Upstream Supply Research Articles

Using Blockchain, Non-Fungible Tokens, and Smart Contracts to Track and Report Greenhouse Gas Emissions

ABSTRACT Global markets are moving toward requiring firms to track and report greenhouse gas emissions across their value chain. This includes self-generated emissions (i.e., Scope 1), emissions from power providers (i.e., Scope 2), and emissions from upstream suppliers and downstream parties (i.e., Scope 3). Yet, obtaining reliable emissions data is a complex task that often relies on cumbersome legacy processes and becomes especially challenging with upstream and downstream emissions. Using the Design Science Research Methodology, we propose and prototype (early-stage) a technological solution that uses blockchain, non-fungible tokens, and smart contracts to track and report greenhouse gas emissions across a firm’s value chain. The proposed model demonstrates how these tools can create a reliable classification and provenance of emissions that all value chain members can access for reporting purposes. Experts in the field evaluate the proposed model, find it technologically feasible, and call attention to some of its challenges. JEL Classifications: C81; P28; Q51; Q55; Q56.

How do 3D printing suppliers facilitate manufacturers’ product differentiation via component provision? A scope economies perspective

Drawing from observed component transactions between 3D Printing (3DP) companies and traditional manufacturers, we build a game model to investigate how an upstream 3DP supplier can foster a downstream manufacturer’s product differentiation by offering differentiated components at a reduced cost with scope economies enabled by 3DP technology. Our model characterises the supplier’s 3DP technology using three parameters: printing variety, the quantity threshold for scope economies (QTSE), and the degree of scope economies. We derive analytical conditions under which distinct equilibrium outcomes: product differentiation with scope economies, neither product differentiation nor scope economies, and scenarios where product differentiation without scope economies emerge. Surprisingly, we discover that advancements in the supplier’s 3DP production technology may not necessarily benefit either the manufacturer or the supplier. Specifically, a reduction in the QTSE required to activate scope economies leads to increased profit for the supplier but decreased profit for the manufacturer. Furthermore, an expansion in the printing variety can enhance one party’s profit at the expense of the other party.

Financing an overconfident distribution channel

This paper examines the effect of overconfidence on financial decisions in a capital-constrained distribution channel where an upstream supplier with sufficient working capital produces goods for a downstream retailer who has limited working capital and may request trade credit from the upstream supplier. We obtain several interesting results. First, in a centralized financially constrained channel (CFCC) setting, we show that overconfidence has the results that both the optimal order quantity is tied to the mean of the uncertain market demand and that the supply chain is worse off. Second, in a decentralized financially constrained channel (DFCC) setting, the optimal order quantity with overconfidence is either higher or lower than that without overconfidence. When the retailer needs to ask for trade credit from the supplier, overconfidence means that the retailer’s order quantity is less affected by the wholesale price. We further numerically show that under market demand uncertainty, overconfidence may benefit a DFCC composed of an overconfident supplier and retailer. We also analyze the impacts of varying overconfidence levels on our results and find that the retailer may benefit when the retailer is more overconfident than the supplier.

Studying the Moderating Effects of Additive Manufacturing Best Practices Between Supply Chain Complexity and Its Performance

Background: Supply chain performance (SCP) is impacted by complexity brought about by static and dynamic drivers. This study aims to investigate the effects of supply chain complexity (SCC) on SCP and ascertain whether additive manufacturing best practices have moderating effects on this relationship. Methods: Using data from 29 Ethiopian footwear industries and 205 respondents, the relationship established in the theoretical framework was validated using structural equation modelling (SEM). Results: The study’s findings provided several important insights. First, upstream supply chain complexity (USSCC), midstream supply chain complexity (MSSCC), and downstream supply chain complexity (DSSCC) negatively affect SCP. Second, additive manufacturing best practices have significant moderation effects between supply chain complexity and supply chain performance. Third, the negative impacts of USSCC and MSSCC on SCP are reduced at a higher level of additive manufacturing adaptation. The findings of this study also revealed that the effects of DSSCC on SCP have no difference at both low and high levels of additive manufacturing best practices. Conclusions: This work offers the first empirical investigation to which the detrimental effects of SCC on SCP are mitigated or improved through the moderating role of additive manufacturing best practice.

