Lassoing the bullwhip effect by applying blockchain to supply chains

Abstract

PurposeA supply chain (SC) involves many stakeholders, directly or indirectly, for satisfying consumers’ requirements. SC management is restricted by a lack of information sharing among stakeholders as parties of SC do not have direct communication and/or are not willing to share private and competitively sensitive information. In the SC, the bullwhip effect (BWE) is an undesirable phenomenon that aggravates the SC performance and increases the overall cost of SC. The main culprit of BWE is the lack of SC coordination among the parties, which results from wrong and lack of information sharing. Blockchain technology (BT) has the main characteristic of distributed shared ledger that makes all parties in the SC network able to access data. This paper aims to develop a BT model and implement it into the SC.Design/methodology/approachA blockchain is developed consisting four SC stakeholders and an integrated development environment has been used for coding in Python.FindingsThe analysis of the impact of the adoption of BT in SC shows the reduction in BWE.Originality/valueIn SC, BT can be considered as an effective tool to share the demand data among all SC partners. Sharing of such data will improve SC planning and reduce the BWE.