Strategic Blockchain Adoption in Supply Chain Operations

Abstract

Supply chains have often benefited from breakthroughs in information technology. Most recently, blockchain is promising to revolutionize the way supply chains are designed and operated. In this thesis, we explore blockchain adoptions in three supply chain settings. First, we optimize blockchain deployment at the supply chain network design stage and propose a mixed-integer quadratic programming model for it. Based on a case study from the fresh flowers supply chain, we find that significant cost savings could be achieved from the strategic deployment of blockchain throughout the supply chain as opposed to full blockchain adoption, which translates to lower market prices to consumers, increased demand, better product quality products, and higher profits. In the second, we investigate the potential of blockchain adoption to deter counterfeiters. We present a game-theoretic model that uses blockchain technology to increase the capability of detecting deceptive counterfeits. We find that blockchain is not always financially viable for manufacturers to discourage counterfeiting and it becomes less attractive for premium and luxury products. Our framework also demonstrates that manufacturers can strategically balance product quality and blockchain investment to combat counterfeiting. Last, we explore the potential of blockchain to accurately track carbon emissions. We study a competitive supplier selection problem with one manufacturer and two suppliers and investigate the use of financial incentives to encourage suppliers to adopt greener technologies. The game-theoretic framework is modelled as a bi-level optimization problem. We find that financial incentives are effective in fostering greener components from the suppliers and that blockchain offers suppliers the flexibility to explore emission reductions either by better reporting or technological upgrades.