IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v114y2008i1p2-13.html
   My bibliography  Save this article

On the impact of order volatility in the European automotive sector

Author

Listed:
  • Childerhouse, P.
  • Disney, S.M.
  • Towill, D.R.

Abstract

Order volatility is an unfortunate fact of life facing most suppliers of both products and services. In this paper we are concerned with establishing the magnitude of the problem faced by the European automotive sector. The evidence has been acquired via the site-based Quick Scan Audit Methodology (QSAM). Production scheduler strategy is thereby classified according to a new five-set schema as observed via individual value-stream volatilities. System variables have then been codified and correlated with customer order volatility. Powerful statistically significant relationships emerge from this evidence. This generally (but not wholly) supports intrinsic views on what constitutes good practice. A specific interface between supplier and OEM shows the existence of a positive loop that acts as a vicious circle to create unnecessary volatility in material flow.

Suggested Citation

  • Childerhouse, P. & Disney, S.M. & Towill, D.R., 2008. "On the impact of order volatility in the European automotive sector," International Journal of Production Economics, Elsevier, vol. 114(1), pages 2-13, July.
    • Handle: RePEc:eee:proeco:v:114:y:2008:i:1:p:2-13
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(08)00064-9
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mollick, Andre Varella, 2004. "Production smoothing in the Japanese vehicle industry," International Journal of Production Economics, Elsevier, vol. 91(1), pages 63-74, September.
    2. Disney, S. M. & Towill, D. R., 2003. "On the bullwhip and inventory variance produced by an ordering policy," Omega, Elsevier, vol. 31(3), pages 157-167, June.
    3. 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.
    4. Bengtsson, Lars & Elg, Ulf & Lind, Jan-Inge, 1997. "Bridging the transatlantic publishing gap: How North American reviewers evaluate European idiographic research," Scandinavian Journal of Management, Elsevier, vol. 13(4), pages 473-492, December.
    5. Hong Chen & Murray Z. Frank & Owen Q. Wu, 2005. "What Actually Happened to the Inventories of American Companies Between 1981 and 2000?," Management Science, INFORMS, vol. 51(7), pages 1015-1031, July.
    6. Dejonckheere, J. & Disney, S. M. & Lambrecht, M. R. & Towill, D. R., 2002. "Transfer function analysis of forecasting induced bullwhip in supply chains," International Journal of Production Economics, Elsevier, vol. 78(2), pages 133-144, July.
    7. Sterman, John D., 1989. "Misperceptions of feedback in dynamic decision making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 43(3), pages 301-335, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Laurent Lim, Lâm & Alpan, Gülgün & Penz, Bernard, 2014. "Reconciling sales and operations management with distant suppliers in the automotive industry: A simulation approach," International Journal of Production Economics, Elsevier, vol. 151(C), pages 20-36.
    2. Benjamin Nitsche, 2018. "Unravelling the Complexity of Supply Chain Volatility Management," Logistics, MDPI, vol. 2(3), pages 1-26, August.
    3. Clément Chatras & Vincent Giard & Mustapha Sali, 2016. "Mass customisation impact on bill of materials structure and master production schedule development," International Journal of Production Research, Taylor & Francis Journals, vol. 54(18), pages 5634-5650, September.
    4. Zhou, Li & Disney, Stephen & Towill, Denis R., 2010. "A pragmatic approach to the design of bullwhip controllers," International Journal of Production Economics, Elsevier, vol. 128(2), pages 556-568, December.
    5. Sivadasan, Suja & Smart, Janet & Huaccho Huatuco, Luisa & Calinescu, Anisoara, 2013. "Reducing schedule instability by identifying and omitting complexity-adding information flows at the supplier–customer interface," International Journal of Production Economics, Elsevier, vol. 145(1), pages 253-262.
    6. Aoki, Katsuki & Staeblein, Thomas & Tomino, Takahiro, 2014. "Monozukuri capability to address product variety: A comparison between Japanese and German automotive makers," International Journal of Production Economics, Elsevier, vol. 147(PB), pages 373-384.
    7. Chuang, Chia-Hung & Chiang, Chung-Yean, 2016. "Dynamic and stochastic behavior of coefficient of demand uncertainty incorporated with EOQ variables: An application in finished-goods inventory from General Motors׳ dealerships," International Journal of Production Economics, Elsevier, vol. 172(C), pages 95-109.
    8. Volling, Thomas & Matzke, Andreas & Grunewald, Martin & Spengler, Thomas S., 2013. "Planning of capacities and orders in build-to-order automobile production: A review," European Journal of Operational Research, Elsevier, vol. 224(2), pages 240-260.
    9. Cannella, Salvatore & Dominguez, Roberto & Ponte, Borja & Framinan, Jose M., 2018. "Capacity restrictions and supply chain performance: Modelling and analysing load-dependent lead times," International Journal of Production Economics, Elsevier, vol. 204(C), pages 264-277.
    10. Staeblein, Thomas & Aoki, Katsuki, 2015. "Planning and scheduling in the automotive industry: A comparison of industrial practice at German and Japanese makers," International Journal of Production Economics, Elsevier, vol. 162(C), pages 258-272.
