Search results
1 – 10 of over 1000Seung‐Kuk Paik and Prabir K. Bagchi
This study attempts to determine the relative contribution of each of the causes of the bullwhip effect and to identify which causes of the bullwhip effect have relatively…
Abstract
Purpose
This study attempts to determine the relative contribution of each of the causes of the bullwhip effect and to identify which causes of the bullwhip effect have relatively significant impacts on the variability of orders in supply chains.
Design/methodology/approach
Computer simulation models are developed. A fractional factorial design is used in collecting data from the simulation models. Statistical analyses are conducted to address the research objectives.
Findings
When all of the nine possible causes of the bullwhip effect are present in the simulation models, the following six factors are statistically significant: demand forecast updating, order batching, material delays, information delays, purchasing delays and level of echelons. Among these six factors, demand forecast updating, level of echelons, and price variations are the three most significant ones.
Research limitations/implications
Simulation models for the beer distribution game are developed to represent supply chains. Different supply chain structures can be constructed to examine the causes of the bullwhip effect.
Practical implications
In order to mitigate the bullwhip effect, supply chain managers need to share actual demand information and coordinate production and distribution activities with their partners.
Originality/value
This study measures the relative contribution of each of the causes of the bullwhip effect and provides evidence that transparent and accurate information flow and supply chain coordination could be a key to reduce the amplification of demand in supply chains.
Details
Keywords
Manuel Brauch, Matin Mohaghegh and Andreas Größler
One pertinent dynamic phenomenon in supply chains is the amplification of order variance, i.e. the bullwhip effect. Its continued significance is underscored in contemporary…
Abstract
Purpose
One pertinent dynamic phenomenon in supply chains is the amplification of order variance, i.e. the bullwhip effect. Its continued significance is underscored in contemporary empirical research. While numerous publications have pinpointed various causes of the bullwhip effect, there remains a gap in their systematic consolidation. The purpose of this paper is to compile a comprehensive list of the causes of the bullwhip effect from existing literature and categorize them appropriately.
Design/methodology/approach
This study conducts a systematic literature review to offer a comprehensive overview of bullwhip effect causes addressed in the existing literature. The identified causes are categorized using a qualitative content analysis approach.
Findings
The study shows the diversity of the causes of the bullwhip effect and their interdependencies. In addition, this study demonstrates that, at the highest level of aggregation, causes of the bullwhip effect can be classified into four main categories: causes inherent in the system structure, causes related to uncertainty, causes related to misaligned incentives and causes related to inadequate cognition of the situation.
Originality/value
The work provides an extensive overview and categorization of bullwhip effect causes, offering valuable insights for both researchers and practitioners seeking a deeper understanding of this phenomenon. In addition, it underscores managerial implications and highlights future research opportunities.
Details
Keywords
Abstract
Purpose
This paper breaks through the limitations of the research on bullwhip effect in the traditional supply chain, extends the research perspective to digital supply chain and discusses the weakening effect of digital supply chain on bullwhip effect by comparing the overall performance of the two.
Design/methodology/approach
This paper starts with the weakening mechanism of supply chain digitization on bullwhip effect, builds bullwhip effect models of traditional supply chain and digital supply chain, respectively, simulates the influence of supply chain digitization transformation on bullwhip effect by using Matlab software and analyzes the causes of bullwhip effect in supply chain led by T company and the digitization process.
Findings
Firstly, digitization can reduce bullwhip effect in multi-level supply chain by reducing information feedback deviation. Second, digital transformation is conducive to improving the overall performance of the supply chain. Third, government incentives can promote the digital transformation of supply chain and inhibit bullwhip effect.
Research limitations/implications
Although the study considers the heterogeneous subject -- the government's incentive effect on digital transformation and information sharing – it does not include the influence of the end node in the supply chain, that is the consumer. In addition, this paper only analyzes and discusses the bullwhip effect on the amplification of demand, without considering the situation that the market contraction will lead to the reduction of demand.
Practical implications
This paper considers the distortion degree and delay degree of information feedback, carries out quantitative analysis of bullwhip effect, builds the bullwhip effect model of traditional supply chain and digital supply chain, uses Matlab software to analyze the difference of the influence of supply chain digital transformation on bullwhip effect suppression and puts forward the corresponding control strategy.
Social implications
The research shows that digital transformation can reduce the bullwhip effect in multi-layer supply chain by reducing the information feedback deviation, which is conducive to improving the overall supply chain performance, and government support can accelerate the digital transformation of supply chain to a certain extent.
Originality/value
First, break through the limitations of traditional supply chain research, expand the research perspective to digital supply chain and discuss the weakening effect of digital supply chain on bullwhip effect by comparing the overall performance of the two. Second, quantify the bullwhip effect through information feedback bias and provide an analysis method for the weakening of the bullwhip effect. Third, the driving role of the government in the digital transformation of the supply chain is considered in the study, so that the model is more close to the actual situation of enterprise operation.
