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Frontiers of Engineering Management

ISSN 2095-7513

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Front. Eng    2020, Vol. 7 Issue (4) : 500-511    https://doi.org/10.1007/s42524-020-0124-2
RESEARCH ARTICLE
Blockchain-driven supply chain finance solution for small and medium enterprises
Jian LI1, Shichao ZHU1, Wen ZHANG1, Lean YU2()
1. School of Economics and Management, Beijing University of Technology, Beijing 100124, China
2. School of Economics and Management, Beijing University of Chemical Technology, Beijing 100029, China
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Abstract

Blockchain has attracted much attention in recent years with the development of cryptocurrency and digital assets. As the underlying technology of cryptocurrency, blockchain has numerous benefits, such as de-centralization, collective maintenance, tamper-resistance, traceability, and anonymity. The potential of the blockchain technology (BT) is widely recognized in the financial field. Although some scholars have proposed the combination of blockchain and supply chain finance (SCF), the details of this combination is rarely mentioned. This study first analyzes the coupling between SCF and blockchain technology. Second, the conceptual framework of blockchain-driven SCF platform (BcSCFP) is presented. Third, the operation process of three SCF models on the BcSCFP is proposed. Finally, a case study combined with actual events is conducted. This paper has a positive practical significance in the operation and management of banks and loan enterprises.
Keywords blockchain technology      supply chain finance      risk management      smart contract      decentralization     
Corresponding Author(s): Lean YU   
Just Accepted Date: 28 June 2020   Online First Date: 27 July 2020    Issue Date: 02 November 2020
 Cite this article:   
Jian LI,Shichao ZHU,Wen ZHANG, et al. Blockchain-driven supply chain finance solution for small and medium enterprises[J]. Front. Eng, 2020, 7(4): 500-511.
 URL:  
https://academic.hep.com.cn/fem/EN/10.1007/s42524-020-0124-2
https://academic.hep.com.cn/fem/EN/Y2020/V7/I4/500
Fig.1  Diagram of the interaction between nodes.
Fig.2  Information flow and functions between nodes.
Fig.3  Conceptual framework of the BcSCFP.
Smart contract type Content of the contract
Repurchasing When the retailer has surplus goods and the sales revenue is not enough to pay off the bank principal and interest, the surplus goods ownership and the payment for purchasing are automatically transferred.
Goods supervision When goods are stored in 3PL institutions, they are monitored by IoT technology, and the status information is uploaded to the BcSCFP automatically. When the status of goods reaches critical, the platform automatically alarms.
Loan This contract includes the loan contract content signed by the bank and the loan enterprise
The loan is repaid automatically on the payment due date
Transport In the process of transportation, the system monitors the distribution temperature, route, and other status in real time. If the temperature or other status information exceeds the standard, the system alarms automatically
Tax Enterprises in the supply chain pay taxes automatically through this contract
Discount When consumers buy a certain number of products, they can have automatic discounts through this contract
Tab.1  Some types of smart contracts and their related contents
Fig.4  Asymmetric encryption process.
Fig.5  Digital signature and authentication process.
Fig.6  Process of advance payment financing in the BcSCFP.
Fig.7  Process of accounts receivable financing in the BcSCFP.
Fig.8  Process of inventory pledge financing in the BcSCFP.
Fig.9  BcSCFP-driven accounts receivable financing scenario.
Items Traditional SCF BcSCFP-driven SCF
Service object Primary suppliers and retailers SMEs in the supply chain
Interaction method Paper document Online and offline
Risk management Advance evaluation Real-time monitoring
Availability of credit Difficult and expensive Low cost, convenient
Credit transfer Only to tier 1 suppliers and retailers To the end of the supply chain
Bank human cost Expensive human costs for checking Almost no human cost
Bank verification time Long Short
Repayment guarantee No Smart contract
Tab.2  Comparison between traditional and BcSCFP-driven SCF models
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