulation has been widely denied
by blockchain stakeholders, due to the spread opinions, that regulators are ill-equipped
when it comes to proper dealing with the technological basis and benefits.
30
According to Tijan et al. (2019), the novelty of blockchain technology means restraints of
the leading players in the supply chain, the same as regulators to adopt and accept it.
The resulting lack of regulation creates a high level of insecurity because, for example,
smart contracts might be adopted in the SC, but not binding from legal and overregulated
from a political perspective. Mangla et al. (2018) puts governmental and industry policies
in the category of external barriers affecting proper blockchain usage in companies. As
governments classify as entities, which are not directly economically benefiting from sup-
ply chain activities, their intrinsic motivation towards sustainable regulation of blockchain
implementation keeps within limits. While external pressure and support would drive sup-
ply chain organizations to integrate new ideas of enhancements, the absence of these
leaves hurdles for precise technical mechanisms or technological sustainability in gen-
eral. Moreover, Cermeno (2016) argues that blockchains' immutability features collide
with the personal data protection of the European Union policymakers. As per these
regulations, every citizen has the right to have their personal information deleted at any
time from another party’s paper or electronic records and databases.
Mirchandani (2019) adds that blockchain either obtains an exemption clause in a sense
that personal data storage is simply allowed on permissioned blockchains according to
the GDPR ruling, or the definition of deletion under the GDPR is revised. If a data erase
allows moving onto a new block or even creating a forked blockchain may comply. The
same applies to a possible access right restriction with blockchain if it can be classified
as data erase as per European Union regulation. As of yet, there is no clear guidance
on these issues in general, which opens room for interpretation and discussion and re-
sults in uncertainty and risk for supply chain stakeholders. Besides the GDPR ruling,
Fitzgerald (2018) describes several due diligence and disclosure obligations for import-
ers and exporters in the logistics context of the SC. Topics such as data protection, digital
identity and payments may require additional legislation and are therefore of major im-
portance for blockchain implementation.
Furthermore, Cole et al. (2019) propose a set of control mechanisms regulators can have
at blockchain-backed supply chains. An example is the installment of a running auditing
possibility for governments in a sense that the network initiators put in place regulatory
authorities as participants of the chain with specific control access roles. Regulators here
could check data and information flows nearly in real-time, instead of waiting for specific
audit dates, which can be some time after the data transfer events. Grech & Camilleri
(2017) point out what governments expect of new technologies such as BC. It is the
importance of a valid proposition of social value, which arises out of blockchain utilization
in the SC. Policymakers assess the current and future impact of technology, the same
as the relative importance different stakeholders may attribute to a blockchain value
proposition. Various conflicting interests of stakeholders can be an opportunity for some
actors, but also a risk for other ones simultaneously. The correct and fair classification
of these is essential for governments’ motivation and interest in considering blockchain
in their future reflections. On the other hand, this means that information sharing between
31
blockchain innovating actors and regulators recognizes as crucial for a fruitful collabora-
tion.
Additionally, Behnke & Janssen (2020) state that regulatory frameworks between coun-
tries and regions diverge still widely and suggest the development of consortia within
supply chain sectors, supported by institutions from the government in order to be able
to define and enhance standardization. The overdue next step of maturity for BC tech-
nology towards long-term implementations includes interface standardization and data
governance as an important precondition. Similar thoughts come from Baumann & Supe
(2018), who see it as essential that participants in these consortia share knowledge and
foster synergy effects. It intensifies the development of innovation and brings the eco-
system a unique characteristic through harmonization of processes with cost-saving re-
sults. Blemus (2017) mentions regulatory sandboxes, where applicant stakeholders who
are ready to test innovative blockchain-related services, can hand in ideas and best prac-
tice information to authorities in order to achieve coherent action between innovators and
regulators. Although, policymakers have been trying to adopt the most efficient regula-
tion method for blockchain technology through either several soft law regulations or few
hard law legislations its possible holistic impact on the global economy required to rethink
possible requirements constantly.
As an example of government pioneerism serves the country of Liechtenstein, which

provides, according to Dobrauz et al. (2018), proactively a Blockchain-Act to build - very
openly and technology-friendly - a clear framework of blockchain usage in the country.
For supply chain processes, it is especially interesting how the tokenization process,
e.g., the digitalization of data elements, are treated from a legal and regulatory perspec-
tive. Hence, rights of ownership, exhibition rights and copyrights can add into the frame-
work of a new digital economy, which is blockchain-based and can be pictured in trans-
portation chains, selling transactions, contracts and proofs of ownership, respectively.
Kshetri (2018) argues on the example of regulatory changes in pharma supply chains,
about the willingness of swiss authorities to accept Ethereum based smart contracting.
Hence, changes in supply chain data, such as pharma product temperature, is compared
against various regulatory requirements to approve final supply chain shipments if all
required conditions meet properly. Additionally, Mattila (2016) marks that blockchain may
well make some of the old regulatory approaches obsolete because with the introduction
of its unprecedented technological qualities, entirely new regulatory approaches could
make use of it. The more technical the shift in regulatory capabilities is, the more clarity
stakeholders have on the question of what kind of regulatory competence is required by
the government in future decentralized systems.
Another viewpoint is brought up by Filippi & Hassan (2016), who speak about regulation
through code, meaning dictated rules put into a self-fulfilling framework according to pre-
defined rules in order to implement different sets of requests and restrictions. Through
this step, possible widespread adoption of technical regulation maintains, but with the
32
distinction that it is more likely to work within routine situations, rather than edge-case
where demand on more regulatory individuality is evident. Still, this is a tradeoff between
gaining transparency inefficiency, the same as eventually a reduction of freedom and
autonomy of individuals, which implementing actors have to consider when breaking new
grounds here. Further, on, Macedo (2018) adds an example of guiding principles, appli-
cable for non-finance organizations such as supply chains, in order to produce a proper
regulatory framework. The start is a basic understanding of who and what can be a mat-
ter of regulation followed by a clear articulation of the goals regulatory policies have. Of
importance is that there is no overregulation and that cooperation between participants
sets the basis for the level of visibility maintained. Moreover, all information should be
treated equally with the precise aim to ensure that the regulatory requirement is reason-
able and expedient. For international trade, however, on top would include trade facilita-
tion, taxation and supply-chain security.
Neuburger (2018) mentions the possibility of the existence of significant conflicts among
regulators and SC actors on the question of interpreting the dimensioning of blockchain-
based solutions. Therefore, parties should agree sufficiently early on the permission ar-
chitecture to appropriately limit an individual’s ability to make use of network data. War-
ren et al. (2019) identify a lack of impartiality from regulators' perspective and at least
this criticism comes from supply chain actors, who are arguing on regulators' attitudes
towards blockchain technology. The questions if regulators strive against possible lack
of knowledge, which ultimately leads to the unfortunate ruling, has to be answered. Ad-
ditionally, it is debatable if there is a grey zone between no regulation and poor regulation
or not.
33
3 METHODOLOGY
3.1 Introduction
After reviewing the state-of-the-art literature on the topic of DLT in the supply chain as a
next step, the method needs to follow the formulated research questions. Based on
these, I tried to distinguish among several research methods, including thoughts on their
advantages and disadvantages in respect of the novelty of blockchain as a topic, same
as the fact that methods are frequently overlapping each other during research. Yin
(2014) adds that it depends on several conditions if the differentiation of methods is suc-
cessful and reasonable. First, the type of posed research question determines a catego-
rization on which method may be a good fit to put the base of research on. The second
condition consists of the extent of control an investigator has over actual behavioral
events. The third relevant situation focuses on the existence of either historical or con-
temporary events. I have applied Yins’ approach after formulating the research questions
and the key here was that I was successful in being wholly unbiased and without any
preferences on the decision that could be the right choice of method for the empirical
part of the thesis. In the end, I have followed what Gerring (2007) mentions with the
terminology of insight. It defines as the unknown quantity, which helps to elude away
from the deliberate choice of a scientific method. I was looking for insight and found out
things, which eventually led to a classification into an existing research methodology.
Merriam (1988) adds who, during an explanation of qualitative research, argues that
there are instances, particularly in social sciences, where researchers are more inter-
ested in interpretation, discovery and insight than in a rigor testing of hypotheses.
3.2 Choice of method
The methodology used in this thesis is the case study research method, which has its
basis on a framework explained by Yin (2014), who provides a leading piece of scientific
literature, which meets a need in no laboratory social science methodology. What deems
salient here is that according to Yazan (2015), the lack of a comprehensive guide to the
utilization of case study method shows up in a sense that Yin presents the design and
methods of case studies and pushes it as a legitimate methodology to conduct inquiries
into a theoretical recommendation. Yin (2014) classifies the case study as one of the
most challenging methods within social science, also because of the use of multiple
sources of evidence. The full variety of evidence, such as interviews, observations and
documents, helped a lot to find a broad approach to the topic. As case studies are not a
data collection technique, the collection of data can happen in various ways and its ex-
tensiveness of the real-life context made it necessary to include more variables of inter-
est, than data points only, namely complex social and behavioral phenomena, matura-
tion of industries and individual life cycles. Based on the research questions, which seek
to explain some present circumstances, the relevance of a case study as a research
34
instrument was clear without any alternative and most suitable. The question of what
would be the distinctive advantage of doing a case study compared to other empirical
methods was evident during the considerations of the research strategy. The complexity
of explaining some presumed causal links in real-life situations, such as technology im-
plementations, led to the decision to acknowledge the superiority of case studies over
other methods, for example, surveys or experiments.
Moreover, according to Schramm (1971), the central tendency among all types of case
studies is that it tries to examine either a decision or even a set of decisions. In more
detail, questions on decision making, how decisions were implemented and with that
result characterizes case studies notably. This holistic approach to tackle the topic em-
pirically was compelling in the sense that blockchain implementation is mainly innovative
both on the technological but also on the social-cultural aspect and simply needs that
kind of diverse handling. As the literature review resulted in a robust information basis in
order to develop theory, it is, according to Yin (2014), also more a blueprint for the case
study, which helps to realize empirical research and generalize the case study results
accordingly.
Given the conceptual framework of Yin (2014), the case study as an instrument serves
the best when a) the research questions in their substance and form are posed with
“how”, “why” in an explanatory manner; b) contemporary events are examined and c)
little or no control over these events by the investigator. Although according to Yin (2014)
case studies go beyond being types of qualitative research, using a mix of qualitative
and quantitative evidence, I was keener to research a qualitative basis, which goes hand
in hand with Creswell (2007), who recognizes the case study among the array of quali-
tative research options. That is because much of the implications and cross-linking infor-
mation illustrated with certain topics can happen in a descriptive mode in order to en-
lighten several sets of outcomes. Yin (2014) distinguished between single and multiple
case designs. Although, because of the novelty of the blockchain topic in the supply
chain, a single case could represent a significant contribution to knowledge an theory
building because it may represent a typical project among many others in the ecosystem.
The lessons learned and valid information out of the case are assumed to be enough
information about the experiences of an average BC project. Still, this is a risky approach,
as a solid argument in justifying the choice of the case is needed. As evidence from
multiple case studies is often considered more compelling and amble in terms of the
development of theoretical frameworks, I followed a multiple case study with two cases
investigated. The advantage in terms of the two cases is either predicting similar results
or contrasting results but for anticipatable reasons. The analysis, though, is more com-
fortable to conduct because of pattern identification.
Another differentiation, which goes beyond hierarchical stereotypes Yin (2014), gives
when classifying case studies in exploratory cases, descriptive cases and explanatory
cases. Because case studies, as every other research method, can be classified in more
35
than only one of these categories, I would define my thesis as being descriptive, because
patterns, relations and connections are delineated, same as explanatory give the nature
of the cases’ research questions. The proofs and arguments resulting from the case
study findings serve to confirm or deny and extend existing theory. Yin terms this as
analytics generalization where out of state-of-the-art theory statements or propositions
are generated, which then get tested, validated or denied by the case study.
Additionally, in alignment with the study approach, Welch et al. (2011) define explanatory
cases as studies, which use deductive logic to test propositions, appraise and compare
rival explanations and revise existing theories and establish causal relationships. There-
fore, verification of theory is rather targeted than a discovery of complete new theoretical
standpoints. In terms of potential disadvantages case studies can have, Zainal (2007)
addresses, based on Yin (2014), on the one hand, a possible lack of precision and reli-
ability, on the other hand, a low basis of scientific generalization, because the number of
subjects conducted is minimal. Here the goal was to make sure not to allow equivocal
evidence and some biases to affect the findings and conclusions. Moreover, the potential
of theory testing, rather than theory-building, stands as a basis for this thesis. Therefore
the case study findings are getting compared to existing theory in the scientific literature,
same as between each other’s as each of the two cases tackles a different field of block-
chain implementation.
3.3 Case study
In general, according to Yazan (2015), case study methodology has long been an area
in social sciences, which is characterized by wavering, often opposing approaches pro-
vided by methodologists. Its evolution gets prevented because of a lack of full consensus
on design and implementation. Nevertheless, Welch et al. (2011) point out that it is one
of the most frequently used qualitative methods, gaining popularity across various disci-
plines. A reason could be what is mentioned by Noor (2008), who emphasizes the ad-
vantage of case studies, where they can be useful in capturing surfacing and inherent
characteristics of life and happenings within organizations, same as lows and highs of
organizational activity, especially in fast-changing environments. Additionally, Welch pre-
sents also opposing standpoints from Yins’, namely quotations from Eisenhardt (1989),
who has Yin's positivistic view of science in common but differs in the assentation in
which case studies are narrowed in a very early stage of theorizing process, meaning
that case studies are the preferred means of research when it comes to the building of
theory.
Moreover, Yazan (2015) argues about the grounded theory concept followed by Eisen-
hardt at some point, but especially Stake (1995), in which through methodical gathering
and analysis of data, construction of theory happens. That is quite different from the
approach Yin favors, namely, perform data collection, which shows how one particular
existing theory does apply or not apply given the gathered case study data.
36
3.4 Study research design
The decision on how to conduct the research design follows the framework of Yin (2014),
identifies, and establishes the logic of the case study. Its task is to link the collected data
and the drawn conclusions of this data with the initial questions of the study. Further-
more, Frankfort-Nachmias & Nachmias (1992) add that a holistic research design guides
the investigator in the process of accumulating, evaluating and interpreting observations.
It serves as a model of proof allowing the investigator to draw interferences about casual
relations among data that is under investigation. Moreover, Yin (2014) emphasizes
based on Kidder & Judd (1986) that the case study research design is supposed to rep-
resent a set of statements, which is logical and can measure the quality with logical tests.
These logical tests are common to all social science methods, but for cast studies, mainly
they should be applied throughout the whole conduct of the case study, instead of utiliz-
ing them only at the beginning. First, the test of external validity occurs when the research
design conducted and the corresponding case study tactic for this thesis is the use of
replication logic in the multiple case study. That means the theory gets tested by repli-
cating the findings in a second neighborhood where the theory has specified that the
same results should occur. The test of construct validity appears during data collection
and should be met through both establishing a chain of evidence and the use of multiple
sources of evidence. Additionally, during data collection, the test of reliability effectively
if a case study protocol is used and a case study database is built. Finally, in the phase
of data analysis, internal validity is ensured through pattern matching, explanation build-
ing and thematizing of rival explanations.
3.4.1 Study Questions
The case study’s questions are based on the initial research questions of this thesis and
include an in-depth view on the presence of some circumstance or, in other words, how
and why happenings appear. A broader formulation of a question to start with would be:
How blockchain implementation in the supply chain happens in practice. Based on this
question, the case study will aim to answer the following three case study research ques-
tions:
1. How can blockchain solve existing business issues within the supply chain of
companies?
2. What limitations does blockchain technology have if utilized in the supply
chain?
3. Why do legal regulations play a role during blockchain implementation?
3.4.2 Study Propositions
Below several propositions of the case study are listed, which also include potential the-
ory building answers derived from the literature review. They serve as a guide through
the collection and analysis of the case study data. Generally, Yin (2014) strongly advises
37
emphasizing the coding of propositions, as the research questions alone are not suffi-
cient to pilot the case study properly. The study propositions are also the basis for theo-
retical generalization and give a hint on where to look for relevant empirical evidence.
An apparent lack within today's SC systems in terms of traceability of goods reveals

