Delft University of Technology

TIL RESEARCH PROJECT

TIL4020-20

Digital Trust and Supply Chain

Relationship Management in Blockchain
Technology used in Supply Chains

Authors:
Manuela Hooghwerff (4689755)

November 13, 2022

Contents
1 Introduction 1
1.1 Situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2 Research Question 3
2.1 Knowledge Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Research Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Scientific Relevance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Social Relevance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

3 Methodology 5
3.1 Method Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4 Literature Review 7
4.1 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2.1 Blockchain Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2.2 Digital Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2.3 Supply Chain Relationship Management . . . . . . . . . . . . . . . . . . 9
4.3 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

5 Planning 12

References 14

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1 Introduction
This chapter elaborates on the current situation regarding blockchain technology used in supply
chains. The motivation for this research will also be explained. Next, the objective of this
research is stated. Finally, the structure of the research proposal is given.

1.1 Situation
Blockchain technology is a newly developed technology and currently it is mostly used for fi-
nancial transactions [14]. In the agri-food, automotive, diamond, education, e-voting, financial,
healthcare, pharmaceutical and smart supply chains blockchain technology has already been
successfully applied [8, 10]. However, it is important that the information that is shared be-
tween the actors is accurate and reliable. In section 4 the current state of the art mentions
that trust is an important factor within blockchain technology. Another important factor is the
security of the integrity of medical data, since that kind of data is sensitive because it contains
personal information. Furthermore, the complexity of trust makes it difficult to add a trust
layer in the architecture of blockchain technology.

Next to the factors on trust in blockchain technology, there are also advantages and disadvan-
tages to the relationships between the actors in a supply chain which implements blockchain
technology. The improvement of the customers’ service is an advantage, since the stakeholders
collaborate with each other by sharing information and this results into trustworthy relation-
ships that are developed. Another advantage is the visibility of the data, since each block
containing information can be seen by all the actors in the supply chain. The use of blockchain
technology also improves the performance of the supply chain by means of speed improvement
in the supply chain, but also the reliability of receiving a product in time [7, 11].

Yet, there are also disadvantages regarding the use of blockchain technology in a supply chain.
The main disadvantage is that there is a lack of central authority or coordination. This can
result into incorrect information that is being shared in the blockchain. Usually, if a block,
containing information, is added to the blockchain, the information is checked by other actors.
However, if certain information that is in a block is only known by one of the stakeholders in the
supply chain, then it cannot be checked by another stakeholder and the information is assumed
to be accurate. Without a central authority it is easier to commit fraud in a supply chain
by sharing unreliable information, which also creates untrustworthy relationships between the
actors in the supply chain [11].

There is hardly any literature that can be found on a stakeholder acting as a central authority
in a supply chain that uses blockchain technology to share information between the different
factors, according to section 4 in which a literature review is performed on blockchain technology
used in supply chains. It is not yet known if the addition of central authority in blockchain
technology has a positive influence on the supply chain, just as the advantages or disadvantages
of adding this are not known.

1.2 Objective
Since there is few literature about a central authority in a blockchain used in a supply chain,
the objective of this research will be to evaluate the effects of having a central authority in

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blockchain, that is used in a supply chain. Moreover, this research will consider the advantages
and disadvantages of having a central authority in the blockchain.

1.3 Structure
This research proposal starts by identifying a main research question based on the objective of
this research in section 2. In that section, multiple subquestions will be defined as a guidance to
answer the main research question. Then, in section 3 the methods that will be used to answer
the research question will be explained. Next, the current state of the art in the literature on
digital trust and supply chain relationship management in blockchain technology is discussed
in section 4. Finally, a planning of the research is given in section 5.

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2 Research Question
This chapter starts with defining the knowledge gap that has been found in section 4 and
will be filled in this research. The next section describes the main research question and
the belonging subquestion that will be answered during this research. The following section
discusses the scientific relevance of this research. Finally, the last section will elaborate on the
social relevance of the research.

2.1 Knowledge Gap

In subsection 4.3 multiple knowledge gaps were addressed after performing the literature review
on blockchain technology in supply chains. There were three areas that might need further
research, like the complexity of trust, the way in which medical data integrity can be secured
and the lack of central authority in blockchain. This research can only focus on one of those
knowledge gaps. The lack of central authority in blockchain technology is chosen as a research
gap and in subsection 4.4 the reasons for choosing this specific knowledge gap can be found.

