The bullwhip effect describes a central problem in supply chain management: even slight fluctuations in market demand can have a whiplash effect on the upstream production and storage stages. They can be recognized by fluctuations in the degree of readiness for delivery with variances of five percent or more.
Our tip: An initial dampening of the whip effect is achieved by directly forwarding demand across several production or delivery stages. It is important to ensure that pull systems that conserve stocks do not become push systems again. Furthermore, the whip effect can be dampened by adapted inventory management and sufficient flexibility in production. The optimum cost between the two measures can be reliably determined using suitable simulation tools.
