Different SCM practices serve different purposes, for example, close partnership with the supplier is a practice that focuses on investing for the sake of integration with the supplier (Pakurár et al., 2019). However, third party logistics focuses on cost and effort saving by contracting with service providers (Tezuka, 2011). Therefore, it is important to understand which supply chain practice impacts operational performance significantly. Consequently, the study identifies nine SCM practices and proposes to measure the impact of these SCM practices on operational performance. Based on this the second research question is developed as follow:

Blockchain is arguably the updated technology that can be used to support the SCM practices via increasing the integration among all SCM functions (Cole et al., 2019). However, it is very important to understand the different features Blockchain provides (Utakaeva, 2019; Viriyasitavat & Hoonsopon, 2019) and how these features can influence different supply chain practices. If the Blockchain features impact most of the supply chain practices it means it may enhance the operational performance accordingly. In recognition of this, this study attempts to investigate whether the supply chain practices of the oil industry in Pakistan are aligned with Blockchain features or not constructing our third research question as follow:

To answer the research questions, first, the supply chain practices of the oil industry in Pakistan were identified, then analyzed the impact of these practices on operational performance, empirically. The results show that the SCM practices positively impact operational performance. On the other hand, with the help of literature, we identified different Blockchain features and their influence on different supply chain practices. This study guides managers and decision-makers to evaluate their current supply chain practices and understand the relationship between supply chain practices and Blockchain features, and how different Blockchain features can help improving supply chain practices and ultimately improving operational performance.

The remainder of this study is structured as follows. Section 2 is a literature review, with an extensive explanation of the oil supply chain, bridging the SCM practices, operational performance with Blockchain, conceptual framework, and hypotheses development. Section 3 is based on the proposed methodology. The results are comprehensively discussed in section 4, and conclusions included the theoretical and practical implications, limitations, recommendations, and future work are summarized in section 5.

Oil is one of the world’s most important raw materials, has been considered to be the most prominent source of energy since the mid of the 1950s, and is one of the most significant parts of the world economy. Emerging technologies, markets, and changing consumer needs have affected the competitive advantages of companies, establishing the need for the reengineering of the oil business (Lisitsa et al., 2019). The oil supply-chain has complex structures similar to those of fast-moving consumable goods (Ahmad et al., 2017; Saad et al., 2018). The oil supply-chain operations are categorized into three functional segments, namely, upstream, midstream, and downstream. The upstream oil supply-chain segment based on exploration and production activities are related to finding the crude-oil reserves. The midstream oil supply-chain involves processing, storage, and transportation of crude oil to refineries, where it is turned into marketable products. Last, the downstream segment is a margin business, because downstream activities provide the value added by means of the refinery process and provide numerous products, such as diesel, petrol, jet fuel, furnace oil, heating oil, kerosene, and lubricants for their consumers. All these segments of the oil supply-chain deal with the flow of products, capital, and information at the same time. This process requires an integrated supply-chain approach to solve the problems within the entire chain and to improve the efficiency of complex supply-chain networks (Lisitsa et al., 2019). Fig. 1 describes the segments of the oil supply chain.

Fig. 1.

Segments of oil supply-chain.

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In this era, where Pakistan has been struggling with energy resources, Pakistan’s oil industry has a special effect on the energy sector as well as on the country’s economic growth. Petroleum products are highly consumable resources for producing commercial energy. In Pakistan, industrial (transport, power generation, and manufacturing) as well as the domestic sector are highly reliable in the supply of petroleum products to meet manufacturing and logistics needs (Guo et al., 2019). Pakistan’s oil supply chains are moving towards online financial transactions, order tracking, and scheduling while dealing with many suppliers. This shift requires a strong, secure, and effective IT infrastructure to deal with cyber-security issues. Therefore, this study proceeds with the belief that the oil sector of Pakistan needs to be explored. Because of complex oil supply-chain networks, the chances of uncertainties are high and integration is the best solution to control all functions with real-time information-sharing platforms (Asim et al., 2019; Birasnav & Bienstock, 2019). This is the right time to investigate the need for introducing the Blockchain into its supply chain for improving productivity and efficiency as a highly secure network. Because in a transition from a traditional to a smarter supply chain, where the supply chains have more stable structures and competitors have standard products to offer on standard prices controlled by the government, the process of innovation is the right way to be competitive.

