Blockchain-embedded closed loop supply chains: Optimization under off-chain risks

doi:10.1016/j.eswa.2026.132115

Blockchain-embedded closed loop supply chains: Optimization under off-chain risks

2026-03-21

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DOI：10.1016/j.eswa.2026.132115

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The integration of blockchain technology into closed-loop supply chains (CLSCs) has the potential to increase transparency, traceability, and operational resilience. However, the inherent uncertainties of blockchain operations, such as off-chain risks and transaction latency, introduce significant challenges for CLSC optimization. Motivated by these issues, this study develops a blockchain-embedded CLSC framework that jointly models supply chain logistics and blockchain transaction dynamics. This paper proposes a processor-sharing queueing model to characterize blockchain recording processes and provide a convex reformulation of the transaction validation latency cost. To address the risks of unconfirmed transactions, we introduce an expected off-chain loss metric and develop a distributionally robust approximation of the worst-case conditional value-at-risk (CVaR). By reformulating the key nonconvexities in the model into tractable forms, the resulting integrated optimization problem can be efficiently solved by commercial solvers. A real-world case study based on BYD’s battery recycling network demonstrates the framework’s effectiveness, yielding a 1.2%-12% cost reduction and 5.4% GHG emission reduction under realistic blockchain congestion. Our results offer actionable insights into the resilient deployment of blockchain in sustainability-driven supply chain systems.

Keywords:

blockchain

closed-loop supply chains

queueing model

off-chain risks

optimization

Blockchain-embedded closed loop supply chains: Optimization under off-chain risks

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