Distributed Ledgers and Operations: What Operations Management Researchers Should Know About Blockchain Technology

Forthcoming in Manufacturing & Service Operations Management

Georgetown McDonough School of Business Research Paper No. 3131250

38 Pages Posted: 7 Mar 2018 Last revised: 6 Sep 2018

See all articles by Volodymyr Babich

Volodymyr Babich

McDonough School of Business, Georgetown University

Gilles Hilary

Georgetown University - Department of Accounting and Business Law

Date Written: August 27, 2018

Abstract

Blockchain is a form of distributed ledger technology. While it has grown in prominence, its full potential and possible downsides are not fully understood yet, especially with respect to Operations Management (OM). This article fills this gap. After briefly reviewing the technical foundations, we explore multiple business and policy aspects. We identify five key strengths, the corresponding five main weaknesses, and three research themes of applying Blockchain technology to OM. The key strengths are (1) visibility, (2) aggregation, (3) validation, (4) automation, and (5) resiliency. The corresponding weaknesses are (1) lack of privacy, (2) lack of standardization, (3) garbage in, garbage out, (4) black box effect, and (5) inefficiency. The three research themes are (1) information, (2) automation, and (3) tokenization. We illustrate these research themes with multiple promising research problems, ranging from classical inventory management, to new areas of ethical OM, and to questions of Industrial Organization.

Keywords: blockchain, distributed ledger, supply chain, operations management

JEL Classification: M4, M11, M15, M41, M48, M49

Suggested Citation

Babich, Volodymyr and Hilary, Gilles, Distributed Ledgers and Operations: What Operations Management Researchers Should Know About Blockchain Technology (August 27, 2018). Forthcoming in Manufacturing & Service Operations Management; Georgetown McDonough School of Business Research Paper No. 3131250. Available at SSRN: https://ssrn.com/abstract=3131250 or http://dx.doi.org/10.2139/ssrn.3131250

Volodymyr Babich

McDonough School of Business, Georgetown University ( email )

3700 O Street, NW
Washington, DC 20057
United States

Gilles Hilary (Contact Author)

Georgetown University - Department of Accounting and Business Law ( email )

McDonough School of Business
Washington, DC 20057
United States

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