Supply chain strategy of adopting blockchain in post-sale customer care outsourcing in a competitive environment

Abstract

Post-sale customer care (PSCC) outsourcing is an effective supply chain strategy to reduce costs, but traditional outsourcing methods cannot ensure consumers’ belief in PSCC quality, harming the firms’ competitive strategy. To ensure consumer satisfaction through transparency, this article examines evolving supply chain strategies of leveraging blockchain to outsource PSCC operations of competing manufacturers to third-party agents. Based on consumers’ beliefs and blockchain adoption cost, manufacturers have two choices; to outsource the PSCC operations with or without blockchain, resulting in multiple outsourcing strategies. Results show that the consumers’ belief in one manufacturer’s outsourcing strategy has detrimental effects on the stance of another manufacturer. Moreover, the blockchain cost and consumers’ beliefs dictate the manufacturers’ strategies for PSCC outsourcing, resulting in a ‘quadruple zone of strategic fit’, where both manufacturers adopt blockchain or neither adopt blockchain, or one adopts while the other does not. Interestingly, despite the low or zero blockchain cost, both manufacturers will outsource without blockchain if their traditional business models satisfy consumers. The extended analysis reveals contradictory results that manufacturers should outsource more often with blockchain to facilitate consumers when a long-term warranty is offered, or the product has a higher failure rate, even though, overall these factors increase costs.

KEYWORDS:

• Post-sale customer care
• consumers’ satisfaction
• blockchain technology
• supply chain outsourcing
• competitive environment

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The authors confirm that the data supporting the findings of this study are available within the article or its supplementary materials.

Notes

1 https://www.warrantyweek.com/archive/ww20211104.html

2 https://money.usnews.com/investing/news/articles/2020-11-24/fords-new-ceo-tackles-warranty-costs-in-bid-to-boost-profit.

3 https://www.fnacdarty.com/en/fnac-darty-rejoint-le-reseau-de-centres-de-services-agrees-apple-en-france/

4 https://www.simplymac.com/pages/support

5 https://computercare.net/2016/10/computercare-expands-relationship-lenovo/

6 https://hbr.org/2006/05/winning-in-the-aftermarket

7 https://appleinsider.com/articles/22/06/09/apple-retailer-simply-mac-is-shutting-down.

8 https://www.classaction.org/media/lotz-v-simply-mac.pdf

9 https://www.ibm.com/blogs/internet-of-things/IoT-blockchain-automotive-industry/

10 https://www.mckinsey.com/~/media/mckinsey/industries/financial20services/our20insights/blockchain20in20insurance20opportunity20or20threat/blockchain-in-insurance-opportunity-or-threat.ashx

Additional information

Funding

This work was supported by National Natural Science Foundation of China [grant number 71872075]; Hainan Provincial Natural Science Foundation of China [grant number 720RC568, 2019RC126].

Notes on contributors

Azmat Ullah

Azmat Ullah received his Ph.D. degree from the Shanghai Jiao tong University, Shanghai, China, in 2020. He is currently a Postdoctoral researcher with the School of Management, Hainan University, Haikou, China. His research primarily focuses on operations and supply chain management, after-sales service, and warranties, etc. His work has been published in academic journals including Asia Pacific Journal of Operational Research, International Journal of Managing Projects in Business, Journal of Management Analytics, International Journal of Industrial Engineering, Theory, Practice and Application, IEEE, Electronic Commerce Research, and International Journal of Production Research.

Qingyun Xu

Qingyun Xu is currently pursuing her Ph.D. degree from the School of Economics and management, Harbin Institute of Technology, Harbin, China. Her research interests focus on Omni channel retailing and operations management. Her work has been published in academic journals including International Journal of Production Research, Transportation Research Part E, Journal of Cleaner Production, and International Transactions in Operational Research.

Yi He

Yi He received the Ph.D. degree from the University of Science and Technology of China, Hefei, China, in 2014. He is currently a Professor with the School of Management, Hainan University, Haikou, China. His research primarily focuses on operations management, Omni channel retailing, cooperative advertising, etc. His work has been published in academic journals including International Journal of Production Research, Transportation Research Part E, Annals of Operations Research, Journal of the Operational Research Society, and International Transactions in Operational Research.

Benjamin Lev

Benjamin Lev is a former Vice President of Meetings for both The Institute of Management Sciences (TIMS) and the Institute for Operations Research and the Management Sciences (INFORMS) and INFORMS Fellow since 2003. Lev received degrees in mechanical and industrial engineering from Technion Israel Institute of Technology prior to pursuing a PhD at Case Western Reserve University. After earning his doctorate, Lev joined Temple University in Philadelphia, Pennsylvania; Worcester Polytechnic Institute, MA; University of Michigan Dearborn, MI and is currently a Professor at Drexel University, Philadelphia, PA. Since 2002, he has been Editor-in-Chief of OMEGA – the International Journal of Management Science; and serves on several other journal editorial boards (INFORMS JAA (formerly Interfaces), IAOR, ORPJ, Financial Innovation, OPSEARCH, IDIM, IIE-Transactions, ERRJ, INFORMS JOR).