Supply chain management: Cracking the bullwhip effect

Unplanned demand oscillations, including those caused by stockouts, in the supply chain execution process, create distortions that can wreak havoc up and down the supply chain. There are numerous causes, often in combination, that can cause these supply chain distortions to start what has become known as the Bullwhip Effect. An important element to operating a smooth-flowing supply chain is to mitigate and preferably eliminate the Bullwhip Effect. The most effective process for smoothing out the oscillations of the Bullwhip Effect is customers' and suppliers' understanding what drives demand and supply patterns and, then, collaboratively working to improve information quality and compressing cycle times throughout the entire process.