Integration of IoT and Blockchain for Smart and Secured Supply Chain Management: Case Studies of China

Introduction

Since the 2008 financial crisis, many countries began to study digital technologies in order to cope with the complex financial environment. This led to changes in finance technology innovation and advancement in the technology; thus, created a fast-paced, technology-led finance environment. As a trading power, e-commerce has become a major factor in China which cannot be neglected. The earliest history of e-commerce in the world began in 1970s, when electronic trading was conducted mailing financial institution. As a result, the electronic data interchange (EDI) expanded the forms of transaction. In the 1990s, the World Wide Web (the “Web”) allowed the companies to send and receive texts and photos, and the term E-commerce was introduced. Afterward, the E-commerce has reformed from B2C to B2B, as in the Chinese case of Alibaba, and then to B2E, and will continue to develop in the future (Turban et al., 2018). With the economic development and the improvement of people’s living standards, technology expanded China’s commerce from the traditional offline to online commerce and expanded the national as well as the international market. In 2015, payment services, online loans, data analytics and automated investment have developed into the fastest-growing areas for big data in finance (Monaco, 2019).

The data on industry e-procurement in China from2013 to 2019 published by the National Bureau of Statistics show a clear tendency. 2013, national e-procurement amounted only to 34662.9 billion Yuan. However, 6 years later that number more than tripled to 101275.1 billion Yuan, (National Bureau of Statistics, 2020). In Figure.1, the x-axis represents the years, while the y-axis represents e-procurement quantities in different years and the different colors on each column represent enterprises from different industries. All of the numbers are recorded in units of 10 billion yuan to show the yearly changes in the industry shares. As an important part of supply chain management (Chartered Institute of Procurement and Supply (CIPS), no date), the amount of e-procurement in different industries is gradually increasing in recent years.

Figure 1.

E-procurement amount from 2013-2019

Data source: National Bureau of Statistics

With the advent and development of Industry 4.0, improved communication provides more choice to the customers and increased risks and uncertainties, an issue that modern enterprises need to consider (Scholten & Fynes, 2017). The strategic and technical choice of supply chain management is particularly important when an enterprise is faced with many suppliers and different projects, which are related to whether the enterprise can realize the potential benefits of the project and then reap the profit (Wei et al., 2021). In order to solve similar problems, the application of digital technology in supply chain management has become the focus of many enterprises. A survey on blockchain in China published by Weilian and Puhuayongdao shows that respondents think that logistics is the most valuable field for this application, accounting for 63.3% of the statistics of application ranked first. Meanwhile, 20% of the enterprises are using blockchain for supply chain management, and the majority of respondents are optimistic about the use of the technology (Weilian & Puhuayongdao, 2018). This shows that the application of digital technologies such as blockchain in supply chain management in China has a good mass base and the support of enterprises. In fact, with the policy support of Chinese leaders and the drive of leading figures from various industries, many enterprises have applied digital technologies such as internet of things (IoT) and blockchain in supply chain management and benefitted by combining them.