Modeling the impact of IoT technology on food supply chain operations

The food supply chain (FSC) has distinctive challenges compared to typical supply chains such as food loss and waste, impact on health and safety, and the complexity of a chain involving farmers, producers, distributers, and retailers. The application of recent developments such as IoT and blockchain technologies can help in facing such challenges. In fact, using IoT data for better decision making and for dealing with various operations management aspects can promote both resilience and sustainability in the FSC. This paper develops models to assess the impact of IoT on coordination, pricing, profits and waste reduction in FSCs. Our analysis reveals that the introduction of IoT leads to higher prices in the supply chain. The extent of price changes depends on consumers' sensitivities to price and quality, the nature of the product, and the retailers' quality marketing strategy. On the other hand, it was found that investment in IoT increases the impact of double marginalization and investigate coordinating the supply chain in the presence of IoT technology. It was shown that the deployment of IoT in a food supply chain leads to a reduction in food waste. Furthermore, insights on how food waste depends on where IoT is deployed were provided. In particular, moderate investment in IoT can partially coordinate the supply chain.

Automated summary

The food supply chain faces unique challenges such as food loss and waste, impact on health and safety, and complexity involving multiple stakeholders. IoT and blockchain technologies can help address these challenges and improve resilience and sustainability in the supply chain. This paper develops models to assess the impact of IoT on coordination, pricing, profits, and waste reduction in the food supply chain. The analysis shows that IoT leads to higher prices in the supply chain and investment in IoT can partially coordinate the supply chain and reduce food waste.