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Human factors influencing the behavior in supply chains are largely unexplored. By using this site, you agree to the Terms of Use and Privacy Policy.

July Learn how and vullwhip to remove this template message. Views Efdekt Edit View history. One way to achieve this is to establish a demand-driven supply chain which reacts to actual bullwhjp orders.

For example, many consumer goods have fairly consistent consumption at retail but this signal becomes more chaotic and unpredictable as the focus moves away from consumer purchasing behavior. Instead, they read the increase in sales as an indication of growing demand for green cars and ramped up production. This article includes a list of referencesbut its sources remain unclear because it has insufficient inline citations.

The bullwhip effect was named for the way the amplitude of a whip increases down its length. The causes can further be divided into behavioral and operational causes. Because customer demand is rarely perfectly stable, businesses must forecast demand to properly position inventory and other resources.

Bullwhiip page was erfekt edited on 24 Octoberat This method is developed and practised mainly in the German automotive industry, with its expanded supply chains [4] and is established in several EDI-formats between OEMs and their suppliers. The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies.


The concept first appeared in Jay Forrester ‘s Industrial Dynamics [1] and thus it is also known as the Forrester effect. In addition to greater safety stocks, the described effect can lead to either inefficient production or excessive inventory, as each producer needs to fulfill the demand of its customers in the supply chain.

Der Bullwhip-Effekt in supply chains

Moving up the supply chain from end-consumer to raw materials supplier, each supply chain participant has greater observed variation in demand and thus greater efekt for safety stock.

People with high self-efficacy experience less trouble handling the bullwhip-effect in the supply chain. Barriers to the implementation of a demand-driven supply chain include the necessary investment in information technology and the creation of a corporate culture of flexibility and focus on customer demand.

The further from the originating signal, the greater the distortion of the wave pattern. It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain. Individual Wal-Mart stores transmit point-of-sale POS data from the cash register back to corporate headquarters several times a day. You can help by converting this article to prose, if appropriate.

Editing help is available. In periods of falling demand, orders fall or stop, thereby not reducing inventory.

Moreover, repeated hiring and dismissal of employees to manage the demand variability induces further costs due to training and possible lay-offs. However, studies suggest that people with increased need for safety and security seem to perform worse than risk-takers in a simulated supply chain environment. The concept of “cumulative quantities” is a method that can tackle and even avoid the effetk.


Lee, Hau L; Padmanabhan, V. In a similar manner, forecast accuracy decreases as one moves upstream along the supply chain. This sequence of events is well simulated by the beer distribution game which was developed by MIT Sloan School of Management in the s. Therefore, it is necessary to extend the visibility of customer demand as far as possible.

This article is in a list format that may be better presented using prose. In the s, Hau Lee, a Professor of Engineering and Management Science at Stanford Universityhelped incorporate the concept into supply chain vernacular using a story about Volvo. Retrieved from ” https: In theory, the bullwhip effect does not occur if all orders exactly meet the demand of each period.

Bullwhip effect – Wikipedia

Human Factors in Supply Chain Management. In spite of having safety stocks there is still the hazard of stock-outs which result in poor customer service and lost sales.

From Wikipedia, the free encyclopedia. This is consistent with findings of supply chain experts etfekt have recognized that the bullwhip effect is a problem in forecast-driven supply chains, and careful management of the effect is an important goal for supply chain managers.

In addition to the financially hard measurable consequences of poor customer services and the damage to public image and loyalty, an organization has to cope with the ramifications of failed fulfillment which may include contractual penalties. In manufacturingthis concept is called kanban.