According to the Council of Supply Chain Management Professionals (CSCMP), SCM is based on two fundamental approaches; (i) planning, implementing, and controlling the primary activities and delivering value for the ultimate customers, and (ii) the integration and coordination of corresponding business processes within as well as across the companies. The integration of the supply chain can be considered to be a force trying to uplift the relationships between all the segment in the supply chain to enable better decision-making by providing visibility and highlighting the bottlenecks (Cole et al., 2019; Feyissa et al., 2019; Sadraoui & Mchirgui, 2014). Blockchain for supply chain management is a digital innovation an emergent enabling technology and it provides distinctive features such as real-time information sharing, cyber-security, transparency, reliability, traceability, and visibility which improve the efficiency of the supply chain (Behnke & Janssen, 2020; Cole et al., 2019; Helo & Hao, 2019; Phadnis, 2018). Operational performance is categorized into two dimensions, cost-based and time-based performance, in the context of the supply chain. Cost-based performance is associated with the “cost of engineering change, cost of quality, and manufacturing cost”. The time-based performance is allied with “manufacturing lead time, delivery speed and reliability, and inventory turnover rate” (Yeung, 2008). The organization's operational performance relies on three fundamental approaches; resources, routine, and capabilities. Resources consist of a firm’s assets, which can be tangible or intangible; the routine includes processes that use the resources; and capabilities consist of knowledge and skills in executing routines (Peng et al., 2008). Blockchain features that will highly improve the business models consist of a framework having these three approaches (Morkunas et al., 2019).

The implementation of SCM depends on the set of several activities that are called SCM practices. The SCM practices have various elements and dimensions that cover all aspects of the supply-chain processes; these include integration, information sharing, outsourcing, strategic supplier partnerships, customer relationships, postponement, and lean practices (Green et al., 2019; Kaliani Sundram et al., 2016; Min et al., 2019). In this paper, we have derived a combination of nine SCM practices from literature, such as the close partnership with the supplier, close partnership with the customer, just in time (JIT), strategic planning, outsourcing, e-procurement, third-party logistics, subcontracting, and many suppliers (Balal Ibrahim & Adam Hamid, 2012; Kaliani Sundram et al., 2016; Koh et al., 2007; Li et al., 2005). Close partnership with suppliers and customer helps the organization to develop trust along with gaining competitive advantages (Frederico, 2015). To achieve this, useful information such as resources, constraints, design plans, forecasts, and production plans are shared with suppliers and customers. Whereas, third party logistics, outsourcing, and subcontracting SCM practices provide the benefits of cost and effort saving by contracting with specialized service providers and become more flexible and responsive in the global business environment (Li et al., 2006). Just in time (JIT) brings a myriad of advantages to a firm including lower inventory level, reduced costs, and shortened lead time because the philosophy of JIT holds that materials arrive at the right time and right place with the right quantity (J. Yang et al., 2021). However, JIT also highly depends on supplier integration and becomes very hard to achieve without supplier integration such as in the case of DELL (Malhotra et al., 2017). E-procurement is considered to be a SCM practice to manage the procurement process by increasing transparency and accountability. E-procurement is an important instrument for preventing corruption in purchasing (Nurmandi & Kim, 2015) and adds value to the efficacy of operational processes as well as the limpidity of supply chain functions (Faheem & Siddiqui, 2020). Many suppliers is, a practice to increase responsiveness, where instead of building a relationship with one supplier, many suppliers are considered however, this makes the supply chain complex and requires a systematic transactional process. Consequently, supply chain management is a complex network that involves technology, people, resources, activities, and information to convert the raw materials into the finished products and distribute these products to end consumers. Therefore, strategic planning is considered effective SCM practice to control and evaluate the supply chain functions and provide a better solution to a particular problem (Lambiase et al., 2013; Liberatore & Miller, 2010). Considering the general supply-chain processes; plan, source, make, and deliver, and management levels; operational, strategic, and tactical, the operational performance of the oil sector is divided into six dimensions such as (i) Reduced lead time, (ii) Flexibility, (iii) Forecasting, (iv) Cost-saving, (v) Resource planning, and (vi) Reduced inventory level (Gunasekaran et al., 2004; Koh et al., 2007).

