Latigos Supply Chain
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Publicado: 4 de diciembre de 2012
SMR029
Massachusetts Institute of Technology Spring 1997 Volume 38 Number 3
Hau L. Lee, V. Padmanabhan & Seungjin Whang
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The Bullwhip Effect in Supply Chains
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Reprints To order reprints, or request a free reprint index,please contact: Sloan Management Review Reprints, E60-100 77 Massachusetts Avenue Cambridge, MA 02139-4307 Telephone: 617-253-7170 Fax: 617-258-9739 E-mail: smr@mit.edu Copyright Permission To request permission to copy one or more articles, please contact: Sloan Management Review Permissions, E60-100 77 Massachusetts Avenue Cambridge, MA 02139-4307 Telephone: 617-258-7485 Fax: 617-258-9739 E-mail:pfitzpat@mit.edu
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Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617-783-7860.
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MIT
Hau L. Lee • V. Padmanabhan • Seungjin Whang
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Do
ot long ago, logistics executives at Procter & Gamble (P&G) examined the order patterns for one of their best-selling products, Pampers. Its sales at retail stores werefluctuating, but the variabilities were certainly not excessive. However, as they examined the distributors’ orders, the executives were surprised by the degree of variability. When they looked at P&G’s orders of materials to their suppliers, such as 3M, they discovered that the swings were even greater. At first glance, the variabilities did not make sense. While the consumers, in this case, thebabies, consumed diapers at a steady rate, the demand order variabilities in the supply chain were amplified as they moved up the supply chain. P&G called this phenomenon the “bullwhip” effect. (In some industries, it is known as the “whiplash” or the “whipsaw” effect.) When Hewlett-Packard (HP) executives examined the sales of one of its printers at a major reseller, they found that there were, asexpected, some fluctuations
No tC
op
Distorted information from one end of a supply chain to the other can lead to tremendous inefficiencies: excessive inventory investment, poor customer service, lost revenues, misguided capacity plans, ineffective transportation, and missed production schedules. How do exaggerated order swings occur? What can companies do to mitigate them?
over time.However, when they examined the orders from the reseller, they observed much bigger swings. Also, to their surprise, they discovered that the orders from the printer division to the company’s integrated circuit division had even greater fluctuations. What happens when a supply chain is plagued with a bullwhip effect that distorts its demand information as it is transmitted up the chain? In thepast, without being able to see the sales of its products at the distribution channel stage, HP had to rely on the sales orders from the resellers to make product forecasts, plan capacity, control inventory, and schedule production. Big variations in demand were a major problem for HP’s management. The common symptoms of such variations could be excessive inventory, poor product forecasts,insufficient or excessive capacities, poor customer service due to unavailable products or long backlogs, uncertain production planning (i.e., excessive revisions), and high costs for corrections, such as for expedited shipments and overtime. HP’s product division was a victim of order swings that were exaggerated by the resellers relative to their sales; it, in turn, created additional exaggerations oforder swings to suppliers. In the past few years, the Efficient Consumer Response (ECR) initiative has tried to redefine how the grocery supply chain should work.1 One motivation for the initiative was the excessive amount of inventory in the supply chain. Various industry studies found that the total supply chain, from when products leave the manufacturers’ production lines to when they arrive on...
Massachusetts Institute of Technology Spring 1997 Volume 38 Number 3
Hau L. Lee, V. Padmanabhan & Seungjin Whang
Reprint 3837
Do
Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617-783-7860.
No tC
The Bullwhip Effect in Supply Chains
op
yo
rP
os t
MIT
Reprints To order reprints, or request a free reprint index,please contact: Sloan Management Review Reprints, E60-100 77 Massachusetts Avenue Cambridge, MA 02139-4307 Telephone: 617-253-7170 Fax: 617-258-9739 E-mail: smr@mit.edu Copyright Permission To request permission to copy one or more articles, please contact: Sloan Management Review Permissions, E60-100 77 Massachusetts Avenue Cambridge, MA 02139-4307 Telephone: 617-258-7485 Fax: 617-258-9739 E-mail:pfitzpat@mit.edu
Do
Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617-783-7860.
No tC
op
yo
rP
os t
MIT
Hau L. Lee • V. Padmanabhan • Seungjin Whang
N
Do
ot long ago, logistics executives at Procter & Gamble (P&G) examined the order patterns for one of their best-selling products, Pampers. Its sales at retail stores werefluctuating, but the variabilities were certainly not excessive. However, as they examined the distributors’ orders, the executives were surprised by the degree of variability. When they looked at P&G’s orders of materials to their suppliers, such as 3M, they discovered that the swings were even greater. At first glance, the variabilities did not make sense. While the consumers, in this case, thebabies, consumed diapers at a steady rate, the demand order variabilities in the supply chain were amplified as they moved up the supply chain. P&G called this phenomenon the “bullwhip” effect. (In some industries, it is known as the “whiplash” or the “whipsaw” effect.) When Hewlett-Packard (HP) executives examined the sales of one of its printers at a major reseller, they found that there were, asexpected, some fluctuations
No tC
op
Distorted information from one end of a supply chain to the other can lead to tremendous inefficiencies: excessive inventory investment, poor customer service, lost revenues, misguided capacity plans, ineffective transportation, and missed production schedules. How do exaggerated order swings occur? What can companies do to mitigate them?
over time.However, when they examined the orders from the reseller, they observed much bigger swings. Also, to their surprise, they discovered that the orders from the printer division to the company’s integrated circuit division had even greater fluctuations. What happens when a supply chain is plagued with a bullwhip effect that distorts its demand information as it is transmitted up the chain? In thepast, without being able to see the sales of its products at the distribution channel stage, HP had to rely on the sales orders from the resellers to make product forecasts, plan capacity, control inventory, and schedule production. Big variations in demand were a major problem for HP’s management. The common symptoms of such variations could be excessive inventory, poor product forecasts,insufficient or excessive capacities, poor customer service due to unavailable products or long backlogs, uncertain production planning (i.e., excessive revisions), and high costs for corrections, such as for expedited shipments and overtime. HP’s product division was a victim of order swings that were exaggerated by the resellers relative to their sales; it, in turn, created additional exaggerations oforder swings to suppliers. In the past few years, the Efficient Consumer Response (ECR) initiative has tried to redefine how the grocery supply chain should work.1 One motivation for the initiative was the excessive amount of inventory in the supply chain. Various industry studies found that the total supply chain, from when products leave the manufacturers’ production lines to when they arrive on...
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