The impacts of blockchain adoption on a dual-channel supply chain with risk-averse members

Blockchain technology is believed to leverage the potential of supply chain performance. However, its benefits and related costs need to be balanced when implementing blockchain solutions. This study constructs a dual-channel supply chain where a manufacturer sells products through both the direct sales channel and the retail channel. Three blockchain adoption scenarios are considered in this study. We analytically find the blockchain adoption strategies of supply chain members are dependent on unit blockchain-operational cost, direct selling cost, and demand volatility. When blockchain adoption is cost-effective and demand volatility is small and medium, the adoption of blockchain solutions by both the manufacturer and the e-retailer (Model B) is more beneficial for the individual and the supply chain, but if demand volatility is large, it is more advantageous when only the e-retailer initiates blockchain solutions (Model R). When blockchain adoption is costly and demand volatility is medium and large, it is more valuable when only the manufacturer initiates blockchain solutions (Model D). We also conduct numerical experiments to inspect the impacts of an imperfectly competitive market and the variation of stakeholders' risk-averse level on the model to present the robustness of our results. Based on these findings, we further provide theoretical and practical guidance for supply chain managers in determining the optimal blockchain adoption scenarios in a dual-channel supply chain. (c) 2022 Elsevier Ltd. All rights reserved.

Automated summary

This study constructs a dual-channel supply chain model and considers different blockchain adoption scenarios. It finds that the blockchain adoption strategies of supply chain members depend on costs and demand volatility. When cost-effective and with small to medium demand volatility, both the manufacturer and e-retailer adopting blockchain is more beneficial. When demand volatility is large, it is more advantageous for only the e-retailer to initiate blockchain solutions. When adoption is costly and demand volatility is medium to large, it is more valuable for only the manufacturer to initiate blockchain solutions. These findings provide theoretical and practical guidance for supply chain managers in a dual-channel supply chain.