The Bullwhip Effect[牛鞭效应](PPT-37).ppt

12/27/00 The Bullwhip Effect John H. Vande Vate Fall, 2002 Diagnosis Treatment What is it? Symptoms? Causes? Treatments Follow-up What it is… The Bullwhip Effect describes the phenomenon in which order variability is amplified as it moves up the supply chain from end-consumers through distribution and manufacturing to raw material suppliers. Example Procter Gamble: Pampers Smooth consumer demand Fluctuating sales at retail stores Highly variable demand on distributors Wild swings in demand on manufacturing Greatest swings in demand on suppliers Illustration Illustration Illustration Illustration What Are the Effects? What problems, costs, challenges does this create for the players in the supply chain? What problems does this create for the product in the market place? The Effects Manufacturing Cost Capital Investment Operating costs Inventories Anticipatory Cycle Pipeline Safety stock Infrastructure Lead Time New product releases Order response time Shipping Receiving Cost Order processing The Effects Customer Service Level Product availability Transport Cost Economies of scale Variability The Causes Order batching Pricing Strategies Uncertain Supply Forecasting Causes Order Batching Reduce processing costs Exploit economies of scale in transport Ordering cycles and planning cycles Causes Pricing Strategies Promotions Reduce margin Advance demand Diversions Sales Targets Revenue Targets Reduce price at end of quarter to meet plans Uncertain Supply Product on Allocation Customers place extra large orders to ensure they get “their share” Forecasting More variability Poorer forecasts Less reliable supply Treatments Information Sharing Wal-Mart provides POS info to PG Channel Alignment Coordination of promotions, transport, etc. Operational Efficiency Reducing cost and leadtime Information Sharing Chrysler makes the cars Leer makes the seats Third party cuts sews fab