A BLOCKCHAIN-BASED SMART CONTRACT MODEL FOR SECURE SUPPLY CHAIN OPTIMIZATION IN KENYA’S TEA SECTOR

Abstract

The environment of the international supply chain is continually evolving. The tea industry in Kenya plays a vital role in the country's economy, providing employment opportunities and generating substantial export revenue. However, the traditional supply chain management processes within the industry face challenges such as inefficiencies, lack of transparency, and limited trust among stakeholders. These issues result in fraud, counterfeiting, and payment delays, which diminish the efficiency and profitability of the tea supply chain. Blockchain technology, with its innovative capabilities, has shown great promise in improving supply chain networks and influencing societal practices. This study explored how blockchain-based smart contracts could address problems related to trade transparency, data management, and security in the tea supply chain industry. The study sought to design, test, and validate a blockchain-based smart contract model for Kenya’s tea supply chain. Specifically, it focused on assessing the existing ICT infrastructure and process automation, examining collaboration dynamics and regulatory factors affecting transparency, developing a secure and efficient blockchain model, and validating its effectiveness in enhancing data exchange, traceability, and overall supply chain performance. The study used a pragmatist research philosophy, which worked well with the deductive approach, due to the many realities. The Research design used was cross-sectional survey design, exploratory study of tea companies in Kenya both multinational companies, KTDA owned companies, focusing on the way the organizations manage tea data, and how tea trade is done. The study employed a number of theoretical frameworks, including Principal Agency Theory, Transaction Cost Analysis Theory, Resource Based View Theory, and Network Theory, to direct its examination of blockchain-based supply chain management. To organize the research, a cross-sectional survey method was used. The study collected and analyzed data using a mixed methods technique that included an interview guide and a standardized questionnaire. While theme analysis was used to examine the qualitative data, descriptive and inferential statistics were used to assess the quantitative data. Data was collected from a study population of 754 staff from different selected tea companies’ workers from which a sample size of 156 was obtained using the formula by Kothari with a 95% confidence level. Quantitative data collected was analyzed using the frequency test and correlation coefficient analysis. The standardized path coefficients and their respective p values, indicated a significant association between blockchain smart contracts for tea supply chain management and all the independent constructs. There is significant relationship between ICT Infrastructure and blockchain smart contracts for tea supply chain management (H1) with � � = .488 and p –value = .040. Likewise, data integration and Automation and blockchain smart contracts for tea supply chain management (H2) is significant with 𝛽 = .970 and p –value = .047. Collaboration equally has direct positive and meaningful effect on blockchain smart contracts for tea supply chain management (H3) with 𝛽 = .843and p –value = .036. Lastly, security and privacy construct has an influence on blockchain smart contracts for tea supply chain management (H4) with 𝛽 = .105and p –value =. 022.Consequently, the datasets for each factor satisfactorily fit the hypothesized model incorporating all the four independent constructs. The results of this study provided the foundation for developing the blockchain smart contract model for tea supply chain management. The model, refined through the research, effectively meets the stated objectives in Kenya. The presented model can help guide adoption of blockchain smart contract implementation in Kenya.