Uncovering effects of supply chain distance on sustainability adoption: empirical evidence from a multi-stakeholder partnership

PurposeTo investigate the effects of supply chain (SC) distance on sustainability adoption, this study aims to advance the way prior studies on SC sustainability presume that SC structures are well-developed and stable. Since SC members face structural voids in different regions, we recognize that the information flow is impacted as SC partners often have limited knowledge of their direct partners. Thus, by studying a multi-stakeholder partnership, this article sheds light on the institutional foundation of sustainability adoption issues largely neglected to date.Design/methodology/approachA qualitative case study was used with members of an MSP (i.e. a roundtable), to understand the beef SC located in Brazil. Overall, 18 h of interview recordings and notes from 18 h of meeting observations were gathered, equaling 36 h of primary data.FindingsFour dimensions of SC distance (physical, organizational, cultural and institutional) were identified, generating three driving effects on symbolic sustainability adoption and, consequently, a degree of invisibility for beef SC members. The results explain the process of sustainability adoption and highlight that smaller and more upstream suppliers show lower degrees of substantive adoption of SC sustainability practices.Originality/valueThis study investigates how SC distance affects the alignment of SC members in terms of sustainability adoption. By providing reflections on how institutional distance can hinder suppliers from adopting sustainability requirements they received from the SC, this research contributes to shifting from sustainability discourse to real practice and proactive partner engagement.

Disturbance in Multitier Supply Chain Under Competition

Disturbances in production along with volatile demand have raised concerns over shortfalls in the global supply chain and prompted the need to build a more diversified supply chain with competitive suppliers. This research investigates the impact of disturbances on a two-tier supply chain network with asymmetric competing firms. We establish the equilibrium in a unique structure that represents the maximum set of profitable upstream supply paths achievable through competition and exhibits stability under specific conditions. We evaluate the efficiency of the supply chain configuration by a shortfall problem and solve it with an adapted pseudoflow algorithm that efficiently identifies the mismatches between shortfalls and capacity surpluses in the multitier network. The parametric analysis reveals that the disturbance loss can be significantly offset by supplier competition, although the marginal benefit of competition decreases rapidly with the number of suppliers. Furthermore, shortfalls could be magnified by network asymmetries that increase configuration inefficiency, and supply chain performance could be improved by pushing high-cost firms to cease production. Simulation results indicate that the supply chain with a moderate level of competition and a balanced configuration can be robust against disturbance and demand volatility.

On cost and revenue in circular supply chains: Where to close the loop?

Environmental sustainability is a main research topic in supply chain management, including sustainable, green, closed-loop, and circular supply chain management concepts. A distinctive feature in concept evolution is the increase in tiers of a supply chain included in the reuse or recycling loop. However, most research focuses on dyadic or triadic supply chain structures. Where to close the loop, i.e., where to position the recycler, repurposer, remanufacturer, refurbisher, repairer, and/or reuser, in multi-tier supply chains remains largely unanswered. In response, this study assesses cost and revenue sharing by analytically modeling monetary flows in linear and circular multi-tier supply chains using linear and circular supply chain models and cost-profit theory to derive equations describing monetary flows between the supply chain tiers and external entities. Results show that firms upstream of the loop-closer are negatively affected by the reuse of material, which leads to an increasingly negative impact on the total profit of the supply chain the further downstream the loop-closer is positioned. This has important theoretical and practical implications since upstream suppliers may leave circular supply chains for linear ones if no offset mechanism is provided. There is no difference between linear and circular supply chains for tiers downstream of the loop-closer level. This effect is normally not considered in the literature, focusing on shorter supply chain structures where all firms are connected to the loop. The most important findings and implications are: If the loop-closer is positioned near the OEM tier or external customer, the total personnel, assets costs and total profits decrease in the circular supply chain compared to the linear supply chain. If the loop-closer is positioned at the most upstream tier level, the total personnel and assets costs, and total profits increase.