Assad (2018) and Zhao et al. (2019), who, in particular, show insufficiencies and criticize
the shortage of truthful and authentic information. Many scholars illustrate those same
issues as core competencies of blockchain features. In terms of traceability, Aung &
Chang (2014) point out the unique identification of units and transfer information linked
adequately by blockchain. Similarly, Tribis et al. (2018) speak about end-to-end visibility
based on permission levels. Moreover, Westerkamp et al. (2019) emphasize the tokeni-
zation of information, which makes it easier available, while Sodhi (2019) highlights the
blockchain potential to make SC more responsive to trends and more stable in order to
connect supply chain stakeholders. Fisher et al. (2018) praise the possibility of identifi-
cation of defective or grey market components along with the SC. Hence, Chang et al.
(2019) mention the visibility of full tracking activities and refer to the transparent and
cross-fitting information coming from the blockchain ledger, resulting in optimizations of
time schedules, due to the detail level of the data provided.
However, scholars also criticize the feasibility of the blockchain applications rather than
on the technological realization. Aung & Chang (2014) state that compatibility problems
through inconsistencies in captured datasets challenge the correctness of tracing good
flows. Casino et al. (2019) point out that blockchain faces constraints in the ability to
project traceability solutions accurately because of performance issues caused by la-
tency in the verification and confirmation process. Back et al. (2014), who introduce
sidechains for information transfer enhancement, mention some remedial action here.
Hence, it is proposed that:
P1. The use of blockchain technology can trace a flow of goods with a high level of detail
As one of the critical characteristics scholars, mention blockchains attribute of decentral-

ization, which ensures the possibility that data and information can be saved locally from
every network participant. Ray (2018) calls it a new paradigm of how information is ac-
cumulated and communicated, while Anderson (2019) states that redistribution and de-
mocratization of possibilities to participate and cooperate is set in motion. The consum-
mation of information gets facilitated through an automated data transfer protocol, which
according to Korpela et al. (2017), is a good idea but lacks comprehensiveness due to
incompatibilities in data formats used by supply chain stakeholders. Based on Abeyratne
& Monfared (2016), the flow of information is as trustful as data validity gets confirmed
through democratic majority and controlled user access enables fairness. Sanjeev
(2019) emphasizes the high level of granularity of data, especially during audits. Further-
more, Baker (2015) points out that with blockchain usage, supply chain participants are
known, tracked and appropriately certified in order to count as trustworthy owners of
38
information. Moreover, Laaper et al. (2017), therefore, argue on the fact that all parties
within a supply chain have access to the same information, pick up the irreversible char-
acter of blockchain data. Mattila (2016) assumes that stakeholders, which have the belief
of holding immutable records of supply chain data, will deliberately favor blockchain-
based applications, because of massive improvements in data accessibility.
A debatable aspect of information allocation across the blockchain provides Treiblmaier

(2018), who sees the technological configuration as sufficient, but no safety net against
a false choice of recipients of the information. Similar opinions come from Malik et al.
(2019), who denies blockchain the ability to ensure full authenticity of observations within
the SC and therefore show its limits if participants generate false data displays on the
chain. Although Tholen et al. (2019) praise an improvement of data sensitivity through
technological add-ons of the blockchain, such as zero-knowledge proofs, the risk of ex-
posing confidential data restricts equal information levels for participants (Lyons &
Courcelas, 2019).
Hence, it is proposed that:
P2. Blockchain technically ensures a fair distribution of available information amongst

participants of the supply chain
Furthermore, the question of whether blockchain is well-fitting for supply chain processes
requires nuanced answers. The self-execution ability of smart contracting, mentioned by
Kamble et al. (2018) or Ganeriwalla et al. (2018), enables higher levels of trust because
of agreed contract components, for example, materials, payments, data transfers or de-
livery information. Tribis et al. (2018) point out end-to-end visibility for all SC participants
with appropriate permission levels on the chain, same as an enhancement of customer
needs as stakeholders, in terms of enhancement of product knowledge and loyalty
through transparency. Moreover, Hackius & Petersen (2017) emphasize benefits in prod-
uct shelf life and waste reduction for non-usable food products and digitalization through
paperless interaction, which reduces risks of data insecurity through physical loss or ma-
nipulation of documents. Through transparent tracking processes, according to Chang
et al. (2019), frictions can be mitigated not only in the flow of goods but also on flows of
capital and information. As potentially cost-saving, an eradication of the bullwhip effect,
e.g., swings in stock, is mentioned by Blossey et al. (2019) and is achieved through real-
time information of stock movements. When it comes to money loss through grey market
activity, Fisher et al. (2019) point out that blockchain brings the ability to identify such
business practices immediately. Mattila (2016) argues on the possibility to legitimate
complex supplier networks and therefore reach higher bandwidths through globalization,
same as Sodhi (2019) argues that DLT enables higher responsiveness to global trends
in the supply chain.
39
The issue of the need for high computerization, which prevents usage of blockchain in
mainly developing countries, gets picked up by Kshetri (2018) as the main issue for miss-
ing participation of all actors around the globe. The expectation of a fast and nearly real-
time system gets doubted by scholars like Saberi et al. (2019), Tribis et al. (2018),
Hackius & Petersen (2017), as scalability and processing of big data volumes remains a
big issue in today’s blockchain deployment. Behnke & Janssen (2020) argue that the
development of trustworthy consortia within SC sectors, which foster standardization and
synergy effects towards blockchain maturity are often very challenging to achieve, also
because of fraud incidents which are mentioned by scholars like Abeyratne & Monfared
(2016); Tholen et al. (2019). Lastly, Laaper et al. (2017) question the convincement of
the public on the safeness of storage and transmission, putting the acceptance of DLT
as new technology to low levels. Hence, it is proposed that:
P3. Blockchain, at its current stage of technological development, is not a perfect fit to
meet the needs of stakeholders in the supply chain.
On the possibility that blockchain substitutes running systems in the supply chain schol-
ars have differentiated opinions. Treiblmaier (2018) brings up the opportunity to reduce
control structures of centralized databases. Furthermore, Malik et al. (2019); Kshetri
(2018) points out that from a technical standpoint, blockchain can assure objectivity with
a low level of biased data and is adaptable with technology matureness. Tribis et al.
(2018), who emphasize the regulators' opportunity to monitor data movements ade-
quately, point out the regulatory perspective. Another advantage compared to legacy
systems mention Aung & Chang (2014) with blockchains’ characteristics to uniquely
identify data towards a security level enhancement. This data integrity, according to
Abeyratne & Monfared, is characterized by low cost and system harmonization. Kshetri
(2018) adds that the establishment of an errorless permissioned system is easy to im-
plement through the nature of blockchain features.
While Apte & Petrovsky (2016) mark that the need for substantial PoW consensus is not
always preferred, because participants are not used to it in previous centralized data-
bases, Westerkamp et al. (2019) questions blockchains deployment and maintenance
costs especially if the data amounts are high because of trust and transparency stand-
ards. Sarkis et al. (2011) miss an automatized blockchain functionality of proper data
checks, which could lower information asymmetries before pulling data into the ledger.
Furthermore, Tijan et al. (2019) criticize the fact that blockchain does not have a single
underlying standard, which is understood and accepted by a majority, which then leads
to a configuration of lots of difficult standalone concepts and programming intervention.
Likewise, according to Kshetri (2018), regulatory uncertainty in implementation questions
puts blockchain a step behind running legacy systems in the area of SC. Hence, it is
proposed that:
40
P4. Blockchain technology is not ready to fully replace legacy systems in the supply
chain.
In general, scholars like Tseng et al. (2018); Herian (2018); Mirchandani (2019) point out
that decentralization, which is one of the core competences of blockchain technology,
clashes with governmental checks and balances and that governments positioning in this
case varies and needs efficiency. Mangla et al. (2018) recommend more external pres-
sure from regulators, which would result in an enhancement of innovation in blockchain-
based supply chain organizations. That is partially shown by Dobrauz et al. (2018), who
argue that proactiveness by governments occasionally existing and gives the example
of Liechtenstein’s’ Blockchain Act, which among others, regulates tokenization of assets
and information towards the opening of new innovative perspectives within the SC. Fur-
thermore, Grech & Camilleri (2017) state the governments’ expectations towards block-
chain in being a valid proposition of social value when utilized in the supply chain.
Conversely, Herian (2018) discusses that due to blockchain stakeholders opinions’, reg-
ulators are ill-equipped in terms of proper dealing with the technology. Therefore regula-
tory proposals are not appropriate recommendations. Hence, Mangla et al. (2018) deny
regulators the intrinsic motivation to put in place appropriate legislation because eco-
nomic benefits from BC are still not recognized suitably. Although Blemus (2017) men-
tions regulatory sandboxes for testing innovation, he criticizes the lack of best practices
exchange to achieve coherent action between regulators and blockchain innovators.
Behnke & Janssen (2020) see standardization and data governance as missing but, on
the other hand, an important precondition for technological maturity of blockchain in lo-
gistics. Finally, Mirchandani (2019) compares the GDPR and other current governmental
rulings around the world with the blockchain approach, and spots contradiction in the
areas of privacy and immutability of data. Hence it is proposed that:
P5. Governments do not provide sufficient legislation regarding the implementation of

blockchain technology.
3.4.3 Unit of Analysis
After the development of the studies’ research questions, followed by propositions for
theory verification, the third component, according to Yin (2014), is related to the funda-
mental problem of defining what the case is about. As already mentioned, the case is a
multiple case study, and its increase of external validity comes from the data collection
and analysis of two cases, which selection bases on the theoretical assumption that ei-
ther conflicting results in theoretical or similar results in a literal replication could appear.
The vital step in these replication procedures is the development of a theoretical frame-
work. Both cases are not about any abstractions, such as arguments or hypotheses, but
the real-life phenomenon, eg. Projects of blockchain implementation in the supply chain.
41
Although both cases operate in different areas of the supply chain, emphasizing its im-
provement in different segments, both have in common that blockchain as technology
amends supply chain processes to enhance stakeholder satisfaction.
The first case is the “Blockchain Initiative Logistik” that was initiated by the consultancy
company EY, to bring leading Austrian logistics companies together. This new form of
collaboration can classify as a consortium, where the money is raised and collected. The
aim is to reach process enhancement with the help of blockchain technology. In particu-
lar, the improvement was the digitalization of supply chain documents. The outcomes of
the initiative should, furthermore, serve as fruitful insights for future cooperation and best
practices. The exchange of information benefits to the commonweal of logistics in Austria
and pushes barriers for future innovative blockchain ideas in the supply chain. The sec-
ond case is the “Rotharium” project that was founded by the blockchain startup Crypto
Future GmbH. Their goal was to build a gate to the blockchain and enable the integration
of apps into the blockchain ecosystem. Their first use case was supply chain-related,
meaning a tracing application based on blockchain, followed by a tokenized medium of
exchange for more straightforward payment execution in supply chain ecosystems.
3.4.4 Case Study Protocol
The necessity of conducting a case study protocol is clearly emphasized by Yin (2014),
who illustrates it as essential and reliability increasing, especially if a multiple case study
is the selected empirical method. Hence, the protocol means more than a questionnaire
or instrument, as I contain procedures and general rules to be followed.
Section Content Case Study: Block- Content Case Study:

chaininitiative Logistik Rotharium
Overview • A consortium of Blockchain Consult- • Startup company builds tracing ap-

ing company, leading Austrian logis- plication for food supply chain
tics companies and IT firms • General mission is the facilitation
• General mission is the digitalization of of goods traceability for customers
supply chain documents and supply chain actors
• Background information before inves- • Background information before in-
tigating: press releases and internet vestigating: press releases and in-
research on user forums, blogs and ternet research on user forums,
similar blogs and similar
Data collection & • The everyday situation on the field • The everyday situation on the field
field procedures distorted by restriction of COVID19 distorted by restriction of COVID19
• Interviews and data collection sched- • Interviews and data collection
uled for Q2 2020 scheduled for Q2 2020
• Data collection plan see section ap- • Data collection plan see section ap-
pendix 3 pendix 4
42
• Recorded guided online interviews in- • Recorded guided online interviews

stead of personal communication in- instead of personal communication
cluding notes including notes
• Preparation before interviews with in- • Preparation before interviews with
ternet-based project and product re- internet-based project and product
search research
• Collection of internal memos • Data collection plan see section ap-
• Collection of pp-presentations pendix 4
• Collection of letter of intent • Collection of whitepaper information
• Collection of product videos
• Collection of meeting minutes
• Review of the product (app) in real-
life context at a grocery store
Case study ques- • See section 3.4.1 • See section 3.4.1

tions
Guidance • Interviews conducted in german • Interviews conducted in german

• No transcription of interview data • No transcription of interview data
• Analytic and structured summary of • Analytic and structured summary of
recordings and documents in English recordings and documents in Eng-
lish
TABLE 3: CASE STUDY PROTOCOL
3.4.5 Data Collection and Interpretation
The process of data collection, especially having the case study as an empirical method,
is a very tedious one. The goal for this thesis is, following Yin (2014), to collect enough
data so that there is confirmatory evidence for the main topics covered, which means
that at least two sources of evidence are included. Moreover, there is an attempt to in-
clude investigations on rival propositions. As the basis, I have chosen guided interviews
with included people in both projects, conducted in german. The implication and theoret-
ical assumption are that they represent expert knowledge and can give fruitful opinions
to outline proper and meaningful case study results. Of significant importance is the effort
to find a good breakdown of interviewees, who have different views and angles on the
topic and, therefore, could provide differentiated answers. A positive side effect was that
interviewees suggested other persons for interviewing, as well as other sources for evi-
dence to incorporate. Overall for one case, three interviews, for the other case, four in-
terviews were done. The respective interview guideline can be found in Appendix 2. Be-
sides the interviews, various other documents get utilized. Examples are presentations,
whitepapers, internal memos, videos, meeting minutes and a self-testing of an applica-
tion in a real-life environment. Although the plan was to include direct observations,
higher power in the form of the COVID19 virus made this virtually impossible. The ap-
proach to corroborate interview data with other sources collected enhanced the signifi-
cance of the case results. Additionally, I have followed the recommendation of Yin (2014)
43
in terms of interpretation of interview recordings. As Yin does not recommend transcrib-

ing and excerpting the interview, because he misses benefits compared to the effort in-
put, I have done structured summaries in English.
As a precondition for the proper interpretation of case study findings counts the estab-
lishment of a chain of evidence. Based on Yin (2014), I, therefore, tried to work backward
with a statement of a hypothetical conclusion for the topic of blockchain usage in the
supply chain. Afterward, there is the identification of specific evidence and data that
would support such a conclusion. Then some protocol questions were elaborated, which
then led to the starting point of case study questions. That helped to understand the
chain of evidence in terms of how the components are linked together. On the topic of
data interpretation, I have followed Yin (2014) on general analytic strategies again. The
first one is a comparison of interpreted case data with theoretical propositions, which led
to the examination of the case study, which is the essential technique used in the thesis.
The other one is to postulate rival explanations and examine them in contrast to the initial
propositions. Given the fact that the case was done explanatory, the technique of expla-
nation building gets used. Here in order to analyze the data, explanations about the case
are formulated and again compared to initial statements.
44
4 CASE STUDY: BLOCKCHAININITIATIVE LOGISTIK

