Blockchain enabled demand information sharing to mitigate the bullwhip effect: an agent-based modeling and simulation

Purpose: This paper investigates the potential of blockchain technology to mitigate the bullwhip effect by enhancing transparent, secure, and immutable customer demand information sharing (CDI) in supply chains. Design/Methodology/Approach: The study utilizes an agent-based simulation approach to model a serial supply chain comprising customer, retailer, wholesaler, producer, and supplier nodes with varying lead times, safety stocks, and smoothing factors. Two scenarios are examined: traditional information sharing (NIS) versus CDI sharing via blockchain technology (BCT). Findings: Results demonstrate that CDI sharing through BCT significantly reduces the bullwhip effect compared to traditional methods. Specifically, BCT-enabled CDI improves information visibility and accessibility for upstream echelons, leading to a notable reduction in order variance ratios for the wholesaler and producer. Value: This research contributes to the literature by showcasing the efficacy of blockchain in addressing supply chain challenges, particularly the bullwhip effect. By introducing blockchain-enabled demand information sharing, the study offers novel insights into enhancing supply chain coordination and performance. Research Limitations/Implications: While the findings are promising, limitations exist, primarily related to assumptions made in the model. Future research could explore additional types of information sharing, analyse different supply chain structures, and investigate the impact of limited capacity and bilateral versus unilateral information sharing. Practical Implications: For managers, this study underscores the strategic importance of adopting blockchain technology to improve supply chain efficiency. By investing in blockchain-enabled platforms for demand information sharing, organizations can enhance visibility, reduce uncertainty, and better align their operations with actual demand fluctuations, thereby improving overall supply chain performance.