Inducing Supplier Backup via Blockchain Era

With the sparking of increasingly latent supply disruption risk, the global supply chains have exacerbated the risk and impact of supply disruptions. In order to cope with supply disruption, the downstream suppliers volunteer to strengthen investment in the appropriate strategy of backup production. This paper studies a single supply chain with potential supply disruption risk where the supplier implements backup production and the retailer has the advantage of using information sharing of blockchain system. This paper examines how the retailer’s using information sharing of blockchain system to strengthen the adoption of backup production. Our findings reveal that, first, when the retailer voluntarily implements blockchain system to share his demand information, such demand sharing leads the supplier to produce the accurate backup production capacity. Second, the retailer strategically implements the blockchain system to utilize the supplier’s backup production for more value.