OPERATIONAL RISK MANAGEMENT IN GLOBAL SUPPLY CHAINS: THE ROLE OF BLOCKCHAIN IN ENHANCING TRACEABILITY

Nurul Aziz Pratiwi

doi:10.62207/m6hgfa70

Authors

Nurul Aziz Pratiwi Universitas Aisyiyah Bandung, West Java, Indonesia Author

DOI:

https://doi.org/10.62207/m6hgfa70

Keywords:

Blockchain, Traceability, Global Supply Chain, Operational Risk Management, Smart Contracts, Risk Mitigation

Abstract

Operational Risk Management (ORM) is crucial for maintaining global supply chain resilience, but disruptions can increase costs, reduce quality, and cause significant financial losses, as evidenced by a 26% increase in cargo theft incidents by 2024, with estimated losses exceeding USD 1 billion. Enhanced traceability is key to risk mitigation, in line with the projected blockchain traceability market reaching USD 44.3 billion by 2034. This study examines how blockchain adoption impacts ORM through improved traceability using a narrative synthesis of peer-reviewed articles from 2015–2025 in Scopus, Web of Science, ScienceDirect, and Google Scholar. The analysis focuses on blockchain-based traceability mechanisms, the types of risks addressed, and the impact on risk mitigation. The results show that blockchain enhances traceability through immutable, transparent, and decentralized data records, reducing fraud, counterfeiting, and compliance issues. Smart contracts enable process automation, reducing delivery delays, and increasing efficiency. These findings are supported by the Transaction Cost Economics (TCE), Resource-Based View (RBV), and Supply Chain Risk Management (SCRM) frameworks, emphasizing transaction cost reduction, competitive advantage, and risk mitigation. Blockchain plays a strategic role in transforming global supply chains, although implementation faces challenges related to cost and integration of legacy systems. Further studies are recommended using quantitative and longitudinal approaches for long-term evaluation.

References

Aslam, M., Jabbar, S., Abbas, Q., Albathan, M., Hussain, A., & Raza, U. (2023). Leveraging ethereum platform for development of efficient tractability system in pharmaceutical supply chain. Systems, 11(4), 202. https://doi.org/10.3390/systems11040202

Cai, C., Hao, X., Wang, K., & Dong, X. (2023). The impact of perceived benefits on blockchain adoption in supply chain management. Sustainability, 15(8), 6634. https://doi.org/10.3390/su15086634

Chelh, S. and Ababou, M. (2023). Improving green supply chain resilience through blockchain innovation: a risk mitigation perspective. E3s Web of Conferences, 412, 01056. https://doi.org/10.1051/e3sconf/202341201056

Chowdhury, S., Rodríguez-Espíndola, O., Dey, P., & Budhwar, P. (2022). Blockchain technology adoption for managing risks in operations and supply chain management: evidence from the uk. Annals of Operations Research, 327(1), 539-574. https://doi.org/10.1007/s10479-021-04487-1

Deloitte. (2024). Using Blockchain to Drive Supply Chain Transparency. Accessed from https://www.deloitte.com/us/en/services/consulting/articles/blockchain-supply-chain-innovation.html

Frolov, D. (2020). Blockchain and institutional complexity: an extended institutional approach. Journal of Institutional Economics, 17(1), 21-36. https://doi.org/10.1017/s1744137420000272

Fu, Y. and Zhu, J. (2019). Big production enterprise supply chain endogenous risk management based on blockchain. Ieee Access, 7, 15310-15319. https://doi.org/10.1109/access.2019.2895327

Gruchmann, T., Elgazzar, S., & Ali, A. (2023). Blockchain technology in pharmaceutical supply chains: a transaction cost perspective. Modern Supply Chain Research and Applications, 5(2), 115-133. https://doi.org/10.1108/mscra-10-2022-0023

