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The green bullwhip effect: Transferring environmental requirements along a supply chain

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  • Lee, Su-Yol
  • Klassen, Robert D.
  • Furlan, Andrea
  • Vinelli, Andrea

Abstract

The bullwhip effect has long been recognized as a critical factor that amplifies demand variability as customer orders pass upstream through successive tiers of a supply chain. Like customer demand, environmental requirements also change significantly at times, and are passed along the supply chain to varying degrees, suggestive of what we term, the “green bullwhip effect”. Based on field cases exploring changes in three supply chains across three adjacent tiers, we find evidence that such a phenomenon exists. First, ratcheting demands for better environmental performance are passed upstream through successive tiers with significant variation. Second, a green bullwhip effect is created as time to comply with specifications is compressed. Four different managerial responses, namely replace, accommodate, negotiate and collaborate, were observed to amplify or attenuate a green bullwhip effect based on the nature of firm relationships and balance of environmental capabilities at each tier. Of particular interest, the green bullwhip effect can force positive change, triggering the development of new environmental capabilities at multiple tiers in a supply chain.

Suggested Citation

  • Lee, Su-Yol & Klassen, Robert D. & Furlan, Andrea & Vinelli, Andrea, 2014. "The green bullwhip effect: Transferring environmental requirements along a supply chain," International Journal of Production Economics, Elsevier, vol. 156(C), pages 39-51.
    • Handle: RePEc:eee:proeco:v:156:y:2014:i:c:p:39-51
    DOI: 10.1016/j.ijpe.2014.05.010
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    14. Massimo Mariani & Fabio Pizzutilo & Alessandra Caragnano & Marianna Zito, 2021. "Does it pay to be environmentally responsible? Investigating the effect on the weighted average cost of capital: Environmental commitment and the cost of capital," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1854-1869, November.
    15. Schniederjans, Dara G. & Khalajhedayati, Mehrnaz, 2023. "Corporate Responsibility Communication and Score Trends: A Buyer and Supplier Perspective," International Journal of Production Economics, Elsevier, vol. 257(C).
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    18. Sharma, Amalesh & Pathak, Surya & Borah, Sourav Bikash & Adhikary, Anirban, 2022. "Collaboration strategies in buyer-supplier relational (BSR) networks and sustainable firm performance: A trade-off story," International Journal of Production Economics, Elsevier, vol. 253(C).
    19. Wang, Xun & Disney, Stephen M., 2016. "The bullwhip effect: Progress, trends and directions," European Journal of Operational Research, Elsevier, vol. 250(3), pages 691-701.

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