IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i5p3921-d1075796.html
   My bibliography  Save this article

Achieving Triple Benefits in a Platform-Based Closed-Loop Supply Chain: The Optimal Combination between Recycling Channel and Blockchain

Author

Listed:
  • De-Qing Ma

    (Department of Management Science and Engineering, Qingdao University, Qingdao 266071, China)

  • Xiao-Qing Wang

    (Department of Management Science and Engineering, Qingdao University, Qingdao 266071, China)

  • Xue Wang

    (Department of Management Science and Engineering, Qingdao University, Qingdao 266071, China)

  • Jin-Song Hu

    (Department of Management Science and Engineering, Qingdao University, Qingdao 266071, China)

Abstract

In order to solve the problem of false recycling, where the real recycling volume does not match the theoretical one, blockchain is widely used in practice due to its characteristics of transparency, traceability, and tamper resistance. To study its value in academics, this paper focuses on a closed-loop supply chain (CLSC) consisting of a manufacturer and an online platform. This paper discusses the implementation conditions of blockchain, the impact on enterprise decision making, and manufacturer recycling channel selection, and the triple benefits of economy, environment, and society in the CLSC with blockchain empowerment are achieved. Because of the nontransparency of the supply chain, the problem of false recycling is always present. To further solve the problem of false recycling, the recycler decides whether to implement blockchain or not. Through analysis and numerical examples, it is concluded that the greater the difference between real and theoretical recycling volumes, the greater the need for blockchain implementation. At the same time, three major effects of blockchain implementation are defined as decision incentive effect, marketing leverage effect , and incentive alignment effect , which reveal the impact of blockchain on increasing the motivation of CLSC members to make efforts, expanding the market size by improving brand goodwill, and avoiding the inconsistency between the manufacturer and the platform in the preference of the recycling channel. In addition, under blockchain empowerment, a cost range of blockchain implementation is defined, where both the manufacturer and the platform are better off, as well as the optimal recycling channel, which achieves the triple benefits of the CLSC.

