The document discusses the bullwhip effect in supply chain management. The bullwhip effect is defined as the uncertainty caused by distorted information flowing up and down the supply chain. This can result in excess inventories, quality problems, increased costs, and lost sales and customers. The bullwhip effect is caused by unforecasted promotions, incentives, lack of confidence, order changes, and freight costs. Companies can avoid this effect by sharing information, aligning the supply chain, using everyday low pricing, and long-term contracts.

2. The Bullwhip Effect in SCM
BY
VINODH.M

3. What’s covered?
• Bullwhip effect definition
• Results of the bullwhip effect
• Causes of the bullwhip effect
• An example

4. Bullwhip Effect Definition:
• The bullwhip effect is the uncertainty
caused from distorted information
flowing up and down the supply chain.

5. 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.

6. 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

7. Causes of the bullwhip effect:
• Un-forecasted sales promotions
• Sales incentives
• Lack of customer confidence
• Customers turning back sales orders
• Freight incentives

8. 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

9. Bullwhip effect - an example

10. Thanks A lot
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