The consultancy company EY initiated the founding of the Blockchain Initiative Logistik
(BIL) and its first use case is the digitalization of freight documents and its illustration on
a blockchain. This solution should help to automatize processes and save costs. The
starting participants are leading Austrian logistics companies such as DB Schenker or
Walter Group, together with the associations GS1, Bundesvereinigung Logistik (BVL) or
the IT company EDITEL. The project was an awarding winner of the futurezone award
in 2019 in the category Blockchain. The following subchapters will summarize the four
recordings and translate them from German into English. Moreover, the case documen-
tation consolidates in a sense that core statements of the case study tenor get clear.
4.1 Interview Matthias Leibetseder (WALTER Group)
Leibetseder, who is Innovation Manager at the Austrian company Walter Group, which
in terms of revenue, is the second-largest logistics firm in Austria, points out that the
company engages with blockchain from a research aspect. That means blockchain is
seen as a technology considerable when it comes to an estimation of how it could en-
hance supply chain processes. The path of cooperative work of logistics companies with
blockchain in this project was found through extensive communication on several ques-
tions. The participants of the initiative asked themselves where potential use cases would
arise and played through several scenarios where information overlap between parties,
who share goods or data, happens. The premise was that no share of own confidential
documentation happens.
Even if the technology may look disruptive for several topics, it is essential to examine if
and to what extent it makes sense to use it. In general, Leibetseder sees blockchain as
a complementary system, therefore more as an addition to established systems than
utter disruption. Especially the use case with the Ethereum based digitalization freight
documents shows, in his opinion, that blockchain brings the proof of entitlement because
the main goal here is to illustrate freight related documents as digital service on a de-
centralized ledger. With this approach, the main problem within today’s logistics gets
addressed, namely that there is no system harmonization in the supply chain. As every
company and sub providers, eg. GPS providers have their system solutions in various
fields of application.
Hence, the collaboration project with their competitor DB Schenker within the initiative
has the main goal to set an industry standard, which results in a reduction of complexity
of various interfaces connecting system programs. That helps supply chain companies,
although being in a rivalry relationship, a step towards bettering their processes, facilitate
the on and off-boarding of the particular platforms. In a second phase, the initiative will
focus on increasing the participant’s number to image a larger number of logistics pro-
cesses on the blockchain. It then should show relevance for the market overall, as the
45
European Union has commissioned a technical evaluation of the deployment of digital

waybills on the blockchain. As a challenge for the project, Leibetseder emphasizes that
both Walter Group and DB Schenker have a very diverse system landscape and different
standard processes in place. The implementation of one tool, which serves as a layer on
the surface, is described as hard to assemble. Very positive feedback there is on the
collaboration and information swap between participants of the initiative. The openness
to share process steps without obvious withhold of information helped the project to grow
towards participants' satisfaction.
As core strengths of the blockchain within the area of supply chain Leibetseder see the
decentralization and immutability of data. He emphasizes the suitability of entries in the
ledger that means the possibility to gain exact knowledge which the user has done en-
tries and when this input happened. Especially the tokenization of information within the
process of digitalization of the waybill, which enables backtracking of at least the devices,
which are used during a goods flow, is very helpful. That is because nowadays, in a
paper process, it is not possible to force all participants of the chain to register and sign
the waybills in a proper way, which results in information gaps. Therefore, blockchain is
a way of enhancing transparency and data security. Although he is not a technician,
coming more from the business side into the project, the formation of a means of security
is praised and also the accomplishment to restrict mutual visibility of information. That is
important because it is difficult to find a superordinate partner who is trusted by all logis-
tics parties. He argues that competition plays a crucial role and that logistic companies
do not want that data to circulate between themselves because the customer’s base is
the same, and the fight for customer retention is hard enough.
Still, as one of the most significant weaknesses of the supply chain, especially in the
area of land logistics, according to Leibetseder, is the level of technology used in daily
work, which is far behind of being state-of-the-art. That is shown by lots of paper-based
processes, with, on the one hand, uncontrolled growth of this form of data, on the other
hand, no regulatory frameworks behind it. The standard waybill, which related to the
handling of road transportation, can be classified more as a recommendation than a le-
gally binding document. Moreover, he sees it questionable if truck drivers, who have an
average age of almost sixty years, can be part of a new digital era and are keen and
knowledge equipped enough to use apps in their daily business activities.
The bright, unique selling proposition (USP) of the working product which emerges out
of the initiative for Leibetseder is that, on the one hand, clear cost savings in terms of
processes can be achieved, on the other hand, an acceleration of internal processes. As
the today's process of settlement of waybills into payment is manual and time lagging,
because the paper needs to be transported, scanned and accounted accordingly, the
new digital solution with the blockchain-based electronic waybill ensured more transpar-
ency and smoother execution of payment as all information on the chain is available near
46
real-time. If executed with fully automatized over smart contracts, a potential cost saving
of several full-time equivalents (FTE) is possible.
Besides the digitalization of waybills, blockchain can help in other areas of the supply
chain too. Leibetseder mentions other documentation that gets collected during trans-
portation of goods, for example, information on insurance-related damage cases, ex-
change of pictures of goods or the whole communication between customers, truck driv-
ers and carrier companies. These types of data, same as custom related documentation,
could be necessary information included in a decentralized platform. There is also an-
other blockchain-based project running at WALTER Group, namely a loyalty points sys-
tem for truck drivers. That motivates the participants of this program to manage several
steps in the application. For example, photographing the waybill and settle the infor-
mation on the blockchain.
Potential for improvement during the project Leibetseder sees in the act of finding mutual
consent for the definition of standard processes. The more stakeholders involved, the
more difficult and slow progress can happen. He suggests that one or two logistics com-
panies internally find potential demand for a specific solution, and this solution then
serves as a blueprint for further onboarded stakeholders on the project. The level of
digitalization in the supply chain, even with big players in the industry, is described as
quite sobering. Therefore, the understanding that even a relatively smaller project of doc-
ument digitalization in a goods loading process has a lot of fine-grained steps and po-
tential information to be processed accordingly is crucial to success. The prototype of
the product was amended quite roughly, including several interactions in product devel-
opment. It was because developers on the blockchain side did not have enough logistics
background knowledge in order to gain enough initial understanding of the subject mat-
ter.
Leibetseder does not see any apparent negative aspects of blockchain integration in the
supply chain from a functionality perspective. Still, he emphasizes again difficulties of
the implementation of highly sophisticated technology as blockchain is in a not fully tech-
nologically developed supply chain ecosystem. That is because Excel still represents the
basis of daily work and the foundation of many companies' enterprise resource planning
(ERP) systems. In order to make it possible to work with blockchain nodes, the model
needs to simplify many process steps and work on the enhancement of acceptance with
supply chain participants. Moreover, a consideration of the costs of a running blockchain
system compared to benefits is a topic to occupy with properly. A transparent calculation
is possible because blockchain service providers can easily show in much detail cost-
benefit ratios on use cases. As the Walter group runs the node, which controls the billing
process of the blockchain-based e-CMR by themselves, steering of its level of usage
and costs is easily possible.
47
In terms of collaboration, Leibetseder points out, that with governmental institutions, such
as various project-related ministries, there were attempts to find adequate contact per-
sons for a further interchange of information in the fields of e-CMR and technological
innovation. It was described as arduous, especially if political administration changes
come up, as Austria experienced during summer 2019. The result is a replacement of
people and regulators in charge represents a hurdle towards coherent cooperation with
rule-makers. Although it is essential to step in as early as possible and gain a foothold
with mutual interaction, it is not clear if valid statements on governmental perception,
especially with the EU can be expected. The ratification of legal binding rules takes up
to thirty months when it comes to the digitalization of freight papers. That is, at least
currently, untouched by the fact if implementations happen with centralized or decentral-
ized solutions. The participants of the initiative rely on local juristic decisions whether a
digital waybill is legal and accepted, instead of having clear superordinate directives.
Hence, Leibetseder criticizes that it is challenging to find investing partners and people
financially involved if regulation is not formulated correctly and does not ensures legal
security. Furthermore, in order to be satisfied with the regulatory collaboration, he would
expect transparent role allocation in the governmental institutions, same as open com-
munication of the entire agenda topic, which is on the desks of governmental decision-
makers. Especially in times of crisis as COVID19, a clear need for digitalization, because
of asocial and distancing behavior in traditional communication, should encourage reg-
ulators to formulate proper rulings. There is no fitting hedge against potential risks within
digitalization with blockchain at the moment, the only way to be on the safer side is to
digitalize, but at the same time also keep the paper in a deposition for audit purposes in
the future.
4.2 Interview Michael Schramm (EY)
Schramm is the initiator of the project leads the blockchain competence center for the
management consulting company EY. Their goal is to support companies in terms of
digital transformation. Here blockchain plays a big role and has relevance, not that much
in internal improvements, but especially in an enhancement in transaction and commu-
nication with other stakeholders in their ecosystem. Schramm points out that blockchain
can either be seen as an addition to existing systems but also be a complete disruption,
dependent on the case of application. The additive character shows when used as a
technological tool for the improvement of partial aspects of a problem. The premise here
is that its utilization brings benefits over existing IT remedies. Examples are its features
to protocol events or to create tokens, which act as containers in data transfers. The
creation of disruption happens when utterly new business models come up. An example
from the logistics field is the insurance of container vessels. Insurance companies can
cover not only blanket amounts insured but include various means of data into the insur-
ance base calculations to tailor the premiums accordingly. These data can be information
about location, weather and other details copied into the ledger in a secure, undeniable
48
and not debatable way. This opens up creativity when conducting price models, which
can change in real-time when taking account of proper risk allocation during shipments.
As of major importance for technology development Schramm sees the public blockchain
and prefers it to be private or consortium chain solutions, which are, in his view, only
short-dated workarounds. The existence of distributed applications, which are running
by themselves backed up by blockchain, ensure new ways of how the economy works,
without the need for third-party involvement towards a systematic performance without
intermediaries. The more companies enlist to these kinds of solutions, the faster and
easier the adoption of new business models can happen.
The initiative Schramm initiated has the goal to spot how different companies can work
together. That includes logistic companies and also firms, for example GS1, which de-
velop and maintain global standards for business communication and act as multiplica-
tors for standardization and distribution. The cost allocation for the project happens on a
joint basis and the product and the property belong to all participating parties. The digi-
talization of the waybill serves as a valid document of several governmental stakehold-
ers, as regulators or customs. That is important because these institutions are seeking
for proper levels of security and replicability. The establishment of a market standard is
one-step towards widespread recognition amongst stakeholders. As challenging, he
sees less in the implementation of the technology itself, because he defines this an easy
to achieve, more on the organizational part. As within such a project, there is not a single
customer where a single problem gets tackled, but lots of diverse similar problem formu-
lations and solution approaches, the crucial part is to find a correct setup to satisfy all
involved parties. Other challenges are on the legal side of the project. That is because;
there are several statutory principles on various levels of legislation. Institutions like the
United Nations, European Union and lastly, local countries handle and ratify the digitali-
zation of waybills in different, sometimes contrary ways.
Schramm brings up traceability as an important topic within the supply chain and em-
phasizes it as one of the core strengths blockchain as a technology has. The question
when several steps in the chain where done and who exactly performed actions is an
important one for supply chain actors. That is because transparency is needed either in
terms of costs, risk allocation, adherence to schedules and similar. Furthermore, compli-
ance reasons in order to meet regulatory observance could be one of the reasons. The
obligation to produce undeniable proof amongst several parties brings blockchain into
the position of being a fair fact-based arbitrator between participants of the chain, who
naturally act driven by their diverse interests. Moreover, the process of archiving and
findability of documentation is especially relevant when it comes to audits by governmen-
tal regulators and easily facilitated by having blockchain solutions. As a central point,
Schramm refers to the additional level of trust, brought by blockchain into the digitaliza-
tion process. The process of digitalization, which often happens with other non-block-
49
chain based centralized systems, lacks an adequate level of reliance, especially if par-
ticipants do not know each other. At the same time, he identifies digitalization projects
as a catalyst for enhancements in established supply chain processes, which are manual
and characterized through human mistakes, media breaks, different system landscapes
or incompatibilities. Blockchain eliminates most of these kinds of steps towards a signif-
icant reduction of process costs, which marks the clear USP of the initiatives’ product.
The project of the digital waybill also offers the possibility to reduce conflicts in terms of
trustfulness of documents, the validity of signatures and similar disputes amongst supply
chain participants. Several conflictual examples are manual changes of handwritten fig-
ures and signatures on documents and the question when exactly these changes hap-
pened on these pieces of paper. Therefore, validity achieved through automated man-
agement of damage and losses, furthermore the electronic proof of delivery in real-time,
and especially crucial for companies who need to prove this kind of information for com-
pliance reasons because of stock exchange listings. Other beneficiary participants are
customs or finance departments of countries, who are interested in the correct transfer
of taxes. Although an eventual appeal of some documentation happens rarely, in case
of controversy, the solid proof of correct documentation helps to save lots of money in a
possible legal battle.
The next steps within the e-CMR project are the integration of other logistics partners
and then on a long-term perspective, also other external stakeholders, such as regula-
tors and end customers. That means it shall be possible to allow these groups to check
data and information movements on the chain independently. As a crucial task here, he
emphasizes to bring the proof in a comprehensible way and to show with proper visual-
ization that blockchain entries are correct, especially to participants who are skeptical on
its benefits and validity. As a future vision, but still not established nowadays, Schramm
speaks about the blockchain being the basis of one solely system. Now blockchain is
used as an additional mechanism to enable an interchange of information of various
heterogeneous systems towards a frequent basis of trust. As a formula for success, he
adds that whenever blockchain is added like a puzzle piece to existing or desired busi-
ness applications, instead of being put into the center of the considerations, projects can
focus on the business problem itself and have higher chances to be thriving ones.
The product prototype of the blockchain-based e-CMR is running on a hybrid version of

an Ethereum blockchain. Schramm formulates the ambition to use a public blockchain
but points out that scalability, costs and especially level of privacy are not sufficient
enough with the progress of technology Ethereum has today. With upcoming updates,
which would include zero-knowledge proofs and lower costs, a move to a fully public
blockchain is a possibility. That would reduce the level of complexity and boost the pos-
sibility to address further participants, who then could easier attend the future possible
market standard.
50
Schramm adds some negative aspects and a possible deal-breaker for blockchain im-
plementation in the supply chain in a sense that blockchains' ability to show flows trans-
parently drowns at the same time the possibility to hide unwanted information. He admits,
based on the experiences within the initiative's project, that not every participant is keen
to live with the level of transparency blockchain offers and describes it as a balancing
act to find the proper middle way, paired with a tailored approach of authorization levels
for participants. In terms of data security, there is a need to distinguish between private
and public blockchains. The lower the number of nodes, the higher the chance of fraud-
ulent activity. Therefore, he characterizes private blockchains not as tamper-proof
enough and sees especially big public blockchains as a premise for data security.
According to Schramm, the initiatives’ project required short and long-term contact with
governmental institutions. Widely detached from the topic of blockchain, a clarification
with regulators was needed on questions if paperless documentation is permitted or not.
The long-term level of collaboration includes blockchain in the future and goes in the
direction of incorporating regulators in order to give them an integrative view of the block-
chain. As examples, he brings the possibility to equip financial authorities with authori-
zations to check if tax payments on transportation activities transfer correctly. Other ex-
amples are checks on toll systems and weather trucks conform to rules or not. Moreover,
companies as Brau Union, which rely on detailed information, wherein the supply flow
goods locates, could be using blockchain in a customized way to maintain their tax re-
portings and due dates automatically. That is how to fit precisely the demands of gov-
ernmental institutions and create a valuable interface towards authorities.
Furthermore, Schramm compares Austria to other European countries, like Estonia,

