커피 공급망의 전통적 순환경제 vs 통합적 블록체인 기

술 비교 연구
초느에진랏 1, 이구구 치세케디 에티엔 1, 무함마드 필다우스 2, 이경현 3
1
부경대학교 정보보호학과
3
부경대학교 인공지능융합학과
3
부경대학교 컴퓨터인공지능공학부 교수
chocho1612@pukyong.ac.kr, etienneiget5@gmail.com, mfirdaus@pukyong.ac.kr, khrhee@pknu.ac.kr

Traditional Circular Economy vs Integrated Blockchain

Technology in the Coffee Supply Chain: A Comparative
Study
Cho Nwe Zin Latt1, Igugu Tshisekedi Etienne1, Muhammad Firdaus2, Kyung-hyune Rhee3
1
Dept. of Information Security, Pukyong National University
2
Dept. of Artificial Intelligence Convergence, Pukyong National University
3
Division of Computer and AI Engineering, Pukyong National University

Abstract
The circular economy approach in the coffee supply chain promotes a more sustainable, environmentally
friendly, and socially responsible coffee industry. It aims to reduce the environmental impact of coffee production
and consumption while ensuring the long-term viability of coffee farming communities and ecosystems. However,
there are many challenges in the traditional circular economy coffee supply chain. Hence, this paper undertakes a
comparative analysis between the traditional circular economy coffee supply chain and its integration with
blockchain. As a result, we display the benefits of incorporating blockchain technology into the conventional
circular economy framework of the coffee supply chain. Additionally, this integration promises to overcome the
challenges in the traditional circular economy coffee supply chain.

1. Introduction coffee supply chain is crucial for promoting sustainable

The coffee supply chain is a critical aspect of the coffee coffee development and ensuring the industry's
business, and its management plays a significant role in competitiveness. Blockchain technology has been adopted in
ensuring the success and sustainability of the industry. the traditional circular economy of the coffee supply chain to
Several factors influence the performance and sustainability improve transparency, traceability, and efficiency in asset
of the coffee supply chain. These factors include economic, tracking. Implementing blockchain in the coffee retailer
social, and environmental aspects and the flow of materials, network can bring transparency, sustainability, and efficiency
information, and finances. Implementing strategies based on in asset tracking [1]. The blockchain facilitates a more
supply chain sustainability indicators can help overcome the efficient circular economy system, especially in closed-loop
challenges faced in the coffee supply chain, such as blocked supply chain (CLSC) systems. The adoption of blockchain
chains and non-optimal flow. Additionally, green supply technology enables better return processes by improving the
chain management practices, such as green cultivation, operations in CLSC and services in reverse omnichannel.
processing, and distribution, can address common problems The proposed blockchain technology model can identify and
in coffee processing, such as waste management and reduce functional growth risk factors in the green supply
ecological impact. Top management sensitivity and chain economy. Blockchain technology can improve
institutional forces can stimulate supply chain coordination corporate governance, environmental impact, and social good
towards green, leading to improved financial and market by increasing supply chain transparency, traceability, and
performance. Understanding and effectively managing the accountability [2]. The implementation of blockchain
technology for the coffee supply chain was explored through economy [5]. The food sector is ready to follow the coffee
a proof of concept on Hyperledger Fabric, which allowed for business in closing the production loop, which will reduce
tracing product origin using a distributed ledger. resource costs and cause damage to the environment.
This paper examines how the traditional circular economy
(CE) coffee supply chain can be improved by integrating
blockchain technology, as well as how to deal with its
existing problems [3]. By integrating blockchain technology
into the coffee supply chain, our key purpose is to increase
transparency, traceability, and accountability throughout the
whole supply chain process.
The structure of this paper is as follows: Section 2 explains Figure 1. Coffee Supply Chain
the traditional circular economy of the coffee supply chain.
Section 3 discusses the comparison of coffee supply chains
2.1 The challenges of traditional circular economy in the
and the benefits of integrating blockchain technology. Finally,
Section 4 concludes this paper. coffee supply chain
The challenges in the coffee supply chain can be addressed
2. Traditional circular economy in the coffee supply by implementing an integrated plan involving sustainable
chain infrastructural facilities, attempts to end farmer poverty,
The concept of "traditional circular economy" in the recycling damaged products, and supplier monitoring
framework of the coffee supply chain in Figure 1 refers to the utilizing environmental standards [6].
traditional linear model of coffee production, distribution, A number of barriers hinders the traditional circular
economy in the coffee supply chain, including:
and consumption, where resources are extracted, processed,
• Climate change: Decades of the "take-make-waste"
used, and disposed of with little regard for sustainability or mentality have created a climate problem, and due to
environmental impact [3]. With little attention paid to waste global warming, the coffee industry is at risk of reduced
management, environmental effects, emission reduction, or efficiency. The quantity of area that can be used to grow
resource optimization, coffee beans are cultivated, harvested, coffee is currently decreasing due to rising temperatures,
processed, and transported to various supply chain steps, and coffee leaf rust outbreaks are becoming more
including roasting, packaging, distribution, and consumption. common due to unpredictable rainfall patterns.
It can be challenging to trace coffee beans' origin, quality, • Complex supply chain: It is difficult to apply circular
economy methods since the coffee supply chain is
and sustainability practices and to ensure accountability for
complicated and has many intermediaries. Circular
their effects on social and environmental issues since the economy production systems face significant obstacles
traditional circular economy in the coffee supply chain because of the supply chain for coffee capsule
requires increased transparency and traceability. However, manufacture that uses reverse logistics.
with the development of innovative technologies like • Resistance to change: The transition to a circular
blockchain, there is a chance of transforming the existing economy requires a considerable change in perspective
circular economy in the coffee supply chain through and behavior, and certain participants in the coffee
supply chain may be resistant to change. For the coffee
enhancing transparency, traceability, and accountability and
business to save money and protect the environment, it
encouraging environmentally friendly practices throughout must transition to a circular economy.
the supply chain process [4]. • Lack of infrastructure: Implementing circular economy
By preserving products and supplies in use and principles in the coffee supply chain can require large
regenerating the environment, the traditional circular infrastructure investments, such as in waste
economy in the coffee supply chain works to reduce waste management and recycling systems.
and pollution. The coffee industry is aware of how critical it • Limited consumer awareness: There may not be enough
demand for circular economy products and consumers
is to move toward a circular economy, and there are many
may need to be made aware of the advantages of a
ways to do it. Reusing coffee pulp, organic pruning waste, circular economy in the coffee supply chain.
and wastewater from coffee processing is one technique to
increase the productivity of coffee farms and the livelihoods In the final analysis, there are several challenges to the
of farmers. Utilizing leftover coffee grounds for diverse traditional circular economy in the coffee supply chain, such
products including biofuels, bioplastics, and cosmetics is as climate change, an elaborate supply chain, opposition to
another option. The entire coffee supply chain must be change, a lack of infrastructure, and low consumer awareness.
considered to achieve a circular economy, and solutions that All participants in the coffee supply chain will need to work
emphasize regeneration rather than extraction must be put together and be innovative to overcome these challenges [7].
into practice. A major challenge will be the shift to a circular
3. Comparison of Traditional vs Blockchain-Integrated industry. By increasing efficiency, the coffee supply chain
CE Coffee Supply Chain can become more circular, and waste can be reduced.
• Improved sustainability: By adding a digital layer to the
We compared the features of the traditional circular
physical commodity flow and enabling the valorization of
economy (CE) coffee supply chain with the CE coffee supply
waste and byproducts, blockchain technology can
chain integrated with blockchain in Table 1. The features
enhance the ecological embeddedness of the coffee
compared included traceability, transparency, security,
supply chain. The coffee supply chain's increased
efficiency, cost, complexity, and regulation [8]. As a result,
sustainability could reduce its adverse environmental
following are some advantages of integrating blockchain
impacts.
technology into the coffee supply chain:

Table 1: Comparison of CE Coffee Supply Chain

Feature Traditional Circular Economy Coffee Supply Blockchain-Integrated Circular Economy Coffee Supply Chain
Chain
Traceability Limited traceability, as information, is often A higher traceability standard since the blockchain can be used to
siloed and not shared between different actors track coffee bean transportation from the farm to the cup. This
in the supply chain. can support sustainable production and trade of coffee.
Transparency Limited transparency, as information about Consumers may have better access to information about the
the coffee supply chain, is often not accessible coffee supply chain with increased transparency due to
to consumers. technologies like blockchain. This may foster accountability and
trust.
Security Vulnerable to fraud and tampering, as Blockchain is a decentralized technology that makes transactions
information is often stored in centralized more secure since it resists fraud and tampering.
databases.
Efficiency It can be inefficient, as the coffee supply It is more efficient since blockchain may improve the coffee
chain is often fragmented, and different actors supply chain and reduce the need for mediators.
need more coordination.
Cost It can be expensive, as implementing circular Although the cost of deploying blockchain technology can be
economy practices can be expensive, considerable, the cost is anticipated to decrease as the technology
especially for small coffee farmers. develops.
Complexity It can be complex, as circular economy In addition to being a complicated technology, blockchain can be
practices can be challenging to implement and hard to understand and use.
require coordination between different actors.
Regulation The regulatory environment for circular Additionally, still developing is the regulatory framework
economy practices is still evolving. surrounding blockchain technology.

• Transparency: Blockchain technology can increase

transparency in the coffee supply chain so that growers
can see where their beans are used, and customers can
learn more about the origins of their coffee. This
transparency can ensure that farmers receive just crop
payments and uphold sustainable farming methods.
• Traceability: By enabling end-to-end traceability
throughout the coffee supply chain, blockchain
technology enables customers to follow their coffee beans
from the farm to the cup. This traceability guarantees that
coffee beans are sourced ethically and that social and
environmental criteria are maintained.
• Reduced risks: Blockchain technology can lower supply
chain transparency, forgery, and fraud risks. The
performance of businesses in the coffee supply chain may Figure 2. Integration Blockchain in the coffee
increase due to this risk reduction. supply chain
• Increased efficiency: By reducing intermediaries and the
time and money they add to the supply chain, blockchain. As discussed in section 2, the traditional circular economy
technology can improve the efficiency of the coffee of the coffee supply chain faces several challenges, such as
climate change, a complex supply chain, disagreement with Acknowledgement
change, a lack of infrastructure, and a lack of consumer This research was supported by the MSIT (Ministry of
awareness. Blockchain technology can help address some of Science and ICT), Korea, under the Special R&D Zone
these issues by bringing transparency, traceability, and Development Project (R&D) - Development of R&D
efficiency to the coffee supply chain, and by enhancing the Innovation Valley support program (2023-DD-RD-0152)
ecological embeddedness of the coffee supply chain through supervised by the Innovation Foundation.
incorporating a digital layer into the physical commodity
flow and enabling the valorization of waste and byproducts. References
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