How does customer enterprise digitalization improve the green total factor productivity of state-owned suppliers: from the supply chain perspective

Environmental problems arising from global industrialization highlight the urgent need to green supply chains. However, the intensification of digitalization and global supply chain risks underscore the leading role of state-owned suppliers. From the supply chain perspective, this study analyzes the impact of the digitalization of downstream customer enterprises on the green total factor productivity (GTFP) of state-owned upstream suppliers using data on Chinese listed companies from 2007 to 2022. The benchmark regression shows that the digitalization of downstream customer enterprises significantly improves the GTFP of state-owned upstream suppliers. Mechanism testing shows that the digitalization of downstream customer enterprises promotes the GTFP of state-owned suppliers by reducing implicit costs and increasing the proportion of highly educated human resources. In improving the GTFP of state-owned suppliers, the external contractual environment, internal environmental responsibility, and market competitiveness act as “accelerators,” whereas the intensity of environmental regulation acts as a “speed bump” in the short term. In contrast to existing research, which mainly focuses on the impact of enterprise digitalization on the production efficiency of internal or upstream suppliers, this study facilitates the understanding of the pillar role of state-owned suppliers in the national economy and their stabilizing function in the supply chain.

How incentive alignment along the supply chain fosters incremental innovation: evidence from defence performance-based contracts

PurposeTo investigate how providers of product-service bundles design and manage their contracts with upstream suppliers to incentivise incremental innovation for the benefit of their downstream customers, who contract the provider based on performance.Design/methodology/approachAn embedded multiple-case study was conducted to examine elements of a European jet fighter’s manufacturing and after-sales supply chain. The embedded cases concern provider contracts with first-tier suppliers of product and service offerings. Data collection involved 21 semi-structured interviews, documents and other secondary data sources. Data analysis was informed by agency theory to assess the effectiveness of contract design and management in delivering incremental innovation and to identify related contracting strategies.FindingsWe identify four strategies for fostering incremental innovation in contracts between providers and their first-tier suppliers. These include two contract design strategies, i.e. reducing goal incongruence and addressing information asymmetry; and two contract management strategies, i.e. reducing outcome uncertainty and promoting inter-firm integration between providers and sub-suppliers.Practical implicationsThe research offers managerial guidelines regarding how providers can design and manage their tier-one supplier contracts to achieve incremental innovation. These include encouraging early supplier involvement, using focussed KPIs in contracts, and managing product and service-offering suppliers differently.Originality/valueThe research shows the contingent effect during contract design and management of a sub-supplier’s product vs. service offering, which, in turn, impacts incremental innovation. We also find that using focussed key performance indicators in sub-supplier contracts can be effective in improving product and service quality.

Got milk? Got cybersecurity risks! Unraveling ransomware threats in the German dairy industry

PurposeThis study aims to explore the vulnerabilities of the dairy industry to ransomware threats, focusing particularly on the upstream supply chain and applying routine activity theory (RAT) to understand the evolving dynamics of cybercrime in critical infrastructure sectors.Design/methodology/approachUtilizing expert interviews and network analysis, this research investigates the exploitation of complex supply chain vulnerabilities by motivated offenders. It delves into the intricate interplay between digital threats and physical supply continuity.FindingsThe study uncovers that ransomware threats transcend digital boundaries, manifesting in disruptions to physical operations and presenting significant risks to food security. It underscores the threat posed by the convergence of information technology (IT) and operational technology (OT), emphasizing the urgent need for heightened awareness and robust defenses against this substantial menace.Practical implicationsAddressing cyber vulnerabilities in critical sectors like dairy ensures not only the security of operations but also safeguards broader societal interests such as food security. Collaboration and proactive measures are essential to mitigate potential social and economic disruptions caused by cyber incidents.Originality/valueThis research fills a knowledge gap by shedding light on the nexus between cyber threats and supply chain resilience. It emphasizes the need for industries to adapt traditional defense mechanisms in the face of sophisticated digital adversaries.

