Open AccessThe Prevention and Reduction of the Bullwhip Effect by Electronic Data Interchange and Collaborative Forecasting
Author(s) -
Bahija Jardini
Publication year - 2021
Publication title -
european scientific journal
Language(s) - English
Resource type - Journals
eISSN - 1857-7881
pISSN - 1857-7431
DOI - 10.19044/esj.2021.v17n23p163
Subject(s) - bullwhip effect , supply chain , vendor , safety stock , vendor managed inventory , business , supply chain management , customer service , information sharing , quality (philosophy) , demand forecasting , service quality , stock (firearms) , service (business) , operations management , marketing , computer science , economics , engineering , philosophy , epistemology , world wide web , mechanical engineering
The bullwhip effect is a phenomenon of curious amplification of variations in demand as one moves away from the final customer. Popularized by Lee and al., (1997), the bullwhip effect has negative consequences on all actors in the supply chain because it generates considerable loss of profits: Too much stock, loss of sales, poor customer service, insufficient quality and multiple disruptions of flow and organization. To prevent and reduce the bullwhip effect, various tools are recommended. The Electronic Data Interchange (EDI) is among the most important given its impact on accelerating information sharing throughout the supply chain. This paper aims to shed light on the role of EDI, VMI (Vendor-managed inventory) and CPFR (collaborative planning forecasting and replenishment) in the prevention and reduction of the bullwhip effect in the supply chain.