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Bullwhip Effect ppt

Date post: 20-Aug-2015
Author: nitte-school-of-management
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  1. 1. The Bullwhip Effect in SCM BY VINODH.M
  2. 2. Whats covered? Bullwhip effect definition Results of the bullwhip effect Causes of the bullwhip effect An example
  3. 3. Bullwhip Effect Definition: The bullwhip effect is the uncertainty caused from distorted information flowing up and down the supply chain.
  4. 4. Who is affected? Nearly all industries are affected! Firms that experience large variations in demand are at risk. Firms that depend on suppliers upstream or distributors and retailers downstream may be at risk.
  5. 5. Results of the bullwhip effect: Excess inventories Problems with quality Increased raw material costs Overtime expenses Increased shipping costs Lost customer service Lengthened lead time Lost sales Unnecessary adjusted capacity
  6. 6. Causes of the bullwhip effect: Un-forecasted sales promotions Sales incentives Lack of customer confidence Customers turning back sales orders Freight incentives
  7. 7. How to Avoid the Bullwhip Effect: Share information Align your supply chain Implement an everyday-low-price policy Establish long-term contracts with suppliers Improve operational efficiency
  8. 8. Bullwhip effect - an example
  9. 9. Thanks A lot KEEP SMILING