2.2 Research Questions

In order to determine a main research question about the knowledge gap described in subsec-
tion 2.1, an objective needs to be defined first. The objective of this research is to evaluate
the effects on a supply chain, if a central authority is introduced in the blockchain. In order to
achieve this, the main research question needs to be answered:
What are the effects on the supply chain, when a central authority is introduced in the
blockchain?
In order to answer the main research question, the following subquestions will be answered as
well:
1. How is blockchain technology used in supply chains?
2. Which actors are involved in the supply chain?
3. How is the authority to share information currently arranged in blockchain?
4. Which actor(s) can act as a central authority in a blockchain in a supply chain?
The first subquestion will explain the use of blockchain technology in multiple supply chains.
The second subquestion will consider what actors are involved in the supply chain that make
use of the blockchain technology, in order to clearly state the options for which actor can act as
a central authority. The third subquestion focuses on how the authority is currently arranged
when sharing information through blockchain technology. The fourth question discusses which
actor(s), from the second subquestion, can act as a central authority in a blockchain, used in a
supply chain.

2.3 Scientific Relevance

The scientific relevance of this research is that it will contribute to the literature on blockchain
technology used in supply chains. Currently, the literature states that a disadvantage of using
blockchain technology is the lack of central authority. Although, there has not yet been a
solution formulated for the lack of central coordination in blockchain technology used in supply
chains. The design of a blockchain with central authority will therefore be a contribution to
the literature.

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2.4 Social Relevance
The social relevance is a new design of the architecture of blockchain technology, which can be
used in other other supply chains, when the new design seems to have a positive effect on the
supply chain. The actors in the supply chain can benefit, when a central authority is available
to guard against actors sharing incorrect information or actors committing fraud in the supply
chain via the blockchain.

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3 Methodology
In this chapter the methodology for this research will be described. The first section gives
an overview of all the methods that will be used and which methods are used to answer the
subquestions. In the following sections, each method will be briefly described and what is
needed to use the regarding method.

3.1 Method Overview

The main method of this research is the case study, which will be performed at a company
that uses blockchain technology in their supply chain. The case study is used to evaluate the
effects of adding a central authority to a blockchain. Therefore, the actors that are involved
need to be analysed in a given supply chain, the authority of sharing information needs to be
known which results in assigning an actor that might be able to act as a central authority in
the blockchain. This case study will answer three out of four subquestions, which will result in
answering the main question. Another reason for doing a case study is that there have not been
any case studies on the lack of central authority in blockchain technology according to section 4.

In order to answer the first subquestion interviews will be performed. Interviews are conducted
to gain a broad insight from different supply chains on the use of blockchain technology without
a central authority guarding the shared information. The way of conducting these interviews
and a more detailed explanation about the case study are given in the following sections.

Subquestion Method used

1. How is blockchain technology used in supply chains? Interviews
2. Which actors are involved in the supply chain? Interviews/Case Study
3. How is the authority to share information currently
Interviews/Case Study
arranged in blockchain?
4. Which actor(s) can act as a central authority in
Case Study
a blockchain in a supply chain?

Table 1: Methods used to answer the subquestions

3.2 Interviews
Interviews are conducted with multiple companies that use blockchain technology in the supply
chain to share information with all the actors. The questions that will be asked to an employee of
the company are about how blockchain technology is used in the supply chain. Another question
will be about which actors are involved in the supply chain and what kind of information is
shared between the actors through blockchain. A final question can be about the arrangement
of the central authority in the blockchain that is used by the company. It is important to know
what the rights are of each actor in the blockchain and how that is currently arranged in the
blockchain.

3.3 Case Study

The main method is the case study, which is used in order to see what the effects will be when
blockchain with a central authority is used in the supply chain. In order to select a suitable
company, multiple companies have been contacted for an interview and a possibility for a case

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study. The companies have been selected on the use of blockchain technology in their supply
chain. Microsoft Corporation is the company that has been chosen for the case study. Mi-
crosoft Corporation is a multinational technology company which produces and sells computer
software, consumer electronics and related services. This company uses Azure blockchain ser-
vices, which is used to share information between the businesses that produce the products of
Microsoft Corporation. The blockchain technology used by Microsoft enables users to create
smart and efficient supply chains, reduce frauds, and verify transactions rapidly.

