Discuss and Response Supply Chain Management

by TrilokChand` Veeranki

Supply chain management is the most important for any production-based industry which links with the financial chain that is the turnover of raw materials along with the supply of goods. If the fluctuation of this aspect causes damage then it will affect the overall planning of the financial chain. The bullwhip effect is one which can be mentioned to be a scenario where this can be mainly scened as we can see a chain effect when we move the whip it will have a major ripple to the end.

So this is a situation which should be avoided at all costs to keep the business stable the main cause of the bullwhip effect is there due to small changes in the downstream management which cause a ripple that clashes with everything. The causes are forecast failure for demand, price fluctuations and many factors.

To manage this we have to have a better planning process throughout the whole downstream supplies and our own inventory.

1.      Understand the Bullwhip effect

2.      Control the inventory.

3.      Control the raw materials.

4.      Have better teamwork between departments.

5.      Uniform pricing.

These steps we have to take are some conditions in our process area which we can manage but we have to consider the areas which are not in our control like wholesaler demands, consumer demand which come into the forecasting category so we have to caution these around 10 to 30 percent in a the margin which will better improve. Do not move according to the order by the suppliers just take the past records on the supplier inventory and move so that the excess will not be a problem and the consumers do not change patterns unless a major change is being done.

A better example of effective SCM is Apple where the parts are many but it manages a tight ship in delivery and inventory. So we can see manage systems with better effects can be seen with improvement on our side and streamline our process.

 

References

O’donnell, T., Maguire, L., McIvor, R., & Humphreys, P. (2006). Minimizing the bullwhip effect in a supply chain using genetic algorithms. International Journal of Production Research, 44(8), 1523–1543. https://doi.org/10.1080/00207540500431347

Éder Vasco Pinheiro, Enzo Morosini Frazzon, Leonardo Sgnaolin, & Luiz Henrique Souza Mendonça. (2016). A beer game simulation model for studying the impact of information sharing to diminish the bullwhip effect in supply chains: an educational support tool in supply chain management. GEPROS: Gestão Da Produção, Operações e Sistemas, 11(2), 53–66. https://doi.org/10.15675/gepros.v11i2.1392

 

Giard, V., & Sali, M. (2013). The bullwhip effect in supply chains: a study of contingent and incomplete literature. International Journal of Production Research, 51(13), 3880–3893. https://doi.org/10.1080/00207543.2012.754552