Application of blockchain technology for addressing reverse logistics challenges: current status and future opportunities

Abstract

Blockchain Technology (BCT) was originally envisioned as a networked record database of digital transactions. Though it was introduced to the general public as the driving force behind the development of digital currency, now it is being used in many operations including supply chain (SC) and reverse supply chain (RSC) due to its ability of secured information sharing, improving real-time communication, and trustbuilding among all logistics and supply chain partners (Kazancoglu et al. 2022). Users who have been granted permission to access the system’s database are tasked with the responsibility of confirming supply chain transactions that have taken place with a particular provider. By using this tool, one can accomplish both continuous traceability and decentralised security (Mukherjee, Singh, and Mishra et al. 2021). In this system, every block unit is connected to another, and the system either expands or grows in proportion to the number of people who participate in it (Corea 2019). The rise in popularity of websites that facilitate online commerce, such as Amazon, Alibaba, Ali Express, and eBay, has contributed to an increase in the demand for products throughout the world. This increase in demand has led to an increase in the number of businesses that are competing to meet consumers’ demands. This increased demand is also leading to a rise in the relevance of a practice known as ‘reverse logistics (RL)’, in which things that have been previously purchased are shipped back to their original sellers for a variety of reasons. Despite the fact that this accounts for approximately 30% of the demand (Panigrahi et al. 2018), the administration of returned items provides some problems. Maintaining a record of a product that has been returned for one of two reasons – because it was discovered to be defective or because it is no longer required – requires the use of an RL system. This results in additional expenses (Queiroz and Fosso Wamba 2019), and in this situation, BCT can be used to create an efficient management system that is capable of covering all aspects, including the management of recalled goods as well as their placement back in the inventory of the product or of their resale, repair, recycling, remanufacturing, repurposing, warranty, or disposal (Saberi et al. 2019). The application of BCT in RL makes it possible to control risks and, in particular, to consolidate the data emerging from internet of things (IoT) sensors (Hrouga, Sbihi, and Chavallard 2022). Additionally, it offers improved visibility and transparency by removing the trust disadvantages that exist in RL. Because of advancements in information and communication technology, massive volumes of data are being produced and disseminated. This, in turn, has led to an increase in the number of devices that are connected to the internet. It is possible for this to be of assistance to businesses in the process of reorganising their supply chain networks to make those networks more responsive and maybe more socially responsible (Mukherjee, Singh, and Mishra et al. 2021). Further, because of BCT’s distinctive characteristics, such as security, privacy, and the ability to eliminate duplication and fraud in transactions, businesses are more likely to implement this technology into their forward and reverse supply chains (Khan et al. 2021). Many companies are viewing RL as a competitive strategy, an asset recovery, a profit centre, and a tool to increase customer satisfaction (Beheshti, Heydari, and Sazvar 2022). RL systems collect wastes obtained throughout the SC and return them to the manufacturer as raw materials so they can be put back into production (Lai et al. 2022). In this context, BCT can be used to assist in the recycling and management of returned products to avoid causing damage to the environment for high-risk goods such as chemicals, electronic products, and machines. This can be accomplished by avoiding the release of harmful chemicals into the environment and managing returned products in such a way that they are not lost or forgotten. Application of BCT also reduces the amount of time and effort required by a company to recall a product by minimising delays or collecting accompanying data, which can be used for prompt decision-making that is both effective and efficient to make improvements where needed. In addition, the use of BCT in inventory management contributes to the assurance of product authenticity, which is an important component of a measure to lessen the possibility that the products will be substituted with counterfeit variants of the same product. As a result of the potential for exceeding product-service safety and quality standards, the sale of counterfeit goods has a negative impact on both the manufacturing and service provider industries. This is because fake SUPPLY CHAIN FORUM: AN INTERNATIONAL JOURNAL 2023, VOL. 24, NO. 1, 1–6 https://doi.org/10.1080/16258312.2023.2165279