First, interviews have been conducted with an employee from Microsoft Corporation asking the
questions that have been described in subsection 3.2. Now, this method is used to answer the
second, third and fourth subquestion. After answering the fourth subquestion, a suggestion
will be made about the actor that can act as a central authority. Then, an analysis will be
performed on the effects that it has on the sharing information between all actors and those
are compared to the supply chain of Microsoft that uses Azure blockchain services.

The comparison can be best made if one product is followed in the supply chain using both
blockchain with and without central authority. First, Azure blockchain services are used and
it is noted what information is shared by which actor. Second, the blockchain with a central
authority is used and again the information that is shared by who is noted down. This com-
parison can be done for multiple products to see if there is any change in the information that
is being shared when a central authority is in the blockchain. Then, results can be deducted
from the multiple comparisons that have been made and a conclusion can be drawn about the
addition of central authority in blockchain.

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4 Literature Review
In this chapter the literature review that has been conducted for this research is given. The
first section explains the methodology of the literature review. The next section gives the
analysis, in which blockchain technology is explained first and then the existing literature on
digital trust and supply chain relationship management in blockchain technology is elaborated
on. Following, a conclusion of the literature study will be given. Finally, the discussion explains
some remarks that have to be considered when studying this subject.

4.1 Methodology
This literature review is performed by searching for relevant articles via Scopus. First, an article
on understanding the blockchain technology in which a systematic literature review was per-
formed is used [14]. From this article an interesting challenge within the blockchain technology
has been chosen and this challenge is used to find interesting articles on blockchain technology
with the challenge.

In order to find more articles on the topic the keywords in Table 2 have been placed into the
search engine Scopus. The result gave 876 articles. Therefore, the chosen challenge has also
been added as a keyword in the search engine, while it would search for this challenge in the
title, abstract and keywords. First, digital AND trust was added, which resulted in 44 articles.
Since it is an innovative topic, only articles from the year 2022 have been used, which resulted
in 8 articles.

Secondly, supply AND chain AND relationship AND management has been added as search
words in the title, abstract and keywords. This resulted in 48 articles, thus again only the
articles from 2022 are used, which gave 13 articles. Not all articles were accessible or relevant.
Therefore, only the relevant articles have been chosen for this challenge, which resulted in the
following articles that have been used for this literature review [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11,
12, 13, 15, 16, 17].

The final article [14] that is used, has been found by searching for "blockchain technology
literature review" on Google Scholar. It was the first article and gave an informative overview
of blockchain technology and the challenges within blockchain technology.

Table 2: Conceptual and methodological framework for literature review

Keywords blockchain technology; supply chain

Title, Abstract and Keywords digital AND trust
supply AND chain AND relationship AND management

4.2 Analysis
According to [14], there are multiple challenges in blockchain technology and one of the chal-
lenges is the digital trust and the supply chain relationship management. The digital trust in a
supply chain that uses blockchain technology is sensitive, since there is no central authority to
enforce honesty in blockchain-enabled supply chains. Therefore, an analysis has been performed
about the current situation in blockchain technology, used in supply chains, regarding the dig-
ital trust and the relationship management within the supply chain. The literature review will

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start with a section on the characteristics and adaptions of blockchain technology, then the
digital trust in the current situation is discussed and finally, the current situation for supply
chain relationship management is elaborated on regarding the use of blockchain technology.

4.2.1 Blockchain Technology

Blockchain technology is a way to share knowledge safely and securely with multiple actors.
The knowledge is shared in a secure and safe way by using a cryptoanalytic hash function.
Blockchain can also be referred to as “a distributed data infrastructure" [14]. A communication
network has nodes on it and these nodes use a communication protocol. In order to have a
back-up of the information, each node has a copy of the blockchain and also a consensus func-
tion, which has been implemented to verify certain transactions and to keep the immutability
of the blockchain. The immutability of the blockchain means that transactions can not be
changed easily.

