Adoption of Blockchain in Critical Minerals Supply Chain Risk Management

Introduction

The expansion of the United States high-capacity battery market drives increasing demand for critical minerals such as lithium, cobalt, and nickel, especially for use in electric vehicles, stationary storage, and defense applications (Fleischmann et al., 2023). This growth offers the US opportunities in job creation, environmental progress, and national security. It also highlights challenges in the supply chain, however, mainly due to limited domestic processing capabilities and an underdeveloped recycling infrastructure (Meegoda et al., 2022). In selecting U.S. critical minerals companies as the focus of this study, we aim to address the unique challenges and strategic importance of this sector in the context of national security, technological advancement, and sustainable development. The critical minerals industry is at the forefront of supply chain vulnerabilities, making it an ideal setting to explore the potential of blockchain technology in enhancing supply chain resilience. While resilience and agility are crucial in supply chain management, this study emphasizes resilience due to the increasing frequency of disruptions and their impact on the critical minerals supply chain. By concentrating on resilience, we seek to contribute to developing robust and adaptable supply chain strategies that can withstand and recover from unforeseen challenges.

Supply chain risk management (SCRM) aims to safeguard businesses from adverse events by managing the variability in supply chain outcomes, likelihoods, and impacts (Jüttner et al., 2003). SCRM is crucial in enabling firms to gain a competitive edge and enhance performance, primarily through innovative methods that augment supply chain efficiency, effectiveness, and resilience (Bag et al., 2021; Madhani, 2021). Key to this is the multifaceted understanding and addressing of risk involving culture, strategy, and team dynamics. The division of SCRM into culture, strategy, and team dynamics is grounded in a comprehensive approach to risk management that recognizes the multifaceted nature of supply chains.

Within SCRM culture (SCRMC), risks arise from resistance to change and innovation, which can hinder the adoption of technologies such as blockchain. An aversive culture can lead to missed opportunities, inefficiency, and competitive disadvantage (Dowty & Wallace, 2010). Conversely, a culture that encourages innovation, continuous learning, and adaptability can significantly mitigate these risks, leveraging technologies such as blockchain to enhance supply chain operations and maintain competitiveness. The SCRMC acknowledges that organizational culture is crucial in perceiving, managing, and mitigating risks. A culture resistant to change can significantly hinder the adoption of innovative technologies and processes, whereas a proactive, adaptable culture can facilitate quicker responses to disruptions and opportunities for growth (Altay et al., 2018).

Strategic planning in SCRM (SCRMS) involves aligning blockchain adoption with organizational goals and effectively mapping out the necessary procedures and resources for integration (Kadadevaramth et al., 2020; Narwane et al., 2021). SCRMS focuses on aligning risk management practices with organizational goals and objectives. This alignment ensures that the strategies for managing supply chain risks are integrated with the company's overall direction, thereby maximizing resource utilization and achieving strategic objectives efficiently. Risks in this domain are linked to misalignments in strategy and execution, leading to potential resource misallocation and ineffective implementation (Sofyalıoğlu & Karatal, 2012). A well-crafted strategy, however, can capitalize on blockchain's strengths, such as increased transparency and security, thereby improving supply chain resilience and operational efficiency (Rauniyar et al., 2023).