The bullwhip effect: Progress, trends and directionsEuropean Journal of Operational Research

About

Authors
Xun Wang, Stephen M. Disney
Year
2015
DOI
10.1016/j.ejor.2015.07.022
Subject
Management Science and Operations Research / Modelling and Simulation / Information Systems and Management

Similar

Rape in marriage

Authors:
Lee H. Bowker, o̊Dean of the Graduate School and Research
1983

Urinary Flow Rates in Patients with Benign Prostatic Hypertrophy following Treatment with Alfuzosin

Authors:
P. TEILLAC, M. C. DELAUCHE-CAVALLIER, P. ATTALI and the DUALF Group
1993

Progress and Trends in Complement Therapeutics

Authors:
Daniel Ricklin, John D. Lambris
2012

The trend of progress-insecticides

Authors:
J. T. Martin, F. Tattersfield
1939

Development and Evaluation of Evidence-Informed Clinical Nursing Protocols for Remote Assessment, Triage and Support of Cancer Treatment-Induced Symptoms

Authors:
Dawn Stacey, Gail Macartney, Meg Carley, Margaret B. Harrison, The Pan-Canadian Oncology Symptom Triage and Remote Support Group (COSTaRS)
2013

Text

Accepted Manuscript

The bullwhip effect: Progress, trends and directions

Xun Wang , Stephen M. Disney

PII: S0377-2217(15)00655-4

DOI: 10.1016/j.ejor.2015.07.022

Reference: EOR 13110

To appear in: European Journal of Operational Research

Received date: 10 October 2014

Revised date: 7 July 2015

Accepted date: 8 July 2015

Please cite this article as: Xun Wang , Stephen M. Disney , The bullwhip effect: Progress, trends and directions, European Journal of Operational Research (2015), doi: 10.1016/j.ejor.2015.07.022

This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.

ACCEPTED MANUSCRIPT

AC

CE

PT

ED

M

AN

US

CR

IP

T 1

Highlights  Bullwhip research is categorised into empirical, experimental, and analytical approaches  Assumptions and validity of bullwhip models are examined  Typical elements, demand, forecasts, delays, policies and coordination are identified  We highlight emerging trends and future bullwhip research opportunities

ACCEPTED MANUSCRIPT

AC

CE

PT

ED

M

AN

US

CR

IP

T 2

Invited Review

The Bullwhip Effect: Progress, Trends and Directions

Xun Wang a,1 , WangX46@cardiff.ac.uk, Stephen M. Disney b,* , DisneySM@cardiff.ac.uk

Logistics Systems Dynamics Group, Cardiff Business School, Cardiff University, Aberconway

Building, Colum Drive, Cardiff, CF10 3EU, United Kingdom. 1

Tel: +44(0)2920 875845. *

Corresponding author. Tel: +44(0)2920 876310, fax: 02920874301.

Abstract

The bullwhip effect refers to the phenomenon where order variability increases as the orders move upstream in the supply chain. This paper provides a review of the bullwhip literature which adopts empirical, experimental and analytical methodologies. Early econometric evidence of bullwhip is highlighted. Findings from empirical and experimental research are compared with analytical and simulation results. Assumptions and approximations for modelling the bullwhip effect in terms of demand, forecast, delay, replenishment policy, and coordination strategy are considered. We identify recent research trends and future research directions concerned with supply chain structure, product type, price, competition and sustainability.

Key words

Bullwhip effect; Supply chain management; Literature review 1. Introduction

The bullwhip effect is one of the most popular and celebrated concepts in the operations management/research field. The term ‘bullwhip’ was coined to describe the effect by which slow moving consumer demand creates large swings in production for the suppliers at the other end of the supply chain. This is analogous to the handle of the bullwhip causing a loud crack at the popper. The bullwhip effect is sometimes referred to as ‘demand amplification’, ‘variance amplification’ or the ‘Forrester effect’. This effect becomes significant when the cost from fluctuations in production/ordering outweighs the cost of holding inventory. Over

ACCEPTED MANUSCRIPT

AC

CE

PT

ED

M

AN

US

CR

IP

T 3 the years, evidence has suggested that bullwhip costs play a pivotal role in some businesses.

Bullwhip costs can be associated with setting up and shutting down machines, idling and overtime in the workload, hiring and firing of the workforce, excessive upstream inventory, difficulty in forecasting and scheduling, systems nervousness, and poor supplier/customer relationships, amongst other consequences.

The bullwhip effect also has a close link with the philosophy of lean production (Ohno, 1988). Mura—the waste of unevenness—is the failure to smooth demand and is recognised as the root cause of both Muda (the seven lean wastes) and Muri (the waste of overburden).

Indeed Ohno (1988) discusses the benefits of bullwhip avoidance: “The slower but consistent tortoise causes less waste and is much more desirable than the speedy hare that races ahead and then stops occasionally to doze. The

Toyota Production System can be realized only when all the workers become tortoises.”

Since the 1990s, a large amount of literature on the bullwhip effect and its various proofs, interpretations, and remedies has emerged and continues to grow. A search in the Web of

Science with the keyword ‘bullwhip effect’ returns 582 papers, highlighting a strong academic interest. This review summarises the achievements and findings of the past 20 years regarding the bullwhip effect and identifies possible future research directions. However, we do not confine our review solely to this 20-year interval, since much research on the macroeconomic, microeconomic and operational levels have a longer history and we include older contributions when they provide important contextual information.

Due to the various orientations and disciplines of research papers under this topic, a statistical systematic review is not appropriate. Rather, this review is narrative in nature as this allows more flexibility. We started collecting papers with a keyword search from the databases of Web of Science, EBSCO, and ScienceDirect. We have searched with the keywords ‘bullwhip effect’, ‘demand amplification’ and ‘variance amplification’ in the title, abstract and keyword sections. We also conducted a careful citation search both prospectively and retrospectively. This led to 455 papers being reviewed and over 150 articles being cited in

ACCEPTED MANUSCRIPT

AC

CE

PT

ED

M

AN

US

CR

IP

T 4 this article. Certainly, the page limitation has restricted us from citing all the papers we collected. However we have tried to include all the papers that are both relevant and significant. We have attempted to be as inclusive as possible but we are aware that we may have missed some important contributions on the topic. For the sake of readability and succinctness, we have avoided deep technical details. However, we do discuss issues such as assumptions and cost criteria since they are an essential basis for critical evaluation.