Georgia or Switzerland, which are far in advance in terms of blockchain understanding,
knowledge and proactiveness. Although there are minor initiatives and punctual ideas in
Austrian institutions about blockchain implementation and research, the topic is still pre-
sent and far off widespread usage. In terms of privacy regulations, according to
Schramm, the GDPR contradicts with blockchains' privacy features. He marks it as very
important to ensure that blockchain is used correctly in terms of design and architecture.
Hence, it is important not to save any personal data on the ledger, because retrospective
deletions are not possible without being obvious. Additionally, he mentions smart con-
tracts, which from a legal standpoint, are not binding, although the wording may suggest
that. However, if automatic running functionalities are implemented, they could be inter-
preted as such contracts under the premise that an accountable legal vehicle is defined,
which is legally liable and responsible for a particular action. Therefore, he sees the im-
plementation of smart contracting as still not distinct enough to be adopted legally ac-
cepted by the mainstream.
51
4.3 Interview Gerald Gregori (BVL)
Gregori, who acts as co-founder and external logistics consultant within the initiative,
represents, at the same time, the interests of the national association of logistics in Aus-
tria. From his point of view, blockchain has an overrated role in the supply chain, because
of the hype created about possible groundbreaking features of the technology. He is
thoroughly skeptical and defines blockchain as a vehicle to promote digitalization in the
SC. If blockchain utilized within its full potentials, including smart contracts, then it could
have huge impacts on the area of logistics. Now Gregori spots a fundamental misunder-
standing because people see blockchain as a substitute for electronic data interchange
(EDI) and cloud services. He denies that kind of view as blockchain implies the use of
both technologies and brings several attributes, such as security, dislocation and trace-
ability, as additional features layer into legacy technologies.
On top of that, he states that many solutions, which have attributed to the blockchain,
could also be solved by other existing technologies. Furthermore, he does not define
blockchain as disruptive in the area of the supply chain because blockchain needs exist-
ing requirements for business processes and standardized information with electronic
messages to make it usable. Hence, this can be one of the reasons for being not a
coincidence that blockchain forces through very slowly in the logistics and SCM, because
standardization is more important than additional features. He defines blockchain as a
technology with features and not as a standard, which shows how to implement pro-
cesses practically. As long as there is no common language and codification valid for all
supply chain participants, blockchain cannot help, because its data input lacks proper
standardization.
The idea of the initiative, according to Gregori, was to find out what blockchain solutions
can offer concretely for the supply chain. For him, the electronic waybill is a meaningful
utilization of blockchain technology because after he critically reviewed the protocol of e-
CMR from 2008, he recognized that all the requirements for a digital waybill require fea-
tures, which represent blockchains’ core competencies such as data certainty, traceabil-
ity and visibility of changes. Especially holistic data management in the supply chain gets
established with the help of blockchain technology. Gregori mentions the supply chain
operations reference model (SCOR), which includes payment and goods, also flows the
information flow. This information flow can be massively enhanced with the stated block-
chain features, so long as the business models elaborate properly, the right partners are
included and blockchain is used expediently. A bulk solution where blockchain provides
the technological basis is the conjunction of smart contracting with vendor-managed in-
ventory (VMI). Where VMI is the solution for the goods flow, blockchain enhances infor-
mation sharing and payments through tokens and therefore makes full digitalization pos-
sible.
52
Gregori adds that that, especially paper documentation, but also information flows overall
in the SC lack consistency and data quality. That is because manual or semi-manual
documentation goes along with possible mistakes in entering data. Here he adds that
the use of blockchain forces actors to switch to standardized digital solutions such as
electronic delivery notes, waybills, confirmations and similar. He sees transparency as
positive but mentions that this kind of transparency is steered in a way that separate
participants should exactly see into these kinds of data, which are of relevance for them.
Here the supply chain sector is exceptionally restrictive when it comes to unwanted data
share amongst participants, such as competitors. If there would be too much transpar-
ency supply, chain actors usually very rapidly close the door for such technology. Be-
sides digital documentation, Gregori sees blockchain as a factor of improvement in the
area of product piracy prevention, namely whenever it is vital to verify the correctness
and validity of units. Still, the significance of a labeled tag, which includes information
based on the blockchain, is only valid when it is ensured that there was no manipulation
in tagging particular units.
On the topic of regulation, Gregori adds that a clear framework of digitalization within
supply chain documentation misses locally, and the execution of binding rules is not es-
tablished in a way that regulators understand the issue adequately. Moreover, the split
of responsibilities if not always clear when it comes to innovative business models. That
is not precisely the case for blockchain implementation, but in general for new kinds of
innovation.
4.4 Interview Andrea Plöchl-Krejci (EY)
Plöchl-Krejci is leading the Logistics Technology Transformation department at EY and

handles the project as the supply chain expert from the consulting side at EY. She char-
acterizes blockchain as an exciting technology for the supply chain, primarily because
due to the variety of involved parties, who usually do not know each other. This fact
makes a possible usage of blockchain evident and exciting to explore. Blockchain, for
her, is a complement to an existing system landscape but has, at some point, disruptive
character because in future manual steps within processes will become obsolete. A com-
plete replacement of current ERP systems through blockchain is not realistic. In her opin-
ion, it is crucial to impart information to companies on blockchain being an existing alter-
native solution, namely in cases where it adds up and brings real enhancements and ads
that this is not the case for many topics in the supply chain. The initiatives' primary goal
with the waybill digitalization project is to better the degree of automatization in a process
which is labeled as being very manual, painstaking for participants on the chain, prone
to error and open for manipulations.
Furthermore, the initiatives’ project showed that supply chain actors, who entered this
new field of technology, were confronted with lots of open questions, with no existing use
case or best practice approaches. This field of unknown provides several possibilities for
53
paths to go but is, in general, tackled very collaborative in smaller working groups. Plöchl-
Krejci sees it as a novelty that competitors in the supply chain openly discuss their pro-
cesses for the sake of progress. Although information exchange is not always possible
to a considerable extent, because of cartel law, there is no refused permission of block-
chain because of antitrust law. Moreover, blockchain can act supportive, as the supply
chain will face many changes in the future, mainly because of climate regulations, which
will require higher levels of cooperation amongst supply chain actors in order to make
more efficient use of capacities. Additionally, Plöchl-Krejci adds that in the brainstorming
process for the initiatives’ use case, other possible blockchain-based supply chain use-
cases were in discussion. These are track and trace applications, solutions for the
transport of sensitive goods with IoT sensors, incentivization of truck drivers, food tracing
or load carrier management. These use-cases bring improvements not only to internal
supply chain stakeholders but also to external ones, for example, customers. It ensures
a more effective end-to-end supply chain. The benefits are trust-building with a basis of
transparency and data security.
Plöchl-Krejci emphasizes several benefits blockchain can bring to the supply chain.
These are the possibilities to reduce manipulation and enhance data security, especially
in environments where several business participants do not trust each other sufficiently
or even do not know each other. That is common practice in the supply chain, because
of possible long chains of people, the features of blockchain can tackle the limitations of
the supply chain accordingly. Additionally, more limitations, such as data inconsistencies
or manual gaps in automatized processes, foster data errors. With blockchain in place,
the correct flow of supply chain data, paired with information coming from sensors via
IoT, also helps within customs-related topics, for example, to estimate relevant bench-
marks figures and span a proper safety net for risk reduction. Another example comes
from the field of insurance companies, who react very briefly when it comes to changes
within real-time data and therefore, adaptations in the products deem necessary. This
trusted partnership between insurance companies and end customers gets even
stronger because customers can be sure that based on the given data, the adaptation of
their policies happens in their full interest based on external happenings.
In general, Plöchl-Krejci sees room for improvement when implementing innovative busi-
ness models. On the technological side, she points out that there is no consistent stand-
ard that is widely used. On the practical side, it is difficult to drive such projects forward
if there are no clear legal and regulatory terms that need to be followed. As one of the
lessons learned out of the initiative, she sees the approach of creating a product, which
may not be instantly perfect, but gives the basis to work on it towards market readiness.
That is contradictory to the approach of tedious discussions through theoretical frame-
works on how blockchain could be useful. The question of how supply chain companies
determine whether blockchain could be useful or not, Plöchl-Krejci answers with a refer-
ral to the Gardner Hype Cycle and is relieved that common opinions of blockchain being
able to displace every other technology are not valid anymore. The critical step here is
54
to find an appropriate business case first where blockchain can play out its strengths.
Frequently decision-makers in companies want to learn more about new kinds of tech-
nology and out of that interest, further implementation steps arise. Hence, she does not
see blockchain features creating unfortunate effects on the supply chain processes. The
features that blockchain offers customize according to predefined permissions.
On the regulatory topic, Plöchl-Krejci states that in the first step, issues with regulators
have not much to do with any technological aspects, meaning that regulators are not
primarily interested in how digitalization is achievable, but more if and what level of digi-
talization is legally allowed and officially accepted. Therefore, independently if blockchain
or any other technology gets used as a driver for innovative business models, it is not a
regulator's responsibility to expose himself in particular with technological details. In a
second step, this could change, namely, if rule makers decide that particular issues re-
quire particular features and if blockchain illustrates as the framework, which fits the best,
then more detailed guidelines, would emerge. The waybill digitalization project required
collaboration with the Austrian governmental departments of climate & innovation and
ministry of finance. Here there are working groups on the enhancement of proactive par-
ticipation within the data transfers on the chain. Here authorities can benefit because of
automatized data integrity, which shows through viewable changes in the data structure
and eradicates the possibility of manual entries. Plöchl-Krejci questions if authorities
nowadays are ready and equipped enough in terms of political will. The next step towards
the incorporation of blockchain-based solutions into their processes and acceptance of
these from a juristic standpoint is still outstanding.
4.5 Documentation
4.5.1 Internal Memo
An internal memo showed results out of a Kick Off-Meeting, which took place end of
2018. The participants of the event, which was called Blockchain Consortium for
Transport & Logistics, attended because the fundamental idea is to lower the entry bar-
rier for new technology and establish together with market players results, which would
be noticeably more challenging to accomplish all alone. Several Austrian logistics com-
panies, EY as an organization, a research team of the university of economics, IT com-
panies and corporations across various industries who are interested in enhancing their
supply chain got invited to brainstorm on possibilities and fetch a small piece of funds
and know-how in order to profit from a bigger collective project which gets maybe also
governmental funded. The paper promises coordinated cooperation amongst partici-
pants of the supply chain, which creates synergy effects and possible blockchain use
cases are of great utility as soon as collaboration and automatization amongst partner is
established. Whoever decides to participate at the consortium contributes partially to the
costs and can expect co-creation and complete rights of use on a pilot product, its source
code and documentation. The participants can send functional or technical experts in
55
terms of content and for technological expertise transfer. The outcome can bring a value
of ten times the investment volume.
The suitability in terms of synergy and cooperation gets examined and after brainstorm-
ing, the following five use cases identify as relevant to work on further in smaller groups
• Automatized contracting up to invoicing/payment

• Digitalization of freight documents
• Management of load carriers
• A decentralized marketplace transport platform
• Track & Trace
After every team presented, there was voting, which decided on the digitalization project
to be the use case of choice.
4.5.2 PowerPoint Presentation
The content of a PowerPoint presentation from EY outlines in detail how the initiatives’
project schedules and how the information flow in the e-CMR product exactly looks.
Moreover, further steps towards widespread blockchain usage in the supply chain are
targeted. First, a recognition of a significant market happened, as carriage of goods will
slow growth steadily for the next decades and almost all trans-border movements in-
cluded paper-based documentation. The paper-based documentation is of high rele-
vance for customs, invoicing, taxes and other authorities, but their handling is often not
professional enough as mistakes happen, which result is less data quality and integrity.
Furthermore, a CMR costs approximately four euros per piece, including shipping and
activation, hence the accomplishment of enormous cost savings through digitalization is
possible. The platform includes core participants, such as shippers, loading agents and
haulers who simultaneously act as holsters of the platform. They interact with end-to-end
participants, such as receivers, drivers, customers or authorities, through an application
directly. Furthermore, service contractors, such as insurance companies, banks or lo-
gistic service providers, can make use of the platform for the collection of tailored infor-
mation. Lastly, IT companies provide the software development and enhancement on
functional features of the application.
A blockchain-based e-CMR contains various attributes and features. There is a unique

CMR number, which marks an identification for the sender and receiver. Furthermore,
there is textual information on every step of the goods transport, including timestamp,
changelog and a possibility to add specific comments or report damages. Moreover,
there is information about the steps of the chain. Examples are place and date of the
takeover, place of delivery, attachments, instructions and participants. The document, in
the end, is digitally signed and then marked as completed. The technical architecture is
Ethereum based and requires every participant to run a blockchain node in a private
blockchain environment, which secures metadata of the transactions in order to keep
56
data integrity. The validators are participants in the private environment of the blockchain
and the data storage gets separated between each participant for the sake of data pri-
vacy. Furthermore, there is a notary service included wherever a private blockchain node
is running. A public blockchain validates the data within this notary service for proper
compliance with external market participants. Here there are neutral validators among
the public blockchain, which is a trust-building factor.
After the finish of phase one, which included the pilot product and first testing, in 2020,
scalability and product maturity is on the bucket list and the participants' number should
be expanded. Phase three in 2021 should then herald commercial operations.
4.5.3 Letter of intent
The letter of intent of the project overall includes the formulation of several goals such
as reduction of process costs, facilitation and enhancement of data access, exact proto-
cols of entry changes, electronic proof-of-delivery and accessible archiving functions. It
should be reached with DLT in which transparency, security and protection against for-
gery is in focus. Furthermore, there is the aim to establish a decentralized commercial
platform, which is prosecuted by pioneering logistic companies and made available for
other manufacturing companies, forwarders or carriers or insurance companies for the
handling of damage claims.
Equivalent to that, one of the involved logistics companies includes in its letter of intent
the importance of spreading digitalization amongst as many market participants as pos-
sible. Relevant here is that there is compatibility with EU regulations hand in hand with
process complexity reduction and trust foundation. To facilitate the formulation of pos-
sible use cases, the approach to tackle as a consortium with knowledge transfer should
bring better project results. Goals for a more extended period are cost reduction per
transaction, tamper-proof, reduction of erroneous shipments, continuous access to doc-
uments for all participants and reduction of human capital resources. Other benefits apart
from the product-related ones are an enlargement of IT Knowledge through cooperation,
technological edge compared to the competition and positive employer branding in the
eyes of talents through the approach of innovative business models.
57
5 CASE STUDY: ROTHARIUM

