Impacts of blockchain technology on food supply chains with potential food contamination

Abstract

Food contamination may have a catastrophic effect on companies, causing a plunge in goodwill. Motivated by the practice that existing voluntary recall strategies still suffer from untimeliness and imprecision, we consider blockchain to provide technical support for food traceability and recall by improving supply chain traceability and transparency. We focus on a two-tier food supply chain facing potential contamination occurrences and build a piecewise deterministic differential game model. We then obtain the optimal strategies of firms and evaluate the impact of contamination events on the dynamic operations of the supply chain. The results show increased contamination likelihood and damage rate, which harm the goodwill of food and optimal decision-making. In addition, we obtain the conditions for the company to be profitable when implementing the blockchain, which is closely related to contamination source identification time, recall efficiency, damage rate, and blockchain cost. Finally, we evaluate several specific cases.