Implementation mode selection for blockchain technology in green product traceability

Abstract

Implementing blockchain technology to improve traceability can enhance consumer trust in green supply chains. However, the associated high fixed costs can pose challenges for companies when choosing the implementation mode. In this study, we investigate the value of blockchain adoption and explore a manufacturer’s choice between third-party or self-implementation. Specifically, we consider the traceability level and the greenness degree in a supply chain comprising a manufacturer, a retailer, and a third-party platform providing blockchain services. Our findings indicate that self-implementation by the manufacturer increases the degree of greenness, and the retailer’s involvement in decisions about traceability levels improves the manufacturer’s traceability level. The highest profits for supply chain members are achieved when both parties opt for self-implementation. Additionally, self-implementation outperforms third-party platform implantation when incentivizing the manufacturer to invest more in green and blockchain technologies. Consequently, blockchain technology’s value exceeds its costs, encouraging supply chain members to select self-implementation whenever possible. However, when the fixed costs or the cost coefficient of green investment or traceability are excessively high, the manufacturer may need to outsource blockchain services to a third-party platform. Furthermore, through comprehensive system dynamics analysis, we find that blockchain’s adoption or non-adoption and imposing an investment cap on the product’s green degree have a little effect on profitability for suppliers, manufacturers, logistics providers, and third-party platforms.