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Der Bullwhip-Effekt in supply chains – EconBiz

In manufacturingthis concept is called kanban. 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.

Human factors influencing the behavior in supply chains are largely unexplored. In periods of rising demand, down-stream participants increase orders. The gullwhip is that variations are amplified as one moves upstream in the supply chain further from the customer.

Individual Wal-Mart stores transmit point-of-sale POS data from the cash register back to corporate eeffekt several times a day.

The concept first appeared in Jay Forrester ‘s Industrial Dynamics [1] and thus it is also known as the Forrester effect. This model has been successfully implemented in Wal-Mart ‘s distribution system.


The causes can further be divided into behavioral and operational causes. In other projects Wikimedia Commons. In theory, the bullwhip effect does not occur if all orders exactly meet the demand of each period.


Human Factors in Supply Chain Management.

Please help to improve this article by introducing more precise citations. Another prerequisite buklwhip 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 also leads to a low utilization of the distribution channel.

Bullwhip effect

Because customer demand is rarely perfectly stable, businesses must forecast demand to properly position inventory and other resources.

The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. This demand information is used to queue shipments from the Wal-Mart distribution center to the store and from the supplier to the Wal-Mart distribution center.

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.

One way to achieve this is to establish a demand-driven supply chain which reacts to actual customer orders. Suffering a glut in green cars, sales and marketing developed a program to move the excess inventory. Forecasts are based on statistics, and they are rarely perfectly accurate. 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 need for safety stock.

The concept of “cumulative quantities” is a method that can tackle and even avoid the bull-whip-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.


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.

By using this site, you agree to the Terms of Use and Privacy Policy. Because forecast errors are given, companies often carry an inventory buffer called ” safety stock “.

July Learn how and when to remove this template message. Better information leads to better inventory positioning and lower costs throughout the supply chain. From Wikipedia, the free encyclopedia.

File: – Wikimedia Commons

Instead, they read the increase in sales as an indication of growing demand for green cars and ramped up production. This page was last edited on 24 Octoberat People with high self-efficacy experience less trouble handling the bullwhip-effect in the supply chain. Lee, Hau L; Padmanabhan, V. In periods of falling demand, orders fall or stop, thereby not reducing inventory.

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.

Views Read Edit View history. Why Supply Chain Management is so Difficult”.