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Please help to improve this article by introducing more precise citations. From Wikipedia, the free encyclopedia.

Views Read Edit View history. The causes can further be divided into behavioral and operational causes. The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. Moreover, repeated hiring and dismissal of employees to manage the demand variability induces further costs due to training and possible lay-offs. Human Factors in Supply Chain Management. This article includes a list of referencesbut its sources remain unclear because it has insufficient inline citations.

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.

Lee, Hau L; Padmanabhan, V. Therefore, it is necessary bulllwhip extend the visibility of customer demand as far as possible. By using this site, you agree to the Terms of Use and Privacy Policy.

This is consistent with findings of supply chain experts who 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. July Learn how and when to remove this template message. Forecasts are based on statistics, gullwhip they are rarely perfectly accurate. 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.

Why Supply Chain Management is so Difficult”. In periods of rising demand, down-stream participants increase orders. 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 further from the originating signal, the greater the distortion of the wave pattern. Better information leads to better inventory positioning and lower costs throughout the supply chain.


This article is in a list format that may be better presented using prose. The concept first appeared in Jay Forrester ‘s Industrial Dynamics [1] and thus it is also known as the Forrester effect. This sequence of events is well simulated by the beer distribution game which was developed by MIT Sloan School of Management in the s.

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


While successful in generating the desired market pull, manufacturing did not know about the promotional plans. 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.

This also leads to a low utilization of the distribution channel. Suffering a glut in green cars, sales and marketing developed a program to move the excess inventory. Because forecast errors are given, companies often carry an inventory buffer called ” safety stock “. Human factors influencing the behavior in supply chains are largely unexplored. In other projects Wikimedia Commons.

Another prerequisite is that all members of a supply chain recognize that they can gain more if they act as a whole which requires trustful collaboration and information sharing. This page was last bullwhip on 24 Octoberat In manufacturingthis concept is called kanban.

In a similar manner, forecast accuracy decreases as one moves upstream along the supply chain. In theory, the bullwhip effect does not occur if all orders exactly meet the demand of each period.


In spite of having safety stocks there is still efekt hazard of stock-outs which result in poor customer service and lost sales.

Bullwhip 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. You can help by converting this article to prose, if appropriate.

The bullwhip effect was named for the way the amplitude of a whip increases down its length. The result is near-perfect visibility of customer demand and inventory movement throughout the supply chain.

Der Bullwhip-Effekt in supply chains – EconBiz

Articles lacking in-text citations from July All articles lacking in-text citations All articles with unsourced statements Articles with unsourced statements from January Articles needing cleanup from August All pages needing cleanup Articles with sections that need to be turned into prose from August It refers to increasing swings in inventory in response to shifts in customer demand as bullwbip moves further up the supply chain.

One way to achieve this is to establish a demand-driven supply chain which reacts to actual customer orders. People with high self-efficacy experience less trouble handling the bullwhip-effect in the supply chain. The concept of “cumulative quantities” is a method that can tackle and even avoid the bull-whip-effect. 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.

Barriers to the implementation bulllwhip 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.

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