Suggested Citation

  • De-Qing Ma & Xiao-Qing Wang & Xue Wang & Jin-Song Hu, 2023. "Achieving Triple Benefits in a Platform-Based Closed-Loop Supply Chain: The Optimal Combination between Recycling Channel and Blockchain," Sustainability, MDPI, vol. 15(5), pages 1-40, February.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:5:p:3921-:d:1075796
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/5/3921/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/5/3921/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yuelin Shen & Sean P. Willems & Yue Dai, 2019. "Channel Selection and Contracting in the Presence of a Retail Platform," Production and Operations Management, Production and Operations Management Society, vol. 28(5), pages 1173-1185, May.
    2. Yinliang (Ricky) Tan & Janice E. Carrillo, 2017. "Strategic Analysis of the Agency Model for Digital Goods," Production and Operations Management, Production and Operations Management Society, vol. 26(4), pages 724-741, April.
    3. Buratto, Alessandra & Cesaretto, Rudy & De Giovanni, Pietro, 2019. "Consignment contracts with cooperative programs and price discount mechanisms in a dynamic supply chain," International Journal of Production Economics, Elsevier, vol. 218(C), pages 72-82.
    4. Liu, Huihui & Lei, Ming & Deng, Honghui & Keong Leong, G. & Huang, Tao, 2016. "A dual channel, quality-based price competition model for the WEEE recycling market with government subsidy," Omega, Elsevier, vol. 59(PB), pages 290-302.
    5. Sara Saberi & Mahtab Kouhizadeh & Joseph Sarkis & Lejia Shen, 2019. "Blockchain technology and its relationships to sustainable supply chain management," International Journal of Production Research, Taylor & Francis Journals, vol. 57(7), pages 2117-2135, April.
    6. Lin Tian & Asoo J. Vakharia & Yinliang (Ricky) Tan & Yifan Xu, 2018. "Marketplace, Reseller, or Hybrid: Strategic Analysis of an Emerging E‐Commerce Model," Production and Operations Management, Production and Operations Management Society, vol. 27(8), pages 1595-1610, August.
    7. Choi, Tsan-Ming, 2019. "Blockchain-technology-supported platforms for diamond authentication and certification in luxury supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 17-29.
    8. Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
    9. Jiri Chod & Nikolaos Trichakis & Gerry Tsoukalas & Henry Aspegren & Mark Weber, 2020. "On the Financing Benefits of Supply Chain Transparency and Blockchain Adoption," Management Science, INFORMS, vol. 66(10), pages 4378-4396, October.
    10. Liu, Chang-Yi & Wang, Hui & Tang, Juan & Chang, Ching-Ter & Liu, Zhi, 2021. "Optimal recovery model in a used batteries closed-loop supply chain considering uncertain residual capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    11. Pnevmatikos, Nikolaos & Vardar, Baris & Zaccour, Georges, 2018. "When should a retailer invest in brand advertising?," European Journal of Operational Research, Elsevier, vol. 267(2), pages 754-764.
    12. Xu, Xiaoping & Choi, Tsan-Ming, 2021. "Supply chain operations with online platforms under the cap-and-trade regulation: Impacts of using blockchain technology," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    13. Dutta, Pankaj & Choi, Tsan-Ming & Somani, Surabhi & Butala, Richa, 2020. "Blockchain technology in supply chain operations: Applications, challenges and research opportunities," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    14. Wang, Yingli & Singgih, Meita & Wang, Jingyao & Rit, Mihaela, 2019. "Making sense of blockchain technology: How will it transform supply chains?," International Journal of Production Economics, Elsevier, vol. 211(C), pages 221-236.
    15. Pietro Giovanni, 2017. "Closed-loop supply chain coordination through incentives with asymmetric information," Annals of Operations Research, Springer, vol. 253(1), pages 133-167, June.
    16. Govindan, Kannan & Popiuc, Maria Nicoleta, 2014. "Reverse supply chain coordination by revenue sharing contract: A case for the personal computers industry," European Journal of Operational Research, Elsevier, vol. 233(2), pages 326-336.
    17. Xiaolong Guo & Shengming Zheng & Yugang Yu & Fuqiang Zhang, 2021. "Optimal Bundling Strategy for a Retail Platform Under Agency Selling," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2273-2284, July.
    18. Andrei Hagiu & Julian Wright, 2015. "Marketplace or Reseller?," Management Science, INFORMS, vol. 61(1), pages 184-203, January.
    19. Wang, Lisha & Chen, Jing & Song, Huaming, 2021. "Marketplace or reseller? Platform strategy in the presence of customer returns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 153(C).
    20. Shi, Dan & Wang, Meiqi & Li, Xiang, 2021. "Strategic introduction of marketplace platform and its impacts on supply chain," International Journal of Production Economics, Elsevier, vol. 242(C).
    21. Pietro De Giovanni, 2020. "An optimal control model with defective products and goodwill damages," Annals of Operations Research, Springer, vol. 289(2), pages 419-430, June.
    22. Feng, Lipan & Govindan, Kannan & Li, Chunfa, 2017. "Strategic planning: Design and coordination for dual-recycling channel reverse supply chain considering consumer behavior," European Journal of Operational Research, Elsevier, vol. 260(2), pages 601-612.
    23. R. Canan Savaskan & Luk N. Van Wassenhove, 2006. "Reverse Channel Design: The Case of Competing Retailers," Management Science, INFORMS, vol. 52(1), pages 1-14, January.
    24. Bin Shen & Ciwei Dong & Stefan Minner, 2022. "Combating Copycats in the Supply Chain with Permissioned Blockchain Technology," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 138-154, January.
    25. Volodymyr Babich & Gilles Hilary, 2020. "OM Forum—Distributed Ledgers and Operations: What Operations Management Researchers Should Know About Blockchain Technology," Manufacturing & Service Operations Management, INFORMS, vol. 22(2), pages 223-245, March.
    26. Anil Arya & Brian Mittendorf & David E. M. Sappington, 2007. "The Bright Side of Supplier Encroachment," Marketing Science, INFORMS, vol. 26(5), pages 651-659, 09-10.