Helo, P. and Hao, Y. (2019). Blockchains in operations and supply chains: a model and reference implementation. Computers & Industrial Engineering, 136, 242-251. https://doi.org/10.1016/j.cie.2019.07.023

Hong, L. and Hales, D. (2023). How blockchain manages supply chain risks: evidence from indian manufacturing companies. The International Journal of Logistics Management, 35(5), 1604-1627. https://doi.org/10.1108/ijlm-05-2023-0178

Ioannou, I. and Demirel, G. (2022). Blockchain and supply chain finance: a critical literature review at the intersection of operations, finance and law. Journal of Banking and Financial Technology, 6(1), 83-107. https://doi.org/10.1007/s42786-022-00040-1

Kshetri, N. and Loukoianova, E. (2019). Blockchain adoption in supply chain networks in asia. It Professional, 21(1), 11-15. https://doi.org/10.1109/mitp.2018.2881307

Mahyuni, L., Adrian, R., Darma, G., Krisnawijaya, N., Dewi, I., & Permana, G. (2020). Mapping the potentials of blockchain in improving supply chain performance. Cogent Business & Management, 7(1), 1788329. https://doi.org/10.1080/23311975.2020.1788329

Market.us. (2024). Blockchain for Supply Chain Traceability Market Size - By Component (Platform, Services), By Deployment Model (Cloud-based, On-premises), By Organization Size, By Technology, By Application, By End User & Forecast, 2024 - 2032. Accessed from https://market.us/report/blockchain-for-supply-chain-traceability-market

McKinsey & Company. (2024). McKinsey Global Supply Chain Leader Survey 2024. Accessed from https://www.mckinsey.com/capabilities/operations/our-insights/supply-chain-risk-survey

Munir, A., Habib, M., Hussain, A., Shahbaz, M., Qamar, A., Masood, T., … & Salman, C. (2022). Blockchain adoption for sustainable supply chain management: economic, environmental, and social perspectives. Frontiers in Energy Research, 10. https://doi.org/10.3389/fenrg.2022.899632

NY Post. (2025). Crime rings attack US supply chain at record rates using this sneaky tactic. Accessed from https://nypost.com/2025/05/09/business/crime-rings-attack-us-supply-chain-at-record-rates-using-this-sneaky-tactic-report/

Recorded Future. (2024). Supply Chain Threats: Understanding Operational Risks. Accessed from https://www.recordedfuture.com/threat-intelligence-101/risk-assessment-management/supply-chain-threats

Revathi, M., Lakshmi, T., & Goud, K. (2024). Impact of blockchain technology in supply chain system. Int Res J Adv Engg Mgt, 2(05), 1670-1672. https://doi.org/10.47392/irjaem.2024.0238

Tan, B., Wang, F., Liu, J., Kang, K., & Costa, F. (2020). A blockchain-based framework for green logistics in supply chains. Sustainability, 12(11), 4656. https://doi.org/10.3390/su12114656

Tijan, E., Aksentijević, S., Ivanić, K., & Jardas, M. (2019). Blockchain technology implementation in logistics. Sustainability, 11(4), 1185. https://doi.org/10.3390/su11041185

Turgay, S. and Erdoğan, S. (2023). Enhancing trust in supply chain management with a blockchain approach. Journal of Artificial Intelligence Practice, 6(6). https://doi.org/10.23977/jaip.2023.060609

Wang, Z. and Wang, K. (2023). Design of international railway logistics management system based on mda and smart contract., 95. https://doi.org/10.1117/12.3011076

Xia, J., Li, H., & He, Z. (2023). The effect of blockchain technology on supply chain collaboration: a case study of lenovo. Systems, 11(6), 299. https://doi.org/10.3390/systems11060299

Zhu, P., Hu, J., Zhang, Y., & Li, X. (2020). A blockchain based solution for medication anti-counterfeiting and traceability. Ieee Access, 8, 184256-184272. https://doi.org/10.1109/access.2020.3029196