On multiple computers, either in a public or private network, a blockchain is stored. Once a

transaction occurs, a block is used and the transaction is put into a block. All blocks are added
together in an irreversible chain and therefore it is called a blockchain. When the blocks are
collected in a chain, they cannot be deleted or changed by anyone. The blocks are verified and
managed by governance protocols [14]. The structure of a standard blockchain string can be
seen in Figure 1.

Figure 1: Strucutre of a blockchain string

Note. Retrieved from [14]

Blockchain technology can be used for financial transactions between different actors, but it can
also be used to register the location of a product within a supply chain or to share other relevant
information within a supply chain where multiple actors are involved. When it is used in a
supply chain, there is no single actor that controls the data. Instead all the involved actors can
see the entire data infrastructure. However, there are two types of blockchain in terms of access
control, namely public and private blockchain. In a public blockchain everyone is allowed to
submit transactions, participate with the consensus process and read the blockchain. Examples
of public blockchains are Bitcoin and Ethereum. In a private blockchain, the actors need to
receive an invitation or ask for permission to join, where a single actor has access control of the
blockchain [14].

4.2.2 Digital Trust

On the one hand blockchain technology develops trust in a supply chain [1, 3, 4, 5, 8, 10], while
on the other hand identifying the need to develop inter-organizational trust in the supply chain

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is a challenge [6, 12]. It can be stated that one of the drivers to adopt blockchain technology in
a supply chain is consumer trust. Other factors are high consistency and data veracity, which
are related to the digital trust in the supply chain [5, 12]. Even though it is mentioned that
trust is a factor which drives the adoption of blockchain, the challenge of blockchain adoption is
to trust all actors to use the immutability in an honest way. Therefore, the collective behaviour
and the consensus of a group that validates the information is an important factor for the
immutability of the blockchain technology [12]. This makes trust an important factor to adopt
blockchain technology in the supply chain, but trust is also a necessary factor in order to adopt
blockchain technology in a suitable way in the supply chain. When blockchain technology is
adopted in a supply chain, a framework is used to highlight the key phases in the adoption.
Creating trust in blockchain technology is one of the stages in the framework, which shows the
importance of trust in blockchain technology [10].

There are already successful applications of blockchain technology in agri-food, automotive,

diamond, education, e-voting, financial, healthcare, pharmaceutical and smart supply chains
[8, 10], where blockchain technology is described as “the most trustworthy and promising dis-
tributed ledger". One of the motivations to support the use of blockchain technology in the
healthcare system is the data integrity, which ensures traceable and identifiable data of the
patients. This information is trustworthy, which implies that it is reliable, precise, complete
and up-to-date. Multiple healthcare projects in blockchain technology are also mentioned, such
as MediShares, FarmaTrust and Guardtime HSX, which are all trustworthy, safe and secure
projects where blockchain technology is implemented. Finally, it is proven that blockchain
technology can protect patients from fake suppliers, since it creates a network of trusted sup-
pliers. Therefore, it seems that blockchain technology should be adapted in the healthcare
supply chain, but there are still some social challenges, like adapting cultural shifts, such as
new policies. So it is required to investigate the way in which blockchain technology would
assist to secure the medical data integrity.

Another application of blockchain technology is in the short food supply chain, where the quality
of the goods is crucial, just like trust [1]. In the study the architecture of blockchain technology
is presented for the short food supply chain, which includes a trust layer that has a trust
mechanism which provides insights on the reputation, expertise and knowledge of stakeholders,
and encouragements on performance are also provided. In order to support trust even more
digital signatures are needed when information wants to be changed in the system. In this way
it is ensured that the data is immutable and tamper-proof. Even though the architecture of
the blockchain technology used in this supply chain seems trustworthy, trust remains complex,
which leads to the need of future research.

4.2.3 Supply Chain Relationship Management

The adoption of blockchain technology in a supply chain of various sectors can influence the
traditional business processes, such as in the fresh fruit supply chain and in the green supply
chain management [2, 17]. Also in the shipping supply chain the relationships between the
actors can differ and the type of relationship between the actors impacts which model is used,
which is important to determine if blockchain technology can be applied in a cost efficient way
or not [15]. The relationships within the supply chain will truly benefit when big data analytics
is used combined with blockchain technology and these relationships might also become more
transparent when applying blockchain technology [9, 16].

