Reduce Uncertainty To reduce the bullwhip effect,one of the most frequent suggestions is to reduce uncertainty,that is,to provide each stage of the supply chain with complete information about actual customer demand. POS,Sharing information on customer demand Sharing forecasts and pricing policies Even when each stage uses the same demand data,the same forecasting method and the same ordering policy,the bullwhip effect will continue to exist
Reduce Uncertainty To reduce the bullwhip effect, one of the most frequent suggestions is to reduce uncertainty, that is, to provide each stage of the supply chain with complete information about actual customer demand. POS, Sharing information on customer demand Sharing forecasts and pricing policies Even when each stage uses the same demand data, the same forecasting method and the same ordering policy, the bullwhip effect will continue to exist
Reduce Variability ■ The bullwhip effect can be diminished by reducing the variability inherent in the customer demand process. Eliminate promotions Year-round low pricing
Reduce Variability The bullwhip effect can be diminished by reducing the variability inherent in the customer demand process. Eliminate promotions Year-round low pricing
Reduce Lead Times Lead time reduction can significantly reduce the bullwhip effect throughout a supply chain.Lead times include two components: ■Order lead times The time it take to produce and ship items It can be reduced by using cross-docking Information lead times The time it take to process an order It can be reduced through the use of EDl
Reduce Lead Times Lead time reduction can significantly reduce the bullwhip effect throughout a supply chain. Lead times include two components: Order lead times The time it take to produce and ship items It can be reduced by using cross-docking Information lead times The time it take to process an order It can be reduced through the use of EDI
Strategic Partnerships Strategic partnerships change the way information is shared and inventory is managed within a supply chain,possibly eliminating the impact of the bullwhip effect. Vendor managed inventory In VMI,the manufacturer does not rely on the orders placed by a retailer,thus avoiding the bullwhip effect entirely
Strategic Partnerships Strategic partnerships change the way information is shared and inventory is managed within a supply chain, possibly eliminating the impact of the bullwhip effect. Vendor managed inventory In VMI, the manufacturer does not rely on the orders placed by a retailer, thus avoiding the bullwhip effect entirely