The effects of the lack of coordination within the supply chain
AbstractThe present article refers to the bullwhip effect that negatively influences the supply chain performance. This effect is experienced by various industries, from fast moving consumer goods to IT products. The consequences for the supply chain members are the following: increased costs, lower profitability, longer lead times and lower product availability. The main factors that generate this effect are the types of incentives provided by suppliers to the downstream customers, the information distortion, the order placing practices, the pricing policies encouraging the forward buying and the specific behavior of the supply chain members focused on local optimization. The only way in which supply chain members may eradicate the bullwhip effect is to enhance coordination among the subsequent stages. Some of the strategies to be considered are the alignment of goals and objectives, data sharing among members, single stage control of replenishment, strategies for the improvement of the operational performance, stabilizing orders with appropriate pricing strategies and building strategic partnerships and trust. The incidence and amplitude of the bullwhip effect may be reduced by strategies and decisions that are harmonized along the stages of the supply chain. The key words in the endeavor to diminish the bullwhip effect are cooperation, coordination, communication and trust.
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Bibliographic InfoArticle provided by Academy of Economic Studies - Bucharest, Romania in its journal The AMFITEATRU ECONOMIC journal.
Volume (Year): 10 (2008)
Issue (Month): 24 (June)
bullwhip effect; logistics; supply chain; coordination; information distortion;
Find related papers by JEL classification:
- M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hau L. Lee & Kut C. So & Christopher S. Tang, 2000. "The Value of Information Sharing in a Two-Level Supply Chain," Management Science, INFORMS, vol. 46(5), pages 626-643, May.
- John D. Sterman, 1989. "Modeling Managerial Behavior: Misperceptions of Feedback in a Dynamic Decision Making Experiment," Management Science, INFORMS, vol. 35(3), pages 321-339, March.
- Matevž Rasković & Barbara Mörec, 2012. "Organizational Change and Corporate Sustainability in an Economic Crisis: Evidence from Slovenia," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(32), pages 522-536, June.
- Ivana Kovacevic & Biljana Panic & Mirko Vujosevic & Marija Kuzmanovic, 2013. "Application of Transactional Analysis in Bullwhip Effect Analysis," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 15(33), pages 210-223, February.
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