End-to-End Tracing and Congestion in a Blockchain: A Supply Chain Use Case in Hyperledger Fabric

Introduction

Supply Chain management is an integration of business processes that are implemented in distributed and heterogeneous systems from end-users to original suppliers (Cooper, Lambert, & Pagh, 1997). Current supply chain management systems have known limitations and the food supply chain is the most complex and fragmented of all supply chains (Martin, 2017). There are many participants involved in a supply chain and they are using distributed and heterogeneous systems increasing the complexity of integration, sharing information, end-to-end tracking, and compliance tracking. Moreover, various systems integrated with a supply chain can be exposed to cyber threats which will result in breaching the integrity of information in the supply chain (Gao, et al., 2018).

Blockchain Technology has emerged as a solution to the double-spending problem that promises traceability, immutability, and transparency of transactions (Nakamoto, 2008). As stated by Consensys (2020), the blockchain technology coupled with smart contracts can enable:

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  Transparency of consumer goods from the source point to end consumption

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  Accurate asset tracking

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  Enhance the licensing of services, products, and software.

The shared IT infrastructure of blockchain can streamline workflows of all participants irrespective of the size of the business network. Moreover, this shared infrastructure enables the auditor greater visibility into the participant’s activities along the supply chain.

In the context of supply chain for the food industry, the farm-to-fork food system is a complicated network of isolated systems. There is no widely adopted industry standard regarding how to record and track data for food traceability purposes. Since blockchain technology is emerging as a distributed, trusted, and immutable ledger, it can be used to record transactions in farm-to-fork food systems enabling traceability (Martin, 2017). The number of transactions in a supply chain network is always huge. As an example, Walmart is serving 260 million customers every week across 28 countries in nearly 12,000 stores (Yiannas, 2018). A few of such participants in one blockchain network create millions of transactions and blocks which are continuously growing, challenge the scalability of blockchain networks.

Moreover, product companies in a supply chain network are producing thousands of various types of products before distributing them to their clients. Some of the detail of these transactions is redundant information. For example, thousands of packets of meat are made from one commodity hence only the packet identifier is different. Moreover, most of this information is needed for a certain limited period. Therefore, creating blocks of transactions for these types and have them stored in distributed ledgers of all other participants is a costly process in terms of congestion in the blockchain network and storage. On the other hand, having the same copy of records in all the ledgers support item traceability and auditing. However, end-to-end tracing of items is necessarily required in the modern complex supply chain systems.

The globalisation of the business sector has increased the cross-border movement of commodities and goods, and hence increased the complexity of global supply chains (Martin, 2017). The regulator’s role in a blockchain is extremely challenging in current complex supply chains with diverse established old laws, regulations, and institutions distributed in various countries (Kshetri, 2018). Playing a monitoring role as in Gao, et al (2018) is not sufficient since they need to approve or reject transactions providing reasons. Regulators are interested in only the relevant information required for compliance. It is not required for them to know heterogeneous transactions happening in various contexts of regulations. Current blockchain architecture supports distributed ledgers of the equal state. A regulatory organization to become a participant of all the blockchain networks which need regulatory compliance and maintain ledgers of them is not a practical approach. Hence, the position of a regulatory organization in a blockchain network is still not clear.