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The effect of a higher demand variation over a supply chain is described as "bullwhip-effect". Since Forrester (1958) discovered around 45 years ago that variations of demand (and based on that the variations of orders and stocks) are increased up the supply chain from customer to supplier, researchers look for reasons and try to find countermeasures.While in-depth academic analysis has been conducted for retail markets, very little research has been done on this in global business-to-business networks.We used data from a case study of one Asian-European supply network in order to identify endogenous causes and counter-measures for demand variation. We analyzed the effects and clustered counter-measures with respect to information and behavior uncertainties. This study provides in-depth insights into the dependencies of supply structures to endogenous, even macroeconomic developments. At the same time this study recommends counter-measure strategies to the bullwhip-effect for practitioners and their global supply chains.
Keywords: Bullwhip effect, Global supply chain management, Automotive industry, Case study
INTRODUCTION
Lacking coordination of demand and supply information is one of the main causes for demand and stock variation which propagates upstream with amplification occurring at each echelon of the supply chain. Lee, Padmanabhan, and Whang (1997a) and Lee, So, and Tang (2000) popularized the term "bulwhip-efect" for this phenomenon of demand distortion. The bulwhip effect has been documented as a significant problem for supply management in an experimental context (Sterman 1989) and in a wide variet y of companies and industries (Buzzell et al. 1990; Kelly 1995; Holmstrom 1997; Metters 1997; Warburton 2004). The bullwhip effect has a number of negative effects that cause significant inefficiencies, e.g. excessive inventory invest ments throughout the supply chain, poor customer supply service and lost revenues due to shortages, misguided management decisions regarding procurement, production, and logistics capacities (Lee et al. 1997a; Carlsson and Fuller 2000).
Early findings have shown that a close cooperation in one supply chain may decrease costs and optimize the flow of goods and information (Forrester 1958, Forrester 1961). Many proposed counter measures have a history of successful application (Clark 1994; Gill and Abend 1997; Hammond 1993; Towill 1997). Particularly i n-depth academic anal ysis has been conducted on the bullwhip effect for retail markets. Changing the perspective, one approach of this paper is...