Bullwhip Efect Barilla Spa Essay

The Bullwhip Effect and Barilla SpA The Bullwhip Effect is an observed phenomenon in forecast-driven distribution channels where there is variability up the supply chain. Some of its causes are: Dependent demand processing Forecast Errors Adjustment of inventory control parameters with each demand observation Lead Time Variability (forecast error during replenishment lead time) Lot-sizing/order synchronization Trade promotion and forward buying Anticipation of shortages One way to achieve this is to establish a demand-driven supply chain which reacts to actual customer orders. The result is near-perfect visibility of customer demand and inventory movement throughout the supply chain. Better information leads to better inventory positioning and lower costs throughout the supply chain. Methods intended to reduce uncertainty, variability, and lead time: †¢Vendor Managed Inventory (VMI) †¢Just In Time replenishment (JIT) †¢Strategic partnership †¢Information sharing †¢Smooth the flow of products ocoordinate with retailers to spread deliveries evenly oreduce minimum batch sizes osmaller and more frequent replenishments