The start of Rotharium was initiated by the blockchain startup Crypto Future GmbH at
the beginning of 2017. After some finance, related use cases beginning of 2019, a food
tracing use case gets created. The app is about to deliver a proof of origin for products
based on blockchain technology. With the help of QR-Code, product information is in-
stantly available for end-to-end customers. Several online market stores, for example,
Markta, use Rotharium as a technical solution to depict the origin of organic food. Several
scholars, such as Wisniewski & Buschulte (2019), warn on severe costs because of food
fraud on a global scale.
The following subchapter summarizes three recordings of Crypto Future members and
premium partners and translates into English. Besides that, the case documentation in-
cludes an analysis of the Rotharium whitepaper, a product video review, meeting minutes
and product testing in a Viennese grocery.
5.1 Interview Tomislav Matic (Crypto Future)
Matic acted as a blockchain pioneer and started in the field of crypto mining. Gradually
he founded his blockchain startup in a sense that it provides blockchain-based IT solu-
tions and today acts as Chief Executive Officer of Crypto Future. He characterizes block-
chain as an addition to many other systems. As companies in times past already invested
and deployed many other information systems, which in the example of a supply chain
display and process data, funds, goods and communication flows this progress, will not
be abandoned that easy. That is because blockchain, according to Matic, at this point, is
not dimensioned and designed to substitute legacy systems in their broad impacts on
businesses. He sees blockchain more in an evolutionary phase, which makes it neces-
sary to input for the next couple of times its features and benefits into working and es-
tablished system landscape. Furthermore, he implies that policies, such as the one on
data privacy, also create barriers for full systematic blockchain implementation. Precisely
because of the recognition that blockchain is a complement to tried and trusted systems,
it is vital to highlight the benefits blockchain brings compared to the limitations of existing
systems. He brings here features such as transparency or data immutability and argues
on the approach to put in place these beneficial features on a specific use case as a
combination of established system structure with blockchain characteristics. A reinven-
tion of the wheel by putting in place blockchain where legacy systems are sufficient Matic
describes as unrewarding and needless.
As one of the first companies in Austria, which engaged with the topic of blockchain, the
organization Cryptofuture wanted to develop new business cases, which were based on
DLT and therefore create recognition value for the brand of Rotharium. The brand is
similar to Microsoft, defined as a base platform and umbrella term, which includes many
different applications in various fields of usage. One of the first applications was the food-
58
tracking app Rotharium Food, which was made available for Apple and Google Play us-
ers. Compared to many other blockchain projects in the supply chain, he emphasizes
the Rotharium project as one of only a few, which has a working use case in a live envi-
ronment. Matic mentions several challenges on the path of being a first mover in the field
of technology innovation. As there are not many empirical values and experience overall
in implementing blockchain solutions, people question one's approaches and uncertainty
about regulation is pervasive. Here it is important to make sure that the implementation
phase is well structured in a project environment. On the technical part, he emphasizes
the dependence on network updates in the public blockchains of Ethereum or IOTA,
amongst others. At the same time, the mainstream reaction on positive or negative hap-
penings in the blockchain ecosystem influenced the interests and motivation of compa-
nies heavily to implement blockchain solutions. Matic sees this phenomenon as one
within the early adoption phase of technology and not relevant in times of future techno-
logical maturity.
In order to enhance the trust of innovative technology for new entrants, he points out that
it is crucial to simplify the utilization for the end customer as much as possible. The ar-
gument is that the complicated subject of blockchain should be explained in easy words,
with an emphasis on its benefits instead of overcomplicating the matter. In the second
mainstream step, no one will be interested in technological gimmicks and how data ex-
actly is exchanged on protocol layers, but more on the premise if the product works with
proper security or trust levels or not. Therefore, the Rotharium food-tracing app con-
structs in the sense that it is user friendly and enables a facilitated input of product data
for producers of the supply chain. If a customer is interested in the flow of information of
a particular good, he can retrieve the information out of the application in seconds. The
huge benefit here is transparency, which leads to customer retention.
Matic mentions two benefits, which influence supply chain processes by blockchain im-
plementation. These are transparency and irreversibility of data. Wherever in a supply
chain, these features are essential, blockchain should apply, because a win-win situation
results, as soon as a substantial need within a particular process come upon ground-
breaking features of a technology. Furthermore, he adds that the more critical and sen-
sitive information of a shipped good is, the more important it is to create a trustful envi-
ronment among participants. Especially the interaction between parties is shown in a
comprehensive, trusted manner and causes stakeholders to feel safe and secure when
it comes to swapping of data in a supply chain. As there is no single administrator of the
database, but more participants running nodes confirming the truth of transactions and
inhibiting manipulations, users of the food tracing app can be sure that the information,
where a particular good comes from, can be seen as unquestionably valid. Matic brings
the example of local products, which are promoted in stores as such, but merchants may
be dishonest. In this case, producers would tag their products and in the next step, con-
sumers could verify this without being dependent on a third party, e.g., merchants’ infor-
59
mation. As full transparency is not always favorable for every actor within the SC, be-
cause location advantages or purchasing benefits possibly reveal, the direction here
would go more on a private blockchain. Here the disadvantage is that trust levels are
lowered accordingly to the smaller number of participants, e.g., nodes, which could be
difficult when actors do not know each other. If attendees of a network have contradicting
interests, it is essential to clarify these first before starting a business relationship based
on a blockchain technology-based system landscape. Moreover, as Matic states, the
topic of data privacy was one to take care of during the implementation of the Rotharium
food-tracing app. The protection of private and sensible data was achieved by simply not
inputting any individual-related data into the blockchain and instead of that saving them
on a centralized legacy system where deletion is possible at any point in time. Further-
more, Matic says that a fully integrated tracking application, where there are seamless
and unbroken data flows, is something, which misses in today's’ supply chain, at least
as an end-to-end process. These data can include several different data sets, for exam-
ple, geographical or timing information, under which weather conditions shipments hap-
pened and if regulatory on the cooling chain was correctly satisfied. Hence, integration
of the service, which provides information on the goods flow with the service of payment,
is something Rotharium combines. The result is a coin, which represents a means of
payment for the supply chain information service and the underlying good, both incorpo-
rated in ident-structured applications
A possible hindering limitation of blockchain in the supply chain Matic mentions by criti-
cizing the velocity of transactions in a blockchain ecosystem. The amount of transactions
per second is limited compared to legacy systems and will stay like that for a couple of
times in the future. That is because the exchange of various data from different indus-
tries, such as payments, transportation information and copyrights, needs to be pro-
cessed within a particular public blockchain, which merely from a technological aspect
still has not progressed far enough yet. Besides that, at peaks of utilization, the network
simply requires more time to confirm and process data. That brings uncertainty for users,
as they do not know if the network is overloaded and operates at full capacity with delays
or not. It is also not a task user should have, as they should rely on a system independent
of network workloads. As the app runs on the public blockchain, Rotharium depends
heavily on progress in network development in terms of scalability. As this happens on
a global scale, the level of dependence is very high. Hence, the achievement to scale
the network accordingly will be crucial and a specific condition for the technology to pre-
vail. As a solution here, side chains are mentioned, where transactions could handle with
fewer confirmations in a smaller based network environment. Still, according to Matic,
there is the preference to update the main networks properly; nevertheless, he sees on
the example of Ethereum, not enough progress, given the fact than hundreds of people
are working to enhance the ecosystem since 2014. The reason is the high technological
complexity of the system.
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As a lesson learned out of the implementation of Rotharium Food Matic marks that the
project was a bit ahead of times for many external people involved. He emphasizes the
importance to undeceive interested parties on the topic by explaining the correlations of
blockchain and supply chain in simplified words. That and the fact that benefits are
showed to stakeholders helped that understanding and acceptance nowadays are rising.
The potential demand of customers to have the possibility to trace a food item determines
by thoughts where blockchain benefits in detail can enlarge trust levels. Additionally,
producers and end customers were questioned on their real desires in this particular
field. The important step here is to set clear boundaries where blockchain should not be
used because of existing satisfying solutions for customers. In general, Matic does not
see any negative impact blockchain has on supply chain processes, as features such as
transparency or privacy can be lowered for the substantial needs of stakeholders, alt-
hough the features potential therefore is cut accordingly.
The collaboration with authorities Matic characterizes as unproblematic. There was a

point of contact on hand for any questions. For both parties, the project was one on new
grounds and therefore, learnings, especially for the authorities, were existent. It was not
the case that regulators gave many directives, but more the fact that their blockchain
project set a direction and in arrangement with authorities pursued the project. Moreover,
he sees regulation only on the crowdfunding part of money collection rather than on
technological standpoints and the question if a particular approach of using BC in supply
chain processes is permitted or not. The topics discussed were on the legal and data
privacy aspect, where it was important to act in consultation with rule-makers. An ap-
proach, which follows the direction of authorities is also important because this helps to
set clear boundaries of where the project stands from a regulatory perspective. Matic
sees blockchain projects ideally as proactive suppliers of information for authorities. That
means that the aim to raise awareness and familiarize governmental institution for the
topic of blockchains helps its overall acceptance for mainstream usage. Some draw-
backs were the linkage of blockchain with fraudulent activities on the market of block-
chain-based cryptocurrencies. The media coverage of such happenings inevitably cre-
ated at least negative beliefs of rule-makers. The need to do much persuading is the
logical consequence. Overall he marks it as necessary that possible issues, especially
on a long term basis of a project, are as early as possible discussed with authorities in
order to save valuable time within the project execution. An internally defined strategy
with a clear-cut course on how to communicate with authorities is also crucial in order to
gain trust among them.
5.2 Interview Zsolt Scheffer (Crypto Future)
Scheffer worked as a blockchain analyst at Crypto Future and was heavily involved in
the project of Rotharium Food. He characterizes blockchain as an addition to existing
systems. In the timeframe of the next ten to twenty years, it still can either disrupt whole
businesses or disappear altogether, depending on the running costs of transactions and
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scalability of the network. Most public blockchain developing consortiums promise huge
steps forward towards a cost reduction paired with transaction speed refinements. Ac-
cording to Scheffer, the pioneer project of Rotharium in the area of the supply chain had
the aim to show people that blockchain-based solutions work for everyone who wants to
make use of it. On top of that, the worthy cause was that every participant on the chain
has a value-added because of the publicly viewable information. In the project, this su-
perior societal objective, paired with mainstream circulation, stands over profit orienta-
tion. The USP of the product Scheffer sees in a completely new definition of trust be-
tween producers, retailers and end-customers. The level of trustworthiness is much more
pronounced compared to today’s solutions, where not every participant amounts to the
same level of knowledgeable information.
An emphasis Scheffer puts on the core strengths of blockchain application in the supply
chain. Hence, it is the possibility to exchange information between agreed parties without
any third party involvement. As this information in the ledger is immutable and irreversi-
ble, it qualifies as being trustworthy. In the example of the tracing app, the consumer,
who does not know about producers’ practices and other happening along the supply
chain, trusts that the information and data are valid and correct. Any fraudulent changes
on the smart contracts or other settings in the chain are possible, but at the same time,
viewable and verifiable, which lower general motivation to manipulate entries. At the
same time, according to Scheffer, features with are core competencies of blockchain
technology can also imply drawbacks when implementing in a particular field. For the
Rotharium app, the feature of data privacy opposed against the GDPR ruling of the Eu-
ropean Union. The issue of permitting the deletion of data is only a problem in public
blockchains. On the other hand, private blockchains work more as small databases
where data is stored decentralized, but other features resemble centralized legacy data-
bases. In Scheffer's opinion, the private solution of a blockchain does not make much
sense as ore values of blockchain cannot be used to a full extend.
A challenging fact during the implementation of the supply chain solution for Scheffer
was that, in theory, many people are interested. However, when it comes to execution,
including funds and labor input, many efforts at persuasion and presentation of possible
advantages and merits is needed. A limitation of today’s supply chain in terms of track
and tracing Scheffer sees in the variety of systems and programs participants are oper-
ating. In case that blockchain as a coherent base layer of data exchange gets used,
multiple companies, actors or organizations can easily use this ledger as a connection
point and harmonize their datasets, processes and approaches accordingly. The possi-
bility to use their systems and interface them to a decentralized ledger for data storage
and processing lowers general dependence on centralistic key players. Further develop-
ment of the application depends on the global progress of the network output, for exam-
ple, reduction of transaction costs and improvements on the velocity of transactions. In
case that these upgrades happen, project implementations and running costs of the
ledger could be reduced and price reductions of transactions could get passed to users
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and end-consumers. Furthermore, Scheffer states that an enhancement towards the es-
tablishment of a marketplace structure is a real next step alternative. That means a com-
plete paradigm shift as the supply chain then happens purely based on supply and de-
mand between end-users. As soon as it gets crucial that data is transferred as soon as
possible towards real-time execution, another limitation gets visible, namely that an es-
timate of whether the transaction takes seconds or hours cannot be estimated accurately
enough.
From the perspective of regulation, Scheffer only mentions money laundering and data
privacy aspects. He does not know any regulations explicitly relevant to supply chain
processes.
5.3 Interview Martin Juric (AURA Delikatessen)
Juric founded a delicacy store nearby Vienna several years ago. He acts as a premium
partner of Rotharium Food, where he contributes to the spread of Rotharium in Austria
by using the product from both production and retail perspective. For quite some time
from his perspective, blockchain was fraught with negativity, because of negative press
on currency business models. Today he recognizes it as a chance to realize essential
changes in the supply chain of goods. While governments and banks, in his opinion, try
to decelerate the progress of blockchain adoption, companies and enthusiasts try to fos-
ter innovation in the sense that more fairness is achievable. Furthermore, Juric sees it
as important to try out innovative business models, especially if there are substantial
demand and interest on the customer side, which he acknowledges. His store is the first
retailer in Austria to work officially with a blockchain solution, which integrates track &
trace with payments.
The most interesting perspective of the Rotharium Food solution Juric sees from the
producers’ aspect. As a delicacy store, the USP of their products is based on the origin
and producing method. As only small producers are contributing to AURA’s product line,
Rotharium was a well-fitting solution for the needs of their customers. The customers get
attracted by the fact that a true and comprehensible story around the product can be
told, mainly because, according to Juric’s experiences, many questions about various
product-related potential buyers at his retail store posed facts. As usually there is not
enough space to print out full information of the product viewable for customers, the
blockchain solution with a scan of the QR-Code, which includes all necessary information
written on the blockchain, offers a welcome opportunity to feed various stakeholders with
full information on for example the products origin, packing time and travel routes.
An example of why track and tracing of especially perishable goods can mean a sub-
stantial competitive benefit, Juric brings with the illustration of fish. Well-known and es-
tablished groceries with their supply chain processes would not dare to use the track and
trace for fish, because it takes over a week from a cast for fish until the product is at the
grocery store. This common practice is unknown by most of the customers and would, if
63
being known, lead to a refusal of the product. With a real-time track and trace function-
ality based on blockchain, a huge competitive edge is created for producers who apply
more efficient and sustainable supply chains. Moreover, this automatically changes rou-
tines for the better and betters existing processes towards enhancement of the general
supply chain standards amongst all providers of goods. That, of course, tends to move
power away from big producers with huge industrialized supply chains towards local sup-
ply based on organic source, at least for the customer group, who is keen to pay premi-
ums for qualitative and healthy food standards.
Moreover, Juric emphasizes the possibility to equip end consumers with valuable infor-
mation, which is not doubtful because of blockchains features of data irreversibility and
transparency. According to him, particularly the stakeholder group, which spends the
money on the product, has the right to be adequately informed. That especially is a grow-
ing trend in the last several years because consumers are more and more aware of their
purchases instead of directly buying the product, as it was the case before. The identifi-
cation with the product rises with its level of information and on top of that makes it more
attractive compared to other not traceable goods. From a consumer perspective, Juric
claims that there is not too much transparency as people precisely filter the amount of
information they need in particular. From producers and retailers' perspective, the aim to
be transparent correlates with the fact that customers react loyal to products with trans-
parent supply chains. The reasons why big food supply chains in their groceries do not
make use of blockchain solutions for Juric are, besides their poor quality standards, also
the negative media releases of blockchain-related to fraudulent actions in the business
models of currencies. In order to solve this issue, a decoupling of blockchain from cryp-
tocurrencies is necessary. In another step, realistic and knowledge building press cov-
erage about blockchain as a technology with emphasis on its beneficial features would
be helpful for widespread adoption and understanding.
5.4 Documentation
5.4.1 Whitepaper
The whitepaper of Rotharium is, of course, very technical and gives a not legally binding
overview of certain aspects of the Rotharium applications, the token and its intended
use. It furthermore contains forward-looking statements, which are subject to risks, un-
certainties and other factors. The platform model of the Rotharium platform has two pri-
mary layers. The first layer is the Ethereum blockchain, which uses data from private and
cloud databases. The second layer is Rotharium services, which then builds the basis
for several applications running on it. The applications, such as Rotharium Food, which
connects to the Rotharium platform, will enable ordinary users to create smart contracts
on the blockchain, without being required to have sophisticated IT knowledge. There is
an emphasis on the consideration of the advantages blockchain brings to the customer
that means decentralization, data integrity and smart contracting. The Rotharium Food
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App is one of the business applications running on the decentralized business to the
customer blockchain platform. For maximum security, the app runs on its own developed
encrypted transfer protocol. The data management is split, as personal data should not
be visible for everyone and therefore are stored in common, not blockchain-based data-
base solutions. The means of payment for services in the Rotharium Food application is
an own token. In a Frequently Asked Questions section linked within the whitepaper de-
scribes Rotharium Food as a platform that allows everyone to find different agricultural
products and manufacturers in their immediate area. The aim is to give producers the
possibility to create a known public profile and define their products in detail. Examples
for findable goods are fruits, vegetables, dairy products, eggs, fish, meat, cereals and
beverages. A tagged Rotharium Food sticker with a QR code includes all the information
saved on the blockchain.
5.4.2 Product Video and visual presentations
For new users of the application, whether they are on the producers or consumer side,
there are several Rotharium Food App Explainer Videos. On the one hand, producers
create a profile and choose the specific products they want to advertise. That is the first
possibility to promote products without massive spending for commercials or similar pro-
motions. Additionally, more information about the origin of the products, harvesting de-
tails, available amounts, expiration dates and similar, including pictures, can be added.
In order to stand out from the crown, a certification by Rotharium responsible people is
possible too. It enlarges the trust level accordingly also because the origin of the goods
is shown by an additional blockchain proof, viewable explicitly for interested customers.
The slogan ‘Know your farmer, know your food’ directs the interest directly towards cus-
tomers, who want to be sure about the origin of their consumed goods.
Furthermore, there was also an introduction of Rotharium Food at the Austrian Federal
Railways Headquarters. The app there was described as a possibility that a higher level
of transparency gets enabled in the supply chain of goods. The producers point out prod-
ucts and mark their core competencies in a sense that, for example, organic food is
offered, without pesticides, made in Austria. The customer even does no need any app.
Instead of that with a QR-Code scanning camera on the smartphone, a recognition of
the code is possible. After successful recognition, the customer can look directly into the
blockchain and can find an entry with a clear text, which describes precisely the infor-
mation, which comes from the producer, in detail a timestamp on then the harvesting
was done, what was exactly the product, the conditions of the product and many more.
The question of how digitalization comes to farmers and producers of the supply chain
gets answered with referral to smartphones. As everyone can easily take the smartphone
while working on the fields or stables a recognition via the app is possible in minutes or
even seconds. After the packing of products, the labels are printed and tagged before
being sent out to the respective groceries or points of sale. The focus here lies on a boost
of local and organic products. Given the COVID19 crisis, this from today’s standpoint
65
can get even more important, as the globalization movement suffers massive cuts and
changes these days.
5.4.3 Meeting Minutes
A review of internal documentation in the form of meeting minutes revealed the thoughts
and idea creation of the tracing app. There were several concerns about how food pro-
duction happens nowadays, primarily because of the quality and sustainability of goods.
As food has become increasingly global, consumers walk into the store and expect their
food to be safe for consummation. However, there is no real background knowledge on
specific points, namely where the product has been and what intermediaries may have
done with it. The fact that many processes during the chain were unknown to the end
customers brought the idea of giving consumers easy access to this information. The
power of consumers to scrutinize the supply chain process gets very real with decentral-
ized solutions. The effect on human health will be immediate as soon as companies in
the supply chain would be forced through consumer expectations to reveal their produc-
tion and further manufacturing process and therefore enhance quality steadily. The em-
phasis on partnerships with retailers gets also highlighted as this brings an enlargement
of potential customer scope. The principle of excluding intermediaries realizes through
the digital conduct of product data.
5.4.4 Product Testing
The research investigation in one of its steps also brought a product testing of the app
at two points of sale in Austria. The first one is the shop ‘AURA Delikatessen’ in Lower
Austria. This premium partner of Rotharium enables tracing for every product within the
product line. After reviewing the products, which were all tagged with Rotharium, branded
QR-Code labels, the decision felt on a cherry jam, schnapps and an aubergine-paprika
sauce. For all three products, the application, after successful scanning of the labeled
code, showed a unique product code and facts such as date and time of production,
terms and location of production, use by date, information on awards, website and con-
tact data. A short description of the specifications of a particular product helps the cus-
tomer to understand more about it. An official digital Rotharium seal includes the direct
link to Etherscan, where the blockchain entry is reviewed in full detail with all its history.
Moreover, the product overview gives hints to more products of the same producer and
lets customers know where on the interactive map, more Rotharium based products are
on sale. The second point of sale was at a pick-up place of the online marketplace
markta.at. Similar to the approach at AURA Delikatessen, the packed products’ labels
were scanned and reviewed accordingly. From the producers' perspective, a presenta-
tion to end customers is possible over a public profile, which links to the product scan
procedure. Here beneficial information about standard practices within the supply chain
process can be made public.
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6 CASE RESULTS AND DISCUSSION