Details
Keywords
The purpose of this paper is to explore whether and how the bullwhip effect, as found in product supply chains, might also manifest itself in services, as well as what policies…
Abstract
Purpose
The purpose of this paper is to explore whether and how the bullwhip effect, as found in product supply chains, might also manifest itself in services, as well as what policies can be successful for mitigating it.
Design/methodology/approach
A combination of analytic methods was used – inductive case analysis and analysis of data from two service supply chains in the telecom industry.
Findings
Empirical evidence from two cases was examined and provides support for the presence of a service bullwhip effect. Quantitative and qualitative case data were used to explore how this effect manifests itself in services, the distinctive drivers of the bullwhip effect in services, and the managerial actions that can either trigger or mitigate these bullwhip effects. In total, eight propositions are developed and three types of characteristics that potentially make the bullwhip effect worse in services than in manufacturing are identified: the destabilizing effects of manual rework in otherwise automated service processes; the omission of accurate and timely data on rework volumes upstream in the chain, pointing at future bullwhip effects downstream; and the lack of a supply‐chain mindset within the various departments jointly responsible for delivering the service, leading to longer delays in reacting to service bullwhips as they develop over time.
Research limitations/implications
The research is based on two cases within a single industry, limiting generalizability. The propositions developed need testing in a wider set of contexts, including hybrid service and product supply chains.
Practical implications
The implications of this research can help organizations prevent or reduce the negative impact of planned and unplanned fluctuations in their service supply chains.
Originality/value
This paper explores an area that has been well researched in manufacturing, but not in services, and it contributes to both the theory and practice of service supply chains.
Details
Keywords
This research applies the construct of bullwhip effect in a non‐traditional context. It is explored in intra‐organisational echelons. It is argued that the bullwhip effect in a…
Abstract
This research applies the construct of bullwhip effect in a non‐traditional context. It is explored in intra‐organisational echelons. It is argued that the bullwhip effect in a company's inventory management of inbound and outbound logistics flows depends in part upon the gap between the degree of speculation and postponement of business activities. It is also argued that the bullwhip effect is caused by the value adding of business activities in supply chains. The study shows that there is a potential bullwhip effect between companies’ inbound and outbound logistics flows, i.e. two internal stocking levels. A see‐saw model of the bullwhip effect, and a typology of the bullwhip effect in intra‐organisational echelons, are introduced. The term “reversed bullwhip effect” is also introduced. Finally, a model of the bullwhip effect‐scenarios in a dynamic business environment positions these contributions in a wider theoretical and managerial context.
Details
Keywords
Compares the bullwhip properties of a vendor managed inventory (VMI) supply chain with those of a traditional “serially‐linked” supply chain. The emphasis of this investigation is…
Abstract
Compares the bullwhip properties of a vendor managed inventory (VMI) supply chain with those of a traditional “serially‐linked” supply chain. The emphasis of this investigation is the comparative impact the two structures have on the “bullwhip effect” generated. Particular attention is paid to the manufacturer's production ordering activities as demonstrated using a simulation model based on difference equations. Documents and considers each of the four important sources of the bullwhip effect in turn. The analysis shows that with VMI implementation two sources of the bullwhip effect may be completely eliminated, i.e. rationing and gaming or the Houlihan effect, and the order batching effect or the Burbidge effect. VMI is also significantly better at responding to rogue changes in demand due to the promotion effect or to price induced variations. However, the effect of VMI on demand signal processing induced bullwhip or the Forrester effect is less clear cut. Concludes that on balance VMI offers a significant opportunity to reduce the bullwhip effect in real‐world supply chains.
Details
Keywords
Maria Drakaki and Panagiotis Tzionas
Information distortion results in demand variance amplification in upstream supply chain members, known as the bullwhip effect, and inventory inaccuracy in the inventory records…
Abstract
Purpose
Information distortion results in demand variance amplification in upstream supply chain members, known as the bullwhip effect, and inventory inaccuracy in the inventory records. As inventory inaccuracy contributes to the bullwhip effect, the purpose of this paper is to investigate the impact of inventory inaccuracy on the bullwhip effect in radio-frequency identification (RFID)-enabled supply chains and, in this context, to evaluate supply chain performance because of the RFID technology.
Design/methodology/approach
A simulation modeling method based on hierarchical timed colored petri nets is presented to model inventory management in multi-stage serial supply chains subject to inventory inaccuracy for various traditional and information sharing configurations in the presence and absence of RFID. Validation of the method is done by comparing results obtained for the bullwhip effect with published literature results.
Findings
The bullwhip effect is increased in RFID-enabled multi-stage serial supply chains subject to inventory inaccuracy. The information sharing supply chain is more sensitive to the impact of inventory inaccuracy.
Research limitations/implications
Information sharing involves collaboration in market demand and inventory inaccuracy, whereas RFID is implemented by all echelons. To obtain the full benefits of RFID adoption and collaboration, different collaboration strategies should be investigated.