Blockchain can improve the integration and coordination between supply-chain functions. Table 1 describes the relevancy of Blockchain features with SCM practice and operational performance.

The SCM practices have widely received importance from consultants, academicians, and managers because it played a vital role for firms to maintain competitive advantages by enhancing profitability and improve the operational performance in the global marketplace (Hasan, 2013; Truong et al., 2017). SCM practices (close partnership with the supplier, close partnership with the customer, just in time (JIT), strategic planning, outsourcing, e-procurement, third-party logistics, subcontracting, and many suppliers) are improving the firm operational performance (Reduced lead time, Flexibility, Forecasting, Cost-saving, Resource planning, and Reduced inventory level) (Gunasekaran et al., 2004; Koh et al., 2007; Roespinoedji et al., 2019). Blockchain is arguably the updated technology that can be used to support the SCM practices via increasing the integration among all SCM functions (Cole et al., 2019). The conceptual framework depicted in Fig. 2 shows the effects of SCM practices on operational performance and explores the relationship of Blockchain features with SCM practices.

Fig. 2.

Framework of study.

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As an initial step, to validate the relationship between supply chain practices and operational performance. The study investigates the below hypotheses and test them empirically.

H1: Supply chain practices have positive and significant impact on operational performance.

Moreover, this study also explores the effect of each SCM practice on operational performance with the following hypotheses.

H1a: Close relationship with suppliers has positive and significant impact on operational performance.

H1b: Close relationship with customers has positive and significant impact on operational performance.

H1c: Just in time (JIT) has positive and significant impact on operational performance.

H1d: Strategic Planning has positive and significant impact on operational performance.

H1e: Many Suppliers has positive and significant impact on operational performance.

H1f: Outsourcing has positive and significant impact on operational performance.

H1g: E-procurement has positive and significant impact on operational performance.

H1h: Third Party Logistics (3 PL) has positive and significant impact on operational performance.

H1i: Subcontracting has positive and significant impact on operational performance.

The oil industry of Pakistan is distributed into three business segments: refineries, oil marketing companies (OMC’s), and traders & distributors. Refineries convert crude oil into refined oil products, such as furnace oil, petrol, diesel, kerosene, and lubricants. The OMC’s, traders, and distributors work in the same domain by supplying petroleum products to the customers in highly competitive environments. In total, 5 refineries, 28 OMC’s, and 100 traders and distributors are currently registered under the Oil and Gas Regulating Authority (OGRA) of Pakistan, giving a total population of 133 entities (Saleh, 2015). We used a non-probability convenience and judgmental (professional expertise) sampling technique to collect the data from the supply-chain managers of the oil companies in January 2020. The questionnaires were circulated to supply-chain managers of 100 different companies (refineries, OMCs, and traders & distributors). After the elimination of incomplete responses, 80 organizations were selected. The response rate of this survey was 80%. The details of selected samples with a total percentage of the population from various organizations are given in Table 2.

We adapted the questionnaire from the previous study based on survey design for tested the implementation of SCM practices for operational performance in small and medium enterprises (Koh et al., 2007) and pre-tested it to ensure that the format, wording, and structure were suitable for this research. A combination of nine SCM practices was recognized and adapted from Koh et al. (2007). These asked respondents about what level of SCM practices were used in their organization, by means of ranking on a five-point Likert scale, where 1= “not at all implemented” to 5 = “fully implemented”. Six questions were used for operational performance to ask about the effect of implemented SCM practices on a firm operational performance, and a five-point Likert scale was used ranging from “definitely better” to “definitely worse” for this part (See Appendix A). Moreover, the demographic questions were asked to the supply chain manager such as gender, age, qualification, and operating region in Pakistan, and the data was coded and input in SPSS and evaluated with statistical methods i.e. validity or factor loading, reliability, descriptive, correlation, and regression analysis.