6.1 Case Study Report Blockchain Initiative
6.1.1 Study Questions Analysis
How can blockchain solve existing business issues within the supply chain of compa-
nies?
In general, the BIL initiative showed that blockchain helps to find a path of cooperation,
through communication and a play of several scenarios, which can solve business issues
in the SC by a share of information between parties. All of the interviewees see block-
chain as complementary to existing system solutions, as some kind of enhancement of
communication and information transactions with other stakeholders in the system. In
this role, blockchain can improve the flow of goods, information and funds through its
core features of transparency and data immutability and data security. In order to make
it possible that blockchain can pointedly solve issues in the supply chain, the possible
use case should be appropriate in the sense that the core features apply purposefully.
As the level of technology used in daily work is very low for most supply chain actors,
Leibetseder argues that blockchain helps to bring more system harmonization in the sup-
ply chain and forces actors to set an industrial standard and reduce the complexity of
processes. That is one of the reasons why companies such as GS1 are interested in
blockchain technology as multiplicators for standardized processes in the supply chain.
Furthermore, Plöchl-Krejci sees it very positive that supply chain actors, because of pos-
sible enhancements through blockchain usage, openly discuss their processes, possible
issues and solutions to enable progress within their processes. Moreover, Schramm and
Gregori add that blockchain brings more of automatization and digitalization into the sup-
ply chain. Holistic data management, linkage of inventory management with contracting
and assurance of goods validity shows this.
Further documents showed that process costs reduce, data access facilitates and elec-
tronic proof of delivery with protocols on entry changes establishes. It helps to reduce
erroneous shipments, reduces costs per transaction, lowers manual processes and en-
ables document access for all respective participants in real-time. Leibetseder adds that
through tokenization of information, paper processes get replaced and therefore, infor-
mation gaps closed adequately. The handling of paper often brings uncontrolled growth
of data, time lags and is done with errors resulting in less data quality and integrity, but
with higher overall cost. Therefore, improvements, which are brought by the use of block-
chain, are welcome, especially as digitalization through blockchain brings a suitability of
entries in the ledger and internal processes are accelerated. More documentation of the
project showed that the use of blockchain in the e-CMR project provides a unique iden-
tification number, together with textual information on every step of the goods transport.
67
That, of course, includes attachments, timestamps, changelogs and specific comment

functions and stands for a gapless flow of information, which is digitally signed too.
Plöchl-Krejci states that due to the variety of involved parties in the SC, who usually do
not know each other additional trust through blockchain is value-adding. Moreover, the
degree of automatization in the supply chain classifies as very low, which results in errors
and manipulations.
Here blockchain acts supportive by requiring higher levels of cooperation amongst par-
ticipants towards efficient use of capacities. Schramm brings up the issue of unequally
distributed information within the supply chain. The actors naturally act driven by their
diverse interests and blockchain ensures, through its competence to deliver undeniable
proof, that a fair fact-based arbitration between chain participants happens. That is ac-
cording to Gregori, because of the extremely restrictive sector of SC and despite full
transparency through blockchain, accomplished as Plöchl-Krejci mentions with re-
strictions of mutual visibility of information by selective transparency standards according
to predefined permission levels. Furthermore, Gregori adds that supply chain issues
within product piracy, e.g., missing validity of units, can be improved by blockchain. The
correctness and verification get ensured if the label tagged on a particular product is
attached correctly. Schramm points out that supply chain processes characterize
through unsolid data processes, different system landscapes and incompatibilities of
data material. Therefore high process costs, trust conflicts with documents and missing
or handwritten signatures make the supply chain insufficient. Here blockchain, basically
through its features of fast consensus through network confirmation, eradicates such
disadvantages and acts as an additional mechanism for interchanging various data from
heterogeneous systems in order to achieve a trustful environment. Plöchl-Krejci states
that a proper end-to-end mechanism in the supply chain is missing. It means that end
customers but also many stakeholders in between the start and end processes of the
chain do not have enough background information about the supplied product. The track
and trace mechanism based on the blockchain provides a transparent view where
changes in data structures are identified quickly and questioned accordingly.
What limitations does blockchain technology have if utilized in the supply chain?
The implemented solution for the e-CMR has not demonstrated limitations of blockchain
technology, as the project is ready to use in a live environment. However, the brainstorm-
ing for the idea and thoughts on blockchain utilization overall brought limitations on either
technological or organizational manner. For more complex issues than the digitalization
of a waybill, Leibetseder argues that in order to make it possible to work with blockchain
nodes, process steps need to are simplified and participants of the chain need to improve
the level of their acceptance towards new technology. A question mark he sees whether
older participants, who are operational actors of the chain, such as drivers or packers,
are keen to use decentralized apps in their daily business routines. Schramm has similar
opinions and describes the implementation of the technology itself as less challenging.
68
However, given the complexity of the supply chain with a lot of diverse problem formula-
tions and exceptions, it makes it difficult to find a blockchain-based setup where all in-
volved parties are satisfied and equally addressed. Moreover, as a crucial task for block-
chain adoption in the supply chain, proper visualization of blockchain entries is needed.
Nowadays, blockchain is seen very technical and therefore, many actors lack under-
standing. Additionally, Schramm formulates several limitations blockchain has explicitly
utilized in the supply chain. First, because of scalability issues of today’s public block-
chains, a private or hybrid solution is required in order to handle the amounts of transac-
tions. That, of course, reduces the data security, trust and transparency level by far,
includes possible fraudulent action and shrinks the possibility to roll out blockchain solu-
tions in the supply chain as a mainstream technology. Second, supply chain actors are
unconvinced if it is possible to reduce transparency properly as the visibility of data for
everyone in the chain is not wanted. Technological developments in this field are present
but still not mature enough. Gregori states that in order to make use of blockchain in the
supply chain in a proper way, standardized information and existing requirements for
business processes are essential. Blockchain implementation presupposes clear defined
processes, reduction of exceptions and common language and codification. That is still
not achieved for most of the supply chain and is one of the reasons that the spread of
BC in the supply chain happens very slow. Similar statements come from Plöchl-Krejci,
who points out that there is no consistent standard, which is of full use in the supply
chain. Therefore on the functional side, it is challenging to drive blockchain projects for-
wards, especially if there are no clear legal and regulatory terms to be followed. More
limiting standpoints come from Plöchl-Krejci, who argues that blockchains benefits of
information exchange cannot be used in the supply chain to a considerable extent be-
cause of cartel law and refused permissions resulting out of it.
What is evident here is that technological progress, same as the adaption to it, still lacks
readiness. The potential is existing, but it is still not possible to retrieve it at its maximum.
At this stage, being a pioneer and early adaptor with the right eye for the right business
case can be of immense advantage at future levels of maturity.
Why do legal regulations play a role during blockchain implementation?
The study showed, based on statements of all interviewees, that regulators look at digi-
talization widely detached from the topic of blockchain. In the opinion of Leibetseder,
blockchain implementers in the supply chain rely on a juristic decision whether a digital-
ized document is legally acceptable or not, more than the question of how digitalization
is achievable. Hence, Plöchl-Krejci adds that regulators are not primarily interested in
how digitalization happens, but more if and what level of digitalization is legally allowed
and accepted. Schramm points out that all the information sitting on the blockchain in
either the e-CMR or other supply chain-related use cases is valuable for authorities. As
governmental institutions, such as customs or finance authorities are generally seeking
for proper levels of security and traceability, this means that the utilization of BC is the
69
right choice to be auditable. Authorities generally have no preference or interest on