Originality/value
Colored petri nets simulation modeling of the inventory management process is a novel approach to study supply chain dynamics. In the context of inventory errors, information on RFID impact on the dynamic behavior of multi-stage serial supply chains is provided.
Details
Keywords
Yao 'Henry' Jin, Brent D. Williams, Matthew A. Waller and Adriana Rossiter Hofer
The accurate measurement of demand variability amplification across different nodes in the supply chain, or “bullwhip effect,” is critical for firms to achieve more efficient…
Abstract
Purpose
The accurate measurement of demand variability amplification across different nodes in the supply chain, or “bullwhip effect,” is critical for firms to achieve more efficient inventory, production, and ordering planning processes. Building on recent analytical research that suggests that data aggregation tends to mask the bullwhip effect in the retail industry, the purpose of this paper is to empirically investigate whether different patterns of data aggregation influence its measurement.
Design/methodology/approach
Utilizing weekly, product-level order and sales data from three product categories of a consumer packaged goods manufacturer, the study uses hierarchical linear modeling to empirically test the effects of data aggregation on different measures of bullwhip.
Findings
The authors findings lend strong support to the masking effect of aggregating sales and order data along product-location and temporal dimensions, as well as the dampening effect of seasonality on the measurement of the bullwhip effect.
Research limitations/implications
These findings indicate that inconsistencies found in the literature may be due to measurement aggregation and statistical techniques, both of which should be applied with care by academics and practitioners in order to preserve the fidelity of their analyses.
Originality/value
Using product-weekly level data that cover both seasonal and non-seasonal demand, this study is the first, to the author’s knowledge, to systematically aggregate data up to category and monthly levels to empirically examine the impact of data aggregation and seasonality on bullwhip measurement.
Details
Keywords
This study aims to answer the question of how firms can deal with the great bullwhip effects caused by COVID-19?
Abstract
Purpose
This study aims to answer the question of how firms can deal with the great bullwhip effects caused by COVID-19?
Design/methodology/approach
An exploratory research method has been adopted and evidence was collected based on 41 online interviews.
Findings
The study finds that the bullwhip effect is caused by the sudden changes in customers purchasing behaviour during the pandemic and the businesses’ inaccurate anticipation of the situation. Managing the bullwhip effects caused by COVID-19 requires situation awareness, localisation and an intelligent supply chain. Situation awareness is a vital concept in emergency response, knowing what is going to figure out what should be done. Furthermore, reducing the geographical distances between the firm and other parties in the supply chain, which equates to supply chain localisation, enforces just-in-time inventory. Finally, supply chain digitalisation is no longer an option; implementing such a solution enables end-to-end visibility, collaboration, flexibility and optimisation of orchestration of the supply chain.
Research limitations/implications
This study presents indicators explaining how organisations can deal with the great bullwhip effects caused by COVID-19.
Originality/value
The ongoing outbreak of the COVID-19 pandemic has brought about significant challenges for supply chain management, and this study contributes to the body of knowledge and proposes a model of reducing the bullwhip effects.
Details
Keywords
Sachin Gupta and Anurag Saxena
The operational aspects of supply chain, when handled correctly, results in diminishing the impact of the bullwhip effect. The purpose of this study is to analyze the impact of…
Abstract
Purpose
The operational aspects of supply chain, when handled correctly, results in diminishing the impact of the bullwhip effect. The purpose of this study is to analyze the impact of operational and financial variables on the bullwhip effect. Various operational factors that contribute to the bullwhip effect in a supply chain are identified and their impact on variability in production is measured at manufacturer’s end in the supply chain.
Design/methodology/approach
Ten different sectors of the Indian economy are identified and analyzed on the basis of bullwhip effect. The ratio of change in production with respect to change in demand is taken as a metric to measure the bullwhip effect. Initially, the impact of identified variables on bullwhip effect is analyzed using the linear regression analysis and then to gain more insights, the threshold regression model is applied according to the change in bullwhip ratio.
Findings
The study identifies four threshold regions in which bullwhip ratio is changing its slope considerably. The operational and financial variables impacting bullwhip effect differently in these four regions provide useful insights about how the variables are impacting the bullwhip effect.
Research limitations/implications
Past 11 years of observations on identified operational and financial variables are studied for ten different sectors. The operational and financial variables are identified on basis of available literature but may not be exhaustive in nature.
Practical implications
The present study implies that the emphasis must be given to the magnitude of the bullwhip ratio. Strategies must be adopted that result in mitigation of bullwhip effect. Such mitigation strategies must not only be restricted on the basis of type of product or sector, perhaps they must be on the basis of threshold region of bullwhip ratio.
Originality/value
The study suggests a novel approach to study the bullwhip effect in supply chain management using the application of threshold regression considering the bullwhip ratio as a threshold variable.
Details