VMI System with Smart Contracts for Demand Forecasting

Abstract

In recent years, the importance of supply chain management has been attracting attention. An increasing number of companies are adopting Vendor Managed Inventory (VMI), one of the effective supply chain management methods. VMI is built on the cloud and has problems such as a lack of data transparency and traceability and a single point of failure due to the cloud. In addition, to efficiently deliver VMI, vendors need experience and know-how in demand forecasting, and inexperienced vendors cannot forecast demand adequately. This study proposes a new configuration of blockchain-based VMI using smart contracts that perform statistical processing to aid in demand forecasting. Including a demand forecasting smart contract in the VMI configuration can add accuracy and reliability to the demand forecasting results of inexperienced VMI managers. In this study, we employ ABC analysis as one of the statistical processes that help in demand forecasting and show its feasibility by implementing and evaluating it using a smart contract.