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Furthermore, implementing blockchain technology can also have positive effects on the rela-
tionships between the different actors in the supply chain. Since it is used to share knowledge
with the different stakeholders it can have a positive influence on other business areas, such
as the customers’ service. This area is improved due to the collaboration of the stakeholders
with information sharing. This results that the development of relationships is one of the main
advantages of knowledge sharing with blockchain technology. Therefore, trustworthy relation-
ships are established by means of blockchain technology. Other advantages of using blockchain
technology to improve the relationships within the supply chain are the data visibility, the im-
provement of trust of the supply chain actors, the improvement in collaboration in the supply
chain, the improvement of the performance of the supply chain, and the improvement of the
speed of the supply chain [7, 11].

Even though there are many advantages mentioned for the relationships within the supply chain
when blockchain technology is adapted, there are also some disadvantages and constraints. One
disadvantage for the supply chain relationships is the lack of central authority or coordination.
Since the information that is shared in blockchain technology can only be adjusted under specific
circumstances, however there is not one central authority having control of all the information
and checking the validity of the shared knowledge. Additionally, there are also some constraints
for the supply chain relationships when blockchain technology is implemented, such as the
inertia of the participants of the supply chain, the lack of trust between the actors within the
supply chain, and the cultural differences that occur between the participants of the supply
chain [11].

4.3 Conclusion
The characteristics and adaptions of blockchain technology have been explained, which men-
tioned that a public blockchain is accessible for everyone without any single actor being able to
control the data. While in a private blockchain the control of the blockchain is controlled by a
single actor. The implementation of blockchain technology can develop trust in a supply chain,
and therefore trust is an important driver to implement blockchain technology. However, all
actors need to trust each other that the immutability of the blocks is used in an honest way, thus
that the blocks in the blockchain contain correct information. In the healthcare supply chain
they support the adaption of blockchain technology, although research needs to be done on the
way of securing the integrity of the medical data. Furthermore, the architecture of blockchain
technology in food supply chains seems trustworthy, but the construction and development of
trust are complex and can vary between different food systems, which also leads to a possibil-
ity for future research. For the supply chain relationship management there are positive and
negative effects, but the lack of central authority or coordination within the supply chain of the
blockchain technology is an effect that needs more research as well. Concluding, the research
gaps are the way of securing the medical data integrity, the complexity of trust within the
architecture of blockchain technology, and the lack of central authority or coordination.

4.4 Discussion
The way in which the integrity of medical data is secured is an interesting research gap, since
medical data contains personal information, which is very sensitive for the person involved,
and it is important that the contained information is true, because it may have information on
certain medicines or medical diseases. For the complexity of trust in blockchain technology it is

10
important to gather more information, because the actors within the supply chain should trust
each other and the information that is shared between them. Otherwise the use of blockchain
technology for information sharing in a supply chain is not worth the trouble. Finally, the lack
of central authority or coordination with blockchain technology may be interesting to investi-
gate more, since the main question will be who is responsible if incorrect information is shared
within the supply chain. But also what would happen if unethical behaviour takes place. Then,
it is of high importance to know who is responsible, which is rather difficult if there is no central
authority in the blockchain that can take control of these kind of situations.

The research gap on the lack of central authority is chosen to study further for this research.
Since it is important to know what would happen in situations as described in the previous
paragraph. These situations can also be extended to situations where corruption might take
place in the blockchain technology. Therefore, it is important to know how the lack of central
authority can be guarded against corruption or incorrect information. This can be researched
by doing a case study, since some articles showed a case study. Interviews can also be conducted
with different companies that already use blockchain technology in their supply chain.

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5 Planning
In Figure 2 the planning for this research project is given. The project is divided into five
phases, namely the starting phase, the interviews, the design, the case study and the finishing
phase. In the start phase the research proposal of the thesis will be finalized and a kick-off
meeting will be held with the committee. Then, the interviews will be conducted in the second
phase. In the third phase the design of a blockchain with central authority will be created.
In week 10 there will be a mid-term meeting to update the committee on the progress of the
thesis. The next phase is the case study, which will be performed at Microsoft Corporation,
as described in subsection 3.3. Finally, the finish phase is used to finalize the report, have a
greenlight meeting with the committee and also have a final presentation. Furthermore, there
will be weekly meetings with the supervisors of the project to ask questions on the project.

Figure 2: Gantt-chart of thesis research

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