    11. Fahmy Salama, Kamal & Luzzatto, Dino & Sianesi, Andrea & Towill, Denis R., 2009. "The value of auditing supply chains," International Journal of Production Economics, Elsevier, vol. 119(1), pages 34-45, May.
    12. Seuring, Stefan, 2009. "The product-relationship-matrix as framework for strategic supply chain design based on operations theory," International Journal of Production Economics, Elsevier, vol. 120(1), pages 221-232, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhou, Li & Disney, Stephen & Towill, Denis R., 2010. "A pragmatic approach to the design of bullwhip controllers," International Journal of Production Economics, Elsevier, vol. 128(2), pages 556-568, December.
    2. Towill, Denis R. & Zhou, Li & Disney, Stephen M., 2007. "Reducing the bullwhip effect: Looking through the appropriate lens," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 444-453, July.
    3. Ciancimino, Elena & Cannella, Salvatore & Bruccoleri, Manfredi & Framinan, Jose M., 2012. "On the Bullwhip Avoidance Phase: The Synchronised Supply Chain," European Journal of Operational Research, Elsevier, vol. 221(1), pages 49-63.
    4. Jaksic, Marko & Rusjan, Borut, 2008. "The effect of replenishment policies on the bullwhip effect: A transfer function approach," European Journal of Operational Research, Elsevier, vol. 184(3), pages 946-961, February.
    5. Cannella, S. & Ciancimino, E. & Ashayeri, J., 2010. "On the Significance of Demand and Inventory Smoothing Interventions in Supply Chain," Other publications TiSEM 03de2e58-4ef5-40a3-96e1-6, Tilburg University, School of Economics and Management.
    6. Caloiero, Giuliano & Strozzi, Fernanda & Zaldívar Comenges, José-Manuel, 2008. "A supply chain as a series of filters or amplifiers of the bullwhip effect," International Journal of Production Economics, Elsevier, vol. 114(2), pages 631-645, August.
    7. Sodhi, ManMohan S. & Tang, Christopher S., 2011. "The incremental bullwhip effect of operational deviations in an arborescent supply chain with requirements planning," European Journal of Operational Research, Elsevier, vol. 215(2), pages 374-382, December.
    8. Geary, S. & Disney, S.M. & Towill, D.R., 2006. "On bullwhip in supply chains--historical review, present practice and expected future impact," International Journal of Production Economics, Elsevier, vol. 101(1), pages 2-18, May.
    9. Ponte, Borja & Puche, Julio & Rosillo, Rafael & de la Fuente, David, 2020. "The effects of quantity discounts on supply chain performance: Looking through the Bullwhip lens," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    10. Wang, Xun & Disney, Stephen M. & Ponte, Borja, 2023. "On the stationary stochastic response of an order-constrained inventory system," European Journal of Operational Research, Elsevier, vol. 304(2), pages 543-557.
    11. Robert L. Bray & Haim Mendelson, 2012. "Information Transmission and the Bullwhip Effect: An Empirical Investigation," Management Science, INFORMS, vol. 58(5), pages 860-875, May.
    12. Luong, Huynh Trung, 2007. "Measure of bullwhip effect in supply chains with autoregressive demand process," European Journal of Operational Research, Elsevier, vol. 180(3), pages 1086-1097, August.
    13. Anantaram Balakrishnan & Joseph Geunes & Michael S. Pangburn, 2004. "Coordinating Supply Chains by Controlling Upstream Variability Propagation," Manufacturing & Service Operations Management, INFORMS, vol. 6(2), pages 163-183, July.
    14. H. Norouzi Nav & M. R. Jahed Motlagh & A. Makui, 2017. "Robust controlling of chaotic behavior in supply chain networks," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(6), pages 711-724, June.
    15. Tangsucheeva, Rattachut & Prabhu, Vittaldas, 2013. "Modeling and analysis of cash-flow bullwhip in supply chain," International Journal of Production Economics, Elsevier, vol. 145(1), pages 431-447.
    16. Tianjian Yang & Weiguo Fan, 2016. "Information management strategies and supply chain performance under demand disruptions," International Journal of Production Research, Taylor & Francis Journals, vol. 54(1), pages 8-27, January.
    17. Cannella, S. & Ciancimino, E. & Ashayeri, J., 2010. "On the Significance of Demand and Inventory Smoothing Interventions in Supply Chain," Discussion Paper 2010-126, Tilburg University, Center for Economic Research.
    18. Disney, S.M. & Farasyn, I. & Lambrecht, M. & Towill, D.R. & de Velde, W. Van, 2006. "Taming the bullwhip effect whilst watching customer service in a single supply chain echelon," European Journal of Operational Research, Elsevier, vol. 173(1), pages 151-172, August.
    19. Dominguez, Roberto & Cannella, Salvatore & Barbosa-Póvoa, Ana P. & Framinan, Jose M., 2018. "Information sharing in supply chains with heterogeneous retailers," Omega, Elsevier, vol. 79(C), pages 116-132.
    20. Kristianto, Yohanes & Helo, Petri & Jiao, Jianxin (Roger) & Sandhu, Maqsood, 2012. "Adaptive fuzzy vendor managed inventory control for mitigating the Bullwhip effect in supply chains," European Journal of Operational Research, Elsevier, vol. 216(2), pages 346-355.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:114:y:2008:i:1:p:2-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.