whether a particular technology or database is in use, as long as the process is under-
standable and legally correct. Moreover, given the fact that different institutions, such as
the European Union, the United Nations or local countries handle the interpretation of
what is permitted or forbidden contrary, makes it difficult for a global applied technology
to function coherently. Both Schramm and Plöchl-Krejci add that the possibility creates
a valuable interface with authorities, to give regulators as an independent group an inte-
grative view and the opportunity to check data and information movements on the chain,
makes blockchain interesting for authorities even without blockchain-related directives.
That especially can get important when, as Leibetseder argues, changes in the political
administration come up. If people in rulemaking positions change, this can get a hurdle
towards coherent cooperation. The usage of blockchain can absorb these risks partially
by enabling the proactivity of regulators in a transparent environment. Still, a lack of reg-
ulation and clear role allocation within authorities’ organization means more difficulty in
finding proper partners and investors who want to be involved financially in a promising
future project. Gregori adds that clear regulatory framework miss and the execution of
binding rules is not in place, because regulators do not understand the issues adequately
in order to react correctly. The issue shows as a compound one by the fact that splits of
responsibilities are unclear when authorities engage with innovative business models.
Furthermore, Schramm gives an example where blockchain does not fit with existing
legal regulation. The privacy feature of blockchain, where no deletion is possible, con-
tradicts with the GDPR of the European Union. Therefore, this has enormous impacts on
the design and architecture of the blockchain solution. Moreover, legal regulations play
a vital role when it comes to the recognition of smart contracts as legally binding agree-
ments. Today smart contracts lack legal approval and, therefore, despite the potential,
cannot be used for self-automated contracting. Plöchl-Krejci adds that if authorities de-
cide that blockchain is a widely accepted means of choice for a particular issue, more
detailed guidelines and directives will follow naturally.
6.1.2 Study Propositions Analysis
This section provides a validity check on the studies’ propositions. The first proposition
that the use of blockchain technology can trace a flow of goods with a high level of detail
cannot explicitly be answered by the BIL case, because the use case was about the
digitalization of documentation on the blockchain. Still, given the fact that tracing infor-
mation of goods requires lots of computing and data processing, today's blockchain de-
velopment does not allow a proper process on the public blockchain due to scalability
issues. On a private blockchain, of course, the performance of the tracing feature is bet-
ter to the disadvantage of other features such as data security and transparency.
The second proposition where blockchain ensures a fair distribution of available infor-
mation amongst participants of the supply chain can by reference to the initiative's project
70
be answered with yes. All involved participants can copy and analyze the immutable
record of the blockchain. From a technical perspective, tailoring of transparency is pos-
sible according to permission levels.
The third proposition, which states that BC, at its current stage of technological develop-
ment, is not a perfect fit to meet the needs of stakeholders in the SC is correct. Block-
chain has lots of potentials, but due to its low maturity from a development perspective,
it does not fit perfectly yet. Examples are scalability issues, an overload of network ca-
pacity on public blockchains and contradictions with privacy law.
The fourth proposition that blockchain technology is not ready to fully replace legacy
systems in the supply chain is true. The BIL project showed that blockchain provides
unique features more than being a standalone concept. It works as a complementary
system in the running landscape of legacy systems. Its goal should be to enhance the
power to tackle issues that are still unsolved with current concepts.
The fifth proposition that governments do not provide sufficient legislation regarding the
implementation of blockchain technology can be answered with yes. Participants of the
BIL initiative state that regulators are not responsible for exposing themselves with tech-
nological details on blockchain mechanics. The legislation more tends to cover the topic
of digitalization, where blockchain can be part of the solution. Unfortunately, here gov-
ernments also miss having clear directives and announcements.
6.1.3 Conclusion
In order to conclude the outcomes of the BIL case analysis, firstly, answers on the study
questions are found and then a check on the validity of the theory-based propositions
followed. The BIL case study showed that blockchain implementation is more part of a
digitalization approach within the supply chain than a groundbreaking and disruptive
game-changer. Its features help to close information gaps and build a trustworthy envi-
ronment but still lack to create sufficient acceptance amongst supply chain actors. The
topic of regulations is mainly covered by the notion of digitalization, rather than explicitly
aiming at blockchain-related circumstances. With the growing maturity of technology,
blockchain has the strength to be an integral part of supply chain enhancement and will
also get into the focus of more detailed regulation principles. The case results mainly
cover the theory-based statements, which means that theoretical standpoints are valid
for practical implications. Although the project covered only one out of many possible
use cases, the digitalization of the waybill is a first small step towards the acceptance of
decentralized solutions, which act as a catalyst for digital innovation. In order to be ready
for innovative business models, the supply chain has to open up for changes in its core
processes, from manual working steps toward automatization.
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6.2 Case Study Report Rotharium
6.2.1 Study Questions Analysis
How can blockchain solve existing business issues within the supply chain of compa-
nies?
The Rotharium case study showed that blockchain, if put with its features into working
and established system landscape, brings benefits to supply chain actors. Although the
development of the technology is in its evolutionary phase, it brings in the particular use
case of track and trace through an application, features such as transparency and data
immutability into the rigid world of the supply chain. The way blockchain solves supply
chain limitations, which get apparent in the field of gapless tracking and tracing of goods,
should be in combination with established system structures. Matic emphasizes that the
idea of putting in place blockchain where existing legacy systems in the supply chain are
sufficient is redundant. Furthermore, blockchain solves only issues if utilized in a possible
simplified way. The customers’ utilization of the technically complicated blockchain
should be in emphasis on its benefits rather than overcomplicating the matter. Moreover,
Scheffer adds that a limitation of today's’ supply chain in terms of track and tracing shows
in the variety of systems and programs participants are operating. In case blockchain as
a coherent base layer of data exchange is used, participants can easily use the ledger
as a point of connection and harmonize their processes and data structure. As a next
step, he states that marketplace structures are a possibility for enhancement, which
would mean a paradigm shift in the supply chain because companies who provide prod-
ucts or services would more and more get substituted through private providers of the
same.
As the information on the flow of goods within the supply chain is limited, long-term cus-
tomer retention happens if the level of transparency enlarges. That is the case for the
Rotharium Food App, as, according to Matic, it puts together a substantial need of the
end customer with a groundbreaking feature of blockchain technology in a user-friendly
way. It provides for both sides of the chain facilitated ways of data input, app usage and
information exchange with reliable and irreversible data. Scheffer points out that an en-
tirely new definition of trust between producers, retailers and end-customers is reached
by making sure that the data is irreversible and immutable without any third party involve-
ment. At the same time, the fact that data is viewable and verifiable lowers general mo-
tivation to manipulate entries. Furthermore, Matic looks at supply chains today and the
validity of data represents a limitation in today's’ supply chain, as examples of dishonest
merchants and not transparent further processing of third party actors show. According
to Matic, the more important and sensitive information of a shipped good is, the more
important it is to create a trustful environment amongst supply chain participants. With
no single administrator of the database, but independent participants, who run nodes to
confirm the truth of transactions and inhibit manipulations, a new era of the supply chain
72
can originate, mainly because consumers could verify information without being depend-
ent on a third-party stakeholder inside the supply chain process. Juric points out that
particularly the stakeholder group, which spends the money for the product, has the right
to be appropriately informed and adds that a product's USP more and more is based on
the origin and producing method. As of today's supply chain lack enough and especially
gapless information on this, customers get attracted by the fact that a true and compre-
hensible story around the product can be told. Trustful information, therefore, gets a sub-
stantial demand for customers and is served to them with unchangeable information on
a decentralized ledger.
Another limitation of supply chain processes shows in the fact that data flows are broken
and not seamless in an end-to-end process. The fully integrated tracking application of
Rotharium includes data flows of different data sets, such as geographical data or timing
information, without any data gaps. Moreover, blockchain also provides the possibility to
embed payments into supply chain processes and therefore acts as a fully integrated
service. The respective coin represents means of payment, same as a token with infor-
mation on the underlying good, which lowers costs and dependence of particular supply
chain processes on third party involvement. In case that blockchain features have to be
lowered in order to be a tailored fit for the individual needs of supply chain participants,
this is possible but cuts its potentials of decentralization accordingly.
The Rotharium services solution for the supply chain builds the basis for several appli-
cations that enable customers to make use of smart contracting with unquestionable
integrity of data without the risks centralized application in terms of security have. Split
from the decentralized database is the area of personal data, which should not be visible
for everyone and stores in a centralized database solution. This workaround is valid until
blockchains development does reach certain levels. It still allows having full amounts of
data at disposal, which is not always common in supply chain practices. The possibility
to offer blockchain certifications through a variety of information, such as product origin,
timestamps, historical movements, harvesting details, expiration dates, pictures and cur-
rent condition positions, blockchain-based supply chain solutions as means of choice
compared to existing supply chain information systems. Moreover, participants can by
themselves look directly on the blockchain to review and verify entries and make sure
that a transaction happens. This proactiveness can mean a paradigm shift in how infor-
mation in the supply chain exchanges in the future. The convenience to use the app on
the smartphone, though, brings technology right into the pockets of producers and con-
sumers, compared to a former computer or even paper-based approach.
Additionally, Matic points out that the lack of information on how food production happens
nowadays is a present limitation in the supply chain. The ignorance of quality and sus-
tainability of goods prevents consumers from knowing if their food is safe, healthy and
unaffected. Blockchain provides consumers’ with the power to scrutinize the supply chain
process with immediate effects on human health. Hence, supply chain actors with the
73
adoption of technology will be forced to reveal their production and manufacturing pro-
cesses with the result of steady quality enhancement. Juric argues that customers react
loyal to products with a transparent supply chain and that the information on the block-
chain, which is accessible via QR-Code, feeds customers with all relevant information,
especially product origin packing time and travel routes. The fact that this information
cannot be altered or manipulated gets according to him more and more important with
mainstream adoption and global loss of trust levels. Furthermore, real-time track and
trace mechanisms bring huge competitive benefits, especially for perishable goods. En-
hancements in general supply chain standards conquer the limitation of an unsustainable
supply chain because qualitative food standards are the basis for customers to pay pre-
miums on the price. If established actors in the supply chain do not better their processes,
the power tends to move away from substantial industrialized supply chains towards lo-
cal suppliers.
What limitations does blockchain technology have if utilized in the supply chain?
The case study of Rotharium showed challenging issues on the path of being a first
mover in the field of technology innovation. The limitations illustrate in a sense that block-
chain at today’s development level is not dimensioned and designed to substitute legacy
systems in their broad impacts on businesses. The dependence on network updates in
the public blockchains, together with mainstream reactions on happenings in the block-
chain ecosystems, heavily influenced the implementation progress of the Rotharium
products. That means that blockchain is still not mature enough to be resistant against
negative and non-reflected views from people outside the stakeholder spectrum. More-
over, the fact that people in the supply chain usually do not know each other a lower
level of transparency in terms of a private blockchain is favorable. The disadvantage then
is that trust levels are low because of the smaller number of participating nodes. For
Scheffer, this is not the preferred solution as it lowers blockchains’ core competencies
and equals private blockchains as small databases where, on the one hand, storage of
data is decentral, but other features look like legacy systems. Matic argues that, espe-
cially if network participants have contradicting interests, as it may be the case for situa-
tions in the supply chain, a prior clarification of these before setup of blockchain technol-
ogy is advisable. Blockchain, therefore only works, if consensus on interests is estab-
lished and participants work towards an enhancement for everyone involved.
There are limitations blockchain shows on the topic of data privacy. The implementation
of Rotharium Food took care of data privacy and followed an approach of establishing a
workaround, by merely not inputting any individual-related data into the blockchain. That
is because, from a development perspective, a deletion, according to GDPR, is not pos-
sible using public blockchains, which means that a potential feature also means a pos-
sible drawback for implementation. The implication is that today's data policies create
barriers for full systematic blockchain implementation. Moreover, Matic argues that more
limitations are created because of the speed of transactions. The reasons are that the
74
exchange of data from different industries besides the supply chain in one public eco-
system causes data congestions in the network and from the technological aspect, the
progress is improvable compared to legacy systems. As users need to rely on system
capacities and overloads bring uncertainty and delays, the long-term solution here
should bring enhancements in network scalability. Here the global network development,
which is usually preferred compared to private or hybrid solutions, sets the standard if
progress happens fast or not and simultaneously builds the basis of whether technology
can prevail or fail. Scheffer adds that blockchain can either disrupt whole businesses or
disappear entirely, depending on the running costs and scalability of the network. A lim-
itation of blockchain here is that nowadays, an estimation of whether transactions take
seconds, minutes or hours is not accurate enough. It can get harmful, especially if the
transaction speed needs to happen in real-time. For Juric, a limitation is shown by the
fact that the topic of blockchain in the supply chain is connected with the business case
of currencies. With a decoupling of these two different business cases, a realistic, and
knowledge building press coverage about blockchain as a technology with emphasis on
its beneficial features, more applications will be adopted in the future.
Why do legal regulations play a role during blockchain implementation?
During the planning and implementation phase of Rotharium Food, Matic argues that it
was not the case that regulators gave a lot of recommendations or legal binding policies.
Quite the reverse was the case because this innovative topic of blockchain tracing was
new for implementers and regulators and therefore, learnings on both sides were exist-
ent. Although the collaboration with authorities was there and a point of contact at the
authorities’ side reacted on requests, regulation, as it is usual for blockchain implemen-
tation on finance, currencies or fundraising, is not in place for supply chain solutions. The
question if an approach of using blockchain in supply chain processes is permitted or
not, is not posed by regulators. What can be necessary is the legal aspect of privacy,
where under rule-makers, clear boundaries get set, which personnel information is al-
lowed to remain visible on the chain and which is not. Scheffer mentions that from the
perspective of regulation, only money laundering and data privacy aspects as relevant.
Any other regulations explicitly relevant to SC processes are unknown to him.
Ideally, blockchain projects act as suppliers of information proactively and make sure
that authorities get familiar and their awareness towards the topic of blockchain rises
accordingly. As a first step, this happens through the simple explanation of the correlation
between supply chain and blockchain and an emphasis on benefits, features and core
competencies of blockchain in connection with the particular supply chain topic. A com-
munication strategy towards rule-makers, which is determined to be open and keen to
debate on, saves, on the one hand, some valuable time within the project execution and
builds on top of that trustworthiness within an interaction.
75
6.2.2 Study Propositions Analysis
The propositions which were created by theory building get analyzed in the below sub-
chapter. The first proposition, which claims that the use of blockchain technology can
trace a flow of goods with a high level of detail, can be affirmed. The Rotharium Food
app provides various information levels within a track and trace mechanism. The level of
detail can be adequately determined, as entries are immediately written on the block-
chain ledger and remain untouched for further checks.
Furthermore, the proposition that blockchain technically ensures a fair distribution of

available information amongst participants of the supply chain is answered positively.
The case has shown that especially end-customers, who usually are the least informed
stakeholder in a supply chain process, enjoy inequitable allocated information. The fact
that the information is openly accessible makes it fairly distributed, as whoever is inter-
ested can check on entries in the blockchain.
The proposition that blockchain at its current stage of technological development is not
a perfect fit to meet the needs of stakeholders can be answered with yes based on the
case outcomes. Although the tracing of products works well in terms of facilitation of the
application or network speed, further deployment steps are more difficult to realize, as
network capacities are not sufficient and features as zero-knowledge proofs, which would
enhance data privacy according to GDPR are still not in place. It conducts that the po-
tential is existing, but the technology has to come to maturity and keep promising ideas
and conditions.
The fourth proposition that blockchain technology is not ready to fully replace legacy
systems in the supply chain is true based on the architecture of the Rotharium applica-
tion. For a full replacement of legacy systems, the issues with data privacy should get
solved first. Moreover, it is not dimensioned and designed to substitute legacy systems
in their broad impacts on businesses.
The fifth proposition that governments do not provide sufficient legislation regarding the
implementation of blockchain technology can be answered positively. It is more learning
for both sides on how to approach technological innovation. The question if an approach
of using blockchain in supply chain processes is permitted or not is nothing posed by
regulators. Instead of that, they expect a robust, auditable and secure base of datasets
to be in the position to check if compliance on legal norms is in place.
6.2.3 Conclusion
The conclusion of this chapter results in a comparison of studies’ questions and propo-
sitions. The case has shown that from the customers’ perspective, blockchain means a
win situation, as the level of information, especially for this stakeholder group, is highly
enlarged. Nevertheless, producers or retailers also can benefit from being transparent,
76
as the positioning as a trustful supply chain actor can bring customer loyalty and higher
margins through price premiums. A paradigm shift can happen when customers start to
see transparency as being without alternatives. It profoundly will affect the process land-
scape of established industrialized supply chains towards more attention to health and
sustainability aspects.
Still, all the potential remains unused as technological development is still not sufficient
to make use of the potentials. Scalability and transaction costs improvements are crucial
for further use cases in the supply chain. The case results mainly cover the theory-based
statements, which means that theoretical standpoints are as valid for practical implica-
tions.
6.3 Comparison of Cases
6.3.1 Similarities
Very similar results are identified when a comparison on the checks on the validity of
theoretical assumptions for both cases gets made. Both cases attest blockchain a fair
distribution of available information amongst participants of the supply chain. Further-
more, both cases reveal that blockchain at its current stage of technological development
and maturity is not sufficient to be a means of choice for broader shifts in supply chain-
related action. Both projects fight with issues of proper data privacy handling with block-
chain. The next proposition in common the cases share in the statement that blockchain
is not ready to replace legacy systems. Instead of that, its features are praised as an
improvement of certain parts of processes along the chain.
The issues caused by the data privacy law BIL and Rotharium solve by saving this type
of data on centralized solutions. That means both projects work with workarounds, which
lower the level of decentralization. Another similarity is that both blockchain-based digi-
talization cases want to lower the use of paper in supply chain processes and enlarge
the level of digital device usage in the operational supply chain. The outcomes of both
cases exhibit that the use of blockchain fosters a system harmonization and sets stand-
ards, which will not be possible without a mutual base layer, which works as a decentral-
ized database.
77
6.3.2 Differences
The two cases looked at blockchain implementation from two different angles. On the
one hand, BIL worked on improvements in internal processes, such as digitalization to-
wards paperless documentation and cost savings, which result out of it. On the other
hand, Rotharium tried to include all stakeholders in a holistic track, trace database, and
therefore create an equal amount of information. BIL addresses to large actors in the
supply chain who fight with issues on low harmonized processes, while Rotharium works
on the goods’ quality aspect, which customers may recognize in a valuable way.
Both cases profit from blockchain features differently. While for the digitalization use case
scalability and speed of transaction is secondary, the track and trace use-case requires
high velocity and transaction volume levels. It goes for transparency, where BIL allowed
a tailored approach for lowering transparency levels, while Rotharium stands for full
equal transparency for every participant of the chain. It goes hand in hand with the ap-
proach of a hybrid form of a private blockchain at the e-CMR case and a public block-
chain for Rotharium Food application. Moreover, participants of the digitalized waybill
project are not keen to check entries for validity that often, as they feel the trust because
the systems guarantee it. Hence, participants of Rothariums’ track and trace solution are
more eager to look up entries on the ledger, because there they find the needed infor-
mation.
78
7 CONCLUSION
7.1 Summary
In general, the propositions, which were derived from the theoretical part of the thesis,
were validated against the case outcomes from previous chapters. The cases showed
conformity with the existing theory on blockchain usage in the supply chain. The ability
to answer the research questions was factual. The following subchapters are not merely
a restatement of the research outcomes, but more a synthesis of the critical points con-
tributed to theory and practice. The aim is to elaborate on the significance of the findings.
7.2 Theoretical contribution
The contribution to theory contains the following brief answers to the research questions
of this thesis.
1. Which business issues can Blockchain solve within the supply chain of companies?
As soon as the limitations of the supply chain come up against unique features of block-
chain technology, a potential solution for business issues is possible. Several scholars
point out that SC structures need to change towards digital transformation in order to be
competitive. The study showed that blockchain acts as a catalyst for digitalization and
paves the way for solutions, which solve business issues existing because of too little
automatization and manual intervention in processes.
Furthermore, gaps in information, fragmentation of data, insufficient visibility and delays