Information sharing decision of retail platform: platform's risk aversion and competing suppliers

An increasing number of retail platforms are adopting blockchain technology to mitigate information asymmetries and share data with upstream suppliers, thereby reducing demand uncertainty. However, these platforms often engage with multiple upstream suppliers of varying product quality. This study constructs a game-theoretic model within a supply chain framework, featuring a risk-averse retail platform and two upstream suppliers of different quality levels. As the core leader of the game, the retail platform decides whether to share demand information with the two competing suppliers after implementing the technology. Using mean-variance theory, this study addresses a key question: Which types of suppliers should be included in information sharing on a retail platform? The results show that when the unit cost of information sharing is low, allowing both suppliers to share demand information is most beneficial. Conversely, when the unit cost is high, only high-quality suppliers should be included. Notably, as the unit cost of information sharing and the intensity of competition between high-quality and low-quality products increase, low-quality suppliers are excluded from information sharing. Additionally, the model indicates that the greatest social welfare can be achieved whether both high-quality and low-quality suppliers are authorized to join the information sharing network, or only high-quality suppliers are included.

When upstream suppliers drive traceability: A process study on blockchain adoption for sustainability

When upstream suppliers drive traceability: A process study on blockchain adoption for sustainability

Evolution and sustainability analysis of global tungsten trade pattern from the perspective of industry chain

Tungsten is an irreplaceable primary material and strategic resource for national economic development and modern national defense security. The endowment of tungsten ore resources in various countries is different; we should not only focus on the availability of tungsten ore itself but also the sustainability of its entire process from upstream supply to downstream industry demand. Analyzing the evolution of the supply and demand patterns of tungsten ore trade from the perspective of the industrial chain, identifying the key supply and demand subjects, and exploring the influencing factors of trade has become an important research topic. Therefore, we construct global tungsten trade networks based on the industrial chain, analyze its overall characteristics, explore critical trade supply and demand entities, and identify China’s trade position. We got some meaningful results: (1) The global tungsten trade networks have prominent power-law distribution characteristics. The trend of trade globalization is evident, but the dominance is still in the hands of a few developed countries or developing countries with developed manufacturing industries. (2) In different parts of the tungsten industry chain, the impact of resource endowment, industrial technology level, and geographical location on the country’s trade role is different. (3) China’s position in the global tungsten resource industry chain and value chain is constantly improving, but there is still a risk of high-end technology being “stuck.” This provides some suggestions for the systematic understanding of the evolution of the trade pattern of the tungsten industry chain and how countries occupy a dominant position in the game of tungsten resources.

Supplier Instability and Idiosyncratic Risk in China: A Risk Mitigation Perspective from Real Options

ABSTRACT Although supply chain instability has garnered significant attention from both academic and practical fields, the propagation of instability-induced risk along the supply chain remains unclear. This study complements the extant literature by exploring the association between the instability of a firm’s upstream suppliers and the firm’s idiosyncratic risk. Analyzing firms listed on the Shenzhen Stock Exchange and Shanghai Stock Exchange in China from 2014 to 2019, we find that firms with greater supplier instability exhibit higher idiosyncratic risk. However, this risk contagion is weaker for firms with more real options (i.e. greater investment opportunities and managerial flexibility) and for firms in regions with higher levels of FinTech digitalization. The impact of supplier instability on idiosyncratic risk remains robust after addressing endogeneity concerns. Our results provide a deeper understanding of the sources of firms’ idiosyncratic risk in the context of supply chain instability and identify tools to mitigate this risk.

