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.
Volodymyr Babich is the Lapeyre Family Term Associate Professor of Business Administration at the McDonough School of Business, Georgetown University. In the past he has been a visiting scholar at the Wharton School at the University of Pennsylvania, an Assistant Professor at the University of Michigan, Ann Arbor, and an engineer at Penske Logistics Engineering, Cleveland, OH. He earned his Ph.D. in Operations Research from Case Western Reserve University, Weatherhead School of Management. He also holds M.S. degrees in Management Science and Mathematics. Prof. Babich’s research interests are the interface of operations and finance, supply risk management, supply chain management, stochastic modeling, and risk management. His research has been supported by the National Science Foundation, and multiple university and industry grants. His papers have been published in leading Operations Research, Operations Management, and Industrial Engineering journals. Prof. Babich serves as an associate editor for Management Science, Manufacturing & Service Operations Management, and Naval Research Logistics, and as a senior editor for Production and Operations Management. He is an active member of INFORMS, POMS, and the MSOM societies, and has served as the Chair of the MSOM Special Interest Group on the Interface of Finance, Operations, and Risk Management (iFORM).