A design method for supply chain traceability systems with aligned interests

Supply chain traceability systems are valuable for managing product safety, product recall, reverse logistics, etc. Designing a traceability system that is efficient and effective at system level, while still motivating individual chain parties to participate is, however, a rather challenging task. In this paper, we propose a new design approach that adapts the Axiomatic design method to incorporate operations management insights. Our theoretical contributions lie in the following aspects: (1) identifying implementable design parameters through a zigzagging decomposition process, (2) quantifying the relationship between design parameters and system economics using rigorous models, (3) aligning individual interest by decoupling the design matrix using the Independence Axiom. Two decoupling approaches for traceability system design are proposed – rebuilding the relationship in the design matrix via cost reallocation, and organizing interest-aligned subsystems via grouping related players. Furthermore, we validate the proposed method with a numerical design example, which shows that the proposed method delivers better performance than traditional ones. Our theoretical and numerical results establish that the proposed method can optimize the traceability chain as a whole while keep self-interested chain parties motivated. Such designs can facilitate wide adoption of traceability systems.