Innovative Multi-Step Anomaly Detection Algorithm with Real-World Implementation: Case Study in Supply Chain Management

Abstract

In all information systems it is very important to operate with correct information. Incorrect information can lead to many problems that can cause direct financial and reputation loss of the company. Data used by the system can be gathered by sensors, scripts or by hand. In all those cases, mistakes are possible. It is important to detect mistakes on time and stop them from propagating further into the system. In this paper, a novel multi-step anomaly detection algorithm based on the greatest common divisor and median value is described. The algorithm for anomaly detection in historical sales data is used as a part of the smart warehouse management system which is implemented in some of the largest distribution companies in Bosnia and Herzegovina. The algorithm showed significant results in anomaly detection on company orders and improved a number of processes in the operation of the smart warehouse management system. The algorithm described can also be used in other areas where the transaction data is collected, such as sales and banking,