《供应链系统设计与管理》课程教学课件（讲稿）Lecture 8（Chapter 5）Bullwhip effect & the value of information

Lecture 8:effect &Chapter 5:Bullwhipthe value of informationDr.Wang,Zhang-qiong王长琼Wuhan University of TechnologyDesigning and Managing the Supply Chain,WHUT,2017

Lecture 8: Chapter 5: Bullwhip effect & the value of information 1 Dr. Wang, Zhang-qiong 王长琼 Wuhan University of Technology Designing and Managing the Supply Chain, WHUT, 2017

effect&Chapter 5:Bullwhipthe valueofinformationObjectives :1.Whatisthebullwhipeffect?2.What are thefactors causingthe bullwhipeffect ?3.Howto reducethe bullwhipeffectoreliminateitsimpact?

Chapter 5: Bullwhip effect & the value of information Objectives : 1.What is the bullwhip effect ? 2. What are the factors causing the bullwhip effect ? 3.How to reduce the bullwhip effect or eliminate its impact? 2

5.1 IntroductionInformationflow ~materialflow;(inventory)Information type in a SC*Inventorylevels*Orders*Production*Deliverystatus

5.1 Introduction Information flow ~ material flow; (inventory)  Information type in a SC Inventory levels Orders Production Delivery status 3

TheValueof Information*Helps reduce variability in the supply chain.* Helps suppliers make betterforecasts,accounting forpromotions and market changes.* Enables the coordination of manufacturing anddistribution systems and strategies.* Enables retailers to better serve their customers byoffering tools for locating desired items.* Enables retailers to react and adapt to supplyproblems more rapidly* Enables lead time reductions

 The Value of Information  Helps reduce variability in the supply chain.  Helps suppliers make better forecasts, accounting for promotions and market changes.  Enables the coordination of manufacturing and distribution systems and strategies.  Enables retailers to better serve their customers by offering tools for locating desired items.  Enables retailers to react and adapt to supply problems more rapidly.  Enables lead time reductions. 4

5.2Bullwhip Effect1.What is the bullwhip effect ? (p. 133 ~136)*While customer demand for specific productsdoes not vary much* Inventory and back-order levels fluctuateconsiderably across their supply chainP&G'sdisposablediaperscase

5.2 Bullwhip Effect  While customer demand for specific products does not vary much  Inventory and back-order levels fluctuate considerably across their supply chain  P&G’s disposable diapers case  1.What is the bullwhip effect ? (p. 133 ~136) 5

4-Stage Supply ChainExternalDemandRetailerFIGURE5-5:ThesupplychainOrderleadtimeDelivery lead time?Sales quite flatWholesaler.Distributor orders fluctuateOrderleadtimeDeliveryleadtimemore than retail salesDistributor· Supplier orders fluctuateOrderleadtimeDeliveryleadtimeeven moreFactoryProduction leadtime6

4-Stage Supply Chain FIGURE 5-5: The supply chain • Sales quite flat • Distributor orders fluctuate more than retail sales • Supplier orders fluctuate even more 6

HigherVariabilityinOrdersPlacedbyRetailertoManufacturerThanActualSalesQuantity6050OrdersPlaced403020ActualSales101TimeLee, H, P. Padmanabhan and S. Wang.(1997), Sloan Management Review

Higher Variability in Orders Placed by Retailer to Manufacturer Than Actual Sales Lee, H, P. Padmanabhan and S. Wang (1997), Sloan Management Review 7

IncreasingVariabilityofOrdersUptheSupplyChainConsumerSalesRetallerOrders toWholesalersOrderQuantityOrderQuantity20201510TimeManufacturerOrderstoSuppllerWholesalerOrderstoManufacturerDrderQuantityOrderQuantity212015151010Lee,H,P.Radmanabhan and S.Wang (1997), SloaniManagement Review

Increasing Variability of Orders Up the Supply Chain Lee, H, P. Padmanabhan and S. Wang (1997), Sloan Management Review 1-8

EffectofOrderVariabilityOrdervariabilityinthesupplychain8070Ordervariability60Factoryis amplified up50Distributorthe supply chain;40WholesalerUpstreamRetailer30echelonsfaceCustomer20highervariability10O1921511K1517WeekFIGURE5-6:The increaseinvariabilityinthesupply chain

Effect of Order Variability FIGURE 5-6: The increase in variability in the supply chain  Order variability is amplified up the supply chain;  Upstream echelons face higher variability. 9

供应商分销商零售商市场需求上游下游10

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