Analisis rantai pasok bahan baku utama ayam pada rice bowl di UKM Tahu Baso Miwiti

This study aims to determine the analysis of the chicken raw material supply chain at the Rice Bowl at Miwiti SMEs using a qualitative descriptive approach method based on the results of interviews and direct observations at the Miwiti SME location. The results of the study indicate that the supply chain at the Rice Bowl at Miwiti SMEs cannot be separated from the Upstream supply chain, Internal supply chain, and Downstream supply chain. These results indicate that the upstream supply chain is related to the activity of supplying raw materials starting from chicken traders at Pasar Anyar Bogor - processing into chicken rice bowls - rice bowls at Miwiti SMEs. The internal supply chain includes procurement of raw materials - washing - cutting - draining water - seasoning - frying - draining oil - packaging. The downstream supply chain includes distribution activities to end consumers. The supply chain that occurs at Miwiti SMEs is running well from the procurement of chicken raw materials from suppliers to customers.

Research on the Game Model of Green Technology Investment in a Two-Echelon Manufacturing Supply Chain Under Carbon Tax Regulation

Using a Stackelberg game model, this research examines the impact of government-imposed carbon taxes on the sustainability of a two-echelon supply chain. The analysis focuses on the interactions between upstream suppliers and downstream manufacturers, taking into account how manufacturers’ carbon emissions influence market demand, as well as how sustainability levels and price affect this demand. The results show that a centralized system has a lesser potential for total profit development in the supply chain than a decentralized system. To encourage investment in green technologies throughout the supply chain, this paper proposes two coordination mechanisms: a green subsidy and a two-part tariff contract. Numerical study reveals that a win–win scenario for the supply chain requires suppliers to share part of the costs. Furthermore, under a two-part tariff contract, successfully managing fixed costs can result in total profit levels comparable to those in a centralized system. The research also makes strategy recommendations, such as differentiating carbon levies, improving supply chain coordination, and assessing fixed costs. These aim to provide theoretical and practical implications for supply chain management in order to assist businesses and policymakers in effectively responding to the problems of climate change.

The effect of energy efficiency retrofits on radical innovation: From the perspective of supply chain

Radical innovation is crucial for continuous improvement in energy efficiency. This paper explores the backward driving effect of downstream customers on upstream suppliers' radical innovation from the perspective of supply chain vertical linkages. Using supply chain data from Chinese listed companies, this paper examines the impact of downstream customers' energy efficiency retrofits on upstream suppliers' radical innovation. We find that: (1) Downstream customers' energy efficiency retrofits significantly promote upstream suppliers' radical innovation, while suppliers' energy efficiency retrofits have a crowding-out effect on their radical innovation. (2) Heterogeneity analysis reveals that the backward driving effect of downstream customers on upstream suppliers’ radical innovation is more pronounced in supply chains where the supplier has strong market influence and the customer has weak market influence. (3) The effect in the supply chain is only effective for radical innovation, with insignificant impact on incremental innovation and no green innovation bias. The findings provide a new perspective and empirical reference for actively cultivating radical innovation capabilities and deeply understanding the pathways to improving energy efficiency.

Signaling or not? The pricing strategy under fairness concerns and cost information asymmetry

Supply chain fairness issues have become crucial and prevalent recently, whereas the operational decisions in the fair chain are more and more challenging when involving information asymmetry. Considering the fact that the upstream supplier of a chain generally has private production cost information, this paper investigates how the supplier strategically makes pricing decisions under the own private information and the downstream fairness concerns. Based on inequity aversion theory, we set up a signaling game between the supplier and the retailer with two kinds of inequity aversion, disadvantageous inequity aversion and advantageous inequity aversion, respectively. Compared with the scenario of symmetric information, under asymmetric information, we find that: the high-cost supplier distorts the wholesale price upward to avoid the low-cost supplier's price mimicry when the retailer has disadvantageous inequity aversion and the cost difference between the two types of suppliers is small; the supply chain's expected profit and expected utility may increase due to the reason that the low-cost supplier distorts his wholesale price downward when the retailer has advantageous inequity aversion, which mitigates the double marginalization. Moreover, we extend the base model to the scenario of endogenous prior probability on supplier cost type and we show that when the retailer has disadvantageous inequity aversion, cost information asymmetry may improve the willingness of the high-cost supplier to become the low-cost supplier. Our results can provide some practical insights on managing cost information asymmetry from the perspectives of the supply chain and the industry.

