Does blockchain technology need to be introduced in the closed-loop supply chain based on product lifecycle management?

Abstract

Resource wastage, prevalent in all industries, hinders sustainable economic and social development. Inspired by the application of blockchain technology in product traceability, we find that government investment in blockchain technology platforms (BTP) can facilitate the recycling of waste products. We develop a closed-loop supply chain (CLSC) model consisting of a single manufacturer and a single retailer, examining the impact of BTP on the CLSC and its potential benefits to the government. The results show that BTP increases retail prices and market demand within the CLSC but has a non-monotonic impact on wholesale prices. Interestingly, we find that even when the BTP unit cost is moderate, BTP can still enhance CLSC profits if the recycling rate falls below a certain threshold. Furthermore, in scenarios with a high service elasticity coefficient, CLSC can leverage BTP to boost profits, even when the unit usage cost is substantial. Under specific conditions, timely investments in BTP can augment social welfare for the government. Notably, government investment in BTP becomes imperative when the recycling rate is relatively low, and the environmental burden is significant. Finally, this paper explores the conditions conducive to collaborative implementation of BTP by the government and CLSC, providing a valuable reference for their effective BTP implementation.

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