and defaults because of poor scaling are nowadays topics, which occupy supply chain
actors. Statements in both case studies confirm this, where especially limitations in data
quality through paper-based documentation, missing system harmonization and stand-
ardized processes, data inconsistencies and unequal distribution of information are em-
phasized.
In order to solve the issues mentioned above, the blockchain acts as the bringer of trust
through integrated features such as transparency, data immutability and data security.
Especially the trust-building process is crucial, as participants within the supply chain
often do not know each other. This issue blockchain solves by the fact that participants
proactively can check on the validity of data. The usage of blockchain eases the estab-
lishment of a full end-to-end process as it functions as a base layer of information. Lastly,
the use of blockchain in the supply chain brings incremental paradigm shifts, mainly how
actors work and what kinds of emphasis will be required to meet changing stakeholder
expectations.
79
2. Which limitations does blockchain technology have in the supply chain?
The limitations of blockchain in the supply chain mainly arise because of missing maturity
of the technology. Several issues, such as poor scalability and speed of transactions,
make it difficult to use the technology on a larger dimension, especially as the amount of
data in complex supply chains is high. Additionally, human involvement allows erroneous
data input, resulting in a limitation, which cannot be eradicated by any form of comput-
erization.
Furthermore, both cases showed the fact that data privacy issues cannot be solved
within a blockchain solution today, which limits it for usage in the supply chain. Moreover,
supply chain actors may want to tailor blockchain features towards lower transparency
or more centralized approaches with private blockchains, which is possible but limits the
technology far off its possible potentials. Lastly, the confidence in blockchain solutions is
expandable, as public opinions on fraudulent activities are a matter of discussion
amongst supply chain participants. Here the limitation does not sit on the technological
side, but more on a general adaption to technology in a digitally slow-moving supply
chain environment.
3. In which ways are legal regulations considered within possible blockchain implemen-
tation?
For implementations of blockchain, technology in supply chain use cases, there is no

specific regulation. Several regulations tackle areas of data privacy, legal recognition of
smart contracts, tokenization, payments or the equation of digital documents compared
to paperwork. Still, blockchain provides authorities’ to have a proactive look into the data
on the ledger, including possibilities to audit data properly. That opens the possibility to
formulate future legal and administrative frameworks towards an information system,
which is sufficient to meet the needs of governmental institutions. As questionable re-
mains, the fact that blockchains core competence of decentralization contradicts govern-
mental supremeness and therefore, an interesting conflict is possible.
Both literature and cases showed that in terms of understanding technology, regulators
are ill-equipped. Therefore, in particular, pointed regulation and directives are challeng-
ing to articulate. That could be another reason why regulation is not at all or very poorly
formulated.
80
7.3 Implications for relevant stakeholders
For readers who want to implement blockchain solutions in the field of the supply chain
or are affected by any of the limitations of today's supply chain, the following implications
can be of concern.
General:
o Blockchain is not an All-in-One solution for every issue in the SC, but features of
blockchain should meet limitations of the supply chain.
o Larger roll-outs of blockchain projects in the supply chain require proper estima-
tions if the network can handle the data flows and whether transactions must
happen in real-time or not.
o The handling of private data issues happens, preferably on centralized data-
bases.
o Regulation is more about legal issues on digitalization than on blockchain in par-
ticular.
Producers:
o Possibility to highlight competitive advantage with a focus on goods flow trans-

parency.
o Adoption of Blockchain in the supply chain urges for higher quality standards of
goods.
o The more trustworthy the product is, the easier it is to claim price premiums.
Logisticians/Carriers:
o Smart Contracts prevent human errors and save human capital, although legal
obligations outstanding.
o Blockchain-based digitalization of data processing, by running own nodes results
in cost savings and risk mitigation.
o Blockchain enables the establishment of new business models, such as transport
platforms.
Customers:
o Blockchain enlarges customers’ amount of information and gives possibilities to

scrutinize supply chain procedures.
o Customers enjoy in future integrated tracking and payment solutions.
o Marketplace structure enables to trade without third party involvement, for exam-
ple, supply and demand for solar energy or electricity.
81
7.4 Limitations
The midpoint of this thesis built the two case studies based on the framework by Yin
(2014). Here may be some possible limitations, as the results of the cases are not rep-
resentative of some population. Therefore, the cases’ findings and outcomes cannot be
generalized to all blockchain implementations in the supply chain. The interviews, which
were the basis of the case study evidence, could have brought disadvantages such as
subconscious bias, inaccurate articulation and poor recall.
Furthermore, the findings of this study have to be seen in light of some limitations of time.
The COVID19 pandemic restrictions led to a lower number of interviews than initially
planned. Still, the number of interviews was enough to be able to make clear statements
and implications. Additionally, one of the most significant advantages of a case study
approach, described by Ary et al. (1972) as the possibility to understand subjects and
participants in the totality of the environment, where the immediate actions, emotions
and thoughts can be probed, was diminished, because of no investigation on the field as
possible.
7.5 Future research
The thesis analysis shows that practical cases can thoroughly explain the theory of block-
chain implementation. The reason could be that existing literature on the topic is very
new, as the topic itself. Many authors deal with blockchain implementation in various
fields of use. Therefore ideas, statements and correlations worthy of empirical checking
come up for discussion. However, more research is a need in order to recognize the
impact factors why blockchain is a possibility to enhance supply chain processes from
the view of more differentiates participants of the SC.
Furthermore, the study demonstrates that after blockchain is mature enough to prove
the promised potential, further research should investigate the questions of whether the
potential is fully used, given better technological circumstances. Moreover, additional
study is interesting, as soon as blockchain as technology emerges from its first use case
of currencies, as nowadays this blurs the view on the opportunities of the technology,
same as mainstream opinions.
Additionally, some quantitative research is an asset when it comes to a full-pictured ap-

proach. It would be a matter of interest how many supply chain stakeholders would par-
ticipate using blockchain solutions, how the use of mobile applications would affect this
number and similar.
Lastly, the topic of blockchain regulatory was not that fruitful in a context with the supply
chain. Future research could either concentrate on this field in the particular use case of
finance and currencies, where it carries weight or confine oneself on investigating on it
on a lower scale.
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APPENDICES
Appendix 1: Interview guiding principle (German)
Original Language of the interview conducted: german
1. Welche Bedeutung hat Blockchain Technologie für Ihr Unternehmen? Sehen Sie
Blockchain als Ergänzung zu bestehenden Systemen oder als völlige Disruption?
2. Was möchte Cryptofuture als Unternehmen im Blockchainbereich bzw. Rotha-
rium als Produkt erreichen? Was ist dabei ihre konkrete Rolle?
3. Was sind die Herausforderungen dabei und wie werden diese gemeistert?
4. Was funktioniert dabei gut?
5. Was sind die großen Stärken der Blockchain für potentielle Anwendungen in der
Supply Chain?
6. Warum eignet sich die Blockchain zur Verbesserung der Supply Chain? Welche
Schwächen der Supply Chain werden durch Blockchainanwendung korrigiert?
7. Welche Verbesserungen bringt Rotharium als Produkt potentiellen Anwendern in
der Supply Chain? Was ist konkret der USP von Rotharium?
8. Sind die Vorteile welche das Rotharium Geschäftsmodell bringt auch auf ähnli-
che in der Supply Chain befindliche Problemstellungen anzuwenden?
9. Wo hat Rotharium als Produkt noch Verbesserungspotential?
10. Welche Relevanz haben Ethereum Updates auf die Funktionalität von Rotha-
rium?
11. Welche Lessons-Learned haben Sie wenn Sie heute auf das Projekt blicken?
12. Welche Maßnahmen werden gesetzt um den Bedarf potentieller Kunden nach
Blockchain Technologie in der Supply Chain zu eruieren?
13. Gibt es aus Ihrer Sicht Elemente der Blockchain Technologie, welche sich nega-
tiv auf Supply Chain Prozesse auswirken?
14. In welcher Form gibt es Zusammenarbeit mit Behörden? Gab es Probleme bei
dieser?
15. Fühlen Sie sich bezüglich Regulatorien ausreichend informiert? Falls nicht, er-
läutern Sie bitte den Verbesserungsbedarf.
16. Welche Risiken bei Implementierungen von Blockchain Technologie bestehen
aufgrund des bestehender gesetzlicher Regelungen?
17. Wie sichert sich das Unternehmen gegen solche Risiken ab?
93
Appendix 2: Interview guiding principle (English)
Translation of Appendix 1 in English:
1. Which relevance has blockchain technology for your company? Do you see
blockchain as an addition to existing systems or as complete disruption?
2. What does Cryptofuture as a company want to achieve, what respectively
Rotharium wants to accomplish as a product? What is thereby your role?
3. What are the challenges in the project and how are these mastered?
4. What works well here?
5. What are the biggest strengths of blockchain technology for potential utilization
in the supply chain?
6. Why does blockchain qualify to improve the supply chain? Which weaknesses of
the supply chain were reduced through blockchain usage?
7. Which improvements bring Rotharium Food as a product to potential users in the
supply chain? What is its concrete USP?
8. Are the benefits of the Rotharium Use Case applicable for similarly business
models and problem formulations?
9. Where Rotharium, as a product, has the potential for improvement?
10. What relevance Ethereum updates have on the functionality of the business ap-
plication?
11. Which Lessons-Learned do you have when looking back at the implementation
and Go-Live of the product?
12. Which measures were set to determine a need from a potential customer for
blockchain technology in the supply chain?
13. Are there from your point of view elements of blockchain technology, which are
negative effects on supply chain processes?
14. In what way is there a collaboration with authorities? Is collaboration problematic?
15. Do you feel sufficiently informed about regulatory guidelines? If not, please out-
line possible improvements.
16. Which risks while blockchain implementation persists because of existing legal
requirements?
17. How does the company mitigate these risks?
94
Appendix 3: Case Data collection schedule ‘Blockchaininitiative

Logistik.’
Type of Data Name, Role Date, Time, Length
Interview 1 at WALTER Matthias Leibetseder, In- 08.04.2020 via Skype,

Group (Logistics) novation Manager of the Start: 3 p.m., Length: 45
logistics company Walter minutes
Group
Interview 2 at EY (Consul- Michael Schramm, Leader 16.04.2020 via Skype,

tancy) of EY Blockchain Compe- Start: 11 a.m., Length: 50
tence Center (project initi- minutes
ator)
Interview 3 at Bundesver- Gerald Gregori, Vice pres- 24.04.2020 via Skype,

einigung Logistik Öster- ident of BVL and external Start: 2 p.m., Length: 20
reich (external) logistics consultant minutes
Interview 4 at EY (Consul- Andrea Plöchl-Krejci, 29.04.2020 via Skype,

tancy) Head of Logistics Trans- Start: 11 a.m., Length: 35
formation minutes
Document PowerPoint Presentation
Document Internal Memo
Document Letter of intent
95
Appendix 4: Case Data collection schedule ‘Rotharium’
Type of Data Name, Role Date, Time, Length
Interview 1 at Crypto Fu- Tomislav Matic, CEO and 09.04.2020 via Skype,
ture GmbH (IT Consul- Founder of Cryptofuture Start: 11 a.m., Length: 45
tancy) GmbH minutes
Interview 2 at Crypto Fu- Zsolt Scheffer, Blockchain 13.05.2020 via Skype,

ture GmbH (IT Consul- Analyst at Cryptofuture Start: 1 p.m., Lengh: 25
tancy) GmbH minutes
Interview 3 at AURA Martin Juric, Owner of 14.05.2020 in Person,

Delikatessen (Retail) AURA Delikatessen Start: 2 p.m., Lengh: 20
minutes
Observation Product Testing
Document Whitepaper
Document Meeting Minutes
Document Product Video
96

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The Use of Blockchain Technology in the

Supply Chain: A Case Study from Austria

Master Thesis submitted in fulfillment of the Degree

Master of Business Administration

In MBA with Major in Entrepreneurship, Innovation & Leadership

Submitted to Dr. Horst Treiblmaier

Vienna, 01. June 2020

List of Tables........................................................................................................................................... VIII

List of Figures ............................................................................................................................................IX

List of Abbreviations ..................................................................................................................................X

4 Case Study: Blockchaininitiative Logistik ..................................................................................45

4.1 Interview Matthias Leibetseder (WALTER Group) .................................................... 45

5 Case Study: Rotharium ............................................................................................................... 58

6 Case Results and Discussion..................................................................................................... 67

Appendix 3: Case Data collection schedule ‘Blockchaininitiative Logistik.’..................... 95

Table 2: Regulatory Overlap BC vs. SC ............................................................................... 30

Table 3: Case Study Protocol ............................................................................................... ..43

Figure 2 - Comparison of networks..............................................................................11

Figure 3 – Development since 2009 ............................................................................12

Figure 4 – Barriers to Blockchain Adoption ..................................................................28

BVL Bundesvereinigung Logistik Österreich

BPR Business process re-engineering

CMR Convention relative au Contract

COVID19 Coronavirus Disease 19

DSC Digital Supply Chain

DLT Distributed Ledger Technology

EDI Electronic Data Interchange

GDPR General Data Protection Regulation

OECD Organization for economic cooperation and development

QR-Code Quick-Response Code

RBC Responsible business conduct

RFID Radio-frequency identification

SCM Supply Chain Management

SCOR Supply Chain Operations Reference Model

SHA Security Hash Algorithm

USP Unique selling proposition

VMI Vendor Inventory Management

of politics and human error.”

1.1 Illustration of the issues

1.2 Previous research and general context

1.3 Aims and objectives

1.4 Research questions and propositions

I have chosen these research questions, as essential elements of scientific research by

Subsequently, there will be an explanation of what used methods in researching and

Crucial here is how the identification of significant relationships or patterns is happening

FIGURE 1 - ILLUSTRATION OF INFERENCES

1.6 Thesis structure

2.1.1 Definition and Terminology

As a topic of increasing relevance in the range of promising technologies, blockchain

On top of that, public blockchains identify as strongly decentralized networks. On the

The result of the above-mentioned trust-building process is called consensus. Scholars

FIGURE 2 - COMPARISON OF NETWORKS

2.1.2 Technical background and development

FIGURE 3 – DEVELOPMENT SINCE 2009

2.2 Disruption in supply chain

2.2.1 Changes and paradigm shift in the supply chain

2.2.1.1 Technical development and digitalization

Several European Associations, according to Van Wassenhove et al. (2007), speak

2.2.1.2 Insufficiencies within supply chains