    27. Huang, Min & Song, Min & Lee, Loo Hay & Ching, Wai Ki, 2013. "Analysis for strategy of closed-loop supply chain with dual recycling channel," International Journal of Production Economics, Elsevier, vol. 144(2), pages 510-520.
    28. Gabriella M. Hastig & ManMohan S. Sodhi, 2020. "Blockchain for Supply Chain Traceability: Business Requirements and Critical Success Factors," Production and Operations Management, Production and Operations Management Society, vol. 29(4), pages 935-954, April.
    29. Yi, Zelong & Li, Fan & Ma, Lijun, 2019. "The impact of distribution channels on trial-version provision with a positive network effect," Omega, Elsevier, vol. 85(C), pages 115-133.
    30. De Giovanni, Pietro & Reddy, Puduru V. & Zaccour, Georges, 2016. "Incentive strategies for an optimal recovery program in a closed-loop supply chain," European Journal of Operational Research, Elsevier, vol. 249(2), pages 605-617.
    31. Hubert Pun & Jayashankar M. Swaminathan & Pengwen Hou, 2021. "Blockchain Adoption for Combating Deceptive Counterfeits," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 864-882, April.
    32. Morvarid Rahmani & Luyi Gui & Atalay Atasu, 2021. "The Implications of Recycling Technology Choice on Extended Producer Responsibility," Production and Operations Management, Production and Operations Management Society, vol. 30(2), pages 522-542, February.
    33. Zheng, Hong & Li, Guo & Guan, Xu & Sethi, Suresh & Li, Yu, 2021. "Downstream information sharing and sales channel selection in a platform economy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ma, Deqing & Hu, Jinsong, 2022. "The optimal combination between blockchain and sales format in an internet platform-based closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 254(C).
    2. Deqing Ma & Pengcheng Ma & Jinsong Hu, 2024. "The Impact of Blockchain Technology Adoption on an E-Commerce Closed-Loop Supply Chain Considering Consumer Trust," Sustainability, MDPI, vol. 16(4), pages 1-41, February.
    3. Xue Wang & Deqing Ma & Jinsong Hu, 2022. "Recycling Model Selection for Electronic Products Considering Platform Power and Blockchain Empowerment," Sustainability, MDPI, vol. 14(10), pages 1-44, May.
    4. Ma, Deqing & Li, Kaifu & Hu, Jinsong & Wang, Xue, 2024. "How to leverage blockchain to react to consumer reference effects and develop a distribution strategy in online retailing?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 187(C).
    5. Zhou, Yu & Gao, Xiang & Luo, Suyuan & Xiong, Yu & Ye, Niangyue, 2022. "Anti-Counterfeiting in a retail Platform: A Game-Theoretic approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    6. Zhang, Tianyu & Dong, Peiwu & Chen, Xiangfeng & Gong, Yu, 2023. "The impacts of blockchain adoption on a dual-channel supply chain with risk-averse members," Omega, Elsevier, vol. 114(C).
    7. Xu, Xiaoping & Choi, Tsan-Ming, 2021. "Supply chain operations with online platforms under the cap-and-trade regulation: Impacts of using blockchain technology," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    8. Zhao, Qingli & Fan, Zhi-Ping & Sun, Minghe, 2024. "Sales mode selection and blockchain technology adoption decisions in a platform supply chain," International Journal of Production Economics, Elsevier, vol. 272(C).
    9. Niu, Baozhuang & Dong, Jian & Liu, Yaoqi, 2021. "Incentive alignment for blockchain adoption in medicine supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    10. Xu, Xiaoping & Yan, Luling & Choi, Tsan-Ming & Cheng, T.C.E., 2023. "When Is It Wise to Use Blockchain for Platform Operations with Remanufacturing?," European Journal of Operational Research, Elsevier, vol. 309(3), pages 1073-1090.
    11. Liu, Shuai & Hua, Guowei & Kang, Yuxuan & Edwin Cheng, T.C. & Xu, Yadong, 2022. "What value does blockchain bring to the imported fresh food supply chain?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    12. Niu, Baozhuang & Ruan, Yiyuan & Xu, Haotao, 2023. "Turn a blind eye? E-tailer's blockchain participation considering upstream competition between copycats and brands," International Journal of Production Economics, Elsevier, vol. 265(C).
    13. Cao, Yu & Yi, Chaoqun & Wan, Guangyu & Hu, Hanli & Li, Qingsong & Wang, Shouyang, 2022. "An analysis on the role of blockchain-based platforms in agricultural supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 163(C).
    14. Li, Zhiwen & Xu, Xianhao & Bai, Qingguo & Chen, Cheng & Wang, Hongwei & Xia, Peng, 2023. "Implications of information sharing on blockchain adoption in reducing carbon emissions: A mean–variance analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 178(C).
    15. Li, Qingying & Ma, Manqiong & Shi, Tianqin & Zhu, Chen, 2022. "Green investment in a sustainable supply chain: The role of blockchain and fairness," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    16. Wang, Manman & Yang, Feng & Shan, Feifei & Guo, Yu, 2024. "Blockchain adoption for combating remanufacturing perceived risks in a reverse supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    17. Matsui, Kenji, 2022. "Optimal timing of acquisition price announcement for used products in a dual-recycling channel reverse supply chain," European Journal of Operational Research, Elsevier, vol. 300(2), pages 615-632.
    18. Zhu, Shichao & Li, Jian & Wang, Shouyang & Xia, Yusen & Wang, Yajing, 2023. "The role of blockchain technology in the dual-channel supply chain dominated by a brand owner," International Journal of Production Economics, Elsevier, vol. 258(C).
    19. Klöckner, Maximilian & Schmidt, Christoph G. & Fink, Alexander & Flückiger, Leonie & Wagner, Stephan M., 2023. "Exploring the physical–digital interface in blockchain applications: Insights from the luxury watch industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    20. Cao, Kaiying & Xu, Yuqiu & Hua, Ye & Choi, Tsan-Ming, 2023. "Supplier or co-optor: Optimal channel and logistics selection problems on retail platforms," European Journal of Operational Research, Elsevier, vol. 311(3), pages 971-988.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:5:p:3921-:d:1075796. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.