In the preliminary analysis, 10 (12.5%) of the respondent are female and 70 (87.50%) are male supply chain managers from the total sample which indicate that this sector is male dominant at managerial level. In terms of age group, 34 (42.50%) people belonged to the 36-45 age group, 24 (30%) belonged to above 45 years and these two values make a cumulative percentage of 72.5% which explains that the maximum respondents are from the higher age group as well as extensive work experience. 18 (22.5%) respondents belonged to the 25−35 years age group and only 4 (5%) people were under 25 years. Besides, 40 (50%) of the participants earned a master’s degree, whereas 30 (37.50%) held a bachelor’s degree, 6 (7.50%) respondents were under bachelor’s qualification and only 4 (5%) participants were post-graduates. Regarding the operating regions, Pakistan has four provinces namely, Punjab, Sindh, Khyber Pakhtunkhwa (KPK), and Balochistan and 42 (52.5%) oil organizations operate in Punjab, 24 (30%) in Sindh region, 10 (12.5) in Khyber Pakhtunkhwa (KPK), and 4 (5%) operate in Balochistan. The demographic profile of respondents is summarized in Table 3.

The measurement items were examined by Cronbach’s Alpha (α) and factor loading analysis via SPSS. The results indicate, in Table 4, the factor loading range from 0.792 to 0.640 (greater than 0.4), and the value of Cronbach’s alpha lies from 0.734 to 0.754 (greater than 0.7) shows good internal consistency and reliability in the measurements (Beckett et al., 2017).

As descriptive statistics and correlation analysis of this study, SCM practices and operational performance variables are presented in Table 5. The correlation value is 0.433, which shows that the SCM practices and operational performance have a significant correlation.

Regression analysis used to examine the derived hypothesis (H1) is presented in Table 6, and those for Hypotheses (H1a → H1i) are presented in Table 7.

The result shows that the supply-chain practices have a positive and significant impact on operational performance, with a coefficient value of 0.573 and p< 0.05; therefore hypothesis (H1) of this research is accepted with shared empirical evidence from the oil industry of Pakistan.

Table 7 shows that all identified SCM practices have a positive and significant impact on the operational performance of the Pakistan oil sector. The purpose of this step is twofold. First, if the impact of combined practices is not significant, which did not happen in this case, then can evaluate which practices are insignificant and can be removed from the analysis. Second, it allows us to look at how much each practice affects operational performance. The result of this step showed that the “close relationship with suppliers” has the highest coefficient value of 0.463, followed by the “close relationship with customers” with a value of 0.352. The relevance of supplier's customer's relationship to operational performance highlights the need for integration, which directly influences the Blockchain features, such as real-time information sharing, cyber-security, transparency, reliability, traceability, and visibility (Table 1). Outsourcing and third-party logistics (3 PL) are numbers three and four, respectively, which makes sense because the oil industry outsources transportation and uses logistic services. However, both practices also need to be a high level of integration for best performances, because when companies get dependent on other companies, this integration is key.

Similarly, the rest of the SCM practices have a significant impact on the operational performance of the oil industry of Pakistan. And all these SCM practices of the oil industry of Pakistan highly rely on integration and Blockchain is the state of the art technology which play a significant role to uplift the integration (Hasan et al., 2020; Kim & Shin, 2019; Kshetri, 2018; Rogerson & Parry, 2020). Unfortunately, despite the importance of this, Blockchain has not yet been implemented into supply chains, it is impossible to prove the impact of Blockchain features on SCM practices and operational performance. However, the literature sheds light on this relationship, and based on the literature it is assumed that Blockchain features enhance the performance of SCM practices. The proposed literature-based relationship is depicted in Table 1, which explains how different Blockchain features enhance different SCM practices on the other hand this study statistically proved the impact of SCM practices on operational performance. This argument summarizes that Blockchain adoption will ultimately improve operational performance while the SCM practices have a role similar to a mediator. Fig. 3 helps us to understand this relationship in more detail. In the case of the oil industry of Pakistan, it has a complex structure that needs strong integration, the relationship between Blockchain features and SCM practices was developed, while the relationship between SCM practices and operational performance was also proved empirically. Therefore, we conclude that integration is a common attribute between supply chain management practices and Blockchain. The best form of integration can be achieved with the adoption of unique Blockchain features such as real-time information sharing, cyber-security, transparency, secure transactions, reliability, traceability, and visibility (Hald & Kinra, 2019; Kshetri, 2018; Mylrea & Gourisetti, 2018; Queiroz et al., 2019). Fig. 3 depicts the implementation of Blockchain features with SCM Practices and each color line express the relationship of each Blockchain feature on SCM Practice as previously described in Table 1.

Fig. 3.

Implementation of blockchain features with SCM practices.

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