Abstract
In the post-pandemic era, food supply chains and firms therein are facing unprecedented severe challenges, because once infection is detected, numerous products must be recalled or abandoned, and both suppliers and retailers in the supply chain suffer enormous loss. To survive under the pandemic, retailers have adopted different sourcing strategies, such as contingent sourcing, which, in turn, affect the upstream suppliers and hence the resilience of the whole supply chain. With the rapid development of digital technologies, retailers nowadays can utilize blockchain as a reliable and efficient way to reduce product risk and hence advance the resilience of food supply chains by improving product traceability and inspection accuracy, and making sourcing transparent. In this paper, we develop a game-theoretic model to investigate the interrelation between the retailer’s decisions on blockchain adoption and sourcing strategies. We consider that a retailer originally orders from a risky supplier while conducting an imperfect inspection to detect infected products before selling. The retailer may speculatively keep on ordering from the risky supplier or adopt contingent sourcing by ordering from an alternative safe supplier. The retailer also has an option to implement blockchain to improve the inspection accuracy and product traceability. We derive the optimal retail prices under different sourcing strategies with and without blockchain adoption and then analyze the incentives for sourcing strategy and blockchain adoption. Then, we identify the conditions of an all-win situation for food retailer, supplier, supply chain resilience, and consumers with/without government subsidy. Finally, we extend to consider the situation that some consumers have health-safety concerns and preferences for blockchain adoption.
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This work was supported in part by the National Natural Science Foundation of China (Grant Nos. 72071113 and 71701222), Excellent Applied Research Program of Jiangsu Provincial Federation of Philosophy and Social Sciences (Grant No. 22SYB-098), Humanities and Social Science Fund of Ministry of Education of China (Grant No. 21YJC630052), Natural Science Foundation of Guangdong Province (Grant No. 2019A1515010492), Social Sciences and Planning Fund of Shenzhen (Grant No. SZ2022C009), Stable Support Plan Program of Shenzhen Natural Science Fund (Grant No. 20200812134420001), and SZU-LU Joint Research Programme (Grant No. 202202003).
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Shi, X., Chen, S. & Lai, X. Blockchain adoption or contingent sourcing? Advancing food supply chain resilience in the post-pandemic era. Front. Eng. Manag. 10, 107–120 (2023). https://doi.org/10.1007/s42524-022-0232-2
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DOI: https://doi.org/10.1007/s42524-022-0232-2