- Title
- The dilemma of introducing blockchain technology into an assembly supply chain: A double-edged sword of profit and upstream invasion
- Creator
- Zhu, Xiaoxi; Qi, Zhenfei; Chiong, Raymond; Zhang, Peilin; Ren, Minglun
- Relation
- Computers and Industrial Engineering Vol. 188, Issue February 2024, no. 109830
- Publisher Link
- http://dx.doi.org/10.1016/j.cie.2023.109830
- Publisher
- Elsevier
- Resource Type
- journal article
- Date
- 2024
- Description
- The flattening of sales channels makes it easy for an upstream core parts supplier in an assembly supply chain to invade the downstream market. This also introduces several challenges for the efficient performance and management of the supply chain system. Whereas restrictive factors such as supplier confidentiality agreements have limited the product encroachment by the suppliers, the adoption of blockchain technology for improving information diaphaneity and efficiency of the supply chain can potentially encourage market intrusion by the suppliers. Therefore, whether blockchain technology can be successfully accepted and implemented by both the suppliers and incumbent manufacturers, and how this can be achieved, are issues that need urgent attention in the case of supply chain systems. In this paper, we establish a two-stage assembly supply chain consisting of an incumbent manufacturer and a core component supplier that invades the downstream market with imitation products, in order to analyze the impact of supplier encroachment and the application of blockchain technology on the assembly system. The results show that it is more beneficial to play the dual role of core supplier and product manufacturer than to only be a core supplier. Similarly, when the cost of implementing blockchain technology is lower than a specific threshold, the implementation of blockchain is always beneficial for the encroaching supplier, whereas the manufacturer does not always benefit. The blockchain not only improves the selling price of the core component produced by the supplier, but also improves the quality of the core component and increases the total market demand. Finally, in view of the potential benefits and conflicts that may arise from the implementation of the blockchain, we design corresponding ex-ante, ex-post and hybrid coordination mechanisms to achieve a win–win situation in this competitive system. Our modeling work and results provide useful managerial insights regarding the encroachment by core component suppliers and the implementation of blockchain technology in assembly supply chains.
- Subject
- assembly supply chain; core component; supplier encroachment; blockchain; synergic schemes
- Identifier
- http://hdl.handle.net/1959.13/1498314
- Identifier
- uon:54518
- Identifier
- ISSN:0360-8352
- Rights
- x
- Language
- eng
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