A blockchain-based approach to enhance transparency and sustainability in a joint pricing and closed-loop supply chain network design problem.

Abstract

This paper explores how blockchain technology (BCT) and decentralized autonomous organizations (DAOs) can effectively address challenges in supply chain management (SCM) by enhancing transparency, improving traceability, and reducing fraud. To this aim, a closed-loop supply chain (CLSC) model is introduced, integrating DAOs and smart contracts to promote environmental responsibility, economic viability, and social sustainability. The approach begins with developing a novel bi-objective sustainable joint pricing and closed-loop network design model, prioritizing profitability while ensuring compliance with environmental regulations and social responsibilities. Then, an integrated framework is created that combines smart contracts and DAOs to tackle transparency issues in product pricing and CO2 emission taxes. This framework empowers stakeholders to make real-time collective decisions, enhancing agility and flexibility through various strategies, including adopting green machinery, minimizing production lines, and utilizing off-chain processing. For optimizing the developed model was solved with the NSGA-III algorithm. The approach is applied to a real-world industrial case, the Hamedan Glass Industry, where a balanced environmentally-aware solution with off-chain processing yields net profit $237,659 and -0.0366 rate of incidences per person for social aspect of sustainability, with a final price of $2.88 for product. Profit-only optimization raises net profit by approximately 1 % with regard to the balanced solution, and by approximately 4.3 % against strongly social-weighted solutions. Implementing off-chain emission checks then enabling carbon-neutralization, followed by a reduction in production capacity in over-threshold centers results in a balanced outcome of higher profits but at the cost of a higher incidence rate. These results showcased the proposed framework's practical benefits and providing valuable insights applicable to various sectors.