Supply Chains Have A Dynamic Of Their Own That Is Often Called The Bullwhip Effect. It Means That Relatively Small Changes: Operations Planning And Design, NCI, IRELAND
Jul 07, 2023
What are the dynamics of supply chains?
Supply chains have a dynamic of their own that is often called the bullwhip effect. It means that relatively small changes at the demand end of the chain increasingly amplify into large disturbances as they move upstream.
Four key methods can be used to reduce this effect. E-enabled supply chains can prevent overreaction to immediate stimuli and give a better view of the whole chain. Channel alignment through standardized planning and control methods allows for easier coordination of the whole chain. Improving the operational efficiency of each part of the chain prevents local errors from multiplying to affect the whole chain. Improved forecasts reduce the inventory holding requirements for supply chains while maintaining customer service levels