Considering the traceability awareness of consumers: should the supply chain adopt the blockchain technology?

Abstract

Blockchain technology is an emerging technology developed in recent years. It has powerful information traceability function. The blockchain technology plays an important role in monitoring product quality and responding to product safety problems. Under considering the traceability awareness of consumers and the cost of using the blockchain technology, should the supply chain adopt the blockchain technology? The research on this issue deserves great attentions. In this paper, for a three-stage supply chain consisting of a supplier, a manufacturer and a retailer, we study the optimal pricing strategies of the supply chain considering the traceability awareness of consumers in two scenarios. These two scenarios are: scenario N (i.e., the supply chain does not adopt the blockchain technology) and scenario B (i.e., the supply chain adopts the blockchain technology). On this basis, we discuss the conditions that the supply chain adopts the blockchain technology by comparing the optimal profits of the supply chain and its members in two scenarios. Further, we discuss the problem of supply chain coordination when adopting the blockchain technology. The results show that it is conditional for the supply chain to adopt the blockchain technology, and the condition is related to the traceability awareness of consumers, the production costs of the supplier and manufacturer, and the cost of using the blockchain technology. We also find that under a certain condition, the revenue sharing contract can realize a Pareto improvement for the supply chain that adopts the blockchain technology.