Investigating the Impact of Technology Application in Upstream Supply Chain through Vendor Satisfaction: An Empirical Study in Precast Concrete Business

Objective - The adoption of Self-service technology (SST) in the construction sector has risen, facilitating suppliers to execute transactions autonomously, minimize expenses, and enhance efficiency. This research seeks to examine the influence of Vendor Self-Service (VVS) adoption in the Precast Concrete sector on vendor satisfaction and continued behavioral intentions. Methodology/Technique - This article examines the impact of perceived usefulness and perceived ease of use on vendor's continued behavioral intentions, as well as the mediating role of vendor satisfaction in these interactions. The sample comprises 58 suppliers who supplied the primary material for this firm. This study employs a model constructed using structural equation modeling (SEM) techniques. Findings – The findings indicate that perceived usefulness and perceived ease of use positively influence vendor satisfaction and directly enhance continuous behavioral intention. The findings suggest that enhancing perceived quality can elevate vendor satisfaction and sustain behavioral intention among the vendors of the Precast Concrete Business. Novelty - The study identified vendor continued behavioral intention factors using the VSS application, an original application developed by Precast Concrete Business. Type of Paper: Empirical research JEL Classification: J28, L74, L86 Keywords: Self-Service Technology, Perceived usefulness, perceived ease of use, Vendor satisfaction, continued behavioral intention. Reference to this paper should be made as follows: Kahar, M; Harimurti, J.S; Fatahillah, G; Sudrajat, D. (2024). Investigating the Impact of Technology Application in Upstream Supply Chain through Vendor Satisfaction: An Empirical Study in Precast Concrete Business, J. Mgt. Mkt. Review, 9(3), 130 – 139. https://doi.org/10.35609/jmmr.2024.9.3(4)

Collaborative and integrated data-driven delay prediction and supplier selection optimization: A case study in a furniture industry

Optimizing supplier selections is an open ended problem, relevant to the operational performance of both individual companies and entire supply chains. Considering the prediction of future occurrences of delays in the optimization of supplier selections is still an under covered problem. Unlike existing literature, this article suggests a more collaborative and integrated workflow to improve the visibility and involvement of multiple stakeholders in the supplier selection decision-making processes. This is achieved through enhanced collaboration between multiple stakeholders (suppliers, customers, decision-makers from different departments, in addition to data sources from information systems), and better integration between data analysis and decision-making, through data-driven-machine-learning and optimization. The specificities of a French company in the furniture industry are considered. A workflow model is designed to support information sharing and to streamline knowledge and interactions between multiple stakeholders from different expertise domains. A Collaborative Predictive Optimization System (CPOS) is designed to classify expected occurrences of delays, to optimize order allocations, and to enable stakeholder collaboration. Delay prediction involves Decision Trees, Random Forests, and eXtreme Gradient Boosting (XGBoost). Supplier selection is solved using mathematical programming, while considering the classification of expected occurrences of delays. Stakeholder collaboration relies on information systems and uses prediction and optimization to support finding satisfactory agreements. The approach is validated using a real 3.5-year dataset, including 139 suppliers, 7,934 products and 89,080 purchase orders. A detailed experimentation, including sensitivity analysis, best–worst case analysis, and a larger scale analysis on company datasets, shows that the suggested approach enhances collaboration and achieves delay reduction and total procurement cost savings. Valuable managerial insights are collected, including the necessity to adopt digital technologies, to adapt company workflows, and to improve upstream negotiations and supplier commitments to yearly plannings.