Professional Documents
Culture Documents
Did you find yourself "blaming" the groups next to you for your
problems?
Bullwhip Effect
100
90
80
70
Customer
Orders
60
Retailer
50
Wholesaler
Distributor
40
Factory
30
20
10
0
Week
Week
Other groups
Bullwhip Effect
Bullwhip Effect
Bullwhip Effect
70
70
70
60
60
60
50
50
50
Retailer
Wholesaler
30
Distributor
40
Retailer
Wholesaler
30
Distributor
Factory
Customer
Orders
40
Customer
Orders
Orders
Customer
Retailer
Wholesaler
30
Distributor
Factory
Factory
20
20
20
10
10
10
0
Week
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39
Week
9 11 13 15 17 19 21 23 25 27 29 31 33 35 37
Week
Bullwhip Effect
Week
Bullwhip Effect
40
Bullwhip Effect
90
60
80
35
50
70
30
20
Wholesaler
Distributor
15
Factory
Orders
Retailer
30
Customer
60
Customer
Retailer
50
Retailer
Wholesaler
Distributor
Factory
20
10
Orders
40
Customer
25
Orders
40
Wholesaler
40
Distributor
30
Factory
20
10
10
0
Week
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41
Week
Week
15
22
29
36
43
Week
10,075
10,55
10,4
10,05
7,7
7,9
8,325
23
35
99
100
mit
20
13
23
20
16
26
mit
Inventory
50
Retailer
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39
-50
Wholesaler
Distributor
Factory
-100
-150
-200
Week
Beergame Debriefing, by Kai Riemer, http://www.beergame.org
73
101
193
230
mit
38
59
32
48
Total Cost
1400
1200
Cost
1000
Retailer
800
Wholesaler
Distributor
600
Factory
400
200
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39
Week
Beergame Debriefing, by Kai Riemer, http://www.beergame.org
10
11
12
13
Demand forecasting
Usage of aggregate and thus inaccurate data does not allow for
good predictions
High variability leads to continuous adaptations of order policies
and thus increases variability upstream
Lead time
High lead time creates uncertainty
Requires high safety stock levels
Reduces flexibility and adaptability to unforeseen changes in
demand
14
Price fluctuation
Stock up when prices are lower large orders
Promotions and discounts
Inflated orders
In time of shortages, suppliers place big orders when expecting to be
allocated proportionally
15
Lesson
In traditional supply chains information about consumer demand is only
passed up the supply chain through the orders that are placed
Or using aggregated figure
Information is therefore lost
High Buffer stocks result
Even if each party acts optimally individually the result is less than optimal
for the whole supply chain
Result is higher prices, less sales.
BUT:
Competition is now supply chain against